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Jan 28, 2011

The Economics of Self-Publishing via Kickstarter (so far)

Ever since I launched the Nature of Code kickstarter page I’ve been getting a ton of questions about the economics of this book project. Though I hate to take any precious moments away from the actual writing of the book, I thought I’d take some time to lay out some thoughts. This is all an experiment, and one that I hope will help future authors with evaluating the pros and cons of self-publishing. So in the interest of transparency here is where I sit at the moment. Admittedly I’m flying by the seat of my pants.

Originally I had planned to raise approximately $5,000. My thought was as follows. I want to hire an editor (done! the wonderful Shannon Hunt). I want to hire a designer. I want to hire an illustrator. I want to hire some technical reviewers. I haven’t worked out the exact costs, but I was planning on spending somewhere between one and three thousand dollars on each of the above, depending on the scope of work, etc. I had always planned to fork out some cash out of pocket, but figured kickstarter would ease the burden. Let’s just say, as a rough wild guess estimate, I’m going to spend $6,000 on any labor associated with production (editing, design, technical review, proofreading, etc.) Come to think of it, that might be a bit low, but that’s the number I’m sticking with for now.

Next, there’s the matter of printing the book itself. I haven’t sorted this out either, but I’m planning on using a print-on-demand service (such as lulu). Let’s say the book ends up around 350 pages and costs $15 to print each copy (might be less, might be more, depending on quality, etc.). As of this writing I have 283 pre-orders on kickstarter for the print book. That’s $4,245. Then I’ll probably want to send out some free copies, review copies for teachers, review copies for bloggers, press, etc. Let’s say I send out 50 free copies. There’s another $750. Oh right, and shipping and handling. Let’s say it’s $3 per book. (Once the book is out, shipping and handling will be passed onto the customer, but I’ll be handling it for all kickstarter “pre-orders”.) So another $999 for shipping.

So now (with some rounding) we have $6,000 (fees + labor) + $5,000 (first round of printing) + $1,000 (shipping). A total of $12,000.

Kickstarter money to date: $12,167.

Total profit: $167

(Note I’ve ignored some important details like Kickstarter’s 5%, but this is close enough).

Here’s the thing. That might not seem so great. But it is. It’s fantastic. It’s amazing. What it means for me is that I’ve written a book (and published it). It also means that I own (exclusively) all of the content in the book. It means that if I continue to sell the book as a PDF, I keep 100% of the price (minus any transaction fees). Let’s take my first book Learning Processing, published by MKP/Elsevier. I think for a kindle version, I barely end up with a dollar (I need to check this, maybe it’s more like 2, but in any case, it’s something quite small).

Regarding print copies, with Learning Processing (which retails at the somewhat ridiculous price of $50), I receive approximately $3 per copy sold (very rough estimate). This self-published book could theoretically reach the customer for $25 (half the price!) and I would receive ~$10 for that copy.

And if I want to put all the content online for free as tutorials, I can.

So, this is where I stand as far as today. Really though, what I care about the most is just writing the darn thing. So back to that.