Tag s | Economics

Show Me the Money!

I’ll never forget the Sunday I was getting ready to leave church, and the pastor’s wife came up to me and touched my arm.

“Karen, my son can’t find a job, so he’s decided to make some fast money by writing a book and having it published. Do you have any counsel for him?”

I’m so proud of myself that I didn’t guffaw in her face. Not so proud that I fixed her with a hard look and replied, “Do me a favor. Don’t ever say anything so stupid to me again.”

Yeah, those spiritual gifts tests. The category I always lack is mercy.

Anyone who has ever gotten involved in this gig knows that writing and being published isn’t the way to make “fast” money. Or, for far too many, any money.

Okay, reality check. Walk into any large bookstore and take a look at all the books. Now, how many of those multitudes of authors do you think are making a living at writing? Brace yourselves. One percent. Yup, one percent! In fact, with all the things authors need to do to find a readership (marketing/promotions, writers’ conferences, reference books, and so on), and the costs for indie publishing (in addition to what traditional authors have to pay for, they have the expense of covers, copyrights, editing, and more) many end up spending far more money than they earn. So is it any wonder several authors responded to my initial blog on obstacles by saying money is a big one? Or the lack thereof.

Yes, there are financial realities to this whole thing. But let me ask you something: What if money isn’t an obstacle at all? I mean, God could, if it was the best thing for you, rain money down on you! So what if the real obstacle is a lack of trust? The feeling that if you don’t do all the things you’re told you need to do, things won’t happen the way they should? That you’re in this on your own, and if you have to put yourself in debt to do it, well, you’re doing it for God, right?

No. You can’t honor God by doing things He says not to do, like going into debt. But here’s what you can do:

  1. First, realize your task is to write. Make sure you’re doing that. Just get your seat in the chair and write.
  2. Then, when a seeming financial need arises, submit it to God’s approval and guidance.
  3. Ask trusted friends and family to pray about the issue, that God will make it clear what He is asking you to do. If God, and your advisors, don’t give you the amen, then let it go. And move on in the freedom that God’s in control of your writing.
  4. Know, in your heart of hearts, that you serve a God who WILL provide what He knows you need. And if that’s money, you can rest in His promises. Promises like those below. Promises to put an end to Writer’s Obstacle #9: Money Concerns–

Deut 28: 8, 12— “The Lord will guarantee a blessing on everything you do and will fill your storehouses with grain. The Lord your God will bless you in the land he is giving you…The Lord will send rain at the proper time from his rich treasury in the heavens and will bless all the work you do. You will lend to many nations, but you will never need to borrow from them.

Psalm 34: 3-5, 6-10– …let all who are helpless take heart. Come, let us tell of the Lord’s greatness; let us exalt his name together. I prayed to the Lord, and he answered me. He freed me from all my fears. Those who look to him for help will be radiant with joy; no shadow of shame will darken their faces…Taste and see that the Lord is good. Oh, the joys of those who take refuge in him! Fear the Lord, you his godly people, for those who fear him will have all they need. Even strong young lions sometimes go hungry, but those who trust in the Lord will lack no good thing.

2 Corinthians 9:10– For God is the one who provides seed for the farmer and then bread to eat. In the same way, he will provide and increase your resources and then produce a great harvest of generosity in you.

Philippians 4:19-20– And this same God who takes care of me will supply all your needs from his glorious riches, which have been given to us in Christ Jesus. Now all glory to God our Father forever and ever! Amen.

 

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Family Christian Stores Closes All Locations

Last Thursday Family Christian Stores (FCS) announced they will be closing all 240 locations in 36 states, liquidating their inventory, and laying off over 3,000 employees. It is a sad day for Christian retail. In this case, the only surprise is that it came so soon after their previous bankruptcy …

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Ned Ryerson and the Startled Rodent

Much has been discussed about the growth (or shrinking) of digital book content delivery. I figured today was the perfect day to put in my two cents. Here is what happened in the last few years, explaining why digital sales have slowed, as told through a little story I conjured …

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A $100,000 Threshold for a Worthy Book?

Recently Brad Martin, the President and CEO of Penguin Random House Canada, was quoted as saying the following: “I’m not interested in a book that is going to generate less than $100,000 in revenue unless the editor or publisher [division] has a compelling vision for the book and/or the author…If …

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It’s a Flat World After All

As a preface to this post, let it be known that I really enjoy hitting my thumb with a hammer, pushing forks into electric toasters and tripping over things in my bare feet in the dark. It is that very masochistic tendency that prompted me to write this blog. _____ …

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J is for Just-in-Time

by Steve Laube

The economics of bookselling are complex and ever changing. There is a method of inventory control called “Just-in-Time” (or JIT) that has revolutionized both the retail and manufacturing industries.

When I began as a bookseller there was no such thing as computerized inventory, at least not in the Christian bookstore business. We used a method call “Stack ‘em high and watch ‘em fly.” Because “If you stack ‘em low, they won’t go.” The idea was to merchandise large amounts of inventory because there was no quick way to replenish your stock if you ran out.

We had sheets of paper with a list of “Never Out” titles in books and music. Weekly we would physically count the remaining stock and if our inventory on a title fell below a particular level we would order more. This was our attempt to time our inventory to match the consumer demand. Titles not on the list would be reordered when that publisher’s sales rep came to visit. The rep would inventory the store and together we would determine what titles to replenish and which ones to let disappear.

Technology Caused Disruption
Computerization changed everything. Using an algorithm the computer determined the speed, or rate, of sale for each title and created order quantities to match the projected demand. This was called “Just-in-Time.” The inventory would arrive just in time to meet the customer wanting that book.

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Author Accounting 101

by Steve Laube

You are a published author. You must be rich!
You are an agent. I know you are rich.

If it only were true.

A couple weeks ago we peered at the bottom line for the brick & mortar bookstore, now let’s attempt to do the same for the author. Please remember this exercise is generic, your mileage may vary. As before we will use some round numbers so we can all follow the math.

Let’s start with that $10 retail price book we dealt with before. The publisher sells the book for $6.00 to a store. That creates a “net price” for the publisher. Be aware that some contracts pay the author a royalty based on the retail price and some on the net price.

The net price is $6.00. They author’s contract pays them 15% of the net price. That would mean when this book was sold to the bookstore the author’s account was credited for 90 cents.

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Bookstore Economics 101

by Steve Laube

Understanding the economics of your local brick-and-mortar bookstore should help you understand the upheaval that is happening in our industry. So put on your math cap and let’s take a ride.

This article focuses on the bookstore not the publisher or the writer. I spent over a decade in the Christian bookstore business, and while that was a long time ago the economic principles are the same.

Let’s start with a $10 book (retail price). I’m using $10 because it will make the math a little easier to follow.

The bookstore buys the book for $6 (or 40% discount off the retail price) from the publisher (who calls that $6 the net price). Note that this discount varies between 40% and 50%.

When the books sells to a customer the store then makes a $4 profit ($10 – $6 = $4).

If the store discounts the book during a 20% off promotion they have to sell two copies to make that same $4 profit. But often a 20% off sale is not enough to double the sales volume. Why? Because a high-volume operation like Amazon.com is happy to sell that $10 book for $6.50 (35% off). They can do this because they plan on selling 10 copies at the discounted price and clear $5 in profit. This pricing strategy has a chilling effect on the ability of the local store to compete.

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