Why Indie Authors Need to Track More Than Book Sales
Knowing the business side as an author helps you afford to do what you love
Imagine selling 50 books in a month…that would be great, wouldn’t it?
That would mean 50 readers saw your book, thought it was worth the purchase, and followed through. That means success, right?
Let’s look at it another way.
What if these 50 sales generate $200 in income, but you spent $250 on advertising to get these sales?
Now, those 50 sales tell us a different story, don’t they?
And this is exactly why authors need to be tracking more than just their book sales when it comes to profit margins.
The Revenue Versus the Earned Profit
One of the biggest things that hurts authors is that they think that the money they bring in from book sales goes directly into the profit margins. However, this isn’t always true.
There is a difference here between revenue and profit.
Revenue is the total amount of money your business brings in before the expenses are taken away. Profit is the money left after all the expenses are paid.
Let’s look at an example. Say you are attending an in-person author event.
During the event, you sell 15 books at $20 a pop and end the day with revenue of $300.
While this sounds amazing, it’s now time to deduct our expenses.
Book Inventory: $100 ($5 per book if you order author copies at a lower cost)
Vendor Registration Fee: Vendors paid $50 to attend this event
Marketing Materials: $9 (Let’s say this is for Canva.com to create flyers and print them, or maybe you ran a cheap ad on social media)
Transportation: $30
When all is said and done, we deducted $189 in expenses, leaving us with $111 in profit.
This is why it’s important to keep track of expenses.
When we do this, it helps us to make more informed decisions on spending, events we choose to participate in, and what things are worth spending on.
Even if you sell hundreds of products a year, we need to ensure our expenses aren’t exceeding our profit, or it can quickly sink you.
Marketing Expenses Versus Return on Investment
Marketing is an essential part of an author’s job because without it, it would be difficult to get our books in front of readers.
This is why it’s important to keep track of our advertising costs, promotional expenses, and the results yielded from individual campaigns.
For example, let’s say that you spend $80 on a marketing campaign for a month. During this month, you generate $120 in sales.
This would mean that your profit after expenses would be $40, making your ROI 50%.
Another way you could track more immediate sales through more organic marketing methods would be to track immediate sales through newsletter signups and any sales directly from this.
Depending on what you pay for your newsletter or marketing for the newsletter, your return on profit could be higher.
Tracking Which Books Perform Best
For someone who has published multiple books, keeping track of which books do better can also help you consider which books will provide you better profit margins.
How can you identify this?
Look at which genres or titles consistently generate sales
Explore which books sell better in paperback versus eBook
Decide whether discounts and promotions increase sales
Look at which older books continue earning royalties
Determine whether readers purchase additional books in a series
Knowing the stats of how your books perform can also help you make a more informed decision later when you move on to publishing another book.
No, writers don’t always write for financial gain. But it does take some money to help you release a decent, polished book into the world.
And understanding the business side of the process can help writers continue to do what they love.
Remember to:
Pay attention to the revenue versus the profit margins
Your marketing expenses compared to your return on investment
Decide which of your works performs the best
Paying attention to these details will help you make smarter business decisions as an author.