I see this question raised numerous times, mostly by people who aren’t offering their time, money and yes, their expertise to create.
Having developed and run an e-commerce website, I am going to discuss a few reasons why you don’t see successful authors go out of their way to create a book distribution website. And why, for the most part, they don’t even bother selling it on their site.
Sunk Cost
Let’s start with the basic set-up cost of a website. It might only cost a few thousand dollars to get a basic website like from Shopify up. But once you have a website up, you need to get the site known to everyone, in a format that is easy to read. Which means an app. Add a few thousand to tens of thousand depending on the app (I don’t know the cost here exactly since I have never commissioned one, but I can’t see a good app costing less than a few thousand).
Now, you’ve down at least $5k. That’s a LOT of books to sell to breakeven.
On-Going Cost
So, some basic on-going cost to expect:
- SSL fee, domain cost, server fees (at the lowest end, $10-20 a month. It EASILY goes up to $300-500 for a dedicated server if you have considerable traffic)
- Gateway fees (to take credit card charges. It’s about 3% or so of your revenue plus a fixed $20-30 unless you use something like Square which makes your variable fee higher)
- IT cost (bug fixes, server updates which add new bug fixes, updates for the app to keep it running)
- Database maintenance (adding/removing new books, updating books / covers for people. If you want others to do that, you’re going to have to create a website that allows it, which I do not believe is part of the ‘generic’ off the shelf stuff that Shopify and most e-commerce websites allow. So, add a LARGE amount to your Sunk Cost)
- Customer service (either you’re answering the CS e-mails or someone you’re paying is answering it. It’s still a cost)
- Legal Fees (you need to get a proper document up and keep the contracts signed and stored somewhere to ensure that everyone agrees to the fee splits, their rights, etc.)
- Bookkeeping / Accountancy Fees (you need to have a VERY robust accounting system since you’re handling other people’s money)
- Chargeback & Fraud fighting & costs. Online fraud is huge. Realise that while people don’t necessarily ‘lose’ anything (physical) when fraud happens, chargebacks have a cost associated with them that often runs around $50 per chargeback. Now, who is paying for that? The books / authors that got hit? You? If so, realise, that comes out of your bottomeline. Oh, and chargebacks can happen up to 6 months AFTER the order has gone through.
- Marketing Cost (see below)
Rights
And then, you have to deal with getting the books. Right now, KU books are the majority in the LitRPG genre. No one is going to give you a book if they aren’t wide already, so that cuts out about 80% of the authors.
Now what? Well, you have these 20% of the other authors who aren’t wide you need to convince to use your new, untested and untrusted system. You’re now adding to their workload too as they’ve got a bunch of other sites to upload their books too, most of which have…. traffic!
Marketing
So. You got a site, you’re ready to pay the on-going cost. But no one is buying from you. Oops.
This is perhaps THE biggest issue. Nevermind everything else, how the hell are you going to get traffic? Marketing is EXPENSIVE. Every thousand people you reach might cost $1. Of that, MAYBE 1 person will click and look at your site. Of that, maybe 1 in 100 MIGHT buy from you. That’s about ‘average’ conversion rate. So, to get 1 customer, you are spending $100.
Your book is only worth $3.99 (or $4.99). And there’s a HUGE amount of cost there.
Realise that Kobo, iBooks, Google, B&N have ALL tried to dethrone Amazon. They have marketing dollars, they ALREADY are on your phone (in 2 cases) and yet, they aren’t able to? Why?
First, it’s VERY hard to get people to move their purchasing from one retailer to another. It normally takes a number of bad experiences before people will change their habits.
Second, Amazon is the preferred area to buy from because they’ve already have so many other things to buy from. You don’t, because your site is ONLY about books.
Thirdly, their Kindles, their app, it’s all so good. Not necessarily perfect, but it works without an issue. And that, for many people, is exactly what they want and need.
So, how do you expect to get people to buy from you? When – you realise – these people could already buy from Amazon /B&N/etc. Even if you skip costly advertising and have the authors send to them, some of the largest authors only have 30k readers. And of those, most of them already have their preferred reading channels. Getting them to switch is going to be hard. Again, remember, only 1% of those who click through are going to buy (okay, if you’re good, you can shift those numbers up to like 3-5% but that requires a slick website, which again, expensive!).
Opportunity Cost
Last reason. I started writing because I enjoy writing. I don’t want to run a business. I’ve done that, I’m not interested in doing it again.
Running a business, doing it well, requires you to focus your attention on it. While you can (and a lot of authors do) work other jobs, writing is what we enjoy. And every hour we don’t spend writing, it’s money down the drain (if you’re a selling author at least). So… Run a business which might or might not make money or write?
Conclusion
So why not set one up? Because it’s expensive, it’s costly, it’s likely to fail and as an author, you’ve got better things to do.
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