Saturday, December 19, 2009

CreateSpace's New Expanded Distribution Channel Information Update

One of my most recent posts was about CreateSpace offering a new distribution service called the Expanded Distribution Channel.  Initially I was pretty excited because any opportunity that helps self-publishing authors expand their distribution opportunities is, I think, a good thing.  I still think the Expanded Distribution Channel (EDC) might be a good opportunity for some self-publishing authors but I am not as excited about the opportunity as I was initially.

In order to use the EDC the author must sign-up for the Pro Plan and pay the additional $39 fee.  This is a no-brainer as the Pro Plan dramatically lowers the cost per copy for the author.  If the book meets certain requirements, it can be entered in the EDC program.  This means that the book can now be sold through three outlets that include: CreateSpace direct sales to retailers, bookstores and online retailers and libraries and academic institutions.

The direct sales to retailers allows retailers to purchase books directly from CreateSpace.  I am not a fan of this and won't be using this service for most of my titles.  I write books for basketball coaches and sell them through three avenues: my own website, Sysko's Sports (a retailer for coaching books and DVDs) and Amazon.  While I make the most money from books sold through my website, that is not where my main marketing efforts are directed.  The website is meant to be a source of information about coaching basketball, the coaching clinics I host and where coaches can sign-up for my e-newsletter.  I do have a store, but also offer links to purchase my books from Amazon and I also mention Sykso's as often as possible.

Amazon reaches customers I can never hope to reach.  Sysko's Sports is a well known entity in the coaching profession and has both its own website and a print catalog it direct mails to nearly every coach in the United States.  I cannot hope to match the exposure these two entities can provide through my website.

Why not let Sysko's purchase the copies of my books directly from CreateSpace? Because the discount Sysko's requires to carry my book is less than the 60% CreateSpace will be pocketing for the EDC service. Why should I make less money per order just for the convenience of not sending Sysko's a bill for the books?

In order to use the EDC service for libraries and academic institutions, it must have an ISBN assigned by CreateSpace, making CreateSpace the publisher of record. If this is not an issue for you, then it is not a big deal.  But if you are truly self-publishing your own book and are planning to use your own ISBN, then this is something you must consider.

The third channel of sales offered through the EDC is for bookstores and online retailers.  I won't be using the first two distribution channels offered through the EDC for certain but will have to think about this third option.  Most of my books are very specialized and I just don't see a bookstore stocking any of these books. My next book on basketball is different and might be of interest to some bookstores.  The red flag though is that nasty 60% discount that CreateSpace will be taking for itself.

Selling books on Amazon through CreateSpace already means that Amazon/CreateSpace are taking a 40% discount.  For example, my book CreateSpace Self-Publishing with Amazon's CreateSpace: A Resource Guide for the Author Considering Self-Publishing lists at $12.95. The book contains 162 pages when the final page count is done. The cost to purchase a single copy directly myself is $2.80. After deducting the cost of producing the book and adding in Amazon's 40% discount, I earn $4.98 for each book sold. At the 60% discount I earn $2.39 for each book sold. Advocates of short discounting and self-publishing would argue that I would be better off dealing directly with Lightning Source and setting a short discount of 35-25% (more later).

I have no complaints about the 40% Amazon takes for its share in the sales of this book.  Without Amazon and Createspace, this book would not be in print nor would it be selling the number of copies per month that it is. If I dealt directly with Lightning Source and set a lower discount I would make more per copy for each book that was sold.  But I would have to overcome the "penalties" built into the Amazon software that reflect the bias against books with short discounts.  If you want to read more about this, I strongly urge you to obtain a copy of Aaron Shepard's Aiming at Amazon if you have not already done so and read his explanation of this.  Morris Rosenthal also addresses this in his blog and book Print-on-Demand.

These two authors can set a short discount and not have it impact their sales on Amazon. They are masters of book marketing, particularly via Amazon.  I have learned a great deal, but do not put myself in their league. Nor do I have the "expert status" that these two authors so rightly deserve (I am working hard on it though) that creates demand for their books regardless of Amazon's ranking software.

When the amount jumps up to 60% though, I feel the need to balk and think this through carefully.  The standard discount for retail stores is 55%.  I don't feel bad about the 40% I give Amazon.  Amazon provides me a great deal for that 40%.  It markets my book on a global internet platform.  It allows me to compete directly with brick and mortar bookstores that would never carry most of my books.  It allows me to work at marketing my books through the features it provides and does not charge me each time I access these features to work at marketing.  It fulfills all of the sales of books ordered for me, keeps records, and pays me once a month.  This is a second job for me, I am not a best selling author nor do I ever expect to be.

What I will spend my time thinking about is how will utilizing the EDC impact, if at all, my bottom line? I plan to use it with my next basketball book to experiment and collect some information over time.  Will the sales that I garner through the EDC impact my bottom line in a positive or negative manner? If it costs me sales on Amazon I lose money.  If it generates additional sales that I would not have had otherwise, it will earn money for me.

It is something to think about. 

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