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Monday, April 23, 2012

CEO Thinking


The main topic of conversation lately in several of the blogs I follow is the profitability of a book. If you’re an indie author, at what point does your book become profitable?

Some writers only include their out of pocket costs. But a lot of folks want to include an hourly wage for their time spent writing the book, as if they are working in a factory making widgets. This is work-for-hire thinking.

Frankly, I don’t think an hourly wage per book is the appropriate correlation. Indie publishing is more like investing in the stock market. When you buy stocks, do you look at the time spent reading reports and studying graphs as work you should be compensated for? No, you look at the end result you want to achieve. Buy stock in Coca-Cola, Inc., today, and you’ll be looking at dividends versus the growth in value of the stocks themselves, not the time you spent on the john reading their latest annual report.

Or a better example would be a corporation’s CEO. Does he/she take a salary? In most cases, they receive a token amount, like Jeff Bezos of Amazon, who receives $86,000 annually. The bulk of their compensation comes in other forms, such as stock options, which is why Mr. Bezos is worth a few hundred million.

In other words, you need to look at the big picture and adjust your thinking accordingly. Do you want to be the CEO or the worker bee making $10/hour?

2 comments:

  1. I agree. It's one thing to look at a wage per hour, or per thousand words, if you're marketing your work to a short fiction market that'll give you a flat rate, or sending your book to a legacy publisher that'll offer an advance and you know that's likely all you'll see on that book until the contract runs out.

    Indie publishing is different, though, and a published book there is an investment that continues paying dividends rather than a widget to be sold for a one-time fee.

    Angie

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  2. And that dividend concept is key, Angie.

    I released Amish, Vamps & Thieves on Friday. A few folks heard about it and bought the entire Bloodlines series.

    Of course, the insecure writer in me thinks, 'What if they don't like the series?' The business woman in me slaps her around until she shuts up. *grin*

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