Heidi Thorne is a self-publishing advocate and author of nonfiction books, eBooks, and audiobooks. She is a former trade newspaper editor.
Making money from self publishing can mean anything from less than a buck up to millions. In fact, I have a friend who, literally, has sold millions from his super niche publishing efforts. But I know others on the opposite side of that spectrum, earning what amounts to "beer money" from their books.
So can you make money from self publishing? If you make even one dollar from your book or ebook, the answer is (technically) yes. But if you're looking for a stream of income, the answer becomes more complex.
Let's look at the various income options...
Will you make money from self publishing?
Royalties from Book Sales
Book sales is the most obvious way to make money from self publishing. You will either earn royalties (from self publishing platforms such as Amazon's Kindle Direct Publishing/KDP) or revenues (if you print, distribute and sell your book yourself).
In terms of royalties, authors can earn as much as 35 percent for print books up to around 70 percent for ebooks (as of this writing), depending on the platform used. Those are decent returns for almost any business venture!
But here's the catch. Currently, common book or ebook prices in an online retail space (such as Amazon) might be in the range of $0.99 to $25 dollars. That means you'll make only a few cents or dollars in royalties per book sold through these outlets, even with great royalty rates. Granted, on a self publishing platform such as Kindle Direct Publishing, you have little or no hard dollar costs for production, distribution and printing. Even considering that, it's obvious that you'd have to sell a LOT of books, every month, to make a living at it.
And here's the other part of that picture. Your books may not sell continuously over time. After an initial flurry of sales when your book launches, sales will likely settle down or even stop from time to time. Sure, your book might be on Amazon, but that doesn't mean it's going to sell; it's just available for sale. As well, your self published book, no matter how good, will face unbelievable competition, especially in online retail. Brick-and-mortar retail bookstores? It's not likely to even be on the shelves.
The Silver Lining: Even though you might not make a lot of sales, you may make some royalties as long as you have your book available for sale. This is called your backlist. I am still getting royalties from books that I published years ago. Your book can be a royalty income source (even if small) for the future!
Because royalties are income, they need to be reported on your income tax returns. Royalties will be reported by the self publishing platform paying you and you will receive a document (e.g., a 1099 form) confirming what was reported as paid to you. Consult your CPA or tax preparer on how to report this income on your returns and to find out if it is subject to any other taxes (such as sales taxes) for your area.
Sure, your book might be on Amazon, but that doesn't mean it's going to sell; it's just available for sale.
— Heidi Thorne
Becoming Your Own Publisher
You might be thinking that you could make more money without using a self publishing platform such as KDP. You might. You'll make 100 percent on your sales by doing it yourself, but you also have 100 percent of the printing, shipping, storage, distribution and business costs, too. Plus, selling direct means you'll also be responsible for collecting and paying business income taxes, sales taxes and all sorts of other business expenses. Yes, you're in business at that point!
Fulfillment or Unfulfilling? If you want to sell your self published and self produced book through an online outlet such as Amazon, you'll usually have to pay what are called fulfillment costs to have your book listed, warehoused, sold and shipped. An author friend of mine pulled her self published and produced print book off of Amazon because her sales didn't justify the monthly fulfillment costs. She was looking at the possibility of losing money by listing and selling it there.
However, another friend of mine has done very well by publishing, printing and fulfilling his book orders himself. He achieved success because he wasn't relying on online or offline retail outlets for all sales his books; he sold direct to his customers. But the real key to his success was that he built and continues to maintain his author platform to sustain sales over the long haul. His scenario is an anomaly which was totally dependent on his marketing skill. If marketing, production and fulfillment skills aren't your strong suit, you could actually lose money (sometimes lots of money!) by going the DIY (do-it-yourself) route. Plus, you could end up with boxes of unsold print books in your garage.
And don't even think you're going to be the one self publisher who's able to convince the brick-and-mortar stores (other than a stray independent bookstore here or there) to carry your book on their shelves.
The Ebook Myth. You might be thinking, "Well, I'm just publishing an ebook. I can easily sell that online as a PDF file and skip all the printing cost and fulfillment hassle." Not so fast! Where and how will you promote your ebook? How do you plan to deliver that ebook to your reader buyers? Via email? Download from the "cloud?"
While we'd like to think that our customers will not share our work electronically, there's nothing to stop them from sharing your PDF ebook with their entire email list, on social media or wherever they choose. If your ebook is strictly promotional, that's not so bad. But if you're publishing an ebook to make money, you could lose sales! There are services that can help facilitate these sales and protect your work, but they do take a commission. That's why publishing on a platform such as Kindle may be preferred for ebooks since there are specific downloading and sharing limitations and procedures in place.
The DIY Reality: Handling all aspects of the self publishing process yourself is a higher risk venture than using self publishing platforms and services. Understand your risks, costs and profit margins BEFORE you decide to go it alone.
Remember that all income from self publishing—even from digital products such as ebooks—will need to be reported as income for tax purposes and may be subject to sales taxes as well. Consult your CPA or tax preparer on how to report self publishing income and expenses on your tax returns.
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What's Your Book's ROI?
You may have invested some cash into developing the book BEFORE you even published it. These development costs can include editing, proofreading, graphic design and more. The money to do these things didn't fall from the sky. It came right out of your pocket.
You will want to figure out what it might take you make back everything you invested. This would be referred to as break even. At this point, your costs are covered, but your return on investment (ROI) is still zero.
Example: Let's say you spent $1,000 total on developing your book. Let's say that AFTER taxes, you anticipate that you'll make $2.00 per book sold.
Total Investment ÷ Net Profit AFTER Taxes Per Book = Number of Book Sales to Break Even
In the example:
$1,000 Total Investment ÷ $2 Net Profit AFTER Taxes Per Book = 500 Book Sales to Achieve Break Even
How long would it take you to sell 500 books? In the self publishing world, it might be a long time! This is why I suggest that self published authors use as many no or low cost self publishing platforms, services and tools as possible. Making money from self publishing can be a long road to profitability!
As well, you may wish to adjust your pricing higher to increase or accelerate your ROI. But don't price yourself out of your market!
Accounting Issues. If you write and self publish as a business, you may be able to claim deductions for your book development investments. Otherwise, you won't. Consult your CPA and tax professionals to determine if they are deductible for your situation.
How Much Do Self Published Authors Forecast (Hope!) to Make?
Making Sales BECAUSE of Self Publishing
While making a living strictly from self published book sales may be tough, making regular sales of your business' product or service because you've written a book can be a much bigger score. Of course, this only applies if you are in business for yourself.
Independent and self employed consultants, coaches and other small business owners who do public speaking to promote themselves may be allowed to solicit what are called "back of the room" (BOR) sales. They're called "back of the room" because that's where books are often sold after a speaker completes a talk. This has the triple income possibility of making BOR book sales, fees for speaking and generating sales leads from the audience for the business' regular products and services.
These days, a book, whether traditionally or self published, serves as a "business card" which can facilitate introductions to new sales prospects... even if it's distributed for free. A book can also help business owners establish their credibility as experts in their fields.
Understand What You're Really Selling: In this case, money is not made totally FROM self publishing, it is made BECAUSE of it.
As noted earlier, any income from royalties or book/ebook sales needs to be reported as income for tax purposes and may be subject to sales taxes, too. Income from sales of speaking or other products and services also needs to be reported. Consult your CPA or tax preparer for how to report all of these on your tax returns.
Updating, Repurposing and Repackaging
Those who self publish also have the ability to create works that are updated (such as 2nd editions), repurposed and repackaged (as workbooks, quote books, ebook editions, etc.). This allows self publishers the opportunity to promote a "new" product to their audiences and appeal to new audiences, too. By doing so, the sales and life cycle of any book or information product can be extended well in the future.
As with any self publishing efforts, the costs, risks and potential returns of reissuing any work need to be evaluated before relaunch. If the topic has passed its "expiration date," it doesn't make sense.
Many Happy Returns on Investment: Always be looking for sensible ways to extend the life of self published works to reap greater ROI (return on investment) of your time and talent.
Watch Out for Diminishing Returns When Self Publishing
This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.
Questions & Answers
Question: Is it better to self publish as a first-time writer or to find a publisher?
Answer: Mariana, that's a tough question! I never sought out a publisher. But that's because I was integrating my publishing endeavors into my business' marketing and a traditional publishing deal would not be in alignment with my goals. Many authors try to get a traditional publishing deal, then go the self-publishing route if they can't find a suitable deal. If that's something you want to try, realize that it could take years to secure a traditional book publishing deal. So give it time before you give up on that. Realize, too, that self-publishing is like a business, meaning that you'll have expenses and will be responsible for all sales and marketing. I would say that you should really assess what you want to accomplish with either route before diving into one or the other.
Question: Do you get a commission from the Department of the Treasury, or the Internal Revenue Service?
Answer: No, I don't get a commission from the IRS! Although my insistence that you check out your income and sales tax situation might make you think so. It's just such a major issue that many authors ignore until it's too late and they're facing an audit and penalties.
© 2016 Heidi Thorne
Heidi Thorne (author) from Chicago Area on July 01, 2020:
Manuela, indeed, self publishing can be frightening at times! That's a signal for you to thoughtfully and carefully review your opportunities before diving in to a self published book project. Glad you found the article helpful. Thanks you for reading!
Manuela from Portugal on July 01, 2020:
Self-publishing is somehow frightening for me but you have here some very good points.
Heidi Thorne (author) from Chicago Area on January 16, 2020:
Happy New Year, Audrey! Glad you found it helpful. Good luck with your book and keep us posted on your progress!
Audrey Hunt from Pahrump NV on January 16, 2020:
A huge thanks to you, Heidi for "telling it like it is." I'm working on my first book ( singing instruction) and this information is super helpful.
Denise McGill from Fresno CA on July 29, 2019:
I am on FB and I will look you up. Thanks.
Heidi Thorne (author) from Chicago Area on July 29, 2019:
Hi Denise! Children's books, especially with illustrations, can be very challenging, both from a production and finance standpoint. And, as you've discovered, while Lulu is a fantastic platform, it doesn't get the traffic that an Amazon does. So you've got a lot of investment in marketing. I hear you!
Thank you for reading and I'm glad you found it helpful. Good luck with your book!
P.S. If you're on Facebook, I have a FB group called Author Network for self published authors.
Denise McGill from Fresno CA on July 28, 2019:
This is very valuable information. I need to come back and watch all the videos later. I have found that some things are just not good at KDP because they require space for margins and gutters. In my case, I created a children's picture book with several double pages spreads with full bleed and KDP would not okay those. I couldn't put in a gutter without ruining the illustrations. I had to turn to Lulu which allowed the full bleed and double-pages and also offers better royalty rates. Still, I see what you mean about the ROI. Fewer people know about and traffic Lulu so I have fewer opportunities for sales without purchasing and selling directly to my customers. Unfortunately, I haven't the finances for that. Thanks for sharing all this info.
Heidi Thorne (author) from Chicago Area on June 21, 2019:
Hello Gupi! So glad you found the article helpful. Thank you so much for reading and good luck with your self publishing adventures!
Gupi on June 20, 2019:
Thank you for sharing this very detailed article. I found it useful. I always dream of publishing my own books one day.