OLD POST ALERT! This is an older post and although you might find some useful tips, any technical or publishing information is likely to be out of date. Please click on Start Here on the menu bar above to find links to my most useful articles, videos and podcast. Thanks and happy writing! – Joanna Penn
An important consideration for your business is diversity of income streams.
You don't want to be over-dependent on one source for your money, because if it dries up, you will suffer immediately and your business may fail.
You will end up with no power in that relationship, and no choice but to do what that company wants in order to continue working with them.
The Amazon/Hachette dispute has been the catalyst for my own move into direct sales of books, even though I have been selling courses online for a number of years now. Amazon represents 60% of Hachette's ebook sales in the US, and 78% in the UK, according to GoodeReader in June 2014. Once another company/platform has that much control over your business, negotiations are always going to be difficult.
Where do you receive your revenue from?
How many different sources does it come from? Is your business sustainable if any channel disappears or changes terms?
Indie authors love Amazon, because they pioneered self-publishing for ebooks and enabled authors to make a living online. But we're also aware of our dependency, and Amazon is a business, not a charity.
Jeff Bezos himself, in an interview on Charlie Rose, said that one day Amazon will be disrupted. It's also their business, so they get to change the rules when they want. So do Kobo, Nook, Apple and any other companies that sit between the author and the customer. I'm not talking about exclusivity here – I publish on all these platforms and plan to continue doing so, but I can still build my own channel on the side.
Building a direct channel for sales is one option to grow an income stream that has no intermediary except a buy button. It also enables the author a way to learn more about their customers and create a direct relationship through email.
Some customers are now actively looking to buy directly from artists, wanting to support creativity on the personal level rather than through a global conglomerate. I've had emails from people who refuse to buy from the big stores for ethical reasons, and the rise of indie movements in craft, farmer's markets and start-up culture have made consumers more aware of the little guys and more ready to support them.
So here are your options for direct sales. This is a chapter excerpted from my book on business for authors.
Sell ebooks/audiobooks/courses or other digital files from your website
Customers can manually transfer digital files onto e-reader or mobile devices in order to read them. This means you can sell .mobi files for Kindle and .ePub files for other devices, as well as PDF or any other formatted files directly from your site, and use a shopping cart through PayPal or other services to process the payments. Customers can purchase directly on your site, receive the download and you receive the money. There are a number of services you can use.
I've been using e-Junkie.com for a number of years, and the $10 fixed monthly payment/no transaction fee as well as affiliate options are great for selling online. However, it is Paypal or Clickbank only payments and the customer's experience is not that intuitive.
You can also just use a Paypal Buy button on your site, but again, it's not very sophisticated and nowadays, there are options that include email and social integration, as well as analytics. When I decided to sell my books directly from my website, I evaluated the following options:
- Great customer interface. Supports creators in 40 countries. It’s quick to integrate Gumroad onto your website, sell on Twitter, Facebook, YouTube, SoundCloud, and through your own email newsletter. You can set up discount codes. Detailed analytics.
- 5% + 25¢ per transaction with no additional monthly, hosting, or setup fees. Everything is covered–file hosting, file downloads, payment processing, payout deposits, customer support, analytics and dispute fees. Consideration for sales tax, including US rules
- Specifically doesn't accept Paypal – explained in detail here – but it's about control of the interface and customer experience
- Can be used for physical items as well as digital. Includes subscription content – great for serials, or for recurring delivery of content
- Used by Jim Kukral for his GoDirect book (all about direct sales!)
- Everything you need to promote and sell your ebooks to your social network. Specifically aimed at easily shareable. Customizable sales page – which is already very attractive with the default options. Ebooks only.
- Pay what you want pricing + discount coupons. PayPal only payment. You are paid directly after purchase. 5% per transaction, taken after PayPal fees.
- Google analytics integration
- Used by Chuck Wendig on his book pages
- Fantastically easy to set up and great design with a pop up within your website so the customer doesn't leave
- 5% + 25c per transaction. Can use both credit cards AND Paypal
- Easy social integration, as well as integration with Aweber mailing list. Responsive design means ability to buy on mobile devices
- Audio and video previews
- Can be used for physical, digital and services
- Used by CJ Lyons on her book pages
You should investigate all these as well as any other more recent developments in order to find what fits your business the best.
Personally, I am now using Selz for my ebook and (coming soon) non-fiction audiobook sales direct from my website. You can see examples on TheCreativePenn.com/Books and also JFPenn.com book pages. My main reason was that, as a customer, I like to be able to pay by Paypal or bank card, so I wanted both options. I also like the audio and video extras as I think multimedia will become every more crucial in sales. It also integrates with my Aweber email lists so I can develop a list of buying customers, separate to the list of people who download my free stuff. I'm still using e-Junkie for my courses as that is all set up and works well.
Sell print books/physical product from your website/online
Many authors buy and hold their own stock so they can sell signed copies of books from their websites. Other authors have DVDs, physical products like T-shirts or other merchandise, like my friend Alastair Humphreys. Again, you can use Paypal Buy buttons on your site for physical sales as well, but for extended functionality, check out:
- Gumroad, Selz, e-Junkie all have physical sales options
- Woocommerce has specific WordPress themes and customization for physical products and catalogues
I don't focus on physical sales in my business model so I can't share my experience. But if you're going to go ahead with physical sales, please do your research and consider print on demand or drop-shipping, where the product is made and delivered straight to the customer without you having to hold stock. Otherwise, you will need to pay for stock upfront, hold it or warehouse it, as well as shipping it. Lines at the post office are no fun, and neither is a pile of unsold stock in your house. Trust me, I've made that mistake and made a business decision to focus on digital products primarily because of it.
Sell physical products in person
The rise of the indie movement across all industries has seen a renaissance in craft fairs, local markets and people interested in buying directly from the creator. You may also be a public speaker wanting to sell books at the back of the room.
In the past, you need to register for expensive swipe machines for various banks in order to process credit/debit card payments in person as a small business. But there are technologies emerging now to suit the small business. These are mainly available in the US and Canada right now, but are spreading globally.
- Square – a small plugin card reader for your phone or iPad. Accepts all major credit cards. Deposits next day into your bank account. 2.75% price per swipe.
- Paypal Here – a separate card reader that works with your mobile. One off fee for the reader and then 2.75% for chip and pin cards or Paypal
- Intuit's Go Payment – Plug in swipe device with signature that works with your Apple or Android mobile and all major credit cards. Works with QuickBooks accounting software. Has pay-as-you-go or monthly rate charging with swipe rates 1.75% – 2.40%
Asking your customers for support
There are also a couple of other models that come under the ‘sell direct' umbrella.
- Crowd-funding. Sites like Kickstarter, IndieGoGo or PubSlush for books allow fans to contribute to costs upfront so special projects can be made. It generally works best for original ideas, rather than asking for readers to pay for editing a book by a first time author.
- Patronage or support. Amanda Palmer's TED talk on the art of asking as well as her incredible Kickstarter campaign encouraged people to think more widely about how creative work can be funded. If you produce great work and your readers want your books, then they want to pay you for your time and your work. Patreon is a site that allows subscription payments to continue as long as the artist continues to produce work e.g. $5 per comic produced. Some creators and podcasters are now asking for ‘support' of their work through purchase of books, products or by giving money directly, rather than receiving advertising revenue from corporates. [I'm actually considering this for my own podcast, which costs time and money every month. I'd love to know what you think about this in the comments if you listen to the show.]
All of these require an author platform
If you want to sell directly, or if you want to explore crowdfunding or patronage, you will need an author platform and people who know who you are and are keen to buy. You will need traffic to your website, and you need an email list so you can tell people when there are books ready to buy. I've covered all these topics in ‘How to market a book‘ or you can check out the articles on marketing here.
Update for Dec, 2014 – EU VAT Tax on Digital Products
On 1 Jan, 2015, the EU introduced new VAT tax laws that impact anyone selling digital products to the EU – that includes authors who sell books or courses direct. Essentially, VAT is now calculated based on where the customer is located, NOT where the seller/vendor is located. The tax varies per country and to be compliant, businesses need to collect 2 pieces of evidence proving location.
Previously, there was an exemption limit for small businesses but this law gets rid of the limit so anyone selling anything and making any revenue above 0 must pay this VAT. Many of the companies above will help with sorting out this tax information, but many small businesses are pulling down their direct sales – myself included – until the law is revisited for small businesses. I am intending to create new courses in future but I will likely sell through Udemy or other sites that process the tax for you. I won't be selling direct because of this legislation.
For more information, please read this article.
Update April, 2016 – EU VAT Tax on Digital Products
a) if you are in the UK (which I am) and sell to UK customers – but DON'T sell to any customers in other EU countries, then you're not liable – see the workflow https://whitehall-admin.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/415931/VAT_MOSS_Flow_chart_FSB_edit_V1_0.pdf
b) the selling sites e.g. SELZ now have the ability to restrict the countries you sell to – so I will (unfortunately) not sell to any customers in EU countries
c) If your online courses have a personal element e.g. Q&A extras, email, then you're not liable. But I also use Teachable.com which has a beta service for charging EU VAT if you're only doing electronic delivery.
Images: Top – Flickr Creative Commons money by Epsos; craft fair by Malisia;