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is an older post and although you might find some useful tips, any technical or publishing information is likely to be out of date.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
I love the transparency of the indie world.
It's so important for us to share information so we can learn from each other. I've just finished my 2014 -2015 tax returns in the UK, so I wanted to share my breakdowns in the hope that it helps you with your author business.
How does my six-figure income break down?
First of all, I am an author-entrepreneur. All my income stems from my writing but I separate that into books and blogging-related, since the latter brings me speaking opportunities and affiliate income as well as direct sales.
The business now makes an income that is 3x the UK average for a male and is a six figure business in USD.
I won't specify exact figures, but in 2014, when I reported for the previous tax year, the income was just over 2x the UK average for a male, so it has improved.
The break down of income streams is shown in the pie chart:
- 50% book related income, which includes audiobooks and print as well as ebook sales on all retail stores. This would be a full-time income for many people on its own, and proves that you can make a good income as an author, despite what the mainstream media suggest (but then they never seem to survey indies!)
- 12% course sales from my own site
- 25% affiliate sales which is basically a commission on selling other people's products that I use and believe are useful
- 10% paid professional speaking
- 3% sponsorship for the podcast from corporate sponsors and Patreon
How does the book income breakdown by format?
Here's the breakdown by format.
Clearly ebooks are dominant, as they are for any indie author. But I wouldn't be without my print sales either 🙂 They are mainly non-fiction sales.
What is more interesting is that a year ago, I had virtually no audiobook income. I am super bullish on audiobook growth over the next few years and have really been focused on growing that area. I have 10 books in audio so I expect to see that figure grow next year.
How does the book income breakdown by store?
I love Amazon.
They changed my life and enabled me to leave my day job and become an author entrepreneur. I read 99% on the Kindle, I'm Amazon Prime and a dedicated Amazon customer.
BUT, I don't believe in exclusivity for my book sales.
In 2008, I was laid off along with several hundred colleagues in one day during the global financial crisis. That was the last time I relied on one company for my livelihood. If selling books is not your main income, then fair enough 🙂
I also believe that, although Amazon may dominate in the US and UK, iBooks and Kobo specifically dominate in other countries and my income there continues to grow every month. Yes, they take some work to get moving, but in my opinion, it's worth it for the long term global market.
I go into more details on the pros and cons of exclusivity in this article, but obviously it's your choice.
How does book income break down by fiction vs non-fiction?
I now have 10 fiction books (plus a short story series) and 5 non-fiction books.
The first graph shows the % income for fiction and non-fiction. I make nearly 60% of my book income from fiction, which is pretty awesome actually as I've been working hard to develop a back-list.
The second graph shows the % sales volume for fiction and non-fiction.
You can see that I sell far more fiction books than non-fiction, and I have taken out the free books so this is just for paid items.
In terms of pricing, I have books ranging from free through $2.99, $4.99 and all the way up to $8.99 on Amazon. On Kobo and iBooks I have boxsets at even higher prices as there is no cap on the royalty rate.
What am I planning for the next financial year?
Obviously more books!
I've just released Deviance, the final book in the London Psychic trilogy. I'm writing a dark fantasy thriller with J Thorn in September, working title, Risen Gods.
I also have the next ARKANE book roughly plotted out, working title, Destroyer of Worlds … and a load more to come … For non-fiction, I'm working on a book on mindset for authors. Busy, busy!
But the big change is that I am getting back into courses.
Those of you who have been around a while know that I have had a number of courses over the last 6 years. I started in 2009 with the Author 2.0 course, then I sold modular courses and then I did several joint venture courses with CJ Lyons, Roz Morris and Alan Baxter. I closed all previous courses in Dec 2014 for two reasons:
a) the EU VAT law that came into law on 31 Dec 2014 meant that I would have to go through painful hoops to sell direct in the way I had set everything up. The law only affects digital products that are electronically provided with minimal or no personal input. That meant I was liable for the new threshold. But if you have a personal element to the product delivery e.g. live webinars, then the usual VAT threshold applies and since most of my income is from the US, that doesn't apply. More here if you want the gory details on the tax rate. I will be including a personal element in future products, so future stuff won't be affected.
b) the courses were dated. They were super 🙂 of course, but it was time to close them down. Those of you who bought the courses still have access to them, but it's time to reinvent my teaching.
c) I was overwhelmed and wanted to focus on my books, especially my fiction, and didn't feel I had time for everything.
The biggest change is that my husband has now joined the business. Yes, I have hired him out of his day job 🙂 and yes, I will introduce him when he's settled in!
This makes a huge difference as I now have help with the technical side of things and can focus on creation. He will also be doing a lot of the customer side of things and it means we can get back into courses.
I get so many emails every day and I am so passionate about teaching what I learn that it's crazy NOT to do courses again. I can't physically speak everywhere and this introvert also does better alone in front of the computer than with crowds. (I do emerge occasionally, honest!)
I want to share how to do everything and help YOU write, publish and market your books as well as build a business. I also want to be able to retreat to my writing cave and create stories 🙂
So, there are courses to come soon as well as a community for those who are serious about building a business as an author.
The first will be the Creative Freedom course – and you can watch a FREE video series where I start to go through the top questions people ask.
Video 1 is 11 ways to make money as an indie author and Video 2 is 7 ways to find time to write and build your author business. Click the image below to get the first free video.
OK, that's about enough for this year. THANK YOU for your support and I'm super pleased to be able to continue helping as much as I can on your author journey.
Please feel free to ask me any questions about this in the comments below.