This is a guest post with some fantastic tips for ebook publishing from J. Daniel Sawyer, prolific author and podcaster extraordinaire.

By now we all know that ebooks are either The Future ™, a passing fad, or the apocalypse which will consume us all. If what Joseph Schumpeter calls “creative destruction” has any meaning, I doubt I've seen a more effective example in my lifetime than what's happening in entertainment media — it started with the record labels, and now it's hitting publishing in a big way.

What is creative destruction?

It's not merely the leveling of a previously well-developed field, it's leveling that enables new development. By first breaking the distribution lock, then creating a demand, then making other companies hungry to share in the potential profits, Amazon has created what will be considered an exemplar of the phenomenon.

Opportunities like this do not come around often, and I aim to capitalize on it, even if only in small measure. So I watched the markets, gathered intelligence, and kept track of pricing and sales information.

I learned quite a lot, but I can distill it down into a few major points:

1) The biggest problems in the new marketplace are the same ones as the old marketplace: discovery and credibility.

2) Big Publishing isn't going away. Oh, there will be some turnover. Some houses will fold, some houses will stumble, but some will survive and adapt. And a lot of small presses are already on the rise–in this sense, what we're seeing is similar to the collapse of newsstand distribution in the 60s and the renaissance of genre literature in the 70s when most of today's big presses were the new little guys.

3) Cover art REALLY matters. It's impossible to overstate this.

4) The optimal price point for a non-NYT bestseller is between $2.50 and $4.50 (the sweet spot is flat between these two price points for the months I was tracking bestseller lists).

5) Genre fiction does best in the ebook market, in this order: Erotica and romance first, mystery and suspense (including thrillers) second, fantasy third, science fiction fourth. Mainstream and Literary fiction don't get noticed yet without a NYT slot. Nonfiction is largely a curiosity at this point, with the exception of material written specifically for writers.

Based on these lessons, I developed an experimental business model, and that model has spawned a number of experiments. I'm currently engaged in conducting the first one.

The model and experiment go something like this:

1) Write a series of novels specifically for the ebook market. I already had one tailor made waiting in the wings. My ultra-snarky hard-boiled detective Clarke Lantham, who has a propensity to go on darkly comic adventures through the borderlands of science on the fringes of society. I've been working on his stories and his world for quite a while, so he was the natural fit with what I learned about the market.

2) Make damn sure the books going to market are something special. Love them, and put out your best possible work. For this, you are the publishing company, and the quality of the work should reflect that. For me, this meant the opportunity to play in one of my favorite genres, and to do it with a lot of dark humor. I struck out into experimental waters and have had the delight of getting feedback from people who were laughing out loud on one page and shaking with terror on the next–and it makes me very impatient to write the next volume.

3) Do, or have done, some very eye-catching cover art. It should look interesting at thumbnail size, and striking at full size. For me, I've got a graphic design studio, so you think this would be easy, but it's not. It's a weird market, and the space is worth studying before you pick your final design.

4) To aid in the discovery process, send out a couple dozen ARCs to people who already enjoy my work, along with an email soliciting honest reviews. The “honest” part is important — 10 ultra-squee reviews looks like astroturfing, even when it's not. Why? Good books polarize people, and readers intuitively realize this. If something's not garnering strong reactions in more than one direction, it's probably not getting honest reviews. 20 or 30 reviews of mixed ratings with lucid explanation looks more credible than fannish uber-squees.

It can be hard on an author's conceit when you read that review that says “I liked this but…” or “Much as I like this author, this book was a piece of crap,” but so long as the balance of reviews skews heavily positive, what's hard on the ego is good for the pocketbook.

5) Price the series reasonably. For me, this means book 1 is $3.20. Later books and stories might go as high as $3.50, or as low as $0.99, depending on their length, but I always bear in mind Heinlein's Dictum: “We're fighting over their beer money.”

6) Leverage your existing audience to attract new readers. I have a podcast audience in the neighborhood of 4,000. If all of them bought a book in the next couple months, I'd be selling like Konrath or Patterson in the ebook space (at least for a little while). Of course, only a fraction of them will buy, but even that fraction can make a huge difference. It takes very little to move up into the 10,000s on Amazon. It takes more to move up into the 1,000s, but indies do it all the time. For me, I'm asking all of my listeners who can do so to hit Amazon, Smashwords, or Barnes and Noble on October 29th to pick up the first book in this new series. The bump in rankings should attract new readers–and if it doesn't, I have a few backup plans.

7) Be patient. This is a long tail business, and momentum builds slowly.

8) Continue the series, with both short stories and novels, for a year or two. to keep the momentum building.

And, finally…

9) Keep properties in New York. One of them will eventually sell. New York sales (and magazine sales for short stories) mean greater visibility; in other words, it's advertising. Every title you have with a mainstream publisher or periodical exposes your name to thousands more people than you can reach on your own, and when they go online to see what else you've written, they'll find your ebooks. So long as the big mainstream markets exist, don't pass up them up. They are literally paying you for the privilege of advertising your brand..

So, in the spirit of shameless self-promotion and practicing what I preach, allow me to invite you to enjoy my new novel, the first of the Clarke Lantham Mysteries. It's a lurid little tale called “And Then She was Gone.” It is now available, without DRM, at Barnes and Noble for Nook, Amazon.com for Kindle, and Smashwords for everything else.

Thanks much to Joanna Penn for the generous loan of the blog. Keep up with my doings, and enjoy my full-cast audio fiction productions at http://www.jdsawyer.net.

See you around the net!

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Michelle Halket is the Creative Director for ireadiwrite Publishing, an independent press specializing in digital books. Passionate about technology and books, Michelle works with writers from submission to publication.

In this podcast, you will learn:

• How Michelle started her career with Nielsen marketing, but she wanted to help authors and foster the creative spirit. She started off with a portal for self-publishing, but this later developed into more of a traditional publishing model focusing on ebooks with a personal touch. So ireadiwrite turned into an independent press focusing on quality books.

• The attractions of an ebook publishing model. Ebooks are growing over 300% p.a. , and sales increase every month and the only other growth is mass market, so this is a great time to be in ebook publishing. It removes the paper, ink, gasoline, warehousing, freight and expenses associated with print books. The investment is smaller upfront – it still includes editing, typesetting, design etc but it is less labor intensive than print.

• So why do print books at all? 95% of readers are still on paper books so it's good to meet that market where they are. By publishing a select group of print books, sales did increase. Michelle is very careful about which books she does print, and uses print on demand and short runs to meet the market. The traditional model of printing thousands of books and shipping them to a warehouse just doesn't work for a small press.

Checklist for what Michelle is interested in publishing:

• Interesting synopsis (publishers are readers!)
• Only fiction at the moment for ireadiwrite, so be careful of what genre you are submitting – read the guidelines
• It doesn't need to be trendy, but does need to be marketable
• Marketable ebook genres which sell well include: sci-fi, fantasy, romance and erotica
• If this is all good, the first 3-5 chapters will be read to check whether it is well written and well edited. Publishers won't usually edit from scratch anymore.
• The author platform is a given right now, you need to have some way to market
• What kind of person is the author and will they be easy and good to work with – this is very important as writer/publisher relationship is a personal one.

• A small press is more like a “little family” and relationships are important. The authors are very positive about ireadiwrite and word of mouth is a great way to grow organically. 
• Why an author should use an ebook publisher rather than self-publishing. Readers still want a ‘quality' filter so publishers act as a portal to books. It's also great if you don't want to do all the publishing yourself i.e. you want someone else to edit, do cover design, format for ebook publishing and distribute. You'll still need to market (like with any publisher) but if you get a publisher, you have less tasks on your plate to get your book to market. So it's about the model an author wants to follow.