Let’s say you would like to make $50,000 as a writer in order to lead a happy life. This is after expenses, which include editorial, marketing, and everything else needed to run your business. $50,000 is what goes into your personal bank account at the end of the year.
If you are lucky, you can run your business at a 50% profit margin.
This likely won’t be the case if you are selling print books, which can have a profit margin as low as 5% or less, but let us say you are focused on ebooks, and you maintain a 50% profit margin.
That means for every $1 you spend, $.50 is pure profit after expenses. If you want to make $50,000, that means you need to make $100,000 because an additional $50,000 will be expenses for your business. It’s really important to understand that every business has expenses, and the more you make the more you will spend.
So, you have a $100,000 goal for your business so that you can keep $50,000 for yourself.
An ebook generally sells for $3.99-$4.99. For the sake of this argument, though, I’m going to say $5, because it’s easy to math. Most vendors only give you 70% of the total sale price, keeping 30% for themselves.
That means on a $5 ebook, you will see $3.5.
At that price, you will need to sell 28,571 copies of a book to make $100,000 in revenue. Now, most people write more than one book a year, so let us assume you write the average of 4 books a year; one every 90 days to stay ahead of the Amazon cliff.
If you release four books a year, then you will need each book to sell 7,142 copies, at least, to make $100,000.
If you release 10 books a year, you will only have to sell 2.872 books in order to make the same amount of money (though releasing more books eats into your profits). Let’s stick with 4 books though, since that’s what most people can comfortably maintain.
The nice thing about books is that once you have a good back catalog, you can make 50% of your income from back catalog books alone. So, let’s say that you have 20 books out and can make half of your income from them.
That means you only need to make 50% of your income from new releases.
Now you only need 3,572 readers in order to make $100,000/yr. So that is your goal. You need 3,572 people who will buy every book you make. Every time you meet a new fan, you chip away at that number.
The more fans your meet, the more you chip away at that number. However, not everybody you meet will be a fan. In fact, 99/100 people won’t be fans of your work. In fact, more like 999/1,000 won’t be fans of your work.
So, if you can find a fan in one out of every thousand people, then you need to talk with:
3,572,000 readers in order to find 3,572 fans. It might sound daunting, but it’s very doable through marketing and advertising. This is also why it’s so important to keep your current fans happy so they keep buying from you.
The funny thing is, that you need an even BIGGER audience to break in than to stay in because once you have several projects you are making money on your old and new work.
What if you want to make $100,000?
Then you will need to find 7,144 fans (3,572 x 2) in order to make $200,000, in order to keep $100,000 after expenses. That means talking to 7,144,000 readers.
It’s all in how you chop it up. There are many levers to pull in order to make these numbers work, but you have to know your goal, and then work toward it. Maybe it means releasing more books, or doing more ads, or having a better profit margin, or maybe you need to convert 1/100 instead of 1/1,000.
If you know the numbers, you can work toward them. Otherwise, you are just going to keep being adrift in a mountain of uncertainty.
I write cool things, filled with monsters, humor, action, adventure, and generally awesomeness. Then, I sell those things to humans. I am pretty good at it.