E2A 015: Selecting a Book Distribution Formula – How Will Your Book get into the hands of Your Ideal Customer? 

 September 21, 2021

By  Scott A. MacMillan

The internet changed the game when it comes to book distribution.

The narrow channels that were once the norm have now expanded allowing first-time authors access to new and growing pools of potential readers.

In this episode of The Entrepreneur to Author Podcast, your host Scott MacMillan discusses the best and most distribution channels for get your book into the hands of your ideal readers.

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Episode Transcript

Scott A. MacMillan:      

You're listening to the Entrepreneur to Author podcast, Episode number 15

Mike Manz:                 

Welcome to the Entrepreneur to Author Podcast, the podcast that brings you practical strategies for building authority and growing your business. And now here's your host, Scott MacMillan.

Scott A. MacMillan:   

You've done it. You have a book. It's real. It feels real. Words, pages, chapters, stories, themes, great insights and examples. Your paperback is professional. Your ebook is easy to consume. Maybe you've even got a hard cover with gravitas and an audio book for the listening audience. So now, how do you get your valuable content into the hands of your ideal reader? What's the most impactful route from point A to point B or in this case, A to R or author to reader? Here's the good news. You have options, plenty of options and options are good. In fact, as a new author, you have more options today than you'd have ever had before. In this episode, I'll walk you through the five major distribution channels that will most likely apply to your book.

But before we go any further, ask yourself this, how did you buy the last book that you read? Probably online. Readers shop online big time. In fact, a recent study found that more than half of all book sales in Canada were transacted online. And that holds true for most industrialized countries. More than half. That's huge. About a third were made in person. So that's a strong hint about where your book needs to be of distribution channels. Let's get at it then shall we? I'm Scott MacMillan and welcome to this edition of Entrepreneur To Author.

Distribution channels, the vehicle through which your book gets into the hands of your readers. Choosing the right distribution channel is very important. Fish where the fish are, they say. Now, like I mentioned, there are five that we'll cover in this episode. Direct distribution, online retail, online subscription services, physical bookstores and partnerships. Now you may not use all of these, but after this episode, you'll have a much better sense for which distribution channels best suit your goals. And with that, let's get started.

We'll begin with direct distribution. Direct distribution refers to any channel through which you distribute your book directly to your readers. This includes sales or gifting through your website, mail or in person. If, for example, you're handing out or selling your book at a speaking engagement or a trade show, well, that would be direct distribution. And you'd be using direct distribution when giving away copies of your book to clients or perspective clients. It could also come into play if you're selling your book through your own website. But when it comes to actually selling your book online, many authors don't want to bother with the hassle of direct distribution. Now for that reason, and this is what I do, I would actually recommend that you provide links from your website to online bookstores where people can buy your book.

Now let's touch on some of the advantages and disadvantages of direct distribution. As far as advantages are concerned, the big one is you keep every dollar of every book sale. So you really get the full financial benefits. If in person, then there's a personal connection as well to selling directly. You're physically meeting with your reader and can answer any questions that they might have. And that's why this is particularly useful for live, in person events. You can, and many authors do, add a signature or personalized note to the front of the book. I'll often do this, for example, when I'm sending a copy through the mail, even. Another benefit is that you collect customer data, which you don't have access to when selling through a third party. And finally a printed book sure beats a business card. It says that you're the real deal, you're credible, an authority. And you're handing that in person to somebody. You have much to share.

Now, there are obviously disadvantages to direct distribution. If you have 1,000 copies of your book, you have to buy them in advance, of course, and store them. Though these day, this can be partially mitigated using print on demand for smaller print batches. But whatever the quantity you print, you have to move them. And what happens if you have a few hundred left. You're only one person or business so your reach with direct distribution may be limited, limited to your own network. That said, this can be expanded through partnerships, but that's also on you. Now we're going to get back to partnerships later in this episode. When distributing directly, whether it's in person or digitally, you need to fulfill orders so you got order taking, tracking, collecting payment, pick, pack, and ship. Again, that's on you and on your team, and it's more work and complexity. So direct distribution has its place, but be thoughtful and strategic about it.

Now the big channel to think about these days is online retail and really it's table stakes. It's a huge piece of the distribution puzzle. More and more consumers click their way through their shopping list. It's easy, it's fast and it's convenient for the reader. More than half of all book sales are done through online retailers. And in fact, early in the COVID-19 pandemic, we saw this number rise as high as 70% in some regions. Now let's drop back a bit from there, but online distribution gets both your print and ebook editions onto retailer websites, the big names. Names like Amazon, The Book Depository or Booktopia, but also brick and mortar retailers. They've got online storefronts too, like Chapters Indigo in Canada or Dymocks in Australia or Barnes & Noble in the US. And while many of these online retailers may not be directly accessible to independent authors, even the self-published author can now access them through a distributor.

Here are some of the advantages to online retail sales. Online retail has at least in theory, infinite shelf space. There's no limit to the number of titles that an online retailer can carry, even if some of them do filter their catalog for strategic reasons. So even though your book and audience may be as niche as it comes, your subject can still get global distribution. Another benefit, there are no significant upfront fees. The only cost is a percentage fee of the sale. And of course the printing cost for a printed book. Another advantage is geographic reach. Many larger online retailers have no geographic limit and can aggregate demand on a narrow topic nationally, if not globally. And a big advantage is that thanks to print on demand, now many books can be printed individually once a sale is made and that's an effective and cost efficient way to do business for everyone involved.

In addition to printing the amount of information stored and captured by online retailers really is mind boggling. And what that does is it enables them to make increasingly accurate predictions about which shoppers are likely to buy which books. So obviously this improves the odds that your book gets discovered by your ideal reader. And as I mentioned, online retail sales is really massive and growing. It's by far your largest distribution channel in terms of reach. It's especially important when your book is written for a niche or a niche for our American listeners audience.

But there are some disadvantages to online retail sales. The first is discoverability, and that's really the flip side of infinite shelf space. And it can be a problem for some titles trying to stand out from the pack. Another disadvantage to online retail sales is tactility. So some readers enjoy picking up a book and flipping through it before they make the purchase. And this can be especially important for certain types of titles, things like art books or recipe books for example. Sometimes that in person experience really helps to seal the deal and online takes away from that experience. The economics of online retail sales can vary, but there are essentially four variables that determine what you can a take back from each sale.

The first is the recommended retail price or RRP. It's the price that you want retailers to sell your book at. Now, they may choose to sell it for less or for more, but fortunately your revenue share will generally be based on the RRP.

Another variable is the discount rate. That's the wholesale discount that you all offer to retailers to sell your book. Now this can range from 30% to 50% and even higher with traditional retailers, usually looking for a discount in the 50 to 55% range. And of course, don't forget about printing costs. Count on around 3 to $10 per paperback, or 10 to $15 for hard covers. But this is obviously broad and rough range. Sometimes it's above, sometimes it's below and a lot depends on the specifics of the book.

Another economics piece to consider is your royalty rate with your publisher. That's the percentage of sales that your publisher has committed to sharing with you in your publishing agreement. If you're working with a traditional or hybrid publisher, they'll keep their share before passing along your share to you. And if you're working with a service publisher, then they'll share the full amount back with you.

Now, there are a few instances where online retail sales doesn't make sense. Maybe if you're publishing your book as an exclusive value ad for clients. Though, truthfully, even then having it available online at a premium price point can add for credibility, it attaches value for your book and gives you that added credibility too when people search for your book. Okay, so there's a lot to consider.

Another distribution channel is online subscription services. These are digital subscription services that offer members unlimited access usually to a catalog of ebooks for a flat monthly fee. And this model applies to audiobook as well sometimes. This is essentially the Netflix model for books, and you've probably heard of a few. There's Kindle Unlimited, there's Kobo Plus, Bookmate And so on.

There are a few advantages to online subscription services that are worth considering. The first is that members of these services are usually high velocity readers, people who read a lot. This service could fit your needs nicely for that reason. And also there's a low barrier for readers, meaning that with the all in model, there's no additional cost for readers to try your book, other than the time that they need to read it. Sales rankings is also a major advantage of the going with online subscription services. Sales ranking represents the downloads of your books in this case, and they usually count towards the book rankings. So this can be a great way to promote your book to bestseller status for example.

Now, as far as disadvantages are concerned, as always, there are a couple. To get your book onto Kindle Unlimited specifically, Amazon insists that you commit to Kindle exclusively for your ebook. Now, this is important. What that means is that you can't sell it elsewhere, or even give it away on your own website. For entrepreneurs gifting to prospects, well, that can be an issue. There can also be some negative value perception when your book is available for free. That's why printed versions serve as value anchors. It's important to consider this.

Now, when it comes to online subscription services, royalties work a little bit differently. That's because you can't directly attribute dollars paid to specific titles when the customer is subscribing to an all you can eat service. So when it comes to royalties, it's worth doing your homework as to which service offers what. A revenue pool is usually split based on some consumption metric like pages read. But royalties aside, all in subscription services can be an excellent way to make your title available to a wide audience of very avid readers. And those avid readers can access your book at no additional cost beyond their monthly subscription fee. If your strategy is to get your book distributed, to as wide an audience as possible, then this might be a good option.

Next up is physical bookstores. Many still do a brick business, at least the ones who've been able to successfully innovate their in store experience. Now remember, about a third of all book sales come from the brick and mortar bookstores, but given that we're publishing your first book and that you're new to this whole publishing distribution world, truthfully, the odds of your first book being featured prominently beside the industry's biggest names are really stacked against you. And look, it's time to get real here. The odds are it isn't going to happen. Now if that sounds harsh, let me explain why.

The prime real estate in a large bookstore is gobbled up well in advance by the large traditional publishers and they pay for that placement. It's called a marketing allowance. The same is true for airport bookstores. If your heart is set on bookstore distribution, there are some options for accessing physical bookstores. Independent bookstores and small niche bookstores may be available to you. And depending on your reader, either, or both may be worth considering. You as the author can actually approach these smaller bookstores yourself and they'll usually be very welcoming. That rarely happens with major bookstore chains. It's just not practical.

Although more than half of all book sales are online, there are still a couple of advantages to selling your book in a physical bookstore. If your book is niche, well, so are some bookstores. If that's the case, and your subject matter is the right fit, well, you might actually get good placement and exposure in the store. Just realize that this is a store by store game. So be very focused in your targeting, or you can spend way too much time trying to get into bookstores. Then let's be honest, there's the ego. Who doesn't want to see their book featured on a shelf in a store, and then watch as a customer picks it up, leafs through it, and then heads to the checkout. That can be a rush.

Now, as far as disadvantages are concerned, well, there are more than a few. Bookstores have limited shelf space. And if your book isn't moving, it's going to be replaced quickly. As we've mentioned a few times, many physical bookstores are being out muscled by the advantages of eCommerce and that trend isn't going to change anytime soon. Maybe never. It's also tough to make a decent profit in this channel. After all, the retailer, distributor, publisher, printer and possibly a literary agent all take their cut. Plus you have to print a number of books before you even sell one. If we can talk about the economics of a physical bookstore, I would start with the obvious mouths to feed, the retailer and the distributor, and their cut is about 60 to 70% of that retail price.

After crunching the numbers, profit margins are slim with this distribution model. That said there is still prestige when having your book featured in a bookstore. The better known you are, the more likely you are to get into a bookstore. And often it's that simple. If your book is being snapped up online, well physical bookstore chains, they may take notice. And in this case, a large store may take a chance.

The fifth and final distribution channel is partnerships. In short, partnership distribution involves selling your book in large quantities to buyers who represent a large group of potential readers. Two advantages to this distribution model are volumes and presales. So you might negotiate a discount with these deals, but as a direct channel, you'll have the margin to absorb this. Now sure, partnering up can be a challenge sometimes. Often these partnerships can take on a life of their own. However, you can get creative in how you structure a partnership, perhaps even mentioning the partner organization in your book in some fashion, whether it's in the actual pros or in the front or the back, there are many ways approach this.

One of the disadvantages of partnership sales is that these don't show up in any sales rankings. So if you're aiming to hit a bestseller list on Amazon or elsewhere, these aren't going to help with that. And another point to consider, direct sales usually involve a focused sales effort. Are you willing to put in the time and effort? Another, well the targeting of your book might not match the end readers when you distribute to a large buyer. Some of the people who receive your book might be your ideal reader, but many are not going to be. And that means that your book may not get read by all of them. So take that into account if part of your strategy is trying to reach ideal readers through a partnership.

If this channel is a focus for you, it's wise to develop a rate card that contemplates the price you will offer at different quantities. It's not only a time saver, but it also communicates professionalism to potential partners. It comes down to this. Unless you have specific goals that relate to sales at the organization or industry level, I generally don't recommend this channel. It can not only consume a lot of your valuable time, but it can distract you from your core business. And that's the reason you're writing your book in the first place. So when considering book distribution channels, remember this.

Distribution has never been accessible than it is today. It's no longer the walled garden that used to be the exclusive purview of traditional publishers. As an independent author, you now have the keys to accessing audiences anywhere in the world, and it doesn't require the costly brick and mortar logistics that it once did. But with all options, comes work, either for you or for your publisher. Your choice of a distribution channel should reflect where your ideal readers are most likely to discover your book and how you plan to integrate your book into your business ecosystem. You've done the heavy lifting. Now let's make sure that readers get their hands on your hard work. As always, when deciding how to distribute your book, consider your audience. Now's the time, time to write, time to publish and time to grow. I'm Scott MacMillan, until next time.

Scott A. MacMillan

Scott A. MacMillan is a speaker, international best-selling author, entrepreneur, and the President and Executive Publisher at Grammar Factory Publishing. He and his team help expert entrepreneurs write and publish books that build their authority and grow their business.

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