Monday, 2 July 2012

POD v Offset, Createspace v Lightning Source


As you may know, we're currently working on getting the print version of Dead on Demand ready to ship. A few other indies have asked us about our experiences, so we thought it would be appropriate to try and summarise the routes to the print market available to indies.

The first distinction to draw is between POD and Offset runs. With print on demand when someone orders the title gets printed, bound and shipped. With offset runs you print a boatload (typically thousands, but it is possible to do as little as 500), ship them to a warehouse, distribute to retailers who then sell them.

Pros of Print on Demand:

·         Virtually no setup costs. All you need are print ready files (inc wrap around cover).

·         Little to no risk - Titles are printed to order, so nothing is wasted.

·         Relatively fixed costings per title to print (but see below for differences in printers)

·         Quality is very good - almost indistinguishable from an offset run

·         Low chance of returns and remainders

·         It's quick - from a finished eBook the formatting and print cover can be done in a day (using 'Createspace Cover Creator')

·         You can get listed on all the major databases easily - Ingrams, Baker and Taylor etc. This makes you 'available to order'



Cons  of Print on Demand:

·         Little to no bulk discount.

·         Slow turnaround - printing time has to be allowed, so it takes longer for titles to ship

·         Most retailers will not keep any stock on hand at all. Except Amazon who often keep one or two in stock for speed of shipping IF the title has been selling well previously.

·         Less flexibility with wholesale discounts, returnability etc.

·         You might be available to order, but few shops will take the risk unless a customer specifically orders your book in. No returns = automatic no for most independent bookstores. Short discounts = likewise.

·         Quality can be inconsistent between regions - POD orders are sent to regional printing facilities so there will be variation.

Pros of Offset printing:

·         Bulk orders massively reduce cost per unit.

·         You can set your own business strategy re discounts/ returns etc.

·         Quality is marginally higher, but the big benefit is quality is consistent

·         Small bookstores can afford to risk stocking you if you offer standard discount or better & accept returns

·         Stock is 'ready to go' keeping shipping times to customers down

Cons of Offset printing:

·         Bulk orders = huge investment in cost

·         Warehousing is expensive (Unless you plan on sticking 1500 books in your living room?)

·         Returns are expensive

·         You'll pay for shipping multiple times

·         Around half will be returned at cost or destroyed

·         Do you have 1500 customers? If not you'll be sitting on alot of excess stock

·         It's a huge financial risk

I would summarise the difference as 'POD = No risk, but lower returns. Offset could lose vast amounts but has the biggest upside'. If you want Offset, the big market player (used by many presses large and small) is Lightening Source. There are lots of small printers around, but LSI has the bulk and the quality controls that really destroy most of the competition. There's also the benefit that LSI are owned by the Ingram Content Group so you know it's relatively safe, and the distribution to Ingram's distribution database is direct.

The thing to keep in mind when dealing with LSI is that they are primarily a printer who happen to do distribution. They take print ready files, print 'em and ship 'em according to your instructions. You take all of the risk.

You can see the full details of their offset runs at http://www1.lightningsource.com/offset_print.aspx

Basically, they do a minimum run of 1500 paperback copies or 750 hardback copies. They don't do any design or file work. They won't promote you. They don't sell your stuff themselves.

This is a 'Print to warehouse' style option. They print 'em, ship 'em to you and you retail them. Everything falls on you to get sales. I can't advocate this for most self publishers. The risk is huge. Printing 1500 copies as an unknown is reckless at best - even those of us who consistently sell cheaply on Kindle can't necessarily expect that to translate into premium priced hardback sales. Equally, you need a huge capital investment. The books are printed (cost 1), shipped to you (cost 2), presumably warehoused (cost 3), hand sold to retails (time), shipped to retailers (cost 4) then either sold or remaindered/ destroyed.

Typically half of your books will get destroyed going by traditional stats for non self pubbed hardbacks. That means your cost per unit isn't the basic printing cost. This sort of option is great if you are run a press for multiple authors and have crossdocking and warehouse capabilities. Otherwise offset runs are very very risky. The numbers are often lopsided too.

Retailers expect a 55% discount as standard. That means they want your £19.99 hardback for £9. That's the retailers cut. Supermarkets etc want even more. They also expect to be able to return the books if they don't sell in a short period (typically 90 days). If they don't sell, they either ship back to you (at your cost) or destroy the books.

Big presses remainder those titles that don't sell. That is to say they take a £20 book, and flog it for about 5% of that to wholesalers who specialise in discount goods who then sell it for up to 25% of cover price (with the author getting nothing). Remainders can be useful in terms of building readership, but again discount buyers are often disloyal customers. It's a last resort to make something back on spare copies. As an indie, you'd need to find these discounters yourself - and they may well say no. This gives a high risk of ending up with excess stock.

The final kicker is some retailers are a bit naughty and return books on day 90... just to reorder them in on day 91. This gets them constant stock at no risk to themselves. It also means you'll end up shipping, returning and reshipping the same books incurring costs without selling.

I expect I've probably put many readers off considering an offset run - and rightly so. It's expensive, it's risky, and the reward even if you do sell the lot isn't great. What it does get you is potentially huge international exposure. Being in book stores is a validation of your hard work, and that has some value.

However, the reality is that print on demand (POD) is much more realistic. The profit per unit won't be as good, but the risks are miniscule. This can be in the form of 'print to order' or 'print to publisher'.

1. Print to publisher is essentially drop shipping. LSI print them and ship to publishers labelling it as if you had shipped it. They are invisible, and charge you only for printing, shipping and handling. This is great if you have the contacts for sales yourself. Discounts start at just 50 copies in POD.

2. Print to warehouse. This is the same system as offset runs but at POD quantities. They print, ship to your warehouse and you flog 'em. Pros and cons are the same as offset but with smaller runs to minimise risk.

3. Print to order. This is the game changer. You give them the files. They take orders on your behalf, print 'em ship 'em etc. They send you the wholesale price minus print/ shipping & any returns.

LSI, as an Ingram's subsidiary, have a huge distribution.

Their partners are:

US:

·         Ingram

·         Amazon.com

·         Baker & Taylor

·         Barnes & Noble

·         NACSCORP

·         Espresso Book Machine

UK:

·         Adlibris.com

·         Amazon.co.uk

·         Bertrams

·         Blackwell

·         Book Depository

·         Coutts

·         Gardners

·         Mallory International

·         Paperback Shop

·         Eden Interactive Ltd.

·         Aphrohead

·         I.B.S - STL U.K

This means virtually any book shop CAN get your book. This is 'available to order'. Online sales are pretty simple - they just print them when the customer orders them. It's a bit of a slow turnaround as it means the book is printed, shipped to distribution partner, then to store, then to customer. Not ideal, but no risk as no excess is created.

The alternative is stores stocking you on a consignment basis. LSI lets you set the wholesale discount you want to offer. So you could go minimal and aim for the online sales only (which would be low risk) or you can offer the standard 55% discount or better and accept returns. Like offset runs, this is risky, but the volumes are lower so the financial gamble is correspondingly reduced.

This is a good option if you want distribution to book stores without an offset run, and you have flexibility with LSI to switch. I would advise anyone to test the waters with POD to see if there is a market before touching an offset run.

LSI is quite pricey on setup. They currently charge:

·         $75 to upload

·         $12 per annum for US distribution, same again for UK

·         $30 per proof

·         $40 per file change

·         $1.50 S&H per order

·         You MUST provide your own ISBN

LSI do offer good discount up to 25% for bulk with PoD - so at higher volumes (Greater than 50, but less than the 1500 for offset) there is a sweet spot where LSI are great. You need some volume to amortize the above costs, but if you have a midlist title this could be the right option for you.

The other option is the other major player in the POD game, Createspace.

Createspace, owned by Amazon, are not a pure printer. Where LSI is geared at professional publishers, Createspace is individual friendly. Their set up is tiny. There is no fee for upload, and distribution is a one off $25. Proofs are charged at cost (See https://www.createspace.com/Products/Book/#content5 and click buying copies to work out the cost for your specific book). USA shipping for one copy is $3.59 and printing should be less than $5 for most black and white books. So that's a $22 saving per proof (and you should do a couple to ensure you've checked everything).

Createspace are a subsidy press. They can provide a free ISBN (which therefore lists them as the publisher in the Nielson db) or you can use your own if you wish. Quality is about the same as LSI (and in some regions they use LSI as a printer).

Createspace is low risk. They do not accept returns. That means no worrying about destroyed copies etc. Instead they pay a royalty based on list minus costs which varies by distribution channel.

They don't do variable discounts, so you'll be operating on a 'short' discount basis - which makes you risky for shops. Therefore few if any will stock you unless you hand sell them.

What Createspace does do is get you into Amazon (they are Amazon) and other e-tailers, very easily. Online consumers can get high quality trade paperbacks (No offset, and no hardback options here) at a reasonable cost. To turn a profit you'll be pricing fairly high -Creatspace used a tiered discount as follows:

·         Their own eStore, 20% wholesale discount

·         Amazon - 40%

·         All others - 60% (i.e. above standard 55% but no returns still)

This isn't too bad in terms of getting websites to ship you. If that's all you want Creatspace is groovy. They also make low volumes very affordable - they don't do bulk discounts however which means your royalty is static.

I should point out here that if you are looking to distribute to libraries, which is useful marketing exposure then Createspace only offer that if you use their own ISBN which means you won't be listed as the publisher. The upside to this is that libraries often order 3 copies at a time. The downside is that by having 'Createspace' on your listings it makes print publication reviews even less likely to happen.
Createspace works on 2 business models:

1. Subsidy press - they ship, they take payment etc. They then remit an agreed royalty. That's it. Done.
2. They ship author copies at cost. Printing is reasonable but no bulk discount so whether you want 1 or 1000 it's the same price. Shipping is discounted but not by much.

I would recommend Createspace if:

·         You have a low budget

·         You want to test the market

·         You need to use their cover creator

·         You think you'll be selling in low volumes

·         You don't want to buy an ISBN (they do custom ISBNs in the US for $10 each, but international publishers will need to buy blocks of 10 from their respective sellers. Canadians get theirs free).

·         You want to use them to get a Library of Congress number (added fee)

·         You need their editing, art, formatting or other services (which are overpriced in my opinion).

·         You want to sell predominantly online

·         You don't mind shipping print copies yourself.

·         You don't want a hardback edition

So, that's that. Offset is risky, but could be profitable. POD is probably the best choice, and LSI wins for bulk or for those who want to set their own discounts/ returns. Createspace is user friendly, quick and cheap in low volumes.

I think that covers most of the basics, but feel free to leave a comment if you know more than I do, or if you have a question on what I've said.

9 comments:

  1. great post guys and thanks for writing it. It's definitely given us something to think about. We'll re-read it several times to make sure we've got everything before we reach a decision :)

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  2. A very interesting post.

    For me, the only sensible option was CreateSpace, through which I have just published. I can't have 1500 books cluttering up the house, gathering dust and making me lose sleep at night! I do know of authors who have used offset, and they spend more time packaging and posting books than they do actually writing.

    If you have the time, the business plan and the contact, offset is probably OK, but I have none of that.

    With CreateSpace I get my book into US (I think they shop to Aus as well, but single item postage is high), Europe and the UK. I haven't tried convincing shops to stock my book, but I may do.

    An interesting read is "Think Like a Publisher" by Dean Wesley Smith - amongst other things he discusses using CreateSpace to supply to shops and the demise of the returns system.

    Right. I have books to sell!

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  3. Selling shops is certainly one route to generating revenue, and with createspace it's relatively simple. All the buyer needs is to create a Reseller account with createspace via https://www.createspace.com/pub/l/createspacedirect.do?rewrite=true and they can order wholesale.

    The problem is in convincing them to stock. Createspace wholesale is non returnable, so they need to be pretty sure the payout is there for it to work.

    The way I would approach it is to write to the book buyers at the major chains enclosing your eBook sales figures. While eBook sales won't translate directly at a higher price point, it does show that a demand exists. Most big chains will ditch your letter as a single author publisher, but if you've got the 240 titles DWS has then you've got enough volume to be taken seriously.

    Alternatively small indie shops, and individual local shops are often happy to take books on consignment at low volumes. For me, that doesn't work in terms of payoff for the time it would take as I only have one titles and it isn't going to shift in huge volumes locally, so online sales make the most sense.

    Direct etailing is also handy - either via your own cart system (e.g. Xuni) or using createspace eStore integration. Of course at that point you've gone from author to author/ publisher/bookseller in the same way as offset runs.

    One area a few have found useful is ebay - the profit isn't huge, but a signed copy still sells for a premium even from a relative unknown, and every viewer of your auction is an extra impression that might generate an eBook sale or an unsigned Amazon order.

    My gut is that electronic distibution via Print to Order will suit most people - it's passive income. Set it up, and away you go. Every hour you spend packing, posting, hand selling or advertising print copies is an hour you aren't writing, and that's damaging to your business. Writing is wonderful if you do it right. Write a book, set it on it's way. Then get on with the next one. Let the books work as adverts for each other rather than spend hours trawling forums for a handful of sales, and the passive income will build with each book published.

    POD is just another income stream within a wider strategy. If you take that approach, Createspace or LSI POD to Order is king.

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  4. Just a quick word on Createspace (not tried LSI because of start-up costs). I've had the chance to hold in my hand one of my books that I have personally formatted and uploaded to Createspace, cover and all. I never did order any copies for myself. this was one of my fans asking for a dedication. It was as good as any book I could have picked up in a book store, published by a big publisher. And I guarantee there are less typos in my novel than any of the Twilight saga books, for example. I care about appearance. Createspace provided all I needed, excellent quality, for zero start-up cost.

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  5. Glad you found Createspace up to par on quality Ella. May I ask how you've found print sales so far? If you went for expanded distribution, did you find it pay for itself quickly?

    The low investment is one of the best things about Createspace. At low volumes it's pretty much ideal (though using your own ISBN number will cost - as they are only sold in blocks of 10+).

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  6. Every indie author toying with the idea of expanding from ebooks to print should read this post. As always, every pro and con researched and considered and commented on - I plumped for CreateSpace a few weeks ago, as a few family & friends wanted a 'real' book:)It seemed sensible to order half a dozen 'author' copies, as the postage didn't increase by much, and I've since used a couple of paperback editions as promotional freebies.

    Sales by the way have been zero ... at least of the paperback.

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  7. I'm not surprised at the slow start to the paperback sales. It's a slow build.

    A point I missed in this article is proofs. If you are going with LSI, you may as well use Createspace for your proofs anyway. The print specifications are the same as long as you use the same size, and Createspace are much cheaper. It adds up if you have to do mulitple proofs.

    A second point I should have included is that this isn't either or - you could use both. LSI is 'all or nothing' in it's distribution, but createspace isn't - you can pick and choose. Combining createspace eStore for local bulk/ author copies in low volumes with LSI might make sense for some. You would have to use your own ISBN at cost though - createspace ISBNs belong to them. Otherwise you would end up with two listings/ editions even if they were otherwise identical. Not only does this look bad, but the sales would be split harming your overall sales rank.

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  8. For the sake of showing quality, I've photographed out Createspace done proofs and put them up as a seperate blog post - http://www.90daysnovel.com/2012/07/print-proof-sneak-peek.html

    I may have to order an LSI proof just to do a compare & contrast of the POD versions.

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  9. A follow up post highlighting numbers using Dead on Demand as an example is now up.

    http://www.90daysnovel.com/2012/07/createspace-v-lsi-part-2.html

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