Running the numbers

Writing is a business, and at the end of the day, any business is going to come down to numbers, which is what I'd like to go over today.

First, let's set a target – the amount of money I'd like to make from my writing every month. We'll use a nice, round number – $5,000 USD / month.

Using Amazon's royalty structure, I figured that each $0.99 short story gets me $0.297 USD. So, to make my $5,000 goal, I'd need to sell 16,835 stories at that price point.

That seems like a pretty high number. But I also have the six short stories I did last year that I'll be posting as individual stories this week. That gives me seven stories that will be available, and thus I'd only need to sell an average of 2,405 per story to hit my goal – much better numbers as a per-story basis. Plus, there's the hope that someone who reads one story will like it enough to buy the next one, and the next one, and so on.

Now, let's consider the numbers for a longer work. I've got three manuscripts out there that I've never edited for publication. I'm working on those now. When they go up, they'll sell for $4.99 apiece. According to Amazon's royalty structure, that would get me $3.493 USD per sale, so I'd only need to sell 1,431 or so per month to get that $5k.

I've been discussing price with a friend of mine, and we agree that at a certain point, a price makes something an impulse purchase, and I'm thinking $4.99 is above that threshold (which personally for an ebook is around $2.99).

So, here's where the business person has to make some decisions. Why price at $4.99 and not be an impulse purchase?

And for that matter, why mess with the short stories at all if you get a much higher return on the novels?

On the $4.99, I don't want my novels to be an impulse purchase. That could be arrogance, but I want to be worth $4.99 to my reader. I'm going to have plenty of $0.99 short stories available if someone wants to grab an impulse read.

The goal is to write the short stories well enough to encourage someone to buy the next short story (or the back catalog), and to consider buying a novel.

The novels have to be written well enough to encourage someone to buy the next one (and the back catalog).

The bottom line is, that quality only comes from writing more. And oddly enough, from writing more comes more content that potentially widens my reach and decreases the number of per-unit sales I've got to make to hit that $5k / month goal.

That leaves the question – why spend time on short stories when the per-unit sales make so much more sense on the novel side?

That's a good question. Maybe I'll run some more numbers and get back to you on that tomorrow.

In the meantime, I've got to get writing.