One of the things I have to do each year when I prepare my taxes is calculate my income earned and expenses generated for publishing this site and all the content on it. It isn’t a particularly complicated excercise: my revenue is easy to track (Project Wonderful for ad revenue, PayPal for individual donations) and my expenses are even easier (hosting fees.)
That will likely change next year, though — now that I’ve jumped into the self-publishing world I’ll need to track more expenses, and the more complicated reality of generating revenue through multiple revenue streams and vendors. I got a small taste of that in 2011 because in October I started selling Pay Me, Bug! as an eBook, and while I was sorting through that complexity I found some interesting statistics concerning where my revenue comes from. I’ll share those statistics under the cut.
In 2010, I had only two sources of revenue that didn’t qualify as “interest earned” or “part of my day job”:
- Ad Revenue from Project Wonderful
- Personal Donations made from visitors to this site through PayPal
2011 introduced the sale of eBooks late into the year (starting in October) — but if you were to ignore the eBook element and break down how much of my revenue came from ads and donations, it would look like this:
- 64% Ad Revenue
- 36% Visitor Donations
NOTE: I am not including any actual numbers in this post, only percentages of the total income generated for the year. Why, you ask? I am withholding actual numbers for the same reason I wear pants — not all laughter is fun.
This is a pretty consistent representation of the split between ad revenue and individual donations throughout the years, with a few outliers here and there. In general, ad revenue exceeds individual donations.
2011 introduced something new: I published Pay Me, Bug! as an eBook, and sold it through multiple vendors:
- From mid-September through October I sold “preview” copies of the eBook on my website, via PayPal
- Starting in November I began to sell ePub and Kindle versions on the Barnes & Noble and Amazon.com websites
- At some point in December I also started selling various formats of the eBook on Smashwords
Factoring in the income generated from eBook sales, the income distribution changes dramatically:
- 64% Ad Revenue
- 36% Visitor Donations
All of a sudden there’s a new rainmaker in town.1 eBook sales are at 45%, and ad revenue is bumped down to 40%. This is impressive enough as it stands, but take into consideration that I didn’t start selling eBooks in earnest until the last three months of the year, and it didn’t hit the “big distributors” (Amazon, B&N) until November.
Let’s add a little more context to that. The number of people who would visit Unexploredhorizons.net, where I published my little space opera serial, could be measured in the tens for the week — not the day, but the week. While publishing serial fiction is incredibly satisfying for me, it’s not the reason most of you come here…
… and yet the eBook easily generated more income than ad revenue.
Why is this, you ask? My basic hypothesis is that selling something automatically expands your audience. There are people who have never heard of Help Desk, who never encountered my webfiction project, who have emailed me because they discovered the eBook on Amazon or Smashwords.
Another hypothesis I have — and you’re going to be blown away by the complexity of this one — is that selling something in a marketplace automatically introduces your product to a demographic that wants to buy something in a marketplace. I know, I know, it’s an incredible assertion to make, but here’s the thing — people don’t go to Amazon.com to meet up and have coffee. The point of Amazon.com is to sell things, and you go there to buy things. That means when someone stumbles across your thing, they’re already inclined to buy something.2
This is, I think, the basic answer to the mystery: in 2010 I wasn’t selling anything. In 2011 I started selling something, and I started making more money.
If that sounds stupefyingly obvious, well, I suspect it is. 3 But the reason people don’t sell things is because it usually costs something to make the item to sell. Well, making my eBook wasn’t free — it took a fair amount of time on my part, and yes, there were some specific fees involved.4 But the costs were not, in the grand scheme of things, particularly high.
Next up: exactly where did this new revenue come from? Let’s take a look below.
- 62% Amazon.com
- 6% Barnes & Noble
- 11% Smashwords
- 21% PayPal
The fact that the lion’s share of purchases took place on Amazon.com really isn’t a huge surprise. Amazon.com is currently the king of the self-publishing market, probably because it is second in friendliness only to Smashwords, and is massively, massively large. What is surprising is that selling eBooks through my site and PayPal did as well as it did, considering that deal was only in play for a month and a half tops. Smashwords only had a month to perform, so 11% really isn’t bad there.
The true disappointment was Barnes & Noble. I love my Nook… but it doesn’t, alas, seem to love me back.
This raises a number of questions for 2012 and beyond, but I’m going to save them for a future post.
Footnotes
- By “rainmaker” I mean, of course “something a little less drought-like.”
- Keep in mind the flip side of this, though — there are eight and a half billion things on Amazon.com for people to stumble across, and your thing is but one of those things.
- Also, I suspect you also have to caveat the hell out of it in order for it to actually be true, but this isn’t the caveat post. This is the broad strokes post.
- $30 license for a copy of Jutoh, a flat-out amazing eBook creation program, copyright registration fee, and buying a block of 10 ISBNs. I broke even by January.
