Dreaming from the numbers is a pitfall that could cost you thousands of dollars

In this section we share guidelines and rules of thumb to help you steer clear of dangerous calculation errors in managing your self publishing project.

Examples of hazards in self-publishing numbers--

1. "The cost of my book is $5 per copy, and my selling price is $20. If I print 2,000 books, my profit will be $30,000.

Problem: No allowance for marketing costs

For every dollar of production costs, count on spending at least 30 cents on marketing and selling your book.

2. "I'll print 10,000 books so that my price per book will be under $2.00. I'll add $0.40 for marketing costs. My selling price is $20.00, so I only need to sell 1,137 books to break even. If I sell all of them, I'll make $176,000.

Problem: Marketing costs are always up front, not per book. Also, you've neglected the trade discount of 40% to 55% if your book is sold by a bookstore or other retail outlet.

3. "I want more profit per book, so I'll just raise my price from $20 to $25. I'm sure there are at least 3,000 people who would gladly pay $25 for my book."

Problem: Overestimating sales. It's ironic, but the more general your topic, the HARDER it is to reach your sales goals. Books usually do best when they're tightly marketed to a specific group of people. Selling 3,000 books within a year of publishing would be satisfying--but unusual.

4. "I want this book to sell well and am willing to sacrifice some profits. I'll mark the price down to $10.00. My price per book is only $2.50, so I'll print 3,000 books and sell maybe 500 per month for a gross margin of $3,750. I can live on that."

Problem: Book sales don't occur evenly from week to week. Often authors will call us for reprint prices after the first week when the book is doing well, but we don't get the reprint order. Rule of thumb: 25% of your total sales will occur within the first two weeks; 50% over the first six months, and 100% over the first two to five years.

Next pitfall: Cutting costs while cutting your throat