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Looking Ahead

McSweeneys’ shift to nonprofit status has me reflecting on this industry, and in particular the way small presses are, for the most part, set up by it to fail. We have to solicit funds from non-sales sources because everybody—and I mean everybody—is making more off the books we publish than we are. So we host Kickstarters and IndieGoGo campaigns and our friends step up generously time and again to keep us going. Or we incorporate as nonprofit organizations and spend time we’d prefer to spend editing on grant proposals, or even more convoluted, we search for grants to fund a position to hire a staffer to write grant proposals. When what we wanted to do was make sure great, deserving books made their best way possible into the world.

At this point, we’re in a thick soup. The thing about nonprofit grantors is that they want to fund service organizations, not producers of consumer products. So then you end up trying to make the argument: who are we serving? And how? What essential social service is fulfilled through the mere publication of books? Not the providing of books to schools, or the operation of literacy organizations, but simply the publishing? When it should be possible to fund the publication of books via selling books.

But the deck is stacked against us in this endeavor in a number of ways. First, a book that cost $14.95 in 1995 should, based on inflation calculations, cost $23 today. Yet not only has the market value of books failed to inflate, we’re bombarded by uninformed trolls shouting that books should cost, to the consumer, some figure close to the cost of the paper they’re printed on. (This argument is so asinine I’m not even going to honor it with a breakdown. I’ve railed against it frequently enough already.) So although the costs of transportation, warehousing, printing, and living (for those involved in the production of literature, hence salary needs) have increased precipitously in the last 20 years, the retail price of books has not.

Moreover, the system is a bit rigged against small publishing houses. I’ve shared this information before, but it seems as good a time as any to update the breakdown of where your money goes when you buy a paperback copy of an Engine Books title at cover price:

  • approximately 45-50% to the retailer, depending on the retailer (or to customer discounts)
  • approximately 26%, plus additional expenses like required catalogue participation, shipping to those retailers, etc., to the distributor
  • 10-20% to the printer, depending on the book’s length, design features, and print run
  • 10% to the author for royalties
  • leaving, at best, 9% for the press. And at worst? The press pays 6% of cover price, 90 cents per copy, for the privilege of publishing books.

Add to this the fact that we spend between $1,500 and $3,000 per title on promotion, which is not figured into the breakdown above, and you have…well, you have some difficult math. Because unless we keep the spending to a very bare minimum and sell out a print run, if a title sells fewer than 1,500 copies, Engine Books takes a loss. There’s also the cost of traveling to Minneapolis in the fall and New York in the spring to present the titles at sales conferences, travel to AWP (which very rarely, though sometimes, pays for itself in sales), plus any generalized promotion for the company as a whole.

(You are perhaps wondering about ebooks. The press splits ebook revenue evenly with the author, after distribution costs, but very few of our titles—only those that get reviewed in extra-literary outlets like O Magazine and People—sell more than a handful of ebooks. The revenue is something like $3 per ebook each for the press and the author.)

You might have noticed that there’s no payment for staff of any kind in that breakdown. We noticed, too.

How is this different for a big press? First off, they’re self-distributed, so that 26% rolls back into their column, minus, of course, the actual costs of getting their books warehoused and into stores. Secondly, even if they’re printing small runs for a given title, their overall printing volume lowers the cost of printing significantly. Third, they are likely able to negotiate better retail discounts than a distributor of small press books can, though that’s a guess—all that information is proprietary. Once you add in staff, it’s still not a hugely profitable endeavor, but there’s a better chance of survival on that scale than for a small organization. That’s what last year’s Big Dream campaign was about—moving toward a more reasonable expense-to-income relationship by scaling up. We didn’t expect that campaign to fully succeed, and we were right.

I find, when I talk to people about publishing, they have no idea that the publisher makes less than everyone else involved. Some retailers, who take the by-far largest slice of the pie, have done an excellent job demonizing publishers as the industry has struggled (as have bitter self-publishing types), and the proprietary nature of much of this information has kept publishers from correcting that impression, if they ever intended to.

What this has all meant is that, despite putting in upwards of 30 hours of work some weeks, I regularly pay from my family’s income to do this work. It is a privilege to publish books. I wasn’t being sarcastic when I used that term. I have no intention of stopping doing that work, whether I ever get paid for it or not.

But it would be terrific to find a way to stop feeding cash by the thousands from my personal bank account into the company’s. I’m guessing, on a different scale and with a lot of different details, this is the thinking at McSweeney’s, as well.

Meanwhile, how does a press like Engine Books, one with no paid staff or dedicated office but with a robust list of gorgeous, well-received books, find new revenue streams? In a perfect world, some investor would come along and write a check to fund that big dream. I believe that investor would eventually make money on my dream. But I also cannot, at present, see how I might make that happen.

We can (and might) start charging a reading fee for submissions. That’s going to complicate our relationship with several great agents, who are not going to pay a fee to query us on their authors’ behalves, but who have sent us some of the books we’ve loved best. And it’s not going to produce an enormous amount of income.

It could be that eventually we’ll follow McSweeney’s down the nonprofit path. I’ve worked in arts nonprofits before, and I’m not a fan of the board structure required by the IRS, in addition to the mess of recalibrating your operation to suit the whims of granting organizations. But considering that the main goal is for the press to simply cover its own expenses, it might be the best option.

And we’ll continue to brainstorm and ponder how we might get to the point where, at minimum, it doesn’t cost us to operate the press. To get paid to do this work would be more good luck than I’ve ever known.

Meanwhile, Engine Books isn’t going anywhere. If we have to keep subsidizing operations with our meager teaching income, so be it. Short of marriage, motherhood, and my own writing, EB is one of the great joys of my life, and has fostered friendships with some of my favorite people in the world. We’ll make it work. But if you happen to know anybody with an extra $3-5M laying around, do send them my way.