I had an interchange recently with a fan, and first, it’s really awesome to have fans 🙂 I’ve said this same kind of thing about books to a bunch of people over the last few years, but I’ve never blogged or ebooked about it. And the math part of it is something everybody looking to do ecommerce online should look at, so here it is.
And by the way, I know there are exceptions- Jay Baer has a great slideshare about how he drove Youtility to bestseller status. But that’s an outlier- an exception (and required a big investment that he hopes will pay off in the next three years, you’ll find if you read the slideshare). If you want a product to sell that typically is successful, books aren’t it.
THE FAN: I want to promote my books on facebook. If the sales hit a million or a minimum thousand, I will share 40% of revenue with you. Here are my books on Amazon: REDACTED
Mar 14, 01:13PM
ME: Thanks for reaching out! Books are a very tough product to sell because the author usually has a really low margin. I am happy to work with you on a services basis- if you’re interested, I can send our services and fees info.
Mar 14, 07:23PM
THE FAN: Thank you Brian for your input. I would love to coordinate with you on other projects. I’m into self publishing at this time and promoting my business books. Will let you know about other businesses………
Mar 15, 10:01AM
ME: Cool, please do. With self published books it’s a bit easier, because you can choose to have a bigger profit margin- but Amazon doesn’t have granular tracking to allow for optimization- you could optimize it if you’re selling it in a way that does allow for advertising conversion code.
Mar 15, 10:04AM
THE FAN: But I’m a great fan of yours would like to work with you on some joint venture. I’ve written some 4 to 5 books. At this time the book sales is rather slow. And I’m hopeful that it will boost up with time. If you can play some magic with these kindle published books then I can share half of my royalties with you for a considerable time as you like. I’m making my presence on G+, Pinterest, and other channels. However, It will be nice if some sound marketing strategy is in place. I’m also working as a freelance writer and editor on oDesk and Elance and I’ve a proven track record of successful projects. Anyway its nice talking to you.
Mar 15, 10:15AM
ME: It’s a math thing. Figure out your possible cost-per-sale range and see if your profit margin can tolerate that.
- What percent buys? Say 5% of the visitors buy, and that would be an amazing conversion rate (CR).
- What’s the lowest possible cost per click (CPC) on Facebook (the cheapest targetable mass traffic ad solution)? Maybe if you’re amazing it’s $0.20
- Cost per sale is CPC/ CR… $0.20 / 5% = $4.00 as spend per sale; Your books would have to be at least $15-20 to have some wiggle room on those numbers, because it could be as bad as 1% conversion, $0.50 CPC = $50 per sale.
That’s why it’s so hard to sell really low price products at scale.
That’s why you see the infoproducts guys selling things for anywhere from $97 to $2,000 – not that I support that; a lot of these are people using hype and manipulation techniques to take advantage of buyers (who often are trying to buy their way around laziness)- read my blog post about Internet Training Ethics.
It’s just the ROI math of ad spend and profit margin.
You at least need to make enough to break even on your ad spend- and that’s fine to do if you’re investing in your long term career. For me, the reason I write ebooks and give them away and advertise them, is that they’re a loss leader. If I spend say $500 to promote an ebook but it brings in a few clients that yield me thousands in revenue, that’s a good investment.