Become a Successful Indie Author

by Craig Martelle

  Is revenue your goal? Is it simply publishing and having strangers read and like your book? All of that is possible if you believe.

  Work first on your goal. Make it achievable, something that you can do in the next month. Write it down and stick it on your monitor, your refrigerator or wherever you will often look. Focus on achieving that goal. When you’ve hit it, put the old goal in a box and post a new goal. This is your ladder to success. But what’s at the top? For many, it’s to be able to write full-time. That is in a distant cloud, but that doesn’t mean you can’t get there. It only means that the ladder is long and has a great number of steps.

  And work. Never doubt that there will be work involved and not all of it is as sexy as writing a killer story!

  That’s my segue to the business side of managing your author business.

  As an indie, you are responsible for all of it. If you make great money but don’t pay your taxes, there’s only one person who gets the blame. If you don’t keep track of your expenses and have trouble finding them in order to deduct them, there’s only one person to blame.

  If you gasp in horror, then you need to step back, take a deep breath, and understand that you can do this. If you have the ability to write a book, you can manage your own author business.

  There are two main things to be aware of in everything you do: Revenue and Expenses. That’s the bottom line of all business. I’ll also talk about cash flow, because the money you make today won’t get paid for a while, while the money you spend today is gone today.

  Where does the data come from?

  Where will you get data that matters? I won’t be flippant and say from everywhere, because it’s not funny and it’s not true.

  At this point in the book, I will tell you that nearly all of my experience is exclusive to Amazon. That is where my experience lies and where I make most of my money.

  In Amazon, your primary source of raw data regarding your sales is from the KDP Dashboard. They show pseudo-real time data in two charts. (If you are not in Kindle Unlimited, it’s one chart.) You can get add-on software packages that do a better job of displaying the data from your KDP dashboard. I use BookReport, but there are many others out there like Trackerbox, Akreport, and ReaderLinks. I’ve heard great things about ReaderLinks and I may have to try it out at some point, because it supposedly will import your AMS data, too.

  I also use Excel by downloading the data and parsing it myself, although the data presentation changes often enough that one needs to be an Excel power user in order to keep it working. I am a power user, but it still takes time to redo the formulas.

  AMS gives you data that you can download. Brian Meeks will tell you to download that data every single day to compare it against the previous day in order to keep yourself up to date.

  I use BookReport because it tells me enough of what I need. Here’s what the start of a new day looks like for me. Made a few bucks—total on the day is at the top—and then the covers from highest earning to lowest.

  And then the pie chart of the breakdown. You’ll see in the next screen that the differentiation is minimal. No breakdown data on ads, so I’ll check AMS and Facebook Ads Manager to see what kind of impressions I’m getting.

  This is how I have my BookReport set up to run. I tell it to use last month’s KU payout rate for the estimate. Many people set it at $0.004 in order to low-ball the estimate. You know yourself. If you think you are making more, do you tend to spend more? As of this writing, KU has not gone below .004, so that is fairly safe for a low-end estimate. You can look at everything above that as gravy.

  If you want the raw data, here’s where you get that. This is on your kdp.amazon.com page when you click “Reports.”

  The default view is the Sales Dashboard. Is there any doubt when my release dates are? If you scroll to the bottom of that page, you’ll find the Generate Report button. Also take a close look—you’ll see that what this report shows as royalties does not match what BookReport shows. It won’t. BookReport pulls the data from the generated report and includes the page reads, which Amazon does not include for a royalties calculation. They don’t even fathom a guess because they don’t want to be liable.

  If you collaborate and aren’t the one who published the book, Amazon and BookReport won’t show you that data. Everything I have here is minus twenty-five of my bestselling books. BookReport at one time considered sharing, but that idea never came to fruition. I would love to have all of my numbers in one place. I do, but that is in my very fragile and phenomenally complex Excel spreadsheet. I won’t share it because it breaks on me, so wouldn’t be much use to anyone, not even another super-user, because they would spend less time recreating the formulas than trying to follow the logic from mine.

  I also gather data from ACX (audiobooks), CreateSpace (paperbacks), Amazon Affiliate program (sending people to Amazon from my web page), and my traditional publisher (I have four books with them and they give me a quarterly report in Excel). This data is very broad, as in gross sales only. I check each day as I run ads trying to push my audiobooks. That is a tough nut to crack, but we’re working on some things to give them a big push.

  I also get data from a few collaborators. When I incorporate their data that applies to me, I have tens of thousands of lines of raw numbers. The good news is that if you have that many numbers, you already know how to work with them or can hire people to do it for you because you are making good money.

  Amazon also keeps a great deal of data secret from the author. How many people have borrowed my book? You have to estimate that from your author ranking. Here’s what I’ve come up with, totally unscientifically but based on my releases and author ranks and talking with those who have put books into the top 100. You see that I have two columns for number of sales because it is harder to get the rank in the first place than it is to hold the rank. Amazon averages book sales and rewards those that have consistently high sales, not those with spikes. Having a solid week of good sales is better than a single stellar day as far as book ranking goes.

  This chart is a guesstimate. If you release your best book ever and BookBub rewards you with a Featured Deal and you sell 5001 copies on the same day that JK Rowling releases a new Harry Potter book and a new Jack Reacher book hits and Steven King delivers his best book ever, you may not be number one. Everything here is subject to what every other author on Amazon is doing, and that includes the big five traditional publishers. Sometimes, you don’t want to try and outspend them. Sit back, watch, and jump in when they are done playing. It doesn’t take long.

  Your author rank is another number that is almost completely meaningless except as a general barometer of sales numbers. That’s it. Don’t dwell on that too much. As you sell more books, your rank will increase and rank is mostly irrelevant outside of the top 20,000 to 30,000, because sales of a few books one way or another will create wild swings in rank. I celebrated like a wild man when I first made it into the top 100,000, then the top 50k, and then into the top 10k.

  Each level is a new plateau from which you launch higher and higher. I feel successful because it’s been more than a year since I’ve been out of the top 100 science fiction authors. I’ve been out of the top 1000 for a total of maybe 45 days in the past year as well. Commensurately, sales have been good.

  One of the lies of your author rank is that it is purely based on sales and borrow numbers (not profit). An author could be spending a great deal on advertising, so much so that they are losing money because all their books are 99 cents. They may have a great rank, but are heading toward bankruptcy. That’s not what you want. Don’t sacrifice your profitability for the fleeting number that is your author rank.

  This is your business. Let your ego be driven by your artistic side, but let your business be run by the cold numbers person. Make a profit and make this a viable business. If you get your author rank when your books are at full price, then you’ll be able to afford business retreats in Bali…

  Reven
ue

  I watch my KDP dashboard. You can watch your D2D dashboard too, as well as Kobo or any others where you have titles for sale. Understand that all numbers are delayed. The numbers you see on all your dashboards are only estimates until they are actually paid.

  Amazon pays two months down the road. Traditional publishers may pay six months to one year later. For an indie using Amazon, money earned on Feb 28 will be paid promptly by April 30th. Money earned on March 1st, will be paid by May 31st. Simple as that.

  They also convert funds from all other currencies into your preferred payment currency. This will probably result in your earnings being less that what is estimated, but the bottom line and what you get taxed on is what you are actually paid.

  But you need those estimates so you can control your spend. If you keep spending more than you’re making, that money will have to come from somewhere. Beginning with a warchest of funds is good, but not always possible. Barry Hutchison showed how he could launch a book without spending a penny and without spending any of his own money. He didn’t start running ads until the money was actually in the bank. He didn’t pay for covers or editing. There are ways and if you want to learn how Barry did it, you can watch his presentation from 20Books London called “Bookstrapping” on YouTube.

  Organizing your business so you have a place to put that revenue and deduct those expenses

  If you don’t make a profit two years out of five (at last count from the IRS), then your business is a hobby and the IRS will tax the income from it, but won’t let you deduct the expenses. So, earn a damn profit for at least two years. And then go crazy and keep earning a profit.

  Setting up your author business before you publish

  Get an Employer Identification Number (or your country’s equivalent). EINs are free to get online. This will separate your social security number from your business accounting.

  Get a business checking account. This will be a separate account to manage all your business finances. Sometimes, you’ll need your company established to do this. Then get a debit card for the account. You may not be able to get a line of credit right up front, but I would not encourage getting credit as an author. Sales are not guaranteed, but if you keep track of revenue, then you will have an idea of what you’ll be paid in a couple months.

  Start a business. You don’t need to do this, but your state may require it to start a business bank account. You can set up an S Corporation, which is usually the least expensive and least time-consuming of the options. This also means getting your business license. That’s how my state works anyway.

  Set aside enough working capital to be able to pay for your author business needs. It could be as little as $1000, but you need something. You can publish at no cost, but remember, we want you to treat this as a business from the outset and you need to manage your cash flow.

  Build your business tracking spreadsheet. I always recommend using Excel (or Google Sheets or something like that).

  Establish a social media presence. You will want your own website. The separate website helped me get my business checking account. Facebook, Twitter, and Instagram are free, and you’ll want to build your presence on one or all. Depends on what kind of time you have. I only use FB, as that is where over 50% of my fans can be found.

  Remember: Dress for the job you want. If you want to be taken seriously as an author, you have to act like a professional, have a professional presence, and keep striving to get better at all aspects of your self-publishing business.

  As soon as you publish your book and put a price tag on it, your book has become a product for sale. This is where you must step back from the personal relationship you have with your creation and look at it dispassionately.

  “A book is not just a book.” It could be a foundational brick in the building of your business. Make it great, and then make more.

  The starving artist isn’t a myth. Those artists probably didn’t understand the business side of their art, or they sold out to middlemen who took the majority of their earnings because they wanted to focus on only their art.

  You’re an indie. You don’t have that luxury, and you don’t want it! There is no sense in paying someone else to do something you can do for yourself, until your writing is bringing in enough income that it’s not worth your time to do the businessy stuff yourself. That is a business decision as well because you’ve looked at your time and seen that your writing hours have a value that exceeds the amount it takes to do the work yourself.

  Until you get to that level of revenue, don’t be afraid! It’s not that hard. Use the checklist to make sure you’ve covered your bases.

  Establish your business name (I went with Craig Martelle Inc or CMI)

  Get EIN (https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online)

  Establish your business (this is State specific – understand the benefits for an S Corp versus an LLC versus a PC or the myriad of other organizations). In Alaska, flow through taxation of a sole proprietorship is an S Corporation. In Arizona, that structure describes an LLC. It is unique to each state.

  Get your business checking account (and point all your payments, Amazon, ACX, CreateSpace/Ingram Spark, etc to it)

  Establish your business presence through a website. Once again, I went with the easiest thing I could think of – craigmartelle.com

  Start tracking your income and expenses

  How much business stuff do you need to do? That’s a good question. I’ll share my daily routine.

  1. I download the latest KDP Sales Dashboard and copy the information into my spreadsheet—available from a link in the back of the book.

  2. Check my Amazon Marketing Service (AMS) ads for the best impressions/clicks/buys. Adjust as necessary. Low conversion rates get a highlight to update the blurb on that particular book.

  3. Check my Facebook (FB) ads for conversion and relevance rating.

  4. Check ad copy on my current WIP. I find it best to write the blurb and taglines as I go.

  5. Check reviews. Yes, I read all my reviews. Bad reviews mean I’m putting my book into the wrong people’s hands. If so, see where the buyer came from—check their other reviews. Adjust ad targeting (usually FB).

  6. On the 15th of the month, I download my KDP Report from Amazon. You’ll find that on your KDP Reports page under the Prior Months’ Royalties tab.

  Tracking Data

  How do we use data to make business decisions as indies? That's the real question.

  How many of us have BookReport running in the background, so we can hear the cha-ching? I do. I finally stopped looking when it made that noise. It didn't change anything I was doing at the moment. I recommend turning off the cha-ching once you realize that you are a professional author and are making money at this business.

  As a business consultant, and specifically a business diagnostics expert, I worked with numerous businesses that collected every nit-noid bit of data and compiled and built massive, all-encompassing reports.

  If the data doesn't change anything you do, stop looking at it! At the least, reduce the frequency that you look at the numbers. I hope you are checking your FB ad spend daily as well as your AMS impressions and spend. But hourly? There's no need for that.

  BookReport or one of the other after-market data tracking programs? Once a day is sufficient, unless you are looking for a trigger to change something like validating how a promotion or ad campaign is resonating with buyers.

  If you can automate something, do it! KDP provides you a full report. You don't need to hand-jam your KENP reads into a separate spreadsheet every day. You can download the spreadsheet from the bottom of your reports page once a week, or however often you need to review your data. The fewer books you have = less often, but that’s when you do it the most. I should study the data hard every day, but I only have time to do it once a week. I have some 70 titles earning revenue for me. It’s best to stay on top of what is doing what
, so be familiar with your top titles and general flavor of your backlist series. I now parse my data by series to give me a better look at how things are doing.

  If you collaborate, only the person or entity that published the story will get the data. I can directly access about half of all my data. I am dependent upon Michael Anderle for the other half as he is the one who hits publish on our co-authored titles. He is a very busy person, but will still give me the data daily if I want it to bounce the numbers against an ad campaign that I’m running or for some other purpose. Generally, though, my time is best spent writing the next book and managing the business finances.

  Your word count? Track that closely and match it against your realistic goals. That is how you get to "The End." Adjust if you're not hitting those goals. My word count has improved because I shut everything down except the story I'm working on. I take that to the finish line before starting something else. Why would you track word count as part of your business?

  Being professional means being able to predict your production. Whether it is one book a year or one book a month, you should be able to know not just what you can do, but what you will do. You might have a co-author opportunity. Winging it with the numbers probably won’t fly. It wouldn’t with me. I can’t take on a co-author who isn’t sure what he/she can produce on a regular basis. My business plan doesn’t support a nebulous delivery date to build the business.

  When it comes to being an indie, you are your own boss. Don't let data overwhelm you. Collect and review the data that will help you manage your business. Everything else? Take a look out of curiosity's sake, but if it doesn't change what you're doing, then why? Don't let data be a distraction. Use it as the tool it is.