OLD POST ALERT! This is an older post and although you might find some useful tips, any technical or publishing information is likely to be out of date. Please click on Start Here on the menu bar above to find links to my most useful articles, videos and podcast. Thanks and happy writing! – Joanna Penn
An important consideration for your business is diversity of income streams.
You don't want to be over-dependent on one source for your money, because if it dries up, you will suffer immediately and your business may fail.
You will end up with no power in that relationship, and no choice but to do what that company wants in order to continue working with them.
The Amazon/Hachette dispute has been the catalyst for my own move into direct sales of books, even though I have been selling courses online for a number of years now. Amazon represents 60% of Hachette's ebook sales in the US, and 78% in the UK, according to GoodeReader in June 2014. Once another company/platform has that much control over your business, negotiations are always going to be difficult.
Where do you receive your revenue from?
How many different sources does it come from? Is your business sustainable if any channel disappears or changes terms?
Indie authors love Amazon, because they pioneered self-publishing for ebooks and enabled authors to make a living online. But we're also aware of our dependency, and Amazon is a business, not a charity.
Jeff Bezos himself, in an interview on Charlie Rose, said that one day Amazon will be disrupted. It's also their business, so they get to change the rules when they want. So do Kobo, Nook, Apple and any other companies that sit between the author and the customer. I'm not talking about exclusivity here – I publish on all these platforms and plan to continue doing so, but I can still build my own channel on the side.
Building a direct channel for sales is one option to grow an income stream that has no intermediary except a buy button. It also enables the author a way to learn more about their customers and create a direct relationship through email.
Some customers are now actively looking to buy directly from artists, wanting to support creativity on the personal level rather than through a global conglomerate. I've had emails from people who refuse to buy from the big stores for ethical reasons, and the rise of indie movements in craft, farmer's markets and start-up culture have made consumers more aware of the little guys and more ready to support them.
So here are your options for direct sales. This is a chapter excerpted from my book on business for authors.
Sell ebooks/audiobooks/courses or other digital files from your website
Customers can manually transfer digital files onto e-reader or mobile devices in order to read them. This means you can sell .mobi files for Kindle and .ePub files for other devices, as well as PDF or any other formatted files directly from your site, and use a shopping cart through PayPal or other services to process the payments. Customers can purchase directly on your site, receive the download and you receive the money. There are a number of services you can use.
I've been using e-Junkie.com for a number of years, and the $10 fixed monthly payment/no transaction fee as well as affiliate options are great for selling online. However, it is Paypal or Clickbank only payments and the customer's experience is not that intuitive.
You can also just use a Paypal Buy button on your site, but again, it's not very sophisticated and nowadays, there are options that include email and social integration, as well as analytics. When I decided to sell my books directly from my website, I evaluated the following options:
Gumroad
- Great customer interface. Supports creators in 40 countries. It’s quick to integrate Gumroad onto your website, sell on Twitter, Facebook, YouTube, SoundCloud, and through your own email newsletter. You can set up discount codes. Detailed analytics.
- 5% + 25¢ per transaction with no additional monthly, hosting, or setup fees. Everything is covered–file hosting, file downloads, payment processing, payout deposits, customer support, analytics and dispute fees. Consideration for sales tax, including US rules
- Specifically doesn't accept Paypal – explained in detail here – but it's about control of the interface and customer experience
- Can be used for physical items as well as digital. Includes subscription content – great for serials, or for recurring delivery of content
- Used by Jim Kukral for his GoDirect book (all about direct sales!)
Payhip
- Everything you need to promote and sell your ebooks to your social network. Specifically aimed at easily shareable. Customizable sales page – which is already very attractive with the default options. Ebooks only.
- Pay what you want pricing + discount coupons. PayPal only payment. You are paid directly after purchase. 5% per transaction, taken after PayPal fees.
- Google analytics integration
- Used by Chuck Wendig on his book pages
Selz
- Fantastically easy to set up and great design with a pop up within your website so the customer doesn't leave
- 5% + 25c per transaction. Can use both credit cards AND Paypal
- Easy social integration, as well as integration with Aweber mailing list. Responsive design means ability to buy on mobile devices
- Audio and video previews
- Can be used for physical, digital and services
- Used by CJ Lyons on her book pages
You should investigate all these as well as any other more recent developments in order to find what fits your business the best.
Personally, I am now using Selz for my ebook and (coming soon) non-fiction audiobook sales direct from my website. You can see examples on TheCreativePenn.com/Books and also JFPenn.com book pages. My main reason was that, as a customer, I like to be able to pay by Paypal or bank card, so I wanted both options. I also like the audio and video extras as I think multimedia will become every more crucial in sales. It also integrates with my Aweber email lists so I can develop a list of buying customers, separate to the list of people who download my free stuff. I'm still using e-Junkie for my courses as that is all set up and works well.
Sell print books/physical product from your website/online
Many authors buy and hold their own stock so they can sell signed copies of books from their websites. Other authors have DVDs, physical products like 
T-shirts or other merchandise, like my friend Alastair Humphreys. Again, you can use Paypal Buy buttons on your site for physical sales as well, but for extended functionality, check out:
- Gumroad, Selz, e-Junkie all have physical sales options
- Woocommerce has specific WordPress themes and customization for physical products and catalogues
- Shopify
I don't focus on physical sales in my business model so I can't share my experience. But if you're going to go ahead with physical sales, please do your research and consider print on demand or drop-shipping, where the product is made and delivered straight to the customer without you having to hold stock. Otherwise, you will need to pay for stock upfront, hold it or warehouse it, as well as shipping it. Lines at the post office are no fun, and neither is a pile of unsold stock in your house. Trust me, I've made that mistake and made a business decision to focus on digital products primarily because of it.
Sell physical products in person
The rise of the indie movement across all industries has seen a renaissance in craft fairs, local markets and people interested in buying directly from the creator. You may also be a public speaker wanting to sell books at the back of the room.
In the past, you need to register for expensive swipe machines for various banks in order to process credit/debit card payments in person as a small business. But there are technologies emerging now to suit the small business. These are mainly available in the US and Canada right now, but are spreading globally.
- Square – a small plugin card reader for your phone or iPad. Accepts all major credit cards. Deposits next day into your bank account. 2.75% price per swipe.
- Paypal Here – a separate card reader that works with your mobile. One off fee for the reader and then 2.75% for chip and pin cards or Paypal
- Intuit's Go Payment – Plug in swipe device with signature that works with your Apple or Android mobile and all major credit cards. Works with QuickBooks accounting software. Has pay-as-you-go or monthly rate charging with swipe rates 1.75% – 2.40%
Asking your customers for support
There are also a couple of other models that come under the ‘sell direct' umbrella.
- Crowd-funding. Sites like Kickstarter, IndieGoGo or PubSlush for books allow fans to contribute to costs upfront so special projects can be made. It generally works best for original ideas, rather than asking for readers to pay for editing a book by a first time author.
Patronage or support. Amanda Palmer's TED talk on the art of asking as well as her incredible Kickstarter campaign encouraged people to think more widely about how creative work can be funded. If you produce great work and your readers want your books, then they want to pay you for your time and your work. Patreon is a site that allows subscription payments to continue as long as the artist continues to produce work e.g. $5 per comic produced. Some creators and podcasters are now asking for ‘support' of their work through purchase of books, products or by giving money directly, rather than receiving advertising revenue from corporates. [I'm actually considering this for my own podcast, which costs time and money every month. I'd love to know what you think about this in the comments if you listen to the show.]
All of these require an author platform
If you want to sell directly, or if you want to explore crowdfunding or patronage, you will need an author platform and people who know who you are and are keen to buy. You will need traffic to your website, and you need an email list so you can tell people when there are books ready to buy. I've covered all these topics in ‘How to market a book‘ or you can check out the articles on marketing here.
Update for Dec, 2014 – EU VAT Tax on Digital Products
On 1 Jan, 2015, the EU introduced new VAT tax laws that impact anyone selling digital products to the EU – that includes authors who sell books or courses direct. Essentially, VAT is now calculated based on where the customer is located, NOT where the seller/vendor is located. The tax varies per country and to be compliant, businesses need to collect 2 pieces of evidence proving location.
Previously, there was an exemption limit for small businesses but this law gets rid of the limit so anyone selling anything and making any revenue above 0 must pay this VAT. Many of the companies above will help with sorting out this tax information, but many small businesses are pulling down their direct sales – myself included – until the law is revisited for small businesses. I am intending to create new courses in future but I will likely sell through Udemy or other sites that process the tax for you. I won't be selling direct because of this legislation.
For more information, please read this article.
Update April, 2016 – EU VAT Tax on Digital Products
I have returned to selling direct through SELZ and you can now purchase my ebooks/audios/courses direct from my site. So what has changed?
a) if you are in the UK (which I am) and sell to UK customers – but DON'T sell to any customers in other EU countries, then you're not liable – see the workflow https://whitehall-admin.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/415931/VAT_MOSS_Flow_chart_FSB_edit_V1_0.pdf
b) the selling sites e.g. SELZ now have the ability to restrict the countries you sell to – so I will (unfortunately) not sell to any customers in EU countries
c) If your online courses have a personal element e.g. Q&A extras, email, then you're not liable. But I also use Teachable.com which has a beta service for charging EU VAT if you're only doing electronic delivery.
Images: Top – Flickr Creative Commons money by Epsos; craft fair by Malisia;
In addition to Woocommerce, Cart 66/Cart 66 lite (the free version) and WP eCommerce seem to be the top (free) plugins for integrating a store into a WordPress site. I tested all of them and Cart 66 with the Cartalog plugin worked the best for me & my site. They handle payment processing through PayPal and automatically gives an access link to the file. They also have a bunch of other payment processing options.
I also have a friend who uses Square for in-person payment processing as well as their online marketplace for her store (and sends the files manually).
Thanks for letting us know Jordan – physical sales is not something I do 🙂
Speaking of crowdfunding, is there a site that would be better than another for fundraising for cover art costs? An image set I want to use is too expensive for me right now but there haven’t been any others I like better for a particular book, so it seems like crowdfunding is my only option.
That’s something I think you’d struggle to get funding for – better to look at using different art, or approaching artists directly and asking for permission to use.
I’ve used guru.com to get custom artwork for a book. The going rate seems to be around $50 per item.
I’ve often wished that the site Etsy would get into indie book sales. It’s a viable alternative to Amazon because one, it sells indie products with customers inclined to such products and two, people logging onto Etsy are ready to buy something–a distinct advantage over author websites. I think they could give Amazon a run for their money in this area. It’s not direct sales, which is the topic here, but it does relate to alternatives.
I agree – and I have considered Etsy for something like hand-printed books – but that’s a special project, not very commercial – although I’d love to do it sometime!
Thanks, Joanna. Great stuff as always.
I’ve always wanted Etsy to get into the book business, too. Does anyone know if they have considered the matter?
You asked for feedback about you possibly seeking patronage for your podcast. After checking out Patreon, I would support you through them, or some similar site that lets me be in charge of the dollar amount, and the length of time. But, Joanna, that’s after months of listening to you, and being thoroughly convinced by your past performance that (in my own little world where I get to decide what “worthy” means and who gets to wear that title) your work is worthy of support. —- So, can you think of a two-step plan, where new Penn-junkies can get their fix for free for awhile, then have the option to elevate their status (wow! I never thought I could be anyone’s Patron!) to Penn-patron?
Best,
Donah
I would support her that way as well. 🙂
Joanna, do these sites take care of all the taxes? In the US, sellers are required to hold taxes for every state and city. That’s a huge task I don’t want any part of. So I’d need the merchant site to do it for me.
Each of the sites has a way to deal with tax – you just need to go and look at the help on each to work out what’s best for you. Lots of indie authors and bloggers and companies are using them, so they will have provision for tax.
Ann, you do not have to collect sales tax for every state and city. You only need to collect for your state/city (i.e. where the product is sold from) and any state/city you physically go to and sell books at.
Using me as an example, if I sell books directly from my site, I only pay sales tax for those sales to other Texan buyers. Outside of Texas, it’s tax free. If, however, I go to a conference in California and sell copies of my books there, then I’d have to do sales tax for California for that specific event.
And yes, any good eCommerce application should have options for programming in the sales tax rates that apply to you. I’ve been looking at the ones mentioned above, and so far I haven’t seen any that didn’t make it relatively easy to indicate which state(s) and rates you have to collect for. 🙂
Dear Joanna,
Can I ask you please if you made three separate contracts with the three companies: Kobo, Nook, and Apple?
Please forgive me if you have already answered that question before.
Thank you,
Gil
You always need to do different contracts with different companies! Just check the FAQ per company.
Hi Joanna, I know how to format books for mobi and epub using open source and other formatting software. But I don’t have tablets or iphone and I don’t know if tablet owners can download directly from a site –instead of from Kindle, Nook, etc. I’ve been able to get some testers who told me that they had to sideload. But then someone told me that these were possibly old devices and that the new devices could upload from any site. I also found that there are apps. that allow you to do things like that. But I really can’t tell how easy it is and what instructions to give the buyers. Since buyers don’t like hassle, I am at a standstill on whether I can offer these ebooks at my site or not. How do your buyers download directly? How do you ensure a good format for both mobi and epub? Any advice on this would be really appreciated. Thanks!
I don’t sell direct anymore due to EU VAT laws – but I used to offer all formats including PDF and the buyer would need to sideload or read on the device – people didn’t seem to have an issue with it.
GUMROAD now sorts VAT tax for you, it is added automatically from each individual country.
Thanks Joanna, appreciate the article, exactly what I was Googling for!
Hi Joanna, I am publishing my first book and the company I am using is returning the full net profit if purchased from their site. I looked at the big 3 sites and their charges is anywhere from 30% to 50% of the net profit. Makes me want to sell everything from my site or the publishing company’s website. I can see though I will have to do some more research on EU VAT because Anma made a statement above about only be concerned with collecting taxes from my state and any state I do book signings in. Thanks for the info, just the straight-forward talk I was looking for as a catalyst for future research.
Hi Joanna,
I’m a big fan of your books as well as your blog. I’m working towards the release of my debut Novel and so far I’ve done a lot myself.
I’ve learned how to make a kickass book trailer for free, taken video tutorials from Derek Murphy and YouTube videos to learn how to make an eBook covers using MS word and Photoshop. I’ve also followed authors to learn about book launch and book marketing for my upcoming book yet one thing stands in my way…. editing!
You mentioned crowdfunding in this blog post is there any you’d recommend for authors working on their first but book an need to raise some money for editing?
I live in Kenya and I’m afraid most are for those on the US & UK
Hi Abigail, crowdfunding really only works for people who already have an audience or a way to build one quickly with a cool project. I don’t think editing would count for that really. I’d suggest that you just save some money for it, or try to barter services. That’s how most of us get started. All the best.
Hi Joanna, Are you familiar with the “Book Buyer’s Preview” service that is offered by my self-publishing service houses? Most companies charge about $139 for it.
The service is described as: “The Book Buyer’s Preview allows book buyers, librarians and researchers across the globe to read a selection from the first chapter of your book. When book buyers access their ordering database, the preview will appear with your book’s ordering information to aid buyers in making a purchasing decision.
“A preview of your book will be available on the databases and websites of Ingram Content Group, Baker & Taylor and Barnes & Noble.
“Once libraries choose to catalog your book, your book’s preview pages will be available to library patrons searching for material.
“Your book’s preview will also be on EBSCO, the leading service provider of archived print materials and related services for libraries and research organizations.”
Do you know who is direct vendor of this service? It’s not an IngramSpark product nor does it appear to be an Ingram Book Company product.
Any leads?
Best, Pranada Comtois
I would say this type of service is useless to be honest. If you can find testimonials by real authors who will verify it, then fine, but generally, this type of service does not sell books.
This article is confusing. It speaks of selling your books on your website, but when I go the the example websites, they all have their books leading to Nook, Amazon, Kobo. At what point do you sell it on your website? I didn’t see an option to purchase on the website.
I just checked some of the links e.g. Jim Kukral’s Sell Direct is still using Selz and Chuck Wendig on Terrible Minds is still using Payhip.
Hi Joanna…Thanks for the update on how you are selling direct again. That’s encouraging as I’d love to start selling direct. What has stopped me is that I’m sure I read (though I will have to research it again) that there is an anti-discriminatory law that states you cannot stop someone in the EU buying your products. Any idea? Or is it ok because you are selling through SELZ and so it’s their responsibility not yours?
I don’t know about that – but since Selz and all the other selling direct platforms now have an ability to block them, then I don’t see how that can be right. Plenty of businesses don’t do business with every country in the world, after all.
Just found this: http://euvataction.org/key-facts/#deeper_blockEU Looks like UK businesses are allowed to block EU buyers. Phew!
Joanna, Thank you so much for this post. I just used selz for my first soft-launch and it worked seamlessly. I’d been looking at several options and was getting a little overwhelmed.
Well, after the brexit it seems that it will be not problems blocking EU customers from buying british ebooks.
How is it best to sell audiobooks without using Audible? iTunes seems to only go through Audible.
Lots on audiobooks here: http://www.thecreativepenn.com/audiobooks/
Thanks for a great overview. I completely agree about not being owned by your platforms. I’ve just spent my morning checking out yet another ecourse platform. All of them give me that claustrophobic feeling.
Re VAT, there has been some movement there.
Both Payhip and Gumroad now take care of VAT for you. They do all the collecting of information and paying of the tax to the appropriate country.
Both give you the option of having VAT added on top of your price or included within it (ie buyer pays or you pay). But they do all the work of data collection/retention and the actual payments.
Hi Alia, Since I wrote that article, I have moved to Teachable for courses: http://www.thecreativepenn.com/teachable and here’s an article on my recommendations: http://www.thecreativepenn.com/2016/08/11/create-online-course/ Plus, I have started selling again with Selz and am very happy with their options. I just opt out of EU VAT countries for now.
Thanks so much for the VATMOSS updates. You really are on top of it. I really needed that information as I wanted to start selling courses too. So as I understood it, as long as I make email contact available, then it’s no longer simply a digital product, is that right?
Many thanks once again.
Terrific advice as usual Joanna. My what a hard worker you are. This is not the first time I have read this but it is very pertinent to me now because I want to sell reasonably priced short science study guides to PNG students based on their school curriculum. My question is, what format should these files be in? If I put them in pdf they will just be reproduced for free. If I make them mobi Kindle files they would need a reader which might put buyers off.
I bought a couple of your books recently Successful Self Publishing and How to Market a book but haven’t read them yet. Perhaps they hold the answer to my question. Forgive me if they do!
Any advice in this area Joanna.
Brian Robertson (from Australia)