Do you want to know how much money you can make in publishing? Well, this article has all the answers for you.
Hi there, my name is Andrew, and I’m the publisher at Black Panel Press, an independent graphic novel publishing company. In this video, I want to walk you through something I’ve created that I call my publishing ROI calculator.
The Publishing Return On Investment Calculator Worksheet
Introduction: Understanding the Costs of Publishing
Self-publishing is a journey with many moving parts, and it can quickly become expensive. To help manage these costs and estimate potential profits, I’ve created a Publishing ROI Calculator worksheet. This tool allows you to keep track of all publishing expenses and project your earnings. Here’s a step-by-step guide on how to use it effectively.
How to Use the Publishing ROI Calculator
Focus on Yellow Cells: To simplify your calculations, only edit the yellow cells. This auto-populates the rest, making it easier to estimate your returns. Let’s walk through a real example.
Scenario Example: Imagine you’re reprinting “Illegal Cargo” and planning to print 2,000 units. You can adjust variables like the number of units sold per month, pricing, and printing costs. For instance:
- Units Sold/Month: Start conservatively, say 20 units.
- Price per Unit: Set at $30.
- Printing Costs: Depending on your quote, either from a local printer or abroad.
Storage Cost Calculation: Storage fees can vary. Use the “Storage Fee Calculator” tab to determine costs, whether billed per cubic foot or per carton. For example:
- A 9x12x12 inch box holds 20 books, equating to 15 cubic feet.
- Plug in the cost per cubic foot (e.g., $6.90 from Amazon), and the worksheet calculates the per-unit cost.
Evaluating Return on Investment (ROI)
Interpreting Results: Once the data is entered, the calculator provides insights like:
- Annual ROI: In this example, the initial ROI might only be 1.08%, indicating that this particular investment might not be worthwhile.
- Net Present Value (NPV): This reflects the profitability considering the time value of money. It’s essential, especially if borrowing money, to ensure your returns outweigh the costs.
Optimizing ROI: Scenarios and Adjustments
Exploring Different Scenarios: If you receive a lower quote from an overseas printer, for example:
- Adjusted Unit Cost: Lowering this can significantly improve your ROI.
- Increased Sales: If you believe you can sell 100 units/month instead of 20, the ROI jumps to 56%, making the investment more attractive.
Distribution Channels and Margins
Understanding Margins Across Channels: Different distribution channels offer varying margins. For example:
- Distributor Sales: Typically offer the lowest margin but require less effort from you.
- Self-Publishing: Allows for higher margins, especially if you eliminate royalties and handle shipping yourself.
Expected Value: Preparing for Realistic Outcomes
Calculating Expected Value: The worksheet also helps estimate expected value by averaging different sales scenarios. For instance:
- Range of Sales: From 5 to 100 units/month.
- Resulting ROI: After averaging, you might see an annual ROI of 23.27%, which is generally considered a good return, especially compared to traditional investments.
Conclusion: Making Informed Decisions
Using the Publishing ROI Calculator, you can make informed decisions about your publishing investments. Remember to factor in all potential costs and compare the projected ROI against other investment opportunities. Target an ROI significantly higher than traditional investments to justify the time and effort involved in publishing.
If you found this guide helpful, you can download the Publishing ROI Calculator to start planning your publishing journey today.
I hope you found this article useful. if you’d like to download the publishing ROI calculator click here.