Kickstarter: Figuring Your Costs
One of the first things you need to do if you’re running a Kickstarter is figure out what you want to produce and how much it’s going to cost. For my 12 for ’12 Kickstarters, this turned out to be pretty simple. The things you need to think about include:
- Production of the files for both the ebook edition and print edition.
- Shipping (Mailers and Labels)
There’s one huge thing I’m skipping over there, but I’ll get to it in a moment. First, let me tackle these things in order.
I spent four years as the president of Pinnacle Entertainment Group, which was a a top-five tabletop RPG company at the time, and I trained the entire production department. Roleplaying game books are far more complicated to produce than a novel, so I felt confident I could handle most of the production of the books myself. I could have hired it out to someone, but I’m picky about my work — and I like to fiddle with things — so I decided to take care of it myself.
I didn’t know much about producing ebooks, but the basic principles are the same as they are for printed books. My friend Steven Saus was kind enough to give me a copy of his So You Want to Make an Ebook?, which served as an excellent primer. Then I figured out how to manage an even smoother workflow using my writing program of choice, Scrivener. I’ll get into that more in a later post.
My costs here are effectively zero, although that doesn’t account for the years of training and experience that allowed me to get away with that. For most people this will run roughly $250–$500 per book, although that can vary a lot. You can ask around for recommendations for good people, or you can try your luck with a new service-matching site like Writer.ly.
I also spent years as a freelance editor before I co-founded Pinnacle with my pal Shane Hensley. Again, I could have hired someone else to edit my books — and in a perfect world, I probably would have — but I opted to tackle it myself. I shanghaied a few friends and family members into helping me out with the proofreading, including my wife.
Again, my costs here are zero, but I recommend that most people hire an editor. For that, you can expect to pay anywhere from 1¢ per word on up. There are lots of great editors out there who are hungry for work.
There are two costs for a cover, actually: artwork and design. I’ve won awards for graphic design, so I felt comfortable polishing up my rusty Photoshop skills to handle that. I decided to go with iconic imagery and design because I want customers to be able to understand the cover at a glance when it’s only an inch or two tall on a screen. That also kept the design requirements closer to my skill level.
For the covers, I’ve used stock art — sometimes heavily modified — from sites like iStockPhoto and GraphicRiver, spending up to $50 a crack. If you do this, make sure that you pay for the proper rights for the art. The basic agreement usually only lets you use the imagery on a single website. If you want to do more — like use it on the cover of a book — you need to pay more too.
My pal Jim Pinto helped me out with the logo for the 12 for ’12 challenge and with the Shotguns & Sorcery logo too. Because we’re old friends, he offered to do it for free, and I insisted on repaying his kindness with autographed hardcover omnibuses of the books his work graces. If you need to, you should hire Jim or someone with similar skills — like Aaron Acevedo, who created the Crescent City maps for my BNW novels.
You can hire a top-level artist for a brand-new book cover too. A great cover is maybe the best marketing tool you can have. Rates can range from $100–$5,000, depending on the artist’s quality and the demands on his or her time. If you go this way, though, don’t forget to hire an excellent graphic designer too, so you can get the most out of that wonderful cover you commissioned.
If you want to sell your book in a bookstore or through electronic stores like iBooks and Kobo, you need to purchase an ISBN, a unique number that identifies the book for the electronic sales systems. In the US, a single ISBN costs $125, 10 cost $250, 100 cost $575, and 1000 cost $1000. I knew I’d need more than 10, but I didn’t want to spend $575 on them, so I skipped this.
It turns out that Amazon — which sells more ebooks than all the other markets combined — doesn’t require ISBNs, nor does Barnes & Noble. To get my books into the other stores, I turned to Smashwords, which offers a free ISBN if you sell through their store too. They take a small cut too, but it takes a while for that to add up.
So my costs here are zero too.
This is where it starts to get tricky. Your best bet is to figure out what the flat rates are for shipping something of the size of your book and assume that this is your worst-case cost for actual shipping. A padded flat-rate envelope from the USPS is $5.70 to send to what fits inside it to anywhere in the US, and it comes with a free envelope you can order from the Post Office.
The same envelope sent to China costs $23.95. That’s a huge jump, and it’s why you often see reward levels on Kickstarter say things like, “Add $20 for shipping outside of the USA.”
Depending on what you’re shipping, you can often get away with spending less than that. It may not be much, but over the course of hundreds of shipments, it can add up. I usually buy mailers and adhesive labels for my laser printer on eBay. Lots of the people selling things there need these kinds of supplies, and the companies selling those supplies compete hard on the prices for their business. A good padded envelope and a label should cost about 30¢ per book.
The USPS site doesn’t allow you to send Media Mail — a special type of mail service meant for shipping books in the US cheap — through its website. However, you can do this through PayPal. It’s $2.53 for anything up to a pound, and $2.98 for up to two pounds. They even toss on delivery confirmation for just 20¢ more, to help you make sure the packages actually arrive.
Printing can be the largest external cost to any novel project. If you’re printing less than a few hundred books at a time, you’re probably best off going with a print-on-demand (POD) service. In any case, using POD is a great way to figure your costs, as that gives you your worst-case scenario. You’d only switch over to a traditional printer if it brought the costs down.
I print my books through DriveThruFiction, which uses Lightning Source as its provider. The price for your book varies depending on the size of the book, the number of pages, and whether or not you have color pages inside it. DTF posts its prices openly, so you can compare them with others as you like. There may be other cheaper sources out there, but not by much, and there’s a kicker. If you sell your books through DriveThruFiction after the Kickstarter, they waive all setup fees. With most other POD services, those can stack up fast. Most charge something like $200 to set up a hardcover, for instance, but at DTF that doesn’t cost a dime.
I print my books at 6.14 x 9.21 inches. That’s the smallest trim (page) size available that matches for both hardcovers and paperbacks, which means I can use the same files for the interiors of both types of books rather than have to create separate ones for each. I just need to generate different files for the covers because the hardcover’s trim is a wee bit larger than the softcover, of course. Either way, the books run roughly 198 pages each.
The Big One: Writing
The largest cost for any novel, of course, goes to the writing. Some authors ignore their own time when they total up their costs. They don’t feel it’s right to account for their own time when setting their Kickstarter’s goal.
That’s their right. But they’re wrong.
Okay, they’re wrong from my point of view. This isn’t a hobby for me. I write full-time for a living. If I don’t make enough to cover my time when I’m writing, I can’t afford to write the book, and I need to write other things instead.
Literally, if I don’t make enough on the Kickstarter, I won’t write the book. I prefer that my kids eat.
How much your time is worth, though, is entirely up to you. Some may not be willing to turn on their computers for less than $30,000. Others might be thrilled with enough backing to pay for a snazzy cover.
Either way and everything in between is fine, as long as it fits your needs and your dreams. Good luck!
Bart Lieb reminded me that I should have mentioned one other cost: the percentage that Kickstarter takes before it passes the rest along to you. In my head, this falls more under “financing details” than “costs,” but either way, you need to account for it.
Kickstarter takes a flat 5% of the funding for any successful project run on its site. If you take in money on the side through some other method — like a PayPal button on your site, for instance — they don’t take any of that, but then it doesn’t count toward reaching your goal on the Kickstarter site either.
Kickstarter collects its funds through Amazon Payments. That makes it easy for anyone with an Amazon account to back a project, but it’s a challenge for those who can’t set one up, which is why some creators set up side deals on their own sites to accept PayPal or other means of payment. Amazon takes the fairly standard 3–5% to process those payments. The exact number depends on the amount of the various pledges, which makes it hard to pin down until the end. To be safe, figure on Amazon taking 5%, and you get to enjoy a happy surprise if they don’t do that every time.
In short, expect Kickstarter and Amazon to take 10% off the top of your successful project’s fund. You can figure that into your costs and should set your goal at least that much higher to compensate.