Subject: Economics of LLG publishing

From: Robert LeChevalier <[email-masked]>
Date: Mon, 26 Aug 2002 18:47:53 -0400

At 11:02 AM 8/26/02 -0600, Jay F Kominek wrote:
>On Fri, Aug 23, 2002 at 07:32:24PM -0400, Logical Language Group, Inc. wrote:
> > As you describe it, we "break even" when our royalties hit $159,
> > which I suspect would take 100 books at standard royalty rates
> > (probably no more than 5-10% of sales unless you have word
> > otherwise). And when we hit 200 books, LLG will have made another
> > $159.
>
>Far better that the book be printed, than it sit and collect dust,
>regardless of how little money is made.

Certainly. I do not favor putting off publication, and if we could afford 
it, Nora and I would finance its publishing like the last time.

> > Right now LLG is the publisher of our books, and we're looking for an
> > on-demand printer that lets us keep our name on the books.
>
>Who cares whose name is on the book as long as the book is available
>at a reasonable price? Personally, I've never looked at the publisher
>of a book when making a buying decision, and I'm not sure what sorts
>of people would. That isn't a whole lot better than judging a book by
>its cover.

This only matters insofar as "official materials". If it comes from a 
source other than LLG, some will wonder as to its credibility. This I 
presume is part of the reason for people wanting LLG official recognition 
for their projects.

> > We've sold close to 400 refgrammars so far, so this seems like a
> > good minimum on the 4.5 year sales potential of the lesson book
>
>I'd like to clarify this, just to make things clear. The number of
>books reported sold at the meetings each year:
>
>1998: about 200
>1999: 266
>2000: 322
>2001: 360
>2002: 380-90
>
>Most of the books are sold within the first year or so.

Correct. That is the nature of book sales. I don't think that there 
really has been a significant drop off in the last year from the previous 
one. It tends to come in spurts, and the timing of the spurts determines 
the annual total. The ability to order direct via Paypal may increase orders.

>If sales keep dropping off the way they're going, nobody will be buying
>any in 3 years.

We have the history of JCB's effort to know that the book orders never 
completely stop.

> And if they keep going at the rate they're at, it'll take
>another 20+ years to sell them off.

Indeed. However, given the nature of what we are doing, every time we put 
out something new, we get a new wave of sales to people who order more than 
whatever is new. Thus when Nick's book comes out, we might sell 200+ right 
away (because most people who are interested enough to buy the refgrammar 
will be interested in getting a copy), but there will also be new people 
attracted by the fact that we now have a textbook, who will in turn buy the 
refgrammar after they see what good stuff we put out. I'm not expecting a 
big spurt, but 50 red books is $2000.

> > (we would hope that the LLG community will grow rather than shrink
> > in the next 4+ years, and I imagine that just as many would buy the
> > lesson book as bought the red book, maybe more because of the lower
> > price).
>
>It isn't going to grow unless things change. Certainly not enough to
>support having thousands of books printed off.

I'm not supporting thousands. Right now I'm favoring 500, with the 
possibility of making it 1000 if preorders are exceptionally large (like 
over 250).

>Unless you've got some top secret plan to quintuple the community size
>in 5 easy steps? :)

It isn't top secret. All this good work you guys are doing is leading to 
steady growth; look at the size of your own beginners-list. The community 
MORE THAN quintupled after the refgrammar came out. And growth continues 
even though we've been largely stagnant in terms of products and 
order-filling for 5 years. With a smarter and faster approach to 
responding to new people, I think we will have a new spurt in the next year 
or so, and merely doubling the community will make our investment in so 
many copies of the red book worthwhile.

And we've only done word of mouth advertising for 5 years. When we put out 
a book, I have the excuse to put notices in the newsgroups and conlang 
mailing lists.

> > We somehow have to make money on our publications in order to support the
> > organization. Or there won't be an organization in a few years.
>
>If you're only selling 30 books a year, you're not making spectacular
>amounts of money as it stands.

Hey, it's $1200 more or less, and that has been most of our income the last 
few years.

>A far better policy is to sell via some sort of print on demand, a
>wide variety of materials, with minimal markup. So instead of making
>$30 of profit per person on a single item, you make $5 on their
>refgram, $5 on their lessons, $5 on their dictionary, $5/yr on their JL
>subscription, $5/yr on their LK subscription, $5 on their tshirt, $5/yr on
>their patron membership, $2.50 on their lapel pin, $10 on their
>logfest attendance, $5 when an LLG psuedo-hiree (who is donating their
>services to the corporation at some reasonable rate, and getting a tax
>deduction for it) translates their horoscope into Lojban.

I don't think we get $5 on vanity press POD. I think we (actually the 
authors - I'm not sure how LLG gets into the picture if we are not the 
publisher or distributor) get more like $1. Which is why I am 
skeptical. The net on CLL copies is $28 or so, and that is because we are 
selling at the discount price. (If I had been smarter and gotten a thousand 
books from Bookcrafters rather than the 1500 from the printer that we 
chose, we would already have paid off the print costs with a couple 
thousand to spare.) Most of those items you mention we have been selling 
at cost. JL subscriptions (which are pure loss to us for the 4 issues, 
since we owe around 125 people who prepaid subscriptions) have been sold 
at-cost, and only around 5% of LK subscribers pay for their copies. (And 
we really weren't making much money on those 10c/page mail orders that 
supported us for 10 years.)

I'm hoping we don't get too many $5 orders, because we already have 
problems with order fulfillment and the cost in time of filling $5 order is 
more than we make (even though we don't pay for volunteer time, it is 
valuable). And the fact that almost no one has ever ordered an "e'osai ko 
sarji la lojban" button when I've offered them suggests that we won't get 
very many. (Note that pay pal charges us 2.9% + 30 cents on each payment 
to us, so that we lose almost 10% off the top of a $5 contribution).

I don't know the rules on donating services as tax deductions, and no one 
has raised the issue before now. In any event, products of donated time, 
like that horoscope, do not pay the bills, and I don't think they would 
properly count as deductible. If someone donates services that we would 
have paid them for, that is another matter, but we don't pay people to 
translate their horoscope. To the IRS, Lojban will still look like a hobby 
to the IRS rather than a business.

Note that I have to document all these tax deductions that people take if 
they exceed a trivial amount. If you claim a $100 tax deduction, I'd 
better have sent you a receipt, or you're in trouble come audit time (the 
threshold I think is $75 for a single donation or $200 for the year). The 
IRS could take away our tax deductible status of people abuse it.

>From the research I've done on mail order, you have to sell books at 
around 8 times the printing cost in order to truly make money at it; 
smaller orders probably need a higher markup. We're unlikely to ever be 
able to mark things up that much. CLL is being sold for a little more than 
3 times printing cost.

>And of course, growing the community so that you're getting all the
>above from each of 1000+ people, and *then* you'll be making money
>worth talking about.

I'd love to see it, but I won't hold my breath. I think I've learned 
enough about the difficulties of mail order business to know that 1000 
sales of a $5 item will almost certainly lose money. As for membership 
cards, there is a reason that most non-profit orgs charge around $50 "dues" 
for a sustaining membership (which would be something different from the 
LLG voting membership). You need the volume of mass marketing to make 
money on small orders.

lojbab

-- 
lojbab [email-masked]
Bob LeChevalier, President, The Logical Language Group, Inc.
2904 Beau Lane, Fairfax VA 22031-1303 USA 703-385-0273
Artificial language Loglan/Lojban: http://www.lojban.org