Could Bitcoin and/or Micro Payments Help Me Sell More Of My Book?

For context, please read yesterday’s post on Creative economy, micropayments and Bitcoin.

This series of posts started with a simple question:

“Could I sell more books and keep more of the profits by selling direct and cutting out intermediaries?”

The economics of the publishing business has interested me since I wrote this article on ReadWrite in 2009.

I published Mindshare to Marketshare using Createspace. It was a pretty good experience, certainly better than the total loss of control from finding an agent who finds me a publisher who then tells me that I am responsible for marketing (i.e that despite their cut, the hard work will still be down to me).

This blog records my research in public into Fintech (including the intersection of e-commerce and payments which is the current sweet spot in Fintech). So now I will “eat my own dog food” by recording my research to solve two problems:

  1. Offer a digital version of Mindshare to Marketshare. People have been asking for a digital version (for reading on Kindle, other e-book readers, phones, tablets and phablets). I wrote the book for busy entrepreneurs who may prefer to skim a digital version and make digital notes. This is nothing to do with Fintech, it relates to boring word processing format issues which is still back in the dark ages. I know there is a fix and soon we will will have an open format like MP3. Still, if anybody reading this knows what I should do, please reach out in whatever way makes (comment, Twitter, email).
  1. Reduce the price while keeping the unit net profit the same. The digital version should be cheaper. Reducing the price should mean that I sell more. If the net profit is the same and I sell more, then I make more profit. Business 101 says that this is impossible, but with a digital twist, it might be possible. This is my experiment.

I am crowdsourcing my experiment by publishing what I have learned and inviting help (via comments or Twitter or email) from people who have tried similar experiments or who understand different pieces of the puzzle.

Here are the unit economics for my book (in US$):

Selling Price 28
Print Cost 3.08 11%
Gross 24.92 89%
Royalty 13.72 49%
Distribution Cost 11.2 40%

I obviously don’t begrudge Amazon their print costs. It is the Distribution cost that is annoying. If that really included marketing it would be OK. As an aside this is why businesses that process payments in niche markets (Uber, AirBnB, iTunes, etc) are so massively profitable. Just being able to offer a simple way for people to buy is a huge win for the seller. Now, we should enter the era when this becomes cheaper and the gatekeepers take a smaller slice.

Ideally I would like to sell through my own site (I use WordPress). Then I want to offer Affiliate deals. In other words, if I am going to have to do marketing myself, I want the tools to do it right.

I am totally sold on WordPress as the base platform. They are an amazing company, almost never annoy me, often delight me and deliver far more value than they extract.

I need to sell in multiple currencies (the book is in English but I have readers all over the world, including people who use English as the language of global business even if it is not their mother tongue). That made me think of Bitcoin.

This could be a big deal. Cutting out 3% credit card fees is one thing. Cutting out 40% distribution when that “distribution” is really just the ability to take credit card orders is an entirely different thing. That is why I think that my experiment could be of value to the large creative economy and the Bitcoin ecosystem.

This applies to all creative workers who sell and deliver digitally. Musicians have been in the “eye of the digital storm” far longer than scribblers. iTunes was great, but it has a heavy tax. Anybody who sells their service through expensive intermediaries will eventually want to a) have control over the process and b) keep more of the revenue. So, eventually the tools that enable this can apply beyond the creative economy to all free agent workers using services such as Uber and Task Rabbit. However I am sure that creative workers will lead this market as they have the capability to implement digital solutions as well as the need. One anecdotal observation from using AirBnB – lots of the hosts are creative workers looking for income on the side to enable them to pursue their passion.

In my next post, I will be looking at specific solutions such as Coinbase, Bitpay, OneName, ChangeTip, Millipay, Bitwall and Paystand. If I am missing any obvious solutions, please tell me. Also if anybody can help me pull it all together and make it happen I would love to hear from you.


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