Ask the entrepreneurs advice
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Amazon is selling it for 34.55. Maybe I'll raise the price a tiny bit, so the customer can get Amazon's free shipping for purchases over $35. As it is, the customer has to buy another thing to get free shipping. I might as well get that dollar instead of annoying the customer and giving it to Amazon.
Rounded prices... for your convenience!Lovely.
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Okay. You wrote a book some months ago. You own and operate a related service. The book was meant as a loss-leader for the service, but it is performing well. So well, in fact, you decided to raise prices. You did that about a week ago, and sales have slowed down, instead of gone up (this is the busy month in a 3 month cycle). Now you're nervous.
What do you do. WHAT DO YOU DO.
Wow, that is a really good question. How many copies have you sold over what period of time? "Performing well" can be wildly different for different people.
From my conversations with you, this is a pretty narrow market that your book is in. You have mentioned before that only a small number of people even take the test that this book is catered towards. Is it possible that you have already reached a level of market saturation?
Amazon is selling it for 34.55. Maybe I'll raise the price a tiny bit, so the customer can get Amazon's free shipping for purchases over $35.
That is unlikely to hurt your sales from the current level. I frequently put off purchases from Amazon until I can reach the point for free shipping. Or, well, I used to until I became a Prime member. Of those purchases, only a small percentage of them ever were completed, from what I remember. You may as well get the money and a chance for increased sales.
Rounded prices... for your convenience!
Lovely.
Since you brought it up, one thing I have found from selling to business owners is that they tend to think in the next largest round number. General consumers tend to see $12.95 as $12, business owners tend to see $13. The same works for larger numbers also. A business owner would tend to see $92 as $100 and make their in-the-head calculations and will make decisions based upon that.
In my experience, there would be almost no difference to a business owner in a sale price of $92 versus $100, so you might as well price it at $100. Sorry, got off on a tangent there, but sometimes these things do not come to me until I am reminded of them.
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How many copies have you sold over what period of time? "Performing well" can be wildly different for different people.
It's not super. I seem to be selling an average of 15 copies a month, and sales are stronger once every 3 months or so, as people gear up for the exam.
I'm working on the second book now, so what I'm really hoping for is that I don't have to lower prices, and can price them both at about $45 (for about $25 in royalties, each) and sell about 25 per month. Hey, it almost pays the rent, and once it's done, it's passive income.
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Maybe you can do a calculation like this:
Po = old price
Pn = new pricesales(Po)/week × Po - sales(Pn)/week × Pn
Is the net result there positive or negative?
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I'm on pace to make the same number of sales as a typical month. Which increases my revenue by like 120%, compared to a typical month. But this is "supposed" to be the busy part of the cycle, so I expected to make, say, 25 sales this month, instead of the 15 I'm on pace for.
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It's not super. I seem to be selling an average of 15 copies a month, and sales are stronger once every 3 months or so, as people gear up for the exam.
15 sales of something that you never really intended to sell is pretty damned good in any book. You may not be able to buy a private island with that income, but it is better than nothing...by roughly 15 copies. ;)
I'm working on the second book now, so what I'm really hoping for is that I don't have to lower prices, and can price them both at about $45 (for about $25 in royalties, each) and sell about 25 per month. Hey, it almost pays the rent, and once it's done, it's passive income.
I wish you luck. It is such a niche market that the best price is really just a guess. Adjust prices and see how people respond to it. That is really all you can do. Market research on this small of a market is just not something that is feasible.
Passive income is a great thing. My next project (that launches this coming month) is largely passive monthly income with a very low attrition rate on customers. Sell them once, don't fuck them over, and they are unlikely to go anywhere. That is the kind of income I strive for, it opens you up to explore other avenues or just fuck off with family.
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It's possible that people who thought about buying at Po are waiting to see if the price moves again before committing...
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You could be right. I've been bumping up in anticipation of the busy season.
/me grows a pair.
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Can you let some of that money ride and purchase some PPC advertising?
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I've tried it, no measurable results for the costs. I do have an Adwords credit I could use, though.
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How precisely was it targeted?
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SOA Exam FM Text Book
www.amazon.com
Complete Exam FM Study Guide
with 150 Problems and Solutionsand others, with similar copy. Clicks are expensive. Like 1.85, and my margin at the time was like 6.9. So when I saw days with 10 clicks and 0 sales, I said eff this.
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Actually, out of interest: How long does it take to write a book? How many hours a day? Is it something you can do while holding down a day job?
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For the technical stuff I'm doing, it takes about a week per 50 pages. That's with 8 hour days. It scales pretty linearly, if you do at least 2+ hours a day. (So if you had a day job and had two hours to spare, 50 pages would take a month). It's okay pay -- 6 weeks of work has a present value of like 5000$ (or more -- like $18,000 -- if this new price sticks).
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So I guess you could think about it taking an hour to write just over a page. Then again, I should probably decide on a topic before investing a great deal of time on planing for bookwriting...
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Yeah, definitely. Write about what you know. If I had to research this stuff it would take way longer. I have to write problems and solutions, too, which is a lot more time consuming that just writing out the theory.
But since I learned the topic for a different reason, and decided to get value out of what I know, I'm not counting the learning time toward book writing time.
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Clicks are expensive.
You should give it another try with one of the $100 free when you spend $25 deals that are always going around.
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So I guess you could think about it taking an hour to write just over a page.
That's about right for a technical work. Sometimes it's faster, sometimes slower, but it averages out at about that. Unless you're very lucky, you won't get rich from being an author.
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Unless you're very lucky, you won't get rich from being an author.
It's really not bad. I'm on pace to make some $270 worth of sales this month. And I consistently make something like 14 sales a month. So, for the next few years, half my rent is paid for, automatically. The next book will take care of the other half. And then, when I get back to work, all that income will go towards paying for food and saving for the next project. And I can always say F-U to a job I hate. As of next month, I will never have to work a job I hate again.
I guess what I'm getting at is that publishing in the right niche can make you rich in time. And if you're good at making use of time productively, the free time can make you rich in money.
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I guess what I'm getting at is that publishing in the right niche can make you rich in time.
Perhaps, but you've got to factor in the cost of your time spent writing, and the fact that for most people the sales decay over time. If you enjoy doing it in your spare time, it's not a bad way to spend your time, but it takes a lot of effort to get a proper income from it.
Unless you're lucky and hit the big time. Computing books rarely seem to make the NYT bestseller list.
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That's true enough. My book is definitely not in the computing niche, and is somewhat immune to the decaying sales effect. In short, my niche is for a certain constantly in-demand professional exam. And the retail price is low enough that reselling is unlikely. Now that I'm sure my new sale price has stuck, I can estimate that my work has a net present value of some $15,000 (for 6 weeks of work), assuming the exam doesn't change its syllabus substantially in the next 5 years. Indeed, this is probably an underestimate, since my reputation and sales should only improve with more sales and reviews (I hope).
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So the new price stuck. 17 sales this month, on pace for some 22-25ish. About 15 dollars in royalties per sale. Not bad.
Also, I'm at 201 pages for the new book. Still have some work to do, but when I'm done, I'll be bold and price it at 84.99 MSRP (so it'll sell on Amazon for about $60, and I'll get some $45 in royalties, each).
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Finished book 2 yesterday. It already has an Amazon listing. Will make $45 in royalties for each sale.
Next steps:
- raise prices on first book in response to bad, but "false" review
- Localize first book for equivalent exams in UK and India, become a multinational.
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Earlier this week, myself and a business associate were at a social function. I introduce myself to another businessperson and he says, "I have heard of you. You are quite the overnight success in the local tech world." I kindly reply, "Well, I certainly wouldn't say that, but thank you."
Later that night, my business associate starts giving me shit about it. Keep in mind, I do not consider myself that successful. Not even locally. I have done pretty well, but there are a fuckload of people more successful than I even on the local level. But lately, I have made some moves and made some waves that got people talking, so that is the only reason this guy had even heard of me.
But it got us to talking... I have spent my entire life learning business. My father was a businessman. My grandfather was a businessman and had quite a large commercial farming operation. I have been at least partially self-employed my entire life. I have counseled friends and family on their businesses. I started my MSP business 7-8 years ago. I started a second tech business this year.
So basically...you work your ass off your entire life...you build a business, you build a client base and then when you finally get noticed by the plebs...you are an overnight success?
There are no overnight successes. There are just people who work their fucking asses off and one day get noticed. That is all, that is my thought for the day.
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There are no overnight successes. There are just people who work their fucking asses off and one day get noticed. That is all, that is my thought for the day.
Occasionally someone gets lucky. It's not something to count on, though working hard and knowing your stuff can help you take advantage of the chances that get thrown your way…
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Occasionally someone gets lucky.
Yeah, but even big time lottery winners probably played for years before they won it big.
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Occasionally someone gets lucky. It's not something to count on, though working hard and knowing your stuff can help you take advantage of the chances that get thrown your way…
Those are few and far between. Even the guy who came up with the Pet Rock was a marketing bigwig before coming up with that idea during a drunken conversation in a bar (yes, that is how it happened). If you know your business though, it helps you to know those opportunities when they come your way and to execute them correctly.
As I (and probably a lot of others) have said before, ideas mean fuck-all. A great idea with poor execution is worthless, and a person who does not know what they are doing is likely to execute poorly.
Yeah, but even big time lottery winners probably played for years before they won it big.
...and then the majority of them end up bankrupt. ;)
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Not the good ones.
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Plenty of them, too.
Went Bankrupt, Now Worth Millions!
I was one told that you arn't a true entrepreneur if you haven't got bankrupt at least once! Well Walt Disney shows us how its done, he was fired by a newspaper editor because "he lacked imagination and had no good ideas." He went bankrupt several times before he built Disneyland. In fact, the...
Whatever else, a guy like you cannot deny Bob Fucking Guccione. OK, a lot of the people on that list are not exactly "businesspeople," but: Henry Ford.
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I was being facetious. If you are interested, there were a couple of books published by Thomas J. Stanley. "The Millionaire Mind" and "The Millionaire Next Door". He did some case studies of millionaires and decamillionaires. One thing that stood out in their studies is that truly wealthy people went bust an average of three times before hitting it big and achieving their success.
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I was being facetious.
Well, I was being drunk. (I think I'm winning.)
One thing that stood out in their studies is that truly wealthy people went bust an average of three times before hitting it big and achieving their success.
Yeah, I'm familiar with that, hence my original joke.
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Well, I was being drunk. (I think I'm winning.)
I had dinner at a place that makes Bloody Marys with moonshine as the liquor. I call it a draw.
Yeah, I'm familiar with that, hence my original joke.
Have you read either of the books I mentioned?
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Whatever else, a guy like you cannot deny Bob Fucking Guccione.
Of note on the link you posted was this comment:
It is also noteable that I have included the founder of Penthouse and the blogger Perez Hilton both web entrepreneurs! The difference between them and the others on the list is that their money is new money, made in the last 10 years!
Did Penthouse go bust and then make a comeback on the web? Because I know Penthouse has been around a long time.
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Have you read either of the books I mentioned?
I have not.
Did Penthouse go bust and then make a comeback on the web?
I have no idea. But as we all know the primary purpose of the Internet is porn and the primary product of Penthouse is porn, the thesis is plausible to me. Seems like someone with a successful magazine should be at least as likely as a basement dweller to be able to monetize the web. Probably more so in this case, given the subject matter, though I wonder if it was at the expense of the dead tree version.
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Those are few and far between.
Luck favours the prepared.
ideas mean fuck-all
QFT
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Luck favours the prepared.
Generally the preparedness seems to be liquid assets. More than a couple of times I could have made a killing if I had been able to invest in opportunities.
ideas mean fuck-all
Unless you can sell them to other people, the amount of crap I get from customers that high-powered consultancies have sold them and is completely unworkable as a product.
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Generally the preparedness seems to be liquid assets.
And/or expertise. You need that to recognise that the opportunities are just that.
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Generally the preparedness seems to be liquid assets. More than a couple of times I could have made a killing if I had been able to invest in opportunities.
That depends, and it certainly does not hurt, but you can usually structure things in such a way that you do not need the cash. Knowledge is usually more important than cash in those situations. Where there is a will, there is a way.
Unless you can sell them to other people, the amount of crap I get from customers that high-powered consultancies have sold them and is completely unworkable as a product.
Those are the people who give sales a really bad name.
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Catching up on a backlog of reading. The May issue of Entrepreneur magazine has a really great article entitled "Six lies they teach in business school". I could add a few to the list, but I would agree completely with their list.
6 Lies They Teach in Business School
Sometimes, the lessons you learn from life experience contradict the ones you learned in the classroom.
/#1 would be first on my list also, except I would rephrase it as "Never write down a business plan". A partnership once fell through because the guy who wanted to team up with me was put off because I did not have a formal business plan written down. I simply told him, "You go write a business plan, I am going to go make money."
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The May issue of Entrepreneur magazine has a really great article entitled "Six lies they teach in business school". I could add a few to the list, but I would agree completely with their list.
Having been in B-School at both undergrad and graduate levels, I didn't know WTF they were talking about for a lot of those things. But then, most B-School stuff isn't focused so much on being an entrepreneur. There was a specific entrepreneur class that I took in undergrad.
Of course, so much depends on the particular people you interact with. I mean...obviously the stuff they talk about makes sense for the entrepreneurs who have succeeded. But not everyone has that sort of risk tolerance, etc (I sure don't!). I suppose anyone who comes out of B-School and thinks they've learned some recipe for success wasn't paying attention or was lied to.
Filed Under: Fucking Gell-Mann again
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I didn't know WTF they were talking about for a lot of those things.
You did not experience the same things in business school? Or you did not understand the article? I am going to assume the first, because I read back through it and did not see anything that I would consider hard to understand.
I mean...obviously the stuff they talk about makes sense for the entrepreneurs who have succeeded.
Yeah, but once you have succeeded, you see all the ways that you did it wrong in the first iterations. For me, the major thing was writing down a business plan. Or, more correctly, letting that business plan cause tunnel vision. Everything in life is iterative. Nothing is perfect on the first try. Different opportunities come along. You need to be flexible. Business plans do not breed flexibility. They help with focus, but in many cases they provide too much focus, so much that you are blinded to other opportunities along the way.
For me, my business plans are confined to a single page word processor document and a spreadsheet to determine a variety of basic things: initial CapEx, gross profit margin, break-even point, a rough idea of any step-fixed costs and their impact on growth, etc. Very basic. If it does not look good in broad strokes, you should probably move on. 95% of everything you need to know can be contained in a simple spreadsheet, because more analysis will only confirm what you want the numbers to say. It will not necessarily tell you the truth.
But not everyone has that sort of risk tolerance, etc (I sure don't!).
What is risk? What is security? At an early age we are all taught the adage "Don't put all your eggs in one basket". Yet, everyone does that with their income without a thought. If (and yes, I concede it is a big "if") you make it past the initial phase and you get multiple (clients, customers, buyers, distributors, etc.) then you do not have all your income coming from a single source. If the average person loses one income stream, they probably lose 100% of their income. If I lose a client, I lose a small percentage of my income. For me, that is a lot less risk than working as an employee.
The other side of the coin is, you never hear an entrepreneur saying that they need a raise. I used to work for a guy who would tell us, "Your raise is effective when you are." I always liked that, and I say it to this day. I never have to go to anyone and ask for a raise. I can just find more work, or more efficient ways to do things, more profitable things to do, etc.
I realize that most people see entrepreneurs as "risk takers", but really we are not. Not in the ways that you think. Yeah, businesses fail. But if you are really smart about how you do things, and only take appropriate risks, it is more secure than having a conventional job.
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Yeah, but once you have succeeded, you see all the ways that you did it wrong in the first iterations. For me, the major thing was writing down a business plan. Or, more correctly, letting that business plan cause tunnel vision. Everything in life is iterative. Nothing is perfect on the first try. Different opportunities come along. You need to be flexible. Business plans do not breed flexibility. They help with focus, but in many cases they provide too much focus, so much that you are blinded to other opportunities along the way.
This reminds me a lot about what the agile approach to software engineering is trying to say. Fundamentally, it's all about staying flexible so that
ifwhen the world changes, you can change with it. Having a plan isn't a problem, but pretending that the plan is perfect and knows everything is.When my information changes, I alter my conclusions. What do you do, sir?
John Maynard Keynes (attributed)
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You did not experience the same things in business school? Or you did not understand the article? I am going to assume the first, because I read back through it and did not see anything that I would consider hard to understand.
Correct.
Or, more correctly, letting that business plan cause tunnel vision.
That makes sense. The main thing I remember about business plans was about getting investors. And not letting them go stale. I couldn't say if there was a tunnel vision warning per se, but I definitely see how that sort of thing could become a trap.
I realize that most people see entrepreneurs as "risk takers", but really we are not.
Uh huh.
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Yes bitches. I made close to 200$ in passive sales this weekend alone.
Also, I apparently "discovered" that if I sell two identical (or nearly so) products with identical descriptions, they'll pay for the expensive one, even if it costs more than twice as much. So I will make "new" editions for my other books soon.
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Also, I apparently "discovered" that if I sell two identical (or nearly so) products with identical descriptions, they'll pay for the expensive one, even if it costs more than twice as much. So I will make "new" editions for my other books soon.
And this, ladies and gentlemen, is how future Steve Jobs are born.
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To be really honest, I made a second edition of that book to lower my printing costs (the first edition has color pictures, so I get charged through the nose for printing). I raised the price to like 115$ to drive people to the new, black and white edition. If they went for that, everybody would win: they'd save money, I would have made more (compared to selling the old edition at the same price). Instead, I'm making 50$ per sale instead of 25$.
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Yes bitches. I made close to 200$ in passive sales this weekend alone.
Your first "real" passive income always feels great. I still remember it for me.
"Holy crap, I am getting paid for doing nothing."
Of course, at that moment I had forgotten completely about the craploads of long days and no sleep that led up to that. At that moment in time, I was getting paid for sitting on my ass and not getting paid for all of that unbillable time that led up to it.
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I still remember the work. I'm just glad my estimates were under-estimates. At this point, it looks like the net present value for the 4 months of work I did is like 120,000.
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Not too shabby. On what sort of timeline?
