With the recent plea from a well known author not to buy her EC books, which I jumped on shamelessly, several people asked me to explain how small publishing works so readers know why we implore them not to buy our books from places like EC, and in my case, paperbacks from Torquere that are still up despite a rights reversion in January.
For our purposes, there are 3 types of publishing going on right now in romance. Major label/big 6 is one (though people argue big 5 pr big 4 these days). That's when you get in with say, Harlequinn or Avon and your book is paperback bound with the ebook as an added value. These ebooks can go for 10-12 bucks and are not the biggest concern for the publisher. Many of those big publishers are looking at e-first lines, but they haven't quite jumped on the bandwagon 100% yet. We're not talking about them right now.
Then there's self publishing. An author writes a story, buys or makes a cover, hopefully pays for an edit, converts book files to e-books and uploads them to Smashwords or Amazon or Kobo or Nook or All Romance Ebooks. Or all of them. Then the distributor, which is one of the previously mentioned places, pays the author all the money they made on the book, less their percentage. For anything 2.99 and over, Amazon only takes 30%. Not bad, right? Ah, but for that .99 price that everyone including me loves, Amazon takes 70%. The author gets .29 per copy, give or take. Seeing as how covers, edits, and formatting can easily add up to about 200-500 bucks, a small publisher, who provides all that for another cut of the percentage, looks really attractive.
So, then we come to small publishers. Yes, EC was a "small" publisher even at several million a year. Some small pubs put out 5 books a year. Some 50. Some 5000. What they have in common is their business model. Unlike the Big 6, most of these publishers have retail websites. They provide cover art, editing, proofreading and file creation at their own expense, unlike a vanity press who charges the author up front for that. They upload the books to the distributors, which stamps their presence on it behind the author. Like a Dreamspinner book? Then you might like Julia's, too! Then they do advertising. Often with blogs, reviewers, or websites such as All Romance, unlike Big 6, who focus on print and radio, even TV a la James Patterson's ads. Word of mouth and repeat customers are important to these publishers, as are their sales on their own websites, so they don't have to pay those commissions we talked about self published authors paying to Amazon, etc. Usually it's the same amount for publishers.
So, what does all this matter? Well, I was asked to explain because some authors and readers have seen people say, "Yes, but I never buy your books from EC. I just buy them from Amazon." This is not an unusual assumption, that the publisher's site is the only place the publisher makes money on a book. But it's not.
In fact, the author, in general, makes more money on a book sold on a publisher's website than they do on Amazon or Smashwords. Since the publisher makes more, they offer the author a better percentage. The money Amazon takes means the publisher makes less, so the author makes less. Often 10-20% less. And what about those .99 books? Oh, man, on Amazon, the author gets about .12. Ouch.
And that's assuming the publisher pays the author. See, this is where people get confused. If you buy a book on any website that lists the publisher as Ellora's Cave, EC gets the money. No matter what site. There's always a publisher listing somewhere in the "information" section of the book listing. On Amazon it's after the blurb and the customers who bought this areas. Don't be fooled when it says Sold by Amazon Digital Services. Look for this: Publisher: Ellora's Cave Publishing Inc (February 5, 2014)
I know it's hard to tell who's doing what with as many publishers and self publishing nicknames (like my own Turtlehat Creatives) out there. But it's easy enough to see an EC book on Amazon. They might not band all their books at the top with their name anymore, but most have the ankh symbol on the top left, and some have EC under that. Then there's that publisher listing that, legally, they can't really hide.
I know some people, sadly, had new books out with this publisher and are still promoting them, so buy those EC titles at your peril. My wife, BA Tortuga, are asking people don't buy our remaining EC books ANYWHERE. EC gets the money, and we're not getting paid. I hope that helps out everyone who asked me to post about this.