Economics of self-publishing a book via Kickstarter: Hello Web App's story

May 14, 2015 Production · Case Study · Hello Web App

About a year ago, I ran a Kickstarter for Hello Web App — and now that the book has officially launched, I thought it would be useful to run down how much money the Kickstarter raised and where it went!

The Hello Web App Kickstarter campaign page.

Note: There will be another post after this one covering setting up the campaign and the regrets I have about the rewards and other details, but the economics of a project is such a long topic already that I wanted to devote an entire post to it.

(Big thanks to Cameron Moll for being the inspiration for this post.)

The Hello Web App Kickstarter campaign raised $12,136 (173% of the original $7,000 goal) from 540 backers.

It's interesting to note that while the average pledge amount was $22.48, the vast majority of backers (322 total out of 540 backers) chose the $10 pledge.

Economics breakdown

Total amount deposited after fees: $10,806

Kickstarter takes 5% and Amazon Payments (which Kickstarter used at the time of my campaign) takes 3-5% depending on region.

Taxes: -$2,000 ($8,806 profit remaining)

As soon as I got my deposit, I squirreled away $2,000 for my eventual taxes. Unfortunately shipping the books happened in the next calendar year, so I had to pay taxes on my entire payment since I couldn't claim any deductions. Note that this is a guesstimate — my taxes were combined with my husband's.

Piles of books at my home ready to be shipped.

Book printing: -$1,037 ($7,769 profit remaining)

I almost printed the books for ~$10 per book, which (in hindsight) would have been devastating. I ended up going with Print Ninja for the paperback printing, which ended up giving me a per-book cost of $3.60 (I ordered 1,000 copies, 200 expedited, with additional costs for color pages, thicker cover and paper stock, and a spot-gloss on the cover.)

Kickstarter backers ended up "ordering" a total of 288 paperback books, which comes out to about $1,037 in printing costs.

Book shipping though Amazon: -$655 ($7,114 profit remaining)

I'm selling Hello Web App through a number of different channels (Gumroad, which has the least fees, Amazon, where I get the least profit but theoretically bigger distribution, and Leanpub). I read in a few sources that it was worth it to order a bunch of copies of your own book for your Kickstarter backers so you can get on Amazon's best-selling lists, which I did the day of launch.

I ended up ordering 55 copies of the book for various backers, which cost overall $1,159 at approximately $21 per book (the $19.95 book price plus sales tax.) I'll eventually receive money back from Amazon for the books ($8.98 per book, so $494), which brings the total cost of shipping via Amazon to $665. (There is also the cost per book for shipping to Amazon, but that ended up being around $0.30 per book so I didn't include it here.)

Was it worth it? I'm not sure — Amazon didn't order enough from me to cover the launch day rush (and I didn't realize at the time I could ask for an increased order) so the books went out of stock immediately. I have no way of telling, but I am pretty sure this negated the effect my book buying had on the ranking of the book.

Hours of prepping and packing went into shipping the books.

Book shipping myself domestically: -$164 ($6,950 profit remaining)

Did you know you can ship books domestically using USPS's "Media Mail" option for much lower shipping costs? I didn't before this project. Media Mail is slower than typical shipments through USPS but the cost savings is ginormous. Shipping one book costs $2.92, and the total cost to ship books domestically $164.

Also — you can't print Media Mail labels from USPS.com, but you can through Paypal. However, Paypal's system is really buggy and I kept getting random errors. I also tried stamps.com, but their system seemed even worse and they required me to call them to cancel my account (and answer a survey augh), which is a terrible business practice so they're now boycotted.

The post office was more understanding than I thought they would be.

Book shipping myself internationally: -$744 ($6,206 profit remaining)

I made a huge mistake when I chose the additional amounts for shipping for the Kickstarter pledges. I set international shipping at $5 extra, but turns out that shipping a book internationally is much more than that — ~$8 for Canada, and $13 for overseas shipments.

I ended up sending a message to Kickstarter backers of the $25 tier, hat in hand, asking if people won't mind sending over the extra money to cover shipping, and a few did, some much more than I asked. The generosity of strangers always amazes me — thanks again to everyone who sent over more money.

The approximate total for international shipping ended up being around $844. I received around $100 in donations for shipping from various backers, which brings the total cost of shipping to $744.

Box ready to be taken to the post office.

Packaging supplies for shipping: -$100 ($6,106 profit remaining)

Of course I needed to buy supplies for packaging my books for shipment — toner, printing labels, bags, and bubble wrap came to approximately $100.

$6,000 Profit?

Having ~$6,000 left on a $12,000 Kickstarter raise isn't that bad. However, the entire process took about a year, and I probably spent thousands of hours on researching, writing, editing, designing, and marketing the book before the public release. I don't actually make that much money from my day job (~$20,000/year), so this profit went directly into my living expenses and I actually fell into debt the last few months because I didn't have enough money left over to pay my bills. Had I actually produced the book within the few months time period I originally estimated, $6,000 on top of producing and shipping fees isn't bad, but didn't last when stretched over a year.

My intent is not to complain, rather, note that while the numbers above sound great, the number of hours I spent on the project probably meant I earned less than minimum wage. Yeehah.

But — the book is now selling and hopefully the debt hole I dug myself into will slowly get filled. I'm getting great reviews on the book (yay!) and have been booking workshops on the book's content.

I have quite a few other articles about the Hello Web App design and production process that you might want to read:

Of course, you should buy Hello Web App if you're interested in learning web app development. You can download a sample of the book by signing up for the newsletter at the bottom of this page.

You should follow me on Twitter for more fun self-publishing tidbits, startup whining, and dorkiness: @limedaring

Thanks for reading!