Pay Scales

I was talking to a prospective writer this week about our pay scale and he was all bent out of shape about how we go about it. He felt that if we did not pay his rates, that it was both an insult and just made Avalon look cheep. I tried to explain to him that its not that we are cheep, well we are, but that the economics of the e-publishing field just are not at a point where we, or for that matter, most publishers, can really put out a great, professional pay scale. Its not that we don’t want to, there just isn’t enough money out there yet to do so.

Here’s an example.

Its no secret that the best price point for a PDF is about $5.00. Anything more then that and sells drop off. On top of that the general, lifetime sells of an average PDF is about 25 copies. Yep, there aren’t a lot of sells going on for any given product. If it does 50 copies it’s a good seller, and 100 copies is a great seller. Sure there are products that do over 500 copies, but these are often from larger print publishers who are also offering the same printed product in a PDF format. Most of us small e-publishers can only dream of doing such sales numbers, and for sure can’t afford to put out any printed products, or if they do, they are small runs of 1,000 copies or less.

Now lets take the numbers and plug them all in. Say we do an average priced PDF ($5.00) and it sells an average number of copies. (25). The gross sales for this product then are $125.00. Now I’m not bragging, but I make more then that in two hours of work at my day job.

Still we have $125.00.

But wait, we have to take out the sites’ commission. The average for this is 33% (With a high of One Book at 35% and a low of WGD at 18%) we thus have a total Net of $83.75.

Wait, there’s more. Web site hosting fees, Newsletter hosting fees, and misc stuff, PayPal fees, so lets take another $5.00 off the top. We then have a net of around $78 bucks. Now the writer gets their 15%, ($12.45) so that when we are done Avalon Games makes a total of about $65 bucks on this product. This its life time sells figures, which may take two to three years to achieve. In a three year period then Avalon pulls $65, which its split more or less three ways, I get 1/3, William gets a third and Avalon Games gets a 1/3 for growth and cash flow needs. In the end me and William pull about $22 on this product, which does not include our time, William with bookkeeping, contract generation, research, etc, or my time with artwork, layout, file management, promotion, etc.

So as you can see no one is pull big bucks on any of this, which is what I tried to explain to this fellow. If we had paid him his 5-cent a word rate we could have easily spent $100 bucks on his work, and not only have not made any money at all, but we would have gone in the hole doing it.

Now don’t get me wrong, at this rate Avalon is going to go nowhere and real fast, but our goal of putting out lots of small, fast, cheep products allows us to take this small turn around and put out 100 products a year, or more. Hum, now that makes a bit of difference when we take those sorts of numbers and apply them to the example above. Currently we project a gross sales for the year to be from $5,000 to $7,000, and much more next year. Each year we plan to grow, not only our product line, but also our opportunities, looking for new directions and new ventures.

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