Tuesday, 17 April 2012

Hero Code - cost, profit, when does the money start rolling in?

One aspect of independent comic book creation I like is the full disclosure afforded to creators.

The idea that one piece of advice or a passing comment may help someone else somewhere is something I am a big fan of.

With that in mind, I present a break down of the cost of production for a single issue of The Hero Code, giving people an idea of what it takes to actually start to make money on a creator owned, self published book.

I've bundled the production costs together, so as not to reveal the individual costs of those aspects like pencilling, colouring and lettering, as I don't feel it is my place to reveal each creators rates.

Production costs

A single issue of The Hero Code is made up of 22 pages of interior art, and one cover. Issue one featured variant covers, partly because of if being a Kickstarter campaign and I wanted to offer those variants as rewards to backers. For the sake of this example, however, I'll be referring to one cover only.

I will also not be including such things as logo and skirt designs. It's hard to factor these costs in as they will be used across the series.

The cost of pencilling, inking, colouring and lettering a single 22 page plus cover issue of The Hero Code is: $2024.00

I know it can be done for less, and I know it can cost a whole lot more!

I did look at doing an offset print run of the book, and found some very good quotes for runs in the low thousands (more on this later), but in the end I opted to use a POD service, namely ICGeeks.

ICGeeks were able to print full colour copies of the issue, 24pages at $1.65 per issue.

The issues are for sale at the Monkey Pipe Studios store for $3.99 + S&H.

This means, not taking into account the initial shipping costs of getting the books from ICGeeks to me, each issue has a profit margin of: $2.34.

For the sake of this article, let's say that shipping costs on a single issue is around .20c - making the profit $2.14.

Selling the book

As most people are probably aware, selling to stores means selling at some kind of discount. Normally stores will accept paying 50% cover price (in this instance $2.00). 

Selling in stores will increase your exposure, but decrease your profit (in this example down to .14c per issue).

It is also worth noting that some stores will not pay 50%, but instead something more like 40% (especially through Diamond). I have also heard of some paying cost. In these instances you make nothing, but open up exposure to the book - something which each creator has to decide if it is worth doing or not.

Selling digital is another method, of course.

Selling through an app or third party normally sees a percentage profit. In this example I sell my books (single issues) at .99c per issue. Making a profit of .49c per sale from the third parties.

Selling direct at .99c means that you make a profit of .99c minus paypal deductions - normally making the profit around .85c.

I also offer digital subscriptions at $5 for 6 issues, making the profit around .75c each.

So when does the money come rolling in?

Not including the Kickstarter campaign, I have to date sold around 25 issues of issue one direct; 17 print and 8 digital.

I also have the book in four stores around the US. Of those four stores, one backed us on Kickstarter, two bought the books at 50% and one took five issues on consignment (to be paid for if they sold).

I know that one store has sold 4 copies, but that is all the feedback I have at present.

There was also a store in Canada which sold two copies.

So, when does the money start rolling in?

With selling print issues through the online store, we would have to sell around 946 issues to break even.

We're currently 929 away from that.

Digital would need a little over 4,000 sales.

I could have gone the offset route. Let's say printing 3,000 issues.

The costs based on the quotes I received would have been around .90c per issue, adding .75c of profit per sale.

It would have made selling in stores and through Diamond a profitable venture. Maybe something to visit at a later date.

I know that a single issue, a first issue, of a new book, self published, a relatively unknown creative team, is a hard sell, but that's how these things start. Having the book ever-green available might help us make profit at a later date, as the issue count grows, the interest might build backwards.

Luckily for me, I have a day job. One which allows me to carry the cost of production for now. I pay the creative team, and would not have it any other way.

However, with tax season now upon us, it is becoming harder to offset these costs against my tax deductions - the numbers basically make this a glorified hobby.

Will I keep going?

Of course - Hero Code is a story I want to tell. Maybe it will all become a huge money spinner in the future, maybe.

For now, I'll keep on telling the story.


Jimmy S. Jay said...

Jamie- insightful article for sure-
most folks don't figure any of this stuff out BEFORE they decide they want to self publish, and self distribute.

Keep up the blogging because i dig it-

Jimmy S. Jay...
Twitter: @JimmySJay

PS- good thing i bought the $10 Karl Alsteatter Variant!

Tyler James said...

Wasn't there a Kickstarter for this? Doesn't that change the "# of sales needed to be profitable equation?"

Second, you've come to the conclusion that I think most indie creators will come to eventually...
selling single issue comics almost exclusively online at those margins will pretty much NEVER let you break even.

There just aren't that many people out there interested in buying a niche product of a niche product (independent floppy super hero books) outside of traditional retail channels.

So, what's the answer? (Wouldn't we all like to know!)

I certainly don't have all of the answers, but a few that can help:

- premium products (artist editions, rare variants, etc.) at higher margins can help.

- Not convinced $0.99 cent digital is the right price point. Our $3.99 Digital Deluxe (bonus content) offerings have sold far better than our $0.99 digital offerings.

- You need advocates and other people pushing your product. (Retail partners.) It's one of the best ways to make outsized noise for your products.

- Signings and cons are a long-term investment, that can pay big dividends.

Jamie Gambell said...

Jimmy - thank you. I will most certainly keep on blogging! And keep hold of the Altsteatter variant - it's going to be a rare one!

Tyler - The Kickstarter was to finish production, and ended up pretty much paying for itself. The additional production costs - the additional rewards, covers, cards, and so on - ended up costing more than originally thought. The best reward bracket was the inclusion of a backers likeness in a later issue (something which I would recommend anyone starting a campaign to consider).

The additionally printed issues, post fulfilling the campaign obligations, were used for conventions and on-line sales.

A lot of them also went out as comp copies to creators, to review sites, to stores in the hope of them carrying the book.

It adjusts the numbers slightly, but not by much, and not for future issues, so the number still fits.

I think premium products work.

I think conventions work.

I am, unfortunately in the hard place of being in SoCal - which still is waiting for the Con that works (especially LA) for the small press creator. I am also only a writer. This limits my margins somewhat - I have books and sundries to sell, in a town which seems interested more in original art.

One of the reasons I've taken a break from cons this year - to allow the production of more issues, thus increasing my wares. As well as to allow Jonathan to finish other commitments.

The digital pricing might shift. But I want to keep issue one at .99c, maybe future issues at 1.99. The changing scape of digital stores might affect this.

Partnering with stores is proving tricky - again something I may be able to do down the line.

One thing I am beginning to think might be good is to set initial runs at 1,000. First prints. This breaks the title even. Make something unique about that first run - perhaps a different cover, never repeated.

Include 50 or 100 artist edition covers.

Even though the books will be ever-green, I think there is value in having an initial buzz upon release.

One thing I would disagree with you with, is that these books are niche. I think the market that sells them is the niche, the limitation. I'm not sure what the next stage is, the platform which opens the doors and lets the new readers in, but I'm happy to try and help find it!

Tom E said...

Slightly off topic, but I think relevant for your post. Rovio, had been producing some 30+ games before they stumbled on Angry Birds.

The first barrier for any creative or business endeavour is to actually get the thing out there in the first place.

Creating work, honing it, adapting it to how you and your team work and what sticks with the audience needs to be a iterative.

Jamie Gambell said...

Tom - there's the rub!

It often takes several goes to get the one that sticks. You can pretty much track any creator back several years from their overnight successes!

One of the reasons I decided to not attend any cons in 2012 was because I wanted to work on producing more titles, extending the range.

Also, I think with something like The Hero Code, a long-form, ongoing story, the important thing would be to produce a lot of work - the more the better.

Cheshire Cat Art said...

This is awesome information. I'm trying to play the numbers game with my little swath of comics, and I'm going conservative with my print runs for now (Ka-blam, 50 copies or less).

I'm beginning to think digital is the way to break even quickest, as there is little to no overhead, but its not as cool as holding your product in your hand.

For me I'm looking at trying some of the local con circuit around here out, and seeing how that fares, but by and large I'm aiming for selling everything and breaking even and considering it an exposure.

Hopefully there'll be some sort of grassroots fandom out there somewhere, but either way, I'll do what I love for as long as I can.