Jennifer Tribe

Article Summary:

Understanding subsidy publishing, including the benefits and drawbacks.

What is Subsidy Publishing?

What the heck is subsidy publishing?

It's a good question, and there's some debate in the industry as to the answer. However, there are a couple of characteristics that identify a subsidy publisher:

  • Authors pay for some or all of the layout, design and printing costs. There may also be fees for marketing, advertising or other expenses.

  • Authors are issued an ISBN from the publisher, which identifies the subsidy publisher as the publisher of record.

  • Authors are typically paid in royalties.

  • Sometimes, the subsidy publisher retains rights to the material.

  • Most subsidy publishers will publish anyone who pays them. There is no screening process.

By contrast, if you are a true self-publisher, you have your own ISBN (which identifies you as the publisher of record), you retain all the rights to your material, and you receive all gross proceeds from the sale of your book. If you have signed with a traditional publisher, also known as a royalty publisher, your manuscript will have been screened from other submissions, and you will not be expected to pay for any of the editing or production costs.

Identifying a Subsidy Publisher
Subsidy publishers can be difficult to identify because many of them don't use the term "subsidy publishing." They might call themselves a POD publisher, a self-publishing company or just a plain old publisher. All three of these terms are misleading.

  • Subsidy publishing and POD printing are not the same.
    POD stands for Print on Demand. It is a digital printing technology that allows you to produce a single book at a time. It is an alternative to off-set presses where many books need to be printed all at once to make the print run cost-effective. POD is not a publishing model, but simply a method of printing. Some of the biggest royalty publishers use POD on occasion to print books. Self-publishers can use POD to print books.

    If a company tells you they are a POD publisher, they have told you what technology will be used to print your book, but they have not told you anything about the publishing model they use. However, it's likely they are a subsidy publisher because royalty publishers do not call themselves POD publishers.

  • There's no such thing as a self-publishing company.
    Hiring someone to be your "self-publishing company" is a contradiction in terms. Only you can self-publish your book. If you are paying another company to publish (not just print) your book, they are a subsidy publisher.

  • Investigate "publishers" carefully.
    Although subsidy publishers are technically publishers and can call themselves such, most people think of the traditional publishing model when they hear the word "publisher" on its own. When a subsidy publisher labels itself as just a publisher, especially when it does not clearly identify its publishing model upfront, it opens the door to confusion. When you come across a "publisher," investigate carefully.

The Downsides to Subsidy Publishing
Many would-be self-publishers find themselves examining subsidy publishing. You pay a fee, they layout your book, design a cover and print everything. Great, right? Not exactly. There are two main reasons why you'll want to seriously reconsider subsidy publishing in most cases.
  • Poor Credibility
    Remember that a subsidy publisher is the publisher of record for your book. That might not be such a problem except that subsidy publishers have a horrible reputation with the mainstream book trade -- for example, royalty publishers, book reviewers, distributors, and book retailers. Come out with a book under the label of a well-known subsidy publisher, and many of those people won't touch your book with a ten-foot pole. Why? They know there's been no screening process. While there are gems printed through subsidy publishers, there's also a lot of dreck. Reviewers and the rest simply don't have to time to separate the wheat from the chaff so they ignore everything.

  • Poor Economics
    Most subsidy publishers tell you they will list your book in stores all over the Internet. If a customer buys through one of these stores, you receive your royalty payment. However, a subsidy publisher will not help you get into bricks-and-mortar stores, or pursue other sales opportunities. You have to do that yourself.

"Okay," you say. "I can do that!" The catch is that to sell your book to other outlets, you first have to buy copies from your publisher, and these books generally have high unit costs.

For example, it could easily cost you $7 or $8 per copy to buy your soft cover books from the publisher. Let's say your retail price is $14.95. Bookstores usually want a 40% discount on the retail price to *stock your book. A distributor or wholesaler will take another 10 or 15%. That means you need to sell your books to the distributor at a cost of $6.73 each -- but you can't because it costs more than that to create them.

With subsidy publishing, you can't give the bookstores and distributors the discounts they need, so you effectively lock yourself out of those markets. And you can forget about book clubs, catalogs, corporate sales and other *bulk selling opportunities too, because the discounts they receive are typically even higher than those for the book trade.

Is Subsidy Publishing Ever a Good Idea?
Yes. If you have a book that you want to publish for the sake of publishing, and you aren't worried about credibility in the general market or selling through bookstores, subsidy publishing can be a fine choice. For example, if you have a family cookbook you'd like to print up for 50 of your closest relatives, a subsidy publisher would likely be a great fit. However, if you are serious about selling a lot of books through traditional channels, getting mainstream reviews, or building credibility in the publishing world, consider another route.

Jennifer Tribe is the president of Juiced Consulting, a company that helps business owners turn their expertise into money-making information products like books, special reports, teleclasses, and audiotapes and CDs. Jennifer holds a degree in journalism and has worked extensively as a writer and editor. Her articles on information products have been published in Management Magazine, Home Business Magazine, BusinessWoman Canada, and other leading publications. Subscribe to her free e-zine, Infopreneuring Strategies, at www.juiced consulting.com.

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