Where the Profits Are

The more specialized and narrowly focused a book, the fewer readers it will attract. The small market for most books dismays writers. However, falling publishing costs create profit opportunities from ever smaller print runs. The emergence of digital books and print-on-demand books promises profits from every book sold. That’s a promise that will be hard to keep, but the trend line is not in doubt.

Mass marketing counts on hits. In the movie business, studios need to sell millions and millions of tickets to make a profit from a big-budget Hollywood movie. With high production and marketing costs, studios lose money on anything but the biggest box office hits.

Niche marketing works on a different logic. If you can keep production and marketing costs low, you can earn a profit from much lower sales volumes. It takes a smaller budget to reach a well-defined target market, and the Internet makes it less expensive to find your niche. If you reduce production costs proportionately, profits show up at a much lower sales volume.

Internet marketing gurus call this selling to the long tail of the distribution. Without getting into the statistics, let’s say that you can do very well by selling less of more. Each item produces relatively few sales, but you make up for this by offering your customers a very large number of different items for sale. Books, particularly digital books, fit this model very well. The inventory carrying cost for a digital book is minimal. Therefore, sales of a modest number of copies per year turn a profit.