Selling Books in the Great Recession: An Economist's Perspective

Adam Smith the Founder of Modern Economics. His book, The Wealth of Nations (1776), establishes the idea that national wealth comes from the productivity of resources, not hoarding gold and silver.

I wrote this article back in 2009. It’s still relevant, alas. I’ve updated and illustrated it with uplifting portraits of great economists. These cool dudes have shaped our world.

“I didn’t know you were an economist,” one of my friends said when she heard about this series on selling books in the Great Recession.

Yep. I hold a BA and MA in economics. I was on my way to a PhD at the Graduate School of Business at Stanford when I realized that I couldn’t do the math. I slunk away to resume doing what I knew how to do––economic analysis.

I was the Economic Analyst for Santa Clara County (the heart of Silicon Valley), among other positions. My first publications were in economics.

Even though I’m an author and proprietor of a small press today, the current situation keeps shoving concepts from economics in my face. I felt compelled to write down a few insights, throwing in ideas from business theory and psychology. (I also have an MA in Marriage, Family, and Child Counseling. I’m not bragging as I mention the alphabet soup behind my name: I’m from Silicon Valley, where multiple degrees are as common as downsizing and excess is barely enough.)

What do I see for booksellers and everyone else?

1. WE’RE IN THE GREAT RECESSION. IT DOESN’T SEEM TO BE GETTING ANY BETTER.

Well, duh. A real economic analysis would back up this assertion with studies and statistics. But we don’t really need that.  If we don’t feel the pain in our personal lives, we can go to out local mall and look at all the empty retail space.

Is that space ever going to be filled? Beats me. In the old days, economists thought that unemployment and under-utilization of productive capacity were short-term phenomena. Everything would be cool in the long run.

John Maynard Keynes

John Maynard Keynes, who revolutionized economics in the 1930s, exploded this myth by observing, “In the long run, gentlemen, we are all dead.”

Lord Keynes explained that the economy was like an elevator. Previous generations of theorists thought the economy would automatically rise to the top floor and stay there, at a natural equilibrium and full employment.

Keynes said, “Not so; the economy can get be stuck below the top and at less than full employment for a long time–-forever, maybe.” He also came up with the idea of government stimulus: direct government expenditures to get the economy going again. It primed the way to recovery from the Great Depression of the 1930s. WWII is what popped us out of that malaise. No one wants to get into a war to stimulate the economy. In our case, that avenue is closed: We’re already in a war.

2. MONEY, PROFITS, AND SMALL PRESSES

How does this affect book sales? The way you’d expect. This series of articles was motivated by a friend lamenting his recent lousy book sales and by other friends asking, “How are you doing? What are you doing? Help!”

In the discussion below, I focus on the financial aspect of publication: Books and book sales as moneymakers. The situation has changed greatly over the years. I recall a publisher friend remarking, “Back in the 70s, you could make money publishing books.” Now the book market has thousands of small presses with more being formed every day. Hundreds of thousands of new books are released every year. Major publishers are cutting back and retail chains like Borders are going belly up.

Except for the mega best sellers, making a profit as a publisher or author is hard. But people still succeed in a big way. See John Locke, How I Sold 1 Million eBooks in Five Months. Ditto Amanda Hocking and who knows how many more hearty independents are tossing the industry on its head. How they do it is the topic of future posts.

 I’m going to share a few thoughts, and then open up the series to the red-hot marketers in the next installments of this series. We’ll hear from people who are selling books, making money, and attaining their personal goals in this recession.

Thomas Malthus, the man who put the dismal in "The Dismal Science." Mathus said, among many other things, that any increase in prosperity in society will be destroyed by a related rise in population. Hasn't proven true so far, but you never know.

3. WHAT BUSINESS ARE YOU IN? KNOWING WHAT YOU’RE REALLY SELLING IS A FUNDAMENTAL OF BUSINESS THEORY.

“I’ve never made money with any of my books,” said my most illustrious boss, an internationally known business consultant and professor who has taught at Stanford, Harvard, and Oxford. He’s written classic books about business theory, which were published by the top publishers in the world.

“My books never made any money, but they got me consulting jobs that did.”

This bit of information is probably more valuable than any in this article. As a life success guide, it’s as valuable as the statistic that 90% of small businesses fail within the first five years. Of the 10% that make it, 90% fail in the next five.

Unless they’re independently wealthy, folks should imbibe my boss’s words before releasing books and memorize the failure rates of small business before starting small presses.

What business are you in? Selling books, or something else? What business should you be in, given your skills and what you write about?

4. ARE YOU IN THE RIGHT PLACE?

An adage in applied psychology is: “If you want something, go to where it is.”

If you want money, you should be where it is. Where’s the money? Here I’ll call upon that venerable enlightenment organization, the Bureau of Labor Statistics. Where does the money live?

The BLS table May 2008 National Occupational Employment and Wage, a distribution of income by occupation, tells us. The table presents “estimates … calculated with data collected from employers in all industry sectors in metropolitan and non-metropolitan areas in every State and the District of Columbia.” The numbers are based on a sample, but a very good sample. The table links to another table giving percentile rankings and the employment percent relative standard error.

The data shows the high income jobs are exactly where you’d expect them: at the CEO level of management, high level technical and scientific professions, and in the medical field. MDs in various specialties received the highest income, with surgeons showing the greatest mean income of any profession, $206,700.

What about writers and authors?According to the Bureau of Labor Statistics estimates, the writers and authors occupation (a sample of 44,170, about the same number as surgeons) showed a mean annual income of $64,560. (Anybody make that much with their books? This figure includes all the people writing articles and doing seminars about making money with writing.)

What does this mean? The data show that some writers make a living from their craft. On the other hand, millions of better paying jobs in other fields exist.

If making money is your primary motivation, it will probably be easier to become a brain surgeon or CEO than a financially successful writer.

Karl Marx: Predicted Revolution Based on Class Struggle and Inequitable Distribution of Wealth. You don't have to think this different.

5. DO WHAT YOU DO DIFFERENTLY, OR DO SOMETHING ELSE

All of this is to establish that maybe writing for money isn’t the best use of your time. I was going to add an appendix of articles about writing for money, because many people would say the exact opposite. Tons of “make money writing” sites and courses and books exist. Google the topic, you’ll see.You may want to work with those ideas, in addition to what I’m saying. (However, none of the writers heralding the possibility of fortune through scribbling can get around the Bureau of Labor Statistics data presented above.)

Meanwhile, have you considered your writing a springboard to another career, as it was for my professor friend? You might augment your income by adding speaking gigs, leading workshops, consulting, teaching writing skills, self-expression, and the gamut of things related to writing that may prove lucrative. Stretch your creativity beyond “I’m an author.” Or just keep your day job.

This writing/publishing world is a rough place to survive, even without a recession. Consumers are jaded: What used to work doesn’t any more. Emailed offers get ignored, book signings aren’t attended, and contests and reduced prices don’t increase sales. (If I get one more notice of a contest or special event from another excessively smiley person selling books, I’ll scream. And get off their mailing list immediately. Add to this ecstatic announcements of new books or  5 star reviews.)

We need to do things differently.

IN CLOSING

I did not discuss one very important subject above. Economists don’t pay any attention to it; it’s irrelevant to economic analysis. That subject is joy. Bliss. Satisfaction. The personal reward we get from writing. I have more fun writing than doing pretty near anything else. I will even forgo riding my horse to do lay down a few choice words. Personal rewards need to be measured against monetary payoffs.

If you’re not making money from your scribbling or getting joy from tossing around words, you might want to think about taking up golf. Or anything else.

In future articles, I’ll discuss thrilling and very relevant concepts like price elasticity, opportunity cost, and use of influence. I’m turning the next article over to the guest bloggers.

There you go, guys, a couple of things to think about in promoting  your books. Have fun with them, and let me know how they work.

All the best,

Sandy Nathan
Winner of seventeen national book awards

Sandy’s  books are: (Click link for more information. All links below go to Kindle editions.)
The Angel & the Brown-eyed Boy
Numenon: A Tale of Mysticism & Money
Tecolote: The Little Horse That Could
Stepping Off the Edge: Learning & Living Spiritual Practice

Two sequels to The Angel & the Brown-eyed Boy are in production with an early 2012 release date planned. If you liked  The Angel you’ll love Lady Grace and Sam & Emily.