Publish Your Book: Print-on-Demand

Selling Books through CreateSpace vs. Lightning Source

We frequently get queries from our customers about whether to use Lightning Source (LSI) or CreateSpace (CS) for printing and distributing print books. The CS option looks good because you get free setup for your titles. Having no up-front cost is a wonderful thing, right? Well, yes, but only if you don't pay more in the long run.

CreateSpace has done a fabulous job of marketing their services. They make it easy to sign up and easy to upload your titles. But if you try to figure out exactly what you are earning when you sell through them, things start to get confusing.

LSI, on the other hand, has geared their services toward professional users. There's less hand-holding, and they seem to have fees for just about everything. On the other hand, these fees are clearly defined and figuring out what you will earn through them is pretty straightforward.

So which is really the better choice?

In this article, I'll compare how much money you make from selling your books through either CS or LSI. It is up to you to decide which service is right for you.

Susan's book Funds to the Rescue (F2R) has been uploaded to both CS and LSI, so I'll use it in my examples.

When you set up a title with either CS or LSI and sell books through them, you have the following costs:

• Setup charges
• Print charges
• Wholesale discount

We'll look at each of these costs in the sections below, and I'll bring them all together at the end of the article.

Setup Charges

Some folks will tell you that CS doesn't have setup charges. That's not entirely true. You may not have to pay when you upload files, but you do have to pay $39 to get your book into their Pro Plan.

The Pro Plan is well worth the money because it saves you about 40% on your print costs. Also, your book must be in the Pro Plan in order to participate in the CreateSpace Extended Distribution Channel, which makes your books available to online booksellers beyond Amazon. Contrary to some reports, the Pro Plan does not give you a better wholesale discount.

The table below compares the setup fees between CS and LSI. Note that the LSI figures are the same for any title, but the cost of a proof varies at CS, so I'm using F2R with an inexpensive shipping option as an example.

Lightning Source has a flat fee and only one shipping option for ordering a proof; you pay $30 for any paperback book, and you always get expedited shipping. CreateSpace charges you the normal print cost for your book and lets you choose how you want the book shipped to you. Yes, you can skip ordering a proof entirely, but if this is the first time you've uploaded the book, I would not recommend skipping the proof. You probably don't want your customers to be the first to discover that something went terribly wrong with the files you uploaded.

Another thing to consider is what happens if you find show-stopper problems in your proof. Uploading replacement files to LSI will cost you $40 per file ($80 if you have to replace both the cover and the interior). CS does not charge you to upload new files.

On last point to note is that both CS and LSI have an annual fee for their distribution services. CS gets $5 per year to continue with the Pro Plan, and LSI gets $12 per year to continue your book's listing in the Ingram catalog.

Print Charges

The nature of Print-on-Demand is that books are printed as they are ordered. One nice aspect of POD is that you only pay for the printing of your book when you receive the money from the purchaser of the book. You have no up-front printing costs or inventory issues.

Several factors play into the print charge for your book: how many pages it has, what kind of binding it has (paperback versus hardback), whether the interior is color or black-and-white, and the trim size.

Funds to the Rescue is a 188-page, perfect-bound (paperback), black-and-white, 6" x 9" book. The following table shows the print costs for F2R at both CS and LSI.

The pricing you see above is the price you pay every time you order books for yourself and every time someone else orders one of your books through a distribution channel.

You can see what a difference having the Pro Plan makes when you go through CreateSpace. We save $2.16 per book. Without the Pro Plan, CS charges far more than LSI for the same book (about 30% more), but with the Pro Plan, the price is actually lower (about 17% less).

Lightning Source does not have an equivalent to the Pro Plan, but they do offer quantity discounts if you order 50 or more books. That doesn't help you for POD orders, but it can help you lower the cost of books you order for your own distribution (signed copies, back of room sales, etc.)

Another thing to consider about printing is quality. Our experience has been that the print quality you get from LSI is superior to what you get from CS. We've ordered a lot of books from LSI and only had to get replacements once when the covers were trimmed crooked. With CS, we've only ordered a few proofs, but we've already experienced the following problems:

• Vertical toner streaks in the gutter of the interior pages.
• Creasing on the front and back of the cover from the spine being pressed too hard by the binding equipment.
• Color discrepancies on the cover which were inconsistent between multiple copies that were ordered at the same time.

Fortunately, if a customer returns a book due to printing defects, CS replaces it at no cost to you (as they should).

We've had many people tell us that the print quality they get from CS is very good. Perhaps we've just been unlucky. Or perhaps those people are just not as sensitive to typographic anomalies.

Wholesale Discount

When you publish a book through a traditional publisher, you get a royalty, which is often expressed as a percentage of the publisher's net receipts. For example, a new author might get 8-10% of the publisher's net, which is the money the publisher receives after the retailer and distributor shares are deducted. If the book sells for $20 and the retail/distribution shares total 50%, the publisher's net is $10, and the author gets $0.80 to $1.00 per book.

When you work directly with a printer/distributor like CS or LSI, you don't earn a royalty in the traditional sense. The money you earn on each book is whatever is left after the wholesale discount is applied and the printing charge is deducted from the retail price. Printing charges were covered above, so now you need to know about discounts.

A discount is like an anti-royalty. It isn't the percentage you earn, it's the percentage you give to the retailers who sell your book for you. For example, if your book has a retail price of $20, setting a discount of 40% means you are letting the retailers keep $8. You get $12 from the sale, and the printing charges are deducted from that.

CreateSpace has a somewhat confusing discounting scheme because it isn't consistent. You get three different discounts, depending upon how the book is sold. With LSI you have one discount that you can set to whatever you want, as long as it is at least 20%.

The following table compares the discount rates offered by CS and LSI, and how those rates affect the sale of a $20 book.

The wholesale price is your share of the sale, before printing charges are deducted. As you can see, the discount has a huge impact on how much money you make on your book. If CreateSpace sells your book through their Extended Distribution Channel, you only get 40% of the sale (retail price less the 60% discount), and that's before you pay for printing!

For CreateSpace, the eStore is the only sales channel that competes discount-wise with LSI, but that is the least likely place you will sell books.

Putting It All Together

Now that you have an idea of how the printing charges and wholesale discounting works, here's a full comparison of how Funds to the Rescue breaks down between CreateSpace and Lightning Source. Amazon.com sells the majority of our books, so I'll use those sales in the example.

The comparison also shows you what happens when we sell 100 books versus 500 books in the first year. For the sake of clarity, I'm going to use $20 for the book price instead of the $19.95 actual price.

The first section of the table calculates your gross earnings based on the retail price of the book. The next section calculates how much of a wholesale discount you have to give up. The third section calculates the total print cost of the books you sold. The final section deducts all of the various charges from your earnings to show your net earnings (how much you actually get to keep).

Even with only 100 books, going through Lightning Source earns us an extra 33%. We earn 37% extra at 500 units. Plus, the books are better. If I were to include the sales we might make from other online retailers (realistically about 20 to 30% of all sales) through LSI versus the CS Extended Distribution Channel, the figures would look even worse for CS because of the 60% discount associated with those sales.

The next time someone touts going through CreateSpace because of the free setup fees, keep this analysis in mind. The difference in setup fees is insignificant compared to the difference in unit cost if you plan to sell more than just a few books. And if you don't plan to sell at least 100 books, why are you publishing in the first place?

More information from The Book Consultant:

• The Wonderful World of Print on Demand Book Distribution
• The Wacky World of Discounts