This first half of this article looks at break even points for Pelgrane books, and the second the distribution of sales between channels in 2010.

Looking Back to Look Forward

In my previous post on Pelgrane Press business about six months ago, I looked at predictions I made, and analysed them. I was constitutionally incapable of doing that without making further predictions. So, let’s look at those first, not strictly a prediction, more a wish – that Trail of Cthulhu sales would be linear rather than a bell curve. Note that these are just sales through distribution.

trailgraph

The linear trend has continued, which is good news, and gave me confidence to reprint the line in the same quality; I reckoned we’d run out in January 2011, but it will probably be March, just as the new shipment comes in.

Looking at my casebound books I also predicted that it would take about four years for the mis-priced Shadows Over Filmland to break even, and Mutant City Blues about two years. That still seems about right, though when I take conventions into account, perhaps a bit less. These books would have broken even if it weren’t for the printing costs; my potential profits are sitting in a big pile of offset books. That said, it will happen, just a bit more slowly than I’d have liked.

Armitage Files, I said, was a test of whether I could do further offset litho Trail supplements. It is a big critical success, and in this case that’s translated into decent sales – it’s well in the black and I still have lots of copies to sell.

Skulduggery was never going to be a big seller of the order of Trail, but I only need another 50 copies by mail order to break even – pretty much what I expected.

Break Even Summary

These books have made back their fixed costs, but still have haven’t broken even, though I have stock:

  • Mutant City Blues (foolish offset print run, about 42 months to break even)
  • Shadows Over Filmland (foolish offset print run, too low a price, about 18 months to break even)

These books haven’t yet made back their fixed costs:

  • Esoterror Fact Book (nearly there; helped sales of Esoterrorists)
  • Hard Helix (Sold an amazing 50% of the total MCB print run, but that’s not enough. Maybe 18 months to go)
  • Skulduggery (nothing to see here. Not out long, will break even soon)

All other products have made back their development and printing costs plus more.

2010 Sales Breakdown

I suggested that I wouldn’t do as well in 2010 than 2009; good, but not as good. The answer is a little more complex than yes or no. Here is a breakdown of the 2010 sales. Some surprises here.

Turnover was down in 2010, but that was due to a collapse in sales through distribution. To some extent this is explained by the fact we released only Armitage Files, Skulduggery and the Arkham Files Extended edition into distribution, but distribution sales were also down in general. Sales through IPR were also substantially down on the very succesful 2009.

Many of our new releases have been PDFs, so sales through OBS (rpgnow.com) were about the same as 2009, and when you take into account that more than a third of 2009 sales were the one-off Dying Earth sale, that’s pretty impressive. Likewise, mail order sales are well up – though the percentage reflects the state of distribution sales more than the increase in mail order.

gross

So, a lower turnover, but when I look at the figures, then, our net margin in 2010 was higher than in 2009. Net margin is a term frequently misused by publishers to ensure that writers get paid less than they should, but I use it in a very strict sense. I simply mean the gross sale price minus the fixed cost of of that sale. So, I take the writing, art, printing and layout costs of the book and deduct that from the amount I make for that sale. Conventions are more complex, and I exclude them, as well as translations.

In decreasing order by percentage of retail price (not gross sale price), here is the list of my channels to market:

  • PDF Mail Order
  • PDF IPR
  • Mail Order Print
  • PDF OBS
  • IPR Print
  • Distribution
  • Conventions (a special case)
  • Amazon (a dubious channel at best)

That said, a print mail order books will always make me more per unit than any other sale.

netThis, then is the picture of 2010. I suppose I shouldn’t have been surprised, but I was – when I did the sums, I made more money through PDF sales than print sales for the first time – 53%  against 47%. A lot of this is down to special circumstances; lots of PDF releases and few print releases, but it’s still startling. It’s notable that OBS has done so well – a consistent trickle of new Trail PDFs has seen to this.

2011 Predictions

We’ll be releasing a lot of books this year, and I predict that our distributor sales will increase, perhaps by 50%, especially with our Bits and Mortar affiliation ensuring retail customers get PDFs. I also predict that our mail order sales will continue at this higher level, but be lower as a percentage. OBS will remain unchanged. IPR; I just don’t know, but will predict no change. As for other channels, we will have eBook sales channels open, which will give modest extra sales.

The biggest punt of 2011 would be to print Ashen Stars full colour, which seems quite likely. With all my talk of the danger of offset print runs, why am I doing this? I’m hoping that an extensive pre-pre-order and pre-order period will allow me to pay for the print run, that full colour will increase sales somewhat, and that there is a market for an investigative SF game.

Or, I could just be foolish again.

At GenCon 2010 for the first time, we supplied PDFs to all of our convention customers. It was a very popular move.

Similarly, through the Retailer PDF program, retail customers of bricks and mortar stores can supply our ebooks to their customers with the print version where we do. Other publishers do this, too, and it seems silly for every publisher to have a bespoke method for supplying these PDFs.

So, Fred Hicks of Evil Hat and a number of other publishers started chatting about a way of extending this program through a central non-profit organisation, where like-minded retailers and publishers could come together to share PDFs. The result, the Bits and Mortar initiative we announced at GenCon.

Fred has written a simple but effective back end which allows registered retailers to email links to their customers, a better solution, I think, than the Dropbox method Pelgrane Press has been using.

We’ve just about finished the beta phase, and you can expect to see many more publishers listed in a few weeks.