Self-publishing insights from two Alts community members

Books can be assets — both when you acquire them (the market for ​rare books​ is doing quite well) and when you write your own.

Today, we’ve got a short but fun issue on self-publishing, with insights and anecdotes from two Alts community members who have been through the process.

We’ll break down the steps, costs, and profit margins. If you’ve ever thought about writing or self-publishing a book, this issue is for you.

Let’s go 👇

Traditional publishing vs Self-publishing

​Alpesh Parmar​ is an Alts community member from San Francisco (and one of the newest members of ​Altea​).

He got into investing in 2009 — starting with alternative real estate (stuff like mobile home parks and senior housing) and quickly moving into more alternatives like private equity, angel investing, crypto, collectibles and precious metals.

One day during covid, he was trying to explain to his children what he did for a living, when he realized it was actually quite difficult. That’s when he got the idea to create a new children’s book.

A few months ago he published ​Growing the Money Tree for Kids​, a book designed to introduce young minds to the concepts of money and investing.

He faced a critical decision early in the journey: Should he pursue traditional publishing, or take the self-publishing route?

There are a few reasons he chose to self-publish:

Time and cost

The original plan was to try his luck with a traditional publisher. But that takes lots of time.

It’s one thing if you’re a famous or established author. Traditional publishing plugs you into entrenched distribution networks which ensure your book reaches bookstores and libraries.

However, since this was Alpesh’s first book, he would have had to hire a literary agent to reach out and pitch the book to publishers. This process can take years and cost anywhere from $5,000 to $40,000. Oh, and there’s no guarantee an agent will be able to land you a deal in the first place!

The agents he spoke with all told him it would cost the same amount of money and time to do it himself. So he decided self-publishing was a no-brainer.

Control over content & rights

The other problem with traditional publishing is that it often requires significant changes to the manuscript. This means losing control over the content, title, and publishing rights.

Sure, most publishers aren’t interested in pulling a 180 on your work. But they can still change things significantly. And even if they stick to your original vision, they still get a permanent cut of the sales.

Another option: Hybrid publishing

There’s something called hybrid publishing, which lies between traditional and self-publishing.

You typically reach out to a hybrid publisher while you’re still in the writing process. They’ll look at your manuscript, help you finish the book, and then help get it published. They also charge between $10,000 – $30,000.

Think of it like doing a kitchen renovation: You hire a contractor to oversee the design, construction and subcontractors, because they have the context and expertise.

You have more control over timing and product with this model. Once they’re done, they’re done. Critically, you still own the rights to your book forever.

But unlike a kitchen reno, with hybrid publishing you still have the risk of going through the whole process and nothing ends up happening.

Alpesh figured he’d be better off just hiring the subcontractors himself, controlling the vision, making sure the book actually go published, and owning the rights forever.

He considered self-publishing platforms like ​BookBaby​ and ​Bublish​, but they keep 1% – 7% of sales.

That doesn’t sound like much, but it can really hurt you in the long run. If you write a second or third book, these platforms take a cut from that as well! Now you have a bit of a problem. It’s not really your business anymore. You’re paying a permanent tax.

So he ended up using Amazon’s extremely popular ​Kindle Direct Publishing​ (KDP) for his ebook and physical books sold on Amazon, and ​IngramSpark​ for the paperback and hardcover versions sold outside of Amazon.

The beauty of IngramSpark is that Bookstores can order directly from them on an as-needed basis: There is no need to stock up or carry more than you need.

Amazon takes a 30% fee on any sales you make on their platform, but they don’t own the rights to your present or future work.

Think of the Amazon KDP fee as the tax you pay for the pleasure of having your book available on Amazon. It’s not a permanent decision. You can pull your book off Amazon anytime without penalty.

This dual strategy allowed him to distribute the book digitally and physically while retaining full publishing rights/royalties for his work.

But it also meant he had to pay for all the editing himself.

Editing is everything

People think editing is like “icing on the cake.” The last step of the process. A final “nice-to-have” before publishing.

But take it from me: editing is everything.

It’s about so much more than spellcheck and grammar. It’s about how the book flows and feels. It’s about clarity, coherence, and quality.

There’s a reason that Editor in Chief is the most critical role at newspapers and magazines. Editing is nothing less than the cornerstone of publishing. It’ll make or break your success.

Alpesh recognized its importance and invested heavily in it. About $7,000, or 45% of his total budget went towards hiring four different types of editors:

Manuscript critic

A manuscript critic assesses the overall structure and content of your early draft, and gives you advice on story and character development.

Line editor

A huge part of editing is deciding what not to say.

Line editors put themselves in the shoes of your target audience, and through your book line by line. They remove sentences, paragraphs, or sections that simply don’t work.

You give them carte blanche to improve your language and tone to ensure you have an engaging narrative and smooth flow.

Copy editor

This is what most people think editing is all about. A copy editor addresses grammatical, punctuation, and spelling errors, ensuring factual accuracy and consistency.

Proofreader

The final check before publication, catching any remaining errors and ensuring the manuscript is polished.

Formatting and design

One of the most overlooked areas of publishing is formatting.

You might think that formatting wouldn’t change much between different publishers; that there’s some sort of “standard protocol” for this stuff.

But that’s not how it works.

Formatting requirements vary greatly between Amazon, Ingram, and other publishers. It’s not a matter of just copying & pasting either, it’s all a huge pain. In fact, the rules are so strict that there’s an entire sub-industry of formatting companies that help you navigate the maze.

Design, on the other hand, is pretty straightforward. People absolutely judge books by their cover; they have to look good. So be sure to hire a good illustrator to design the covers and content illustrations.

A color cover is a no-brainer, but you’ll pay a lot more to print the inner illustrations in color. Whether or not that’s worth doing is debatable.

Alpesh paid about $2,600 for the covers plus about 30 internal images.

Distribution

The biggest con with self-publishing is that you’re on your own when it comes to physical distribution.

Getting your book into stores is a hustle, plain and simple. It’s calling up local bookstores and talk to the manager or owner. It’s organizing book signing events. Companies like ​Half Price Books​ can help you out a bit. But it’s mostly a lot of old-school hustle.

As far as books sold on Amazon go, there are a few strings you can pull to help your book rise towards the top.

Alpesh spent about $600 to solicit reviews from an independent book reviewer. It’s not free, but it helps with rankings, backlinks, and authority.

Revenue, expenses, and profit

As is so often the case in life, Alpesh ended up spending more money and time on the project than he thought.

Here’s the breakdown of his expenses and revenues so far:

Expenses

• Editing: $7,000
• Design, Illustration, and formatting: $3,050
• Mentoring: $2,000
• Website development: $800
• Independent book reviews: $600
• ISBN: $320
• Education: $167
• CIP block: $85
• WordPress theme: $60
• Hosting: $48
• Domain: $30

Total Expenses: $15,320

Note: He didn’t count time into the cost calculations, because time is very difficult to value — especially when you’re spending it on something you thoroughly enjoy.

That said, he estimates he has spent about 20 hours per week for a full year, or about 1,000 hours in total.

Revenue

Most Amazon ebooks are priced low — usually $2.99 and under. But Alpesh’s mentor advised him to go upmarket. So, after launching with a temporary $.99 promo, he raised the price to $8.99

Amazon takes a 30% cut from ebooks, but unlike with physical books, there are really no other expenses involved. So, from a pure profit standpoint, he’d prefer people buy ebooks. (Though from a legacy standpoint, he hopes people buy hardcover)

ebooks (promo price)

• Sales: 379 units at $0.99: $375
• Amazon Fees: ($112)
• Net: $263

ebooks (Regular Price)

• Sales: 352 units at $8.99: $3,164
• Amazon Fees: ($969)
• Net: $2,215

Paperbacks

• Sales: 196 units at $13.99 = $2,742
• Production and Fees: $1,782
• Net: $960

Hardcovers

• Sales: 76 units at $18.99 = $1,443
• Production and Fees: $938
• Net: $505

Net Revenue: $3,943

Net profit

$3,943 – $15,320 = ($11,377)

Despite the net loss, Alpesh views this as a long-term investment in his brand and a stepping stone for future books.

This is all part of a larger picture. He wants to create a full business out of this, and is planning an audiobook, a videobook course (for ​Coursera​, etc), a board game, an app.

Finally, he wants to expand the series into other demographics (perhaps Growing the Money Tree for Teens, or Growing the Money Tree for Parents, etc)

He believes that building a strong foundation with his first book will pay off in the long run.

Amazon’s sloppy AI future

The relative ease of publishing via Amazon KDP has created a frustrating problem: Lately, Amazon has become overrun with ​AI-generated slop​.

These scammy, AI-generated books hack the algorithm, trick Amazon’s customers into buying them, and make it harder for shoppers to find high-quality books written by humans.

In fact, there’s a whole corner of the internet devoted to making “undetectable AI content” for Amazon KDP:

The other big problem is AI summaries, where someone takes an existing piece of work, summarizes it with AI, creates an extremely similar-looking cover, and publishes it under a pseudonym.

Publishing industry expert ​Jane Friedman​ says these AI-generated summaries have been “dramatically increasing in number” — despite Amazon limiting authors to uploading a maximum of three books per day.

It’s in Amazon’s long-term interest to crack down on all this crap. But how much can they do to prevent it? (And how much do they even want to do?)

Stephen Daly is an Alts community member who is an experienced Amazon KDP publisher. After publishing a few successful ebooks under various pen names, he expanded his business to become a KDP consultant (similar to the publishing mentor that Alpesh used)

I first ​interviewed Stephen​ back in 2020. Since then he has certainly noticed the influx of AI-generated content on the platform — and even published a few AI books of his own.

According to Stephen, Amazon embraces AI, and now asks authors to declare AI usage for images and texts:

Overall, Amazon likes AI. When you publish a book now, they ask if you used AI for any text or images, and if so which platform you used.

I’ve published books with lots of declared AI content which went on to sell well! To me this proves Amazon does not have an issue with AI. I think that what they ultimately care about is quality and customer satisfaction.

Stephen compares what’s happening now to the 2011 ebook mess, where low-quality, outsourced content flooded Amazon, leading to a crackdown. He anticipates a similar cleanup for AI content:

The current AI slop situation is quite similar to the 2011 ebook mess, which saw an influx of what was basically rubbish, rehashed content mostly outsourced to places like India and the Philippines.

It ended up flooding the ebook market, and one day Amazon literally wiped the floor. KDP accounts were closed overnight, ebooks were removed from the marketplace… It was a mess, and Amazon cleared it up fast.

I think a similar crackdown is coming soon. The market is flooded with low content publishing and, most importantly, low quality! Amazon’s recent upload limits show they are starting to watch things more closely.

All this being said, there is still a lot of money to be made from KDP publishing! But I would suggest investors focus on full content books fiction or nonfiction. That’s the way to go for sure, and plus full content books are easily turned in to audiobooks.

Stephen is bullish on audiobooks, noting their growing popularity as people multitask during commutes, workouts, chores, etc:

With the Amazon KDP sector becoming saturated over the past year, ACX (selling audiobooks) is how I make most of my income now. I know firsthand how the audiobook industry is going from strength to strength. People are busy and listening is the new reading!

He highlighted Amazon’s new ​virtual narration tool​, which drastically reduces production time and costs and makes audiobook creation even easier:

Last November Amazon shocked the audiobook industry by announcing the launch of their virtual narration tool. It is invite-only, but I’ve been lucky enough to use this myself, and it is CRAZY!

Look, it’s super cool, but kinda scary in a way. What used to take weeks of back and forth sending scripts to narrators and negotiating prices on ACX now takes less than 3 days, and cuts down the costs astronomically!

This is another clear example of how Amazon likes AI. They know it isn’t going anywhere and will be part of our future whether we like it of not!

All-in-all, I think KDP is still a great business model. But it’s not great if you’re just trying to make a quick buck — it’s much better if you view it as a long term investment.

Play the long game. Sounds like good advice to me. 📚

That’s all for today.

A big thanks to Alpesh Parmar and Stephen Daly for their help with this issue.

If you have kids aged 8-12, consider ordering Alpesh’s book “Growing the Money Tree for Kids” directly from his website, ​Money Tree Books​.

Reply to this email with comments. We read everything.

See you next time, Stefan

Disclosures

• Neither the author, nor the ​ALTS 1 Fund​, nor ​Altea​ has any holdings in any other companies mentioned in this issue.
• This issue contains no affiliate links (even though it appears Amazon recently began ​allowing affiliate links in emails​)