Jul 102012

Here’s how the second quarter of 2012 went for Evil Hat. Inside of that quarter we saw the conclusion of our Dinocalypse Trilogy kickstarter, which sold a cheeeap e-bundle of all of the novels funded current and future, so I’ve counted the representative sales quantity for each of the novels here, even though some of them won’t manifest let alone see further sales for a few quarters. Don’t Read This Book’s numbers may be interesting as a sort of compare-and-contrast — a good 2/3rds of that (very approx) is in e-book sales in a variety of venues. DriveThruFiction.com showed surprising strength, there — have a look at the detail further below.

Title Sales Last Q Sales This Q LQ vs TQ Prior Lifetime New Lifetime
Penny 48 56 +17% 1217 1273
Diaspora 141 200 +42% 1427 1627
Do 117 104 -11% 1338 1442
Do:BoL 21 20 -5% 104 124
DLYM 75 101 +35% 1797 1898
DRYH 231 300 +30% 4523 4823
DFRPG:OW 517 525 +2% 11867 12392
DFRPG:YS 788 835 +6% 14549 15384
HBR 46 54 +17% 678 732
SOTC 344 383 +11% 7865 8248
SOTS 16 31 +94% 776 807
S7S 57 51 -11% 1813 1864
DRTB 0 478 New 0 478
DinoNow 0 1664 New 0 1664
DinoBeyond 0 1520 New 0 1520
DinoForever 0 1520 New 0 1520
PharaohHK 0 1520 New 0 1520
AmeliaStone 0 1520 New 0 1520
KhanOfMars 0 1520 New 0 1520
KingKhan 0 1520 New 0 1520

Details after the cut.

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Apr 302012

Quick post today.

What’s it take for our in-preorder Don’t Read This Book to be profitable? This is going to be based on an approximation of the costs of the writing, editing, cover art, printing, and other line items.

So, approximately:

At the time of this writing our webstore preorder has got 46 softcovers and 48 ebooks sold, which is a fine start; we’re seeing modest performance in our third party ebook vendors (~60 DriveThru, ~25 Amazon, ~2 B&N). In aggregate that adds up to about 20% of the revenue we need in order to make it into the black.

It’d be tempting to look at the above and think, Oh holy crap, I’d better order through Evil Hat! But that’s not necessarily the right conclusion. Sales through those other venues tend to produce more sales through those venues (as do reviews on those sites & such), whereas sales through our webstore stay largely invisible in terms of the collective perception of demand for the product. So, ideally, I’d love to see a big healthy mix of sales through all of those channels. Ultimately, buy where is convenient for you and ideologically comfortable to do so — but once you buy, if you enjoy, please turn someone else on to the book, whether it’s with a review, a blog post, a tweet, or a (gasp!) face to face conversation.

EDIT: Those eager to proclaim the uselessness of print books should take note: the print sales have the best per-sale shot of getting us into the black even in distribution, and for that matter the initial printing only represents about a third of our cost. Drop to an ebooks-only strategy here, and we’d still need 800-ish direct sales of the e-books to get in the black, or over 1200 through Amazon & the like. The whole “print books cost so much more than ebooks to produce” argument, at least with our print run strategy, is on shaky ground. I’ve elected to price the anthology in ebook format at $5 and the softcover at $15; if I was simply making the ebook the cost of the softcover, minus the proportion of the cost of a print run, it’d come out at more like $10. For Evil Hat, new to fiction, I don’t think that a $10 pricepoint for a 50k word anthology is supportable (rather: I have a gut feeling like we’d see fewer than half the sales we get at $5 if we priced it at $10, so the economics dictate the $5 pricepoint). But I’d sure understand the hell out of a publisher who decided to go that route.

Apr 152012

2011’s last quarter was weak, so it’s no shock we’re seeing improvements on almost all products in the first quarter of 2012 compared to 2011. The catalog is aging and we’re only just now starting to see some new stuff coming in, THIS quarter, with the Dinocalypse Kickstarter and other projects bearing fruit. So the next few quarters will be more interesting, I think. This just concluded quarter is more the standard M.O.

Title Sales Last Q Sales This Q LQ vs TQ Prior Lifetime New Lifetime
Penny 53 50 -6% 1167 1217
Diaspora 161 141 -12% 1286 1427
Do 93 117 +26% 1221 1338
Do:BoL 32 21 -34% 83 104
DLYM 52 75 +44% 1722 1797
DRYH 147 231 +57% 4292 4523
DFRPG:OW 434 517 +19% 11350 11867
DFRPG:YS 648 788 +22% 13761 14549
HBR 39 46 +18% 632 678
SOTC 228 344 +51% 7521 7865
SOTS 31 16 -48% 760 776
S7S 38 57 +50% 1756 1813


Details after the cut.

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Jan 192012

2011 ended not so much with a bang as a whimper. Every single title experienced fall-offs, some of them a bit drastic (but explicable — Do’s coming off its release spike, and Dresden the prior quarter surged due to a release of a new novel) — every title except Spirit of the Season, of course, which experienced its small annual spike in response to the holidays, and Penny, which saw a teensy bump thanks to more retail sales through IPR than expected.

It’s easy to look at these numbers and respond with alarm, but remember that a) the 4th quarter of the year is typically pretty crappy, and b) Evil Hat’s catalog is aging without a lot of new-product blood, something which we should be remedying over the next two years.

Distribution continues to bring in a large portion of our long tail (seen after the cut).

Title Sales Last Q Sales This Q LQ vs TQ Prior Lifetime New Lifetime
Penny 49 53 +8% 1114 1167
Diaspora 180 161 -11% 1125 1286
Do 497 93 -81% 1128 1221
Do:BoL 51 32 -37% 51 83
DLYM 91 52 -43% 1670 1722
DRYH 196 147 -25% 4145 4292
DFRPG:OW 1013 434 -57% 10916 11350
DFRPG:YS 1427 648 -55% 13113 13761
Wizard Dice 26 0 OOP 2102 2102
HBR 79 39 -51% 593 632
SOTC 345 228 -34% 7293 7521
SOTS 11 31 +182% 729 760
S7S 47 38 -19% 1718 1756

Continue reading »

Nov 152011

David Berg writes, over on the Evil Hat 2011 Q3 Sales Numbers post:

I have a bunch of distro questions!  If this isn’t the place for them, no prob, I can revisit some other time.

Basically, I’m wondering what those 1095 Q3 sales of DFRPG:YS look like, the chain of ownership from Evil Hat to the customer.  That’s 77% of the total 1427, which surprises me!

My (probably incorrect) understanding looks like this:
1) Alliance gets Dresden books from Evil hat.
2) Alliance offers Dresden books to American hobby stores.  The number of hobby stores is small and dwindling.  The number of those that carry RPGs is smaller still.  The number that carry anything other than D&D is vastly smaller still.
3) Those few retailers pay Alliance for Dresden.  Alliance then takes their cut and pays Evil Hat.
4) If the retailers can’t sell Dresden, they send it back and ask for their money back.  So Evil Hat hasn’t really sold a book until a customer’s taken it home with them.

1095 in 3 months seems like a staggeringly large number to me, based on that process.  Am I simply underestimating the number of people who go into hobby stores and buy a spiffy new RPG they’ve never heard of?  (I mean, if they’d heard of it, they probably would have bought it via another channel, right?)  Am I underestimating the overseas market?

Up front, I should say that the Dresden Files RPG books don’t necessarily behave like any other product in our catalog. That’s the strength of the license at work there. DF probably makes up a good 80-90% of our revenue — which can be a little nervewracking in the long term. Part of why I’ve been using this year and will be using the next couple to try to expand the variety of games that Evil Hat produces.

Anyway, to get into your question, the good thing here is that there’s plenty of history to peruse on this blog, so to get our context straight, let’s first figure out how that ‘77%’ on DFRPG:YS has been trending over time:

Quarter – Total Sales – Distro Sales – % distro
Q3 2011 – 1427 – 1095 – 77%
Q2 2011 – 1099 – 819 – 75%
Q1 2011 – 1346 – 967 – 72%
Q4 2010 – 1373 – 1004 – 73%
Q3 2010 – 2531 – 1776 – 70%
Q2 2010 – 4545 – 2741 – 60%

Now, I think if you broke down the month-by-month of the book’s first quarter, you’d see that Evil Hat and distribution were going about neck and neck at the start. We have very solid reach and leveraged it to give us a strong direct sales preorder (which trapped a BUNCH more per-sale cash for us, a real boon), but over the long haul, that reach only goes so far. So while distro started at a 50/50 kind of split with us, they’ve trended upwards since. The reason for this is simple. Or, perhaps I should say, the reason for this is “simple”. The service that distribution is offering to retailers is a simplification of product acquisition: one stop shop, many publishers. It’s a pain, and a lot of time investment, for a retail store to contact and buy from each individual publisher, so most simply don’t. They form a favored relationship with one to three distributors, and they’re done. If your product isn’t there, there’s a decent chance they won’t have your product on their shelves.

Once the spike on DFRPG:YS sales settled down, we started averaging between 300 and 400 a month, with 3/4ths-or-so of that being due to distribution. (Note: The ‘total sales’ numbers on the above fold in our PDF sales numbers as well, so if we limited the data to strictly only physical books, distribution’s percentage would be even higher.) We might have captured some of those sales if we’d stayed out of distribution, but I’m pretty certain we wouldn’t have captured all of them. It’s likely, given the interest in the game, that distribution has brought us enough additional sales to accommodate for any “loss” of per-sale revenue due to the steeper discounts that product is sold into distro. It’s been a good partnership.

Now, to get into your (in fact, semi-correct, semi-incorrect) understanding of the process:

What you’re describing is a situation where a service holds the stock, but does not own the stock, and sells it on behalf of Evil Hat, providing revenue to Evil Hat only when that sale (to a retailer) occurs. That’s not how most distribution works, though (more on that in a moment). That’s consignment, which is essentially what IPR does (not counted in my distro tallies). IPR sells stock on behalf of publishers both to retailers and direct to customers, so they’re sort of a half-distributor — as far as the retailer client is concerned, they are a distributor, because they distribute products they have not themselves created to retailers. The consignment thing is what makes IPR a little different.

What most distributors do is buy the products from the publisher, at a steep discount (often just 40-44% of the cover price). At that point, the distributor owns the product and assumes the risk. They’re responsible for then turning those units around and selling them to retailers. Since most of Evil Hat’s distributor clients are placing reorders at least once per quarter, we can surmise that all the books sold to distribution in prior quarters have at least been sold to retailers. Hopefully, those retailers have then successfully sold those books to their customers, but that’s nearly impossible to get visibility into. But, to get to the heart of your question, yeah: there’s enough interest in the DFRPG by enough retailers out there to have sustained such numbers as these for over a year.

Now — to complicate this a bit, along the way, Alliance made me an offer to take over as Evil Hat’s fulfillment service. That’s a phrase that simply means “act as shipper for”. They also are doing flooring, which means they’re warehousing our stuff for a small monthly fee (which gets reduced a little if our stuff remains active at a certain level). Because they’re doing this, they don’t need to purchase our stuff in advance in order to have it available when a retailer places an order. So this has essentially moved Alliance into the same ownership-sequence space as IPR: consignment (matching the 1-2-3 chain of ownership you theorized was applicable for all other distributors, but isn’t). So the sales numbers I get from them each month are based on stuff they’ve actually sold. Now, for business partnership reasons I don’t want to put a specific number on what Alliance sold, but I can tell you that they account for over half of Q3’s distribution tally, with Esdevium (a UK-based distributor) and ACD (Alliance’s top domestic competitor) vying for the second place spot.

Where your theorized sequence breaks down is “4) If the retailers can’t sell Dresden, they send it back and ask for their money back.  So Evil Hat hasn’t really sold a book until a customer’s taken it home with them.” That situation only exists if the publisher offers returnability — basically a promise that if a book isn’t sold, it can be sent back or destroyed and the seller can get a refund.

If you think about it a bit, returnability sounds great to a middle man — it essentially says that they face no risk for buying the product and putting it on their shelves. Which is dandy for them, but poison for a publisher (and in fact has sunk publishers of various stripe over the years, especially those that sold into big chain bookstores) because it’s utterly unpredictable, and it means that you can’t trust that the money you’ve been paid is money you’ll get to keep. But money spends — so the publisher spends some of it, and hopes that they won’t end up with a negative balance when the returns come in. Worse, when publishers offered returnability with a time limit (say, 180 days), they’d see a scenario where buyers would buy a bunch of books, return them on the last day or so of the time period, and then rebuy, essentially rendering the time limit moot and the cash situation continually in question. (And since most buyers don’t have to pay right away — they usually defer payment by 30 or 60 days — that wasn’t a momentary dip in cash on hand for the publisher, it was a canyon.)

I know some publishers still offer this, but I don’t and won’t, and that’s going to limit what distributors and retailers will buy and sell to an extent. But that’s fine by me. To be perfectly frank, I don’t want them buying books they don’t have confidence they can sell, because the point here is to get them to the end consumer — the guy or gal who’ll actually take the product home and put it to use.