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If you’re writing the next great American novel and you are courting the likes of Random House then this advice doesn’t apply to you.

But if you’re an entrepreneur in the business of creating products and selling them for passive income, listen up.

Don’t write a book to make money off royalties.

1. Writing the book is hard work
2. Getting it self published can be a pain in the ass
3. The margins stink

So why write a book? Here’s a few reasons.

For one thing, nothing is better for demonstrating your knowledge and authority in your chosen marketplace.

Here’s a quick example.
You decide to seek legal advice on setting up a family trust, and rewriting your will. All else being equal, would you choose the attorney that has published a book or two on the subject and has them listed right on Amazon.com with glowing reviews, or the one without the book(s)?

No brainer, right?

Here’s another great reason: Some professionals operate under difficult marketing conditions where it’s unethical or illegal to collect certain kinds of testimonials. So the professional either collects no testimonials, or they’re so bland that they have no impact.

Think of a chiropractor. Even if several of her patients will put their hand on the Bible and swear that she cured them of aches and pains that no other physician could remedy, she can’t put that in print.

Or what about a financial advisor? Even if one of his clients would gladly tell his story of three consecutive years of double digit returns in down markets, the testimonial can’t be used.

But… testimonials about a book are fair game. And more often than not, peers will gladly review and provide testimonials for a well written book.

Book Publishing Vendor: Lightning Source

From what I’ve read, it seems that Lulu.com and many other book publishing companies actually use Lightning Source and simply resell and repackage the service.

So why not go straight to Lighting Source? You can… but they’re much more difficult to get established with than Lulu.com or others. You need to have a set of ISBN numbers in hand. These can be pricey. You’ll also want to order these far in advance of signing up with Lightning Source so you aren’t even tempted to pay $125 to get “rush” delivery of your numbers.

Here’s some interesting information James shared about Lightning Source’s pricing and Amazon’s fees:

It turns out there is a 90 cent base fee per book and then 1.5 cents per page. For my book, that works out to $6.27.

Amazon (and probably most book retailers) takes a 55% cut, so if I charged $25, the wholesale price would be $11.25. I would get the difference between $11.25 and $6.27 which is $4.98. OK. We’re still not gonna get rich on books, but at least I can charge a more reasonable $25 instead of $35 just to break even which would be the LuLu deal.

His pricing info on Lightning Source was reverse engineered, so it’s an estimate. But the bottom line is that a lot of folks get paid before any money reaches your hands.

If you’re not careful, it sounds like you could actually be in a negative cash flow situation if you book is long and you price it too low. This still could be a good deal for you if the book is a powerful loss leader for your products and services, but you should know your numbers going in, long before you write page one.

One of the reasons I stay tuned to James’s blog is that several times a month I’ll pick up a new trick, new twist on an idea, or in this case, a new vendor.

His Internet Business Book Volume 1 is being sold by Lulu.com. I’d never heard of the site, but it’s got me intrigued.

From the Lulu home page:

Lulu is fast, easy and free

Publish and sell easily within minutes.
No set-up fees. No minimum order.
Keep control of the rights.
Set your own price.
Each product is printed as it is ordered.
No excess inventory.

Note to self… This might be an interesting way to sell whitepapers.

James hasn’t said so, but I’m pretty sure that Lulu.com sends him a check at the end of the month, and a list of his buyers. The buyers pay for the shipping. Lulu’s cut (according to their guided tour) is 20% of the profit, not the gross. The author makes 80% of the profit, which appears to be roughly half of the gross.

I’ll save you the math and tell you that the author makes about 36%. So off of a $15 book, James will probably make somewhere between $5.40 to $5.60. I imagine there are other factors that go into the royalty calculation: colors used in the cover of the book, gross price of the book, etc.

36% on a typical book isn’t going to get you rich, but there are other reasons for creating a book: reaching a wider audience, credibility, authority, loss leader, etc.

Another thing I’ve picked up from watching James Brausch is that you can sell a ton of products without your own merchant account. Merchant accounts have their place, but there’s something to be said for never seeing a monthly statement with regular fees; fees you get slapped with even during a slow month.

There’s even more to be said for vendors that do all the work for you: collect the payment, ship the product, and send you a list of your buyers.

The Strategy

The other reason I stay on top of his blog, is that James Brausch often comes out with 24 hour discount specials. Case in point, I picked up this book for less than most e-books, so my buying decision was easy.

He shows no flexibility with missed deadlines, so it pays to be subscribed to his newsletter if you think you might want to buy something of his in the future. And like I said, he’s coming out with new products on a regular basis.

The strategy I just described is one I’ll be putting into practice in the coming weeks and months. After all, if it keeps my attention, it will probably work with my clients too.

By using Lulu for this book, he gets a payment processor and drop shipper for zero upfront expense. His loyal blog readers will review the book, and likely send in glowing testimonials he can use for marketing. Early readers like me will also catch some spelling errors he can fix before putting the book on Amazon.

I know a lot of savvy marketers promote heavily to their house list in order to get their Amazon books to the front page, if only for a short while. I’ll be watching to see if James tries to get his book to the top of the popular listings on Amazon and how he does it.

I’m pretty certain that James will use the book to introduce his products to a different market (via Amazon). For example, if he discusses online salesletters, I’m sure he’ll mention his product for generating more effective headlines (which you should strongly consider buying): Glyphius.

When he gets into article writing for driving traffic to your site, he’ll certainly mention his article submission software, ArtemisPro.

(Strange product names, huh?)

Creating A Book Quickly

James is big on creating products quickly. Writing a book is normally an arduous endeavor. But James is completely up front about how this book was put together:

There won’t be any new content that you haven’t seen before. The book is basically just the first three months of this blog with some editing.

So for all you bloggers out there, maybe you can take a page out of James’ book (no pun intended) and recycle some of your blog content into a book.

Whether this technique results in a quality book, I’ll let you know after I get it in the mail.

I insisted that I could.

Not on the spot, like a magician pulling a rabbit out of a hat (got the visual) but given a few weeks, yes, I could materialize money.

So here’s what I did.

Last month I did a full blown promotion to a house list of mine. Full blown in the sense that the promotion was sent by snail mail, with a lot of time put into the packaging, and the message. No one that received my mailing could have thrown it in the trash without first opening it up.

This is a very tight niche industry. By tight I mean 150 potential buying units… eliminating the startups and nonbuyers brings it down to more like 75.

The promo was a test drive of a service I’ve been offering for years. It’s a high ticket purchase (by internet standards) with recurring revenue.

Results:

Mailed 25 at a total cost of $19.
3 people raised their hands to take the two week test drive – which paid for my mailing cost.

And this morning, now that the test drive is over, I got the first order.

$3,000 over the fax machine.

And I think one or both of the other two clients might soon follow.

My Point

The point of this is not to brag, or point out that I “won” the argument.

My point is that attracting a group of clients that want to trade their money for your knowledge, service, or products, is probably the most stable and enjoyable business you can build.

Some of you can relate to my story and you know how good it feels to turn on the computer and find money in your inbox or on the fax machine. Some of you are way ahead of me and the numbers you see coming are many multiples of what I’ve described.

But if the story I just spelled out for you sounds like a far away dream… I’m here to tell you that you can make it happen.

I won’t tell you it’s easy, or that I have a push button gizmo that does all the work for you.

If you want it, you might have to put in some really long hours, learn a lot, and keep going through disappointing setbacks.

But man is it worth it.

The Lessons For Me

Here’s what I learned.

Number One, don’t strain my shoulder patting myself on the back, because…

Number Two, I should be doing something similar every single month and just imagine where I’d be if I had been sending out similar promotions every month for the past three years…

Number Three, it shouldn’t take an outside stimulus to give me that swift kick in the butt to get things moving.

As I’ve read on another blog… Do It f-n’ Now