A quick look at Smashwords

Smashwords, based in Los Gatos, California, is an eBook self-publishing and distribution platform founded by Mark Coker. The company began public operation in 2008. Smashwords is a self-serve publishing service – a platform for complete, finished, and original works Authors upload their manuscripts as Microsoft Word files to the Smashwords service, which converts the files into multiple eBook formats for reading on various eBook reading devices. Once published, the books are made available for sale online at a price set by the author. Smashwords does not use digital rights management (DRM).

Coker began work on Smashwords in 2005 and officially launched the Smashword web site in May 2008. Within the first seven months of launching, the site published 140 books. Due to initially low profits, Coker switched to a distribution model that offered retailers a ‘30% commission in exchange for digital shelf space’. Smashwords achieved a profit in 2010 and has partnered with Apple, Barnes & Noble, Kobo, and Sony. In 2012, Smashwords announced that it would potentially partner with 3M Cloud Library, which would allow for the option for their authors’ books to be available in libraries, and that it had reached about 127,000 titles by 44,000 authors.

Some Smashwords authors distribute free copies of their books via lotteries at such sites as LibraryThing and Goodreads, in exchange for reader reviews. Smashwords reports they are the leading distributor for indie authors. It’s free to publish on Smashwords. Smashwords earns an income by taking a small commission on all net sales. Their commission is 10% of the retail price for sales through their retail distribution network (Apple, Barnes & Noble, Sony, Kobo, etc.) and library distribution network (Baker & Taylor Axis360, 3M Cloud Library, and others coming) and at their Smashwords store, 15% of the net for sales or 18.5% for sales that are originated by affiliate marketers. Smashwords earns all its income selling eBooks to readers. In June, 2012, Forbes magazine did a feature profile on Smashwords. It was the first time they shared revenue numbers.

Over 50,000 serious writers and small independent publishers publish and distribute with Smashwords. Many Smashwords authors have been previously published in print through mainstream publishers, or have had their works published in well-respected literary journals. Starting March, 2009, Smashwords introduced new publishing options for publishers who want to publish and centrally manage two or more authors.

Authors, Publishers, and Literary Agents Smashwords offers an easy option for distributing eBooks to the world’s largest eBook retailers. They provide free tools for marketing, distribution, metadata management and sales reporting. Authors and publishers retain full control over how their works are published, sampled, priced and sold. If an author wants to give it away for free, they have that right. Smashwords is ideal for publishing novels, short fiction, poetry, personal memoirs, monographs, non-fiction, research reports, essays, or other written forms that haven’t even been invented yet. Smashwords have grown to become the world’s leading eBook publishing platform for indie authors and independent presses.

Retailers Smashwords offers a catalogue of over 125,000 vetted, well-formatted eBooks from over 50,000 authors and publishers. They actively work with retail partners to help them efficiently ingest and sell titles.

Readers

Smashwords provides an opportunity to discover new authors in all categories and genres of the written word. Once you register, the site offers useful tools for search, discovery and personal library-building. Most of their books are affordably priced, and many are free. The eBooks on Smashwords can be read online using their online readers, or they can be downloaded to other reading devices such as the iPhone, iPad, Amazon Kindle, Sony Reader or Barnes & Noble Nook, or to other eReading devices. Smashwords offers free sampling options so readers can try before they buy (in many cases, readers can read up to half of the book before they commit to a purchase decision). Free sampling allows the reader to test drive your writing before they make a decision to purchase. Smashwords also allows readers to read in multiple DRM-free formats; create digital libraries of purchased and sampled works; publish reviews (including YouTube video book reviews); and ‘favourite’ their favourite authors, publishers and works.

Earnings

At Smashwords, authors/publishers earn 85% or more of the net proceeds from the sale of their works. Net proceeds to author equals (sales price minus PayPal payment processing fees) times .85 for sales via Smashwords.com retail operation. Authors/publishers will receive 70.5% from affiliate sales. Smashwords distributes books to most of the major retailers including the Apple iBookstore, Barnes & Noble, Sony, Kobo and the Diesel eBook Store. Sales originated by retailers earn authors/publishers 60% of the list price. This earnings model means that an author who publishes a $30.00 mass market paperback via a traditional commercial publisher would receive a 10% royalty ($3.00); whereas if they published the same book at Smashwords as an eBook they would earn up to $25.50, or nearly 9 times more. Or, they could price their eBook on Smashwords for $5.00 and make nearly 2 times the per unit amount of selling a traditionally published print book. The economics are equally advantageous for publishers.

Sales

The reality is the most authors will be lucky to sell their books in commercial quantities via Smashwords. Some Smashwords authors do not sell a single book. Some authors sell thousands of dollars worth of books each week. Although eBooks are the fastest growing segment of the book industry, eBooks still only represent about 40% of the overall book market in the US (2012 data from AAP), and less in other countries. Authors should publish their books on Smashwords not because they’ll make a lot of sales today, but as a long term investment in their writing career. eBook authors face the same marketing challenges all authors have always faced. By publishing digitally on Smashwords authors and publishers can expand their global readership by leveraging the power of viral marketing to reach more potential readers with less effort.

Marketing

Smashwords offers multiple free marketing tools to help authors and publishers connect with readers. They offer distribution to major online eBook retailers such as Barnes & Noble, Sony, Apple iPad iBookstore, Kobo and the Diesel eBook Store, and to all major smart phone platforms via app providers such as Aldiko, Page Foundry, Kobo and Word-Player. Smashwords also offer free author pages with bios, headshots and lists of works; the industry’s broadest range of sampling options; embedded YouTube videos for video book trailers and virtual author events; reviews from readers; eBook downloads in multiple eBook formats; a coupon code generator for custom promotions; and more tools in the works.

For a great summary of what Smashwords does to market your book, along with 30 marketing ideas you can implement at no cost, download the ‘Smashwords Book Marketing Guide’ (via the WP310 Moodle portal). The Guide starts with an overview of how Smashwords helps you sell your book, and then provides a series of tips for how authors can take their book marketing to the next level. Although thousands of readers march through Smashwords virtual doors every day, the bulk of your sales will come as a direct result of your own marketing and promotion efforts. Smashwords provide authors/publishers free tools (including ‘The Secrets to eBook Publishing Success’ which outlines best practices of the most commercially successful eBook authors) to help you do this, but it’ll be your hard work that makes sales happen.

Economics Of Authorship

With 85% of the net purchase price going to the author/publisher, author/publishers can charge readers significantly less for their works than would otherwise be possible through traditional print channels, while making greater per-unit profit on each book. When costs to the reader drop, there is a fundamental change to the demand side of the equation. This creates a virtuous cycle of more per-unit profit for the author/publisher, lower prices for consumers, and greater demand and consumption for written works. Usually it’s a win-win-win for publishers, authors and readers.

Publishing Contracts

Smashwords does not require an exclusive publishing contract. All author contracts with Smashwords are non-exclusive as they are the distributor. You (the author or publisher) are the publisher, and retain all ownership rights to your works, and are therefore free to publish your work elsewhere if you choose. Authors and publishers can remove their works from Smashwords at any time (although they cannot take back works that have already been purchased or sampled by readers).

First Publishing Rights

Traditional commercial publishers have begun to warm towards independently published authors, especially if those authors sell a lot of books and thereby prove that a large commercial market exists for their books. Many successful Smashwords authors have later sold their books to big international publishing houses. If you do well as a self-published author, you will increase the value of your book because you will have proven the market for it. Most Smashwords authors believe it’s better to get their work out there now for readers to start discovering than to allow their books to languish in obscurity as they wait for a publisher to publish it. An increasing number of Smashwords authors don’t even bother pitching their books to international publishers.

Maintaining Quality

Smashwords mission is to give every author and publisher a chance to find their audience. At Smashwords every author or publisher has a right to publish, and it’s up to readers to decide what’s worth reading. Readers are the new curators. Because Smashwords publish everyone, it means they publish brilliant up-and-coming writers who haven’t yet been discovered, and Smashwords will also publish works of lesser quality. The great authors will bubble up to the top and build audiences and the lesser authors will drop out of sight.