writersNate at The Digital Reader drew my attention to the current round of “Amazon is going to cut their royalty rate to 35%” hand wringing. And to Hugh Howey’s excellent response.

The reason I said “current round of hand wringing” is because I’ve seen this before. Someone on KBoards said it comes around about every three months, which sounds about right. I agree with Nate’s conclusions and Howey’s response.  I don’t think it’s likely to happen, at least not soon. So we can stop worrying about this, for the moment, and aim our energies at looking at writing as a small business.

One of my hats is as a business coach. I’ve coached clients through decline and recovery. Heck, I’ve dealt with having my own revenue cut to 1/4 of what it was at its height. Revenue fluctuation is part of business. Apologies to Dean Wesley Smith, but I’m going to reverse two of his quotes to make them flow better in this article. He recently published a great article killing the “you can’t make money at writing” myth and he discusses the reasoning behind studies on how much writers make (which by the way, are similar to one of Howey’s recent articles).

It would be exactly like trying to figure out what an average lawyer makes by also including every undergraduate who is thinking of going to law school and every law student in the study about what they made working the law. Lawyers, in that type of study, would make less than two thousand average I’m betting.

Writing, to my knowledge, is the only profession that takes studies this way.

Writing is the only profession that does a lot of things oddly, including avoiding treating it like a small business. The essence of small business is, well, being small, first, which most writers are since most of us are a business with one “employee,” ourselves. And most of us are small in terms of revenue. (According to the SBA, “small” is defined as under $7 million in annual revenue for non-manufacturing businesses.)

However, the real essence of being a small business is being flexible and adaptable to changing market conditions. Successful small businesses have a plan for handling the awful situation of losing half their income quickly. It can and does happen.

Diversity of offerings is one good way to manage that sort of situation, and self-published writers are situated to achieve that. Diversity can include number of channels where you’re published and the number of books you have available.

This is why I’ve always felt KDP Select was a trap. It’s like being a business with one customer. Losing your one customer is devastating. Even losing a significant portion of revenue from that one customer can be just as devastating. While I don’t think Amazon will suddenly cut royalties, being diversified is still a good strategy.

Diversification can also be how many books you have available and in what genres. We’ve already seen recent examples of one genre writers being hurt by sudden policy changes. So if you can write in multiple genres, do so. It has the potential to even out ebbs and flows.

No, nothing here is new or revolutionary, however, I do think all authors, self-published and otherwise, should look up their nearest Small Business Development Center and take a few classes on business ownership. A change in perspective from someone who just writes to a writer who thinks like a small business owner could make a huge difference in long-term success.


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