Who Will Play in The eBook Supply Chain?

I was reading this Konrath post by Barry Eisler on the “Attack of the self-publishing memes” in which he argues that there isn’t an inherent conflict of interest for agents to also help authors epub their books. This got me thinking about the steps (tasks) in the current supply chain, who was going to provide them, and where the biggest value lay.

Here’s the process right now as I understand it from manuscript to reader. The numbers are only task identifiers and don’t represent sequential order in every case, although I did try to sort them that way.


1. Promote manuscript to editor at publisher
2. Negotiate contract with publisher

3. Story edit manuscript
4. Revise for story edits
5. Copy edit manuscript
6. Revise for copy edits

7. Create cover design and art (a marketing/advertising function)
8. Obtain ISBN
9. Typeset book
10. Print book

11. Establish book selling hierarchy (lead book, second lead, etc.)
12. Obtain reviews from trade publications, newspapers, websites, authors, etc.
13. Create sales catalog and other sales documents
14. Contact book buyers and promote books (calls, visits, conferences, etc.)
15. Take orders

16. Ship to retail outlets and wholesalers
17. Warehouse book
18. Process reader purchases & returns

19. Publicity, including free copies
20. Advertising
21. Co-op display purchases


1. Story edit manuscript
2. Revise for story edits
3. Copy edit manuscript
4. Revise for copy edits

5. Create cover design and art (which you could lump under marketing)
6. Obtain ISBN
7. Format book for ereaders and POD services (CreateSpace etc.)

8. Upload book to retail and library outlets
9. Warehouse the bytes
10. Process reader purchases & returns

11. Obtaining reviews from trade publications, newspapers, websites, authors, etc.
12. Publicity, including free copies
13. Advertising, including website display etc.

There are actually two channels here–physical audio books (CDs) and downloads (Audible, etc.).

I would assume the physical audio would follow the marketing, distributing, and promoting aspects of the paper channel tasks and add in the audio production tasks. Downloadable audio would follow the marketing of the ebooks and add in the audio production tasks.

I’m sure I’m missing some key steps somewhere. Somebody please supply them if you see gaps.

As for the future, here’s what I see. The paper channel tasks aren’t going to change much. Nor do I think the people performing the various tasks will either. For example, I just don’t think POD machines are going to catch on in stores and wipe out distributors. They may take out printers (#10) of trade and mass market paperbacks. But I haven’t seen a POD machine that can do hardbacks. Maybe the PODs will move to the retail outlets. But I don’t think so. Somebody disabuse me of the notion.

However, I do think there will be some interesting developments in the ebook/POD channel.

Right now a lot of authors are spending time performing tasks 6, 7, and 8. Some literary agencies are wanting to charge 15% forever for those steps with maybe a little cover design. But tasks 6-8 are the tasks that require the least amount of skill and will soon be automated.

Formatting for ebooks now is like coding html was for webpages 10 years ago–people in the code spending hours tweaking crap. Right now it takes you about a day to learn how to format a novel for the various ebook readers. Once you know how to do it, you’ll spend a day, maybe two, formatting your novel and uploading it. Or you can pay someone else to do it–any responsible teenager will do.

But within the next year I predict an application coming (if it’s not already here) that will hook into Word and other programs that will make the labor obsolete. Creating a Kindle document will be like creating a PDF document in Word today—you just click Save.

Uploading could be automated as well across various sites with some application. But it’s fairly easy now.

So for which tasks are these ebook distributors wanting to charge 15% forever? Obtaining an ISBN?

I don’t even think they even do that.

Amazon and the other ebook retailers have a lock on 9 & 10. It would be incredibly hard to dislodge those gorillas. So I think the place where literary agencies and others who want to play in the indie ebook/POD supply chain are going to flourish is in the other tasks that require the most skills–editing, cover art, and marketing, which I’ve marked in blue.

Authors interested in the indie ebook/POD channel are going to want service providers who can deliver great editing, cover art, and marketing. They’re going to want folks who can help them sell into traditional domestic and foreign paper distribution channels. They’re going to want folks who can help them sell rights to other buyers–audio, film, etc.  And they’re going to want help with their contracts.

If I were an agency, graphic artist, editor, intellectual rights lawyer, or some other entrepreneur trying to serve indie ebook/POD authors, that’s where I’d spend my time.

Dystel & Goodrich literary agency recently announced they would do something like this . . . almost.

Over the past months and years we’ve come to the realization that e-publishing is yet another area in which we can be of service to our clients as literary agents. From authors who want to have their work available once the physical edition has gone out of print and the rights have reverted, to those whose books we believe in and feel passionately about but couldn’t sell—oftentimes, after approaching 20 or more houses—we realized that part of our job as agents in this new publishing milieu is to facilitate these works being made available as e-books and through POD and other editions.

Right now, you’re thinking, oh, DGLM is going to be another of those agencies that has decided to become an e-publisher and charge clients whose books they can’t sell 50% of their income for the privilege of uploading their work. Some of you may be mumbling, “Uh…that’s a conflict of interest.” We get it and we understand how that can be the perception. However, we have no intention of becoming e-publishers. As we said above, we have too much respect for the work that publishers do and too much respect for the work we ourselves do to muddy the waters in such a way.

Again, what we are going to do is to facilitate e-publishing for those of our clients who decide that they want to go this route, after consultation and strategizing about whether they should try traditional publishing first or perhaps simply set aside the current book and move on to the next. We will charge a 15% commission for our services in helping them project manage everything from choosing a cover artist to working with a copyeditor to uploading their work. We will continue to negotiate all agreements that may ensue as a result of e-publishing, try to place subsidiary rights where applicable, collect monies and review statements to make sure the author is being paid. In short, we will continue to be agents and do the myriad things that agents do.

Our intention is to keep on trying to find books we think we can sell to traditional publishing houses, to negotiate the best deal (always), and to give our authors as many options as we can. Because we will continue to be commission-based, we will not be automatically pushing authors into e-publishing. Again, we want to give our authors options and empower them to do what they set out to do all along: have their work read by the largest possible audience

However, from what I understand they’re not offering to perform the necessary tasks for 15% forever, only the project management of the tasks. Which means the author will still be paying for the editing and cover art and marketing.

15% forever for project management (a list of to-do’s in this case) and a service provider contact list? Where the author still pays for the editing, cover design and art, and marketing?

Ummmmm, no.

Others like D&G will pop up. But the ones that indie authors will eventually go to will be those that deliver on the high-skill tasks for reasonable rates.  Those will be the ones playing in the ebook supply chain of the future.

Many authors will contract the tasks separately themselves.  But a lot of authors won’t want to do that. They’ll want a one-stop-shop. Or one that does most of it. Some of those one-stop-shops will charge an upfront fee and will probably accept anyone who can pay. Others will make most of their money on a % of the sales to readers and libraries, footing the initial costs of the tasks, and will only work with clients they think will pay out, which if you think about it isn’t really an idie (self-pub) model at all. That’s the space traditional publishers play in right now.

But in the ebook/POD world distribution is no longer a key barrier to entry for new competitors. And so I expect to see a whole bunch of new publishers coming to play in that space. Those that select, edit, and market well will flourish.

Meanwhile, I don’t think most of us authors care which road we take and who we play with. Well, as long as they play nice and don’t poop in the sandbox. We just want to get our stories in to the hands of massive numbers of delighted readers.

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6 Responses to Who Will Play in The eBook Supply Chain?

  1. I think your blue highlighted items are correct, John (with the caveat that the formatting tool may not come as quickly as we’d like), and I’d say that those self-published authors who get the help they need (no matter how they pay for it) in those areas will stand out quite a bit from those that don’t.

    I work in marketing and public relations. People who can truly edit, project manage and/or art direct are generally more expensive for a reason — and it totally shows in the final product. The same is true of executing a publicity campaign. Even with something as simple as writing a news release, it’s very clear who knows their stuff and who doesn’t — not to mention putting together an excellent pitch.

  2. Okay. Just read your comment on the Eisler post, John. I think you make a good point about the 15%. I think that I make a good point about the true professionals. I think what we’re looking at is the wrong person to help the author — it shouldn’t be an agent. Not if by agent we’re talking about someone who mainly sifts through queries and then sells books (with maybe some editing of manuscript to get in to shape to sell to the publisher).

    It needs to be, really, somebody to do account management. Yes, you could do some internet research and make some calls. But are you sure you’re going to get quality work?

    For example, in the business/non-profit world the reason to pay an agency to do marketing and advertising (and perhaps public relations, but I think that traditional media relations is dead and that might be better done in-house) for your organization is that they have the contacts and the bundled scale. That saves you time and money because you’re going to get reliable creative out of them. And it saves you money with things like printing and media (ad) buys because they have knowledge of the market you don’t and deal with volume (because they have several clients) or at least repeat business so they can get better rates than you can if you do it yourself. Yes, paying that agency fee for account management (in addition to the ) is a bit painful and for some organizations might not be worth it. But if the end result is a better advertising and marketing campaign with solid creative then you’re sales are going to be much better.

    So what I think is needed is someone who is almost like an indie publisher (but without the print pretensions) who can edit and project manage and do some basic marketing and publicity and then has a stable of freelance designers, formatters and publicists that he or she can bring in. And that the payment model is either the author pays an agency fee for certain work done. Or the author provides a percentage of sales for a fixed time period that the book is on the market with perhaps, boosters if certain sales goals are met and with the option to renew the deal for future maintenance on the book/property.

    That’s all very roughly thought out, but my point is that I’m not sure it makes sense for authors to look to agents to help them self publish.

  3. John Brown says:

    I agree with you. Doing these tasks well requires some savvy. When you find someone good, they’re certainly worth the higher price. But, as you said, one of the key things authors are dealing with is good information on who you can trust to do quality work.

    As far as agents go, I don’t think it matters if a literary agency hires resources or developes the necessary capabilities and morphs into something that provides all the skills and resources you and I mention. Their incentive is still to sell gobs of books, which is perfectly aligned with the author’s best interest.

    However, the moment they begin to purchase rights, that’s the moment they introduce a conflict of interest. Because then they have the whole buy the rights low, sell ’em high thing going on, which works against the author since she’s the one selling. But up until that point, I’d say anyone who has the ability is what an author would want, regardless of what they’re called and what other functions they may perform.

    You agree?

    I like your payment options.

    It really does start moving toward and advertising service, except for the editing. Although, I’m not sure how effective advertising is in the book world. You’ve got to have a good cover. Okay, that’s advertising. But that’s worthless without some visibility.

    The right kind of endorsement/recommendation visibility is key, which is why best-seller lists are important, and Oprah, and book placement in stores, and the “this person also bought this” feature on Amazon. Good reviews by Booklist and Library Journal and PW perform this function for libraries.

    These service providers would have to be great at getting this kind of visibility, which I think is probably very different from marketing and advertising with other products, say cars or dish soap. Maybe I’m wrong about that. Or maybe it’s just that the average payout of the average book isn’t near enough to cover the cost to create a campaign that would acutally have any effect.

  4. Good analysis. And I sort of agree. I every much agree that authors are smart to hang on to their rights.

    In regards to whether literary agencies can morph and whether advertising and public relations services are worth it and who can effectively provide them. Well, it all depends. The field of marketing — especially advertising and public relations — is going through a huge change now. Some firms and practitioners are making the change; some aren’t. It’s no longer enough to buy some print ads and send out some news releases. I can describe what’s needed. Who would be best at delivering these services is a bit up in the air, I think.

    1. A good novel that appeals to a large enough audience that there’s a good chance of sales that lead to a decent ROI. That usually means that it needs to pass through the hands of someone who can provide good feedback on developmental edits as well as be thoroughly proofread.

    2. A book cover that not only is pleasing to the author but is also going to attract sales and that works in all the various sizes and formats where the book is going to be sold.

    3. Presence of the book in all the physical and electronic formats that it needs to be sold in to reach readers. And it needs to be formatted and packaged correctly for each of those formats. This may mean, going forward, additional elements from a premium hardbound book package that includes extra *stuff* to an enhanced ebook experience (which is what David Farland’s company is betting on).

    4. Related to #3 — Presence in all of the stores, physical and electronic, where it is most likely to reach potential readers. And not only present, but priced correctly in each of those venues with the right meta-data, categorization/shelf space, etc. This would also include continual monitoring of sales to tweak metadata and pricing to try to optimize sales, and that should be pegged to both analytics data based on trends, but also to take advantage of any changes related to publicity.

    5. An ongoing marketing campaign that may or may not include advertising (paid ads) but should definitely include an active ongoing social media conversation (with advice and analytics on which platforms are the best use of the author’s time); media pitching (reviews, Q&As, profiles, top ten lists, etc. — and to both traditional outlets and bloggers/social media stars); search engine optimization (SEO); giveaways/contests; appearances at bookstores, cons, etc.; and all of those need to be tied to actual data where possible and benchmarked with other authors where possible.

    6. Active reaching out to sell/lease/cut a deal on foreign rights/translations, film rights, game rights, etc. and then management of those deals so that there’s the best chance possible for a decent ROI (or at least a ROR — a Return on Rights) as well as preservation of the author’s brand which means any further iterations of the book/story have to be of a certain quality.

    That’s a lot. And it requires someone or some people with creative, analytical, managerial and relationship skills. It’ll be interesting to see who emerges with the ability to do all of that (and obviously execution of the above can be grander or smaller/deeper or shallower depending on the author, the book and the ability to provide an initial investment. And this is why many authors prefer to have publishers. The problem is that neither publishers, nor agents, nor marketing/pr firms really have a grasp on it all (or at least few do). And the bigger problem is that, as you mention, all of this can lead to significant costs and some of it may not have much of an effect on sales.

    It’s going be tempting for authors to trade rights for services (which is essentially what they do now when they get literary agents who then sell to publishers). I think the more authors can hold on to rights and either DIY or contract out or collaborate with other authors (co-ops) to make it happen, the better. But if the right agency (literary agency, marketing/pr agency, publisher that turns in to an agency) with the right fee structure and expertise were to be able to provide some or all of these services, I do think it would be worth looking at. Ideally, it would be one that doesn’t invest in huge overhead (authors don’t want to be paying for that) and could even be, as you mention in your comment on Barry Eisler’s post, a virtual marketplace where you can select and pay independent contractors.

  5. Servius says:

    “Amazon and the other ebook retailers have a lock on 9 & 10. It would be incredibly hard to dislodge those gorillas. ”

    I don’t know. Disk space is awfully cheap.

  6. John Brown says:


    You’re right on #9. They could easily outsource it. But I don’t think you can replace #10. There’s a lot of tech put into Amazon’s venue. But it’s more than that. It’s all of the contracts they have with vendors and other sellers and the habit of customers etc. Amazon is an experience and a brand. And they have the first slot in the mind share for that. There’s more than just the simple order taking in #10.