What happens when a POD publisher goes out of business? Authors are left floundering, their pockets empty, and with no book on the market.

Several years ago, there were only a few major players in the Print on Demand (POD) industry. Now, POD publisher wanna-be’s are coming out of the woodwork, and signing with them can be very costly for authors.

IT’S NOT EASY!

Starting a business isn’t easy. Most new businesses fold for a variety of reasons. Lack of capital is a big reason but another is lack of knowledge. When somebody starts a business on a whim, with no idea what they’re doing, they’re probably going to fail. Running a professional company requires not only business acumen and training, but also accounting knowledge, familiarity with local, state and federal requirements, knowledge of tax issues, a good law firm, trademarks and other licensing, a merchant account (which requires good credit), and much, much more. Running a publishing business requires additional expertise (or the hiring of experts) in computers, graphic design, printing, distribution, and a whole lot more.

Unfortunately, when Print on Demand publishers fail (it happens more often than you think), their customers (authors) end up with empty pockets, and no book on the market. Those authors must then pay another POD publisher all over again…and have to start over with publishing their book. It’s very sad but it’s not surprising since it’s happened so often.

WHY PAY MORE TO A START-UP WHEN YOU CAN PAY LESS TO AN ESTABLISHED FIRM?

While signing with a start-up may seem like a nice thing to do (who hasn’t wanted to give a new, small business owner a break?), it can be a huge risk considering the financial investment authors make. Many POD start-ups charge authors WAY too much money. Would you rather pay $675 to a veteran POD publisher with a solid background and over 15 years of experience, or would you rather risk paying $1,000 or more to a fledging start-up that may very well go belly up in a few months?

ONE OF THE FIRST EBOOKS EVER PUBLISHED…

At BookLocker.com, we have published more than 7,000 print and electronic books since 1998. While one of my books was traditionally published by St. Martin’s Press, I’ve made far more money publishing my own books. After printing and selling my own titles for awhile, I unknowingly created one of the first ebooks back in 1998 (long before Stephen King made ebook a household word) when I started selling my books as MSWord files at a discount. My book sales soared! Of course, now we sell ebooks as pdf, epub and mobi files, and we sell them not only on BookLocker.com, but also on Amazon, BarnesandNoble.com, Apple and Kobo (Canada’s popular ebook retailer).

After I started selling my own ebooks, I wrote a book about how to do it and I earned more than $700 the first day I put it up for sale on WritersWeekly.com. My ebook was also the #1 best seller on a small ebookstore called BookLocker.com (that we later purchased).

BOOK SELLING KNOWLEDGE AND EXPERIENCE IS ESSENTIAL

I knew how to sell books and I still earn thousands per year promoting and selling my own titles (13 non-fiction books for not only writers and authors, but also moms considering Vaginal Birth After Cesarean, anthologies for those interested in life after death, and a how-to book on reborning dolls.

PRINT PUBLICATION AND GLOBAL DISTRIBUTION

After writing about my success in selling books, other authors started asking me to list and sell their ebooks on our websites, too. And, we then branched into offering print publication services as well, including professional interior and cover design, ISBNs, barcodes, etc. (everything you need to get a quality book published), and print book distribution/fulfillment on BookLocker.com, Amazon.com, BarnesandNoble.com, BooksAMillion.com, Powells.com, and many, many more stores across the globe. Customers can also order our print books from their local bookstores because they are available through Ingram, the world’s largest book distributor.

WHAT’S OUR SECRET? WHY WERE WE SUCCESSFUL WHEN SO MANY OTHERS FAILED?

Starting the business wasn’t easy. It took a long time, and a lot of money.

Why were we successful and why do we continue to be successful?

1. We had enough capital to launch a business, and to sustain it (and us) until the business could sustain itself. Any extra money was invested back into the business so it continued to grow. We mailed every royalty check on time, of course, because that was our authors’ money, not ours. We paid our contractors and service providers on time, too. We did not make extravagant expenditures, nor were we interested in growing to the point where we could go public. Business owners who have an end goal of growing quickly, selling, and retiring are, in my opinion, toxic. They are not interested in the greater good. They’re just interested in getting rich. That was never our goal because that’s not the kind of people we are. We enjoy our jobs, we enjoy serving authors and book lovers, and we enjoy spending time with our children. That’s all we need to be happy. We’ve been in business for more than 15 years now and BookLocker has been profitable from day one, and continues to grow because we don’t spend more than we have, and we always meet our financial obligations.

2. Richard and I are both professional writers. We know what authors need (and what they don’t).

3. Richard is also a technical writer and an Internet marketing expert. He has been involved in Internet marketing since it became a profession back in 1995. His contributions have been invaluable to the company. Early in his career, he developed and executed online promotional strategies for a number of companies. Read more HERE. This not only helps promote WritersWeeky and BookLocker, but also helps authors with book promotion since he is always available to give free advice, and to exchange unique marketing ideas with BookLocker.com authors. He, of course, does not charge them for that since we, too, benefit from book sales. We and the authors have a common goal of selling their books!

When I was freelancing for magazines, writing and publishing my own books, and starting a website for writers, I was also working in accounting for a government contractor. I had extensive exposure to accounting policies and procedures, budgets, contracts, a variety of taxes (boring as heck – but extremely helpful when we started our own business!), and more.

As we’ve watched competitors come and go, I’ve often shook my head at their lack of knowledge about basic accounting procedures (more about that below). If a “publisher” doesn’t know what they’re doing, and spends their authors’ royalty earnings before sending those earnings to the author, they’re stealing and they’re going to go out of business, and may even be prosecuted. Too many POD publishers have gotten into trouble doing this. Others may spend any incoming money on bizarre expenses (rent for a high-rise office, a granite, monogrammed conference table, a few vacations per year…) and they later wonder why they can’t pay their invoices from the printer.

Someone with accounting and tax knowledge is needed in every business but some hobbyist publisher wanna-be’s think that balancing a checkbook is all they need to know to run a business. This gets lots of new business owners into serious trouble.

4. Richard is a computer whiz. If something breaks, he can fix it. We also have an excellent web hosting and maintenance service that assists Richard with any number of system updates and security processes on an ongoing basis. And, let me tell you, good services like that are NOT cheap! We spend tens of thousands per year ensuring our systems remain active (the talented and friendly tech guys are available to us 24 hours/day), and selling books. We have back-up, mirror servers as added security. If one conks out, the other one immediately kicks in.

Most new POD publishers don’t consider this necessity when starting their business. One of our competitors was put out of business by hackers who stormed his servers with fraudulent purchases. He hadn’t bothered to invest in the right software, equipment, and security services. He didn’t catch the fraud, books were shipped out, and he lost thousands. Then, he simply shut his website down one day and all his authors were left in the dust.

5. Before I started dating Richard, I already had a successful website for writers (WritersWeekly.com) that I’d started as a way to help other writers find current paying markets for their work. Back in 1997, there was no source of paying markets with each editor’s current needs as the old Writers Market books were composed of material that was collected months ahead of time.

I sold my writing-related books through that site as well. It’s been more than 17 years now and, on WritersWeekly.com, we continue to provide quality editorial content and paying markets and jobs for writers – for free – every Wednesday. When we started publishing other people’s books, we already had a large online community/family with which to exchange ideas, and to obtain information on what they wanted in a publisher. Of course, we also had an audience eager to buy books on writing from other authors.

6. We recognized who our competitors would be, and how they were scalping authors with their high fees. Most took rights to production files, upsold authors on worthless products and services, and performed many other unsavory, greedy acts. And, many of them continue to find creative new ways to separate authors from their money.

We made detailed plans about how we were going to serve authors far better, for far less, and in a much faster time-frame (we usually get a book to market within a month while our competitors can take 4-6 months, or longer).

7. We decided we were not going to fill the market with garbage. Our reputation would reflect not only on us, but on our authors as well. We vetted manuscripts for quality and salability. We rejected trash books, like celebrity tell-alls, books that promoted dog fighting and other illegal, unscrupulous acts, books that promoted child abuse, etc. (Yes, one of our competitors got bad publicity for that! It sure seems some people really will publish anything for the almighty dollar!)

All the while, our competitors continued to publish anything and everything, which harmed the entire industry.

8. We weren’t afraid to work upwards of 16 hours per day or more to serve authors and book buyers. We still rarely take a whole day off but that’s how it works when you own your own business. Business owners who don’t dive in head first, and devote the majority of their time to the success of their business, do not succeed.

Thinking you can run a successful online business by launching a website, and leaving it to its own devices, is a sure-fire path to failure.

AVOID SIGNING ON WITH THE WRONG POD PUBLISHER!

We frequently hear from authors who have paid money to a new POD publisher that eventually went under. These hobbyist publishers get an idea, think it looks easy, try it out, realize it is either too expensive or too much work, and abandon ship. Their victims (authors) must then scrounge up more money to get their books published all over again. (They often rename the book because the old listings exist online forever.) Or, sadly, these victims walk away from publishing altogether, disheartened after being scammed.

Yes, when a company is ill-prepared to start a business, or remain in business, and when they leave their customers with nothing, I call that a scam. Anyone who doesn’t have the resources and knowledge to start a business, but who does so on a whim anyway, is setting their customers up to be victimized.

At BookLocker.com, we offer the victims of other POD publishers (whether defunct or still in business) our “disgruntled author special,” which provides a $159 discount. There’s nothing more disheartening for an author to work months or years on a book, get it published, and then see it die through no fault of their own…other than the fact that they chose the wrong POD publisher to begin with.

I belong to a few POD publisher discussion lists. Nobody has to prove they’re a real publisher to join most of the lists, nor do they need to prove that they even remotely know what they’re doing. This gives me a front-row seat to how unknowledgeable, ill-prepared and, frankly, ignorant some of these “firms” are about the publishing industry, and business in general. Many clearly didn’t know what they were getting into and it’s only a matter of time before they grow bored (or go broke), and go out of business, leaving who-knows-how-many author victims in their wake. Again, it happens all the time.

Of course, there’s always the risk that the government is going to catch onto their shenanigans, and force them out of business. That’s happened quite a few times, too.

RIDICULOUS COMMENTS AND QUESTIONS FROM AMATEUR POD PUBLISHERS

Here are some examples of comments I’ve seen posted by so-called POD publishers:

“I just can’t figure out how to collect sales tax so I’m going to stop offering our books for retail sales. I’m only going to sell them in bulk quantities now.” (This is suicide for his business, and for his authors’ books!)

“Do I need a sales tax certificate?” (Yes, you do!)

“I collect sales tax but I don’t have a license. I don’t know who to send the money to. I’ll just keep it until someone tells me I can’t.” (This is illegal, and could result in prosecution.)

“One of my authors asked for a 1099. What’s that?” (If she doesn’t send those out to authors who have earned a specific threshold, she faces stiff fines by the IRS and they may even shut her down.)

“I’m deducting taxes from my employees’ checks but I don’t understand what to do with the money. Can someone explain it to me? What if I just make all the expenses contract labor instead?” (This is also highly illegal, and could result in the employer being audited and fined. Business owners and even board members can be held personally responsible for failure to remit payroll taxes. And, this can also create havoc for their employees come tax time. Trying to categorize an employee as a contractor is also illegal, and can result in stiff fines that can put someone out of business.)

“Isn’t Medicare withholding optional?” (No!)

“Do I need worker’s compensation insurance?” (In most cases, yes, you do.)

“Do I have to charge my local authors sales tax if they’re buying copies to sell themselves?” (Yes, unless they provide you with a resale certificate.)

“What does 300 dpi mean?” and “What’s an ISBN?” and “What’s a Library of Congress Control Number?” (Any publisher who doesn’t know the answer to any of these questions doesn’t have a CLUE about what they’re doing!)

“Do I need a business bank account? Why can’t I just use my personal one?” (When someone makes a check payable to your business name, you won’t be able to deposit it. Asking customers to make a check payable to your personal name is VERY unprofessional.)

“I’m not going to get a merchant account. I’ll just accept checks by mail.” (This publisher will be out of business in a matter or weeks, if not sooner. Not accepting credit cards will kill your business. Period.)

“I can’t afford ISBNs. I’m just going to publish our books without them.” (If your authors’ books don’t have ISBNs, they won’t be listed/sold by Ingram – the world’s largest book distributor, nor by most bookstores. This is, again, sales suicide.)

“I am new to this. How do I get our books on Amazon?” (Further proof how many so-called publishers don’t know enough to be working with authors’ books!).

“I can’t make the headers in the file work. How do you do that?” and “How do you insert page numbers?” and “What information should I put on copyright pages?” (If you don’t know this basic information, you shouldn’t be publishing books.)

“Can someone help me with these copyright forms?” (If you can’t fill in the blanks on a simple government form, you shouldn’t be publishing other people’s books.)

“I priced my first books too low and I just realized I’m losing money on every wholesale order. My authors are upset because there’s nothing left for them. How can I fix this? Can I make my authors cover my losses?” (If someone can’t perform simple math and budgeting, they should NOT be publishing other people’s books! And, they certainly shouldn’t expect their author clients to cover their losses!)

“My daughter does all the editing of our authors’ books.” (When I asked where her daughter went to school, she replied, “Oh, she didn’t go to college.”)

This is just the tip of the iceberg. When reading comments like these on a daily basis, I don’t know whether to laugh, or cry, or get sick because I know what’s going to happen to their poor authors. Not surprisingly, many of the POD publishers who have these types of questions and problems quickly go out of business within just a few short weeks or months. Some hang on longer, seeing how many authors they can con into paying their fees before the roar of complaints gets too loud online, and affects their reputation.

Don’t be tempted to sign on with a start-up that may very well have been launched on a whim by an unprofessional, unknowledgeable individual. Launching and running a successful publishing business takes professional knowledge, training, money, and lots of hard work.

Avoid becoming another victim of a serial hobbyist who will simply drop you and your book when the going gets tough. Only publish your book with a professional, established POD publisher (but do your homework about those, too!).

For most authors, there is far too much at stake to do otherwise.

Got questions about Print On Demand and Self-publishing? Ask Angela Hoy.

About The Author

Angela Hoy is the publisher of WritersWeekly.com, the author of 19 books, and the co-owner of BookLocker.com (one of the original POD publishers that still gets books to market in less than a month), PubPreppers.com (print and ebook design for authors who truly want to self-publish), and Abuzz Press (the publishing co-op that charges no setup fees).

Angela has lived and traveled across the U.S. with her kids in an RV, settled in a river-side home in Bradenton, FL, and lived on a 52 ft Irwin sailboat. Angela now resides on a mountaintop in Northwest Georgia, where she plans to spend the rest of her days bird watching, gardening, hiking, and taking in all of the amazing sunrises.

WritersWeekly.com - the free marketing ezine for writers, which features new paying markets and freelance job listings every Wednesday.

BookLocker.com - According to attorney Mark Levine, author of The Fine Print, BookLocker is: "As close to perfection as you're going to find in the world of ebook and POD publishing. The ebook royalties are the highest I've ever seen, and the print royalties are better than average. BookLocker understands what new authors experience, and have put together a package that is the best in the business. You can't go wrong here. Plus, they're selective and won't publish any manuscript just because it's accompanied by a check. Also, the web site is well trafficked. If you can find a POD or epublisher with as much integrity and dedication to selling authors' books, but with lower POD publishing fees, please let me know."

Abuzz Press offers FAST and FREE book publication, but only accepts a small percentage of submissions, and only works with U.S. authors.

PubPreppers.com - "We Prep, You Publish!" Print and ebook design for authors who truly want to self-publish. Offers formatting and design services only, and then provides simple instructions for authors on where to sign up to have the print and ebook editions printed/listed/sold. Cut out the middle man. Keep 100% of what bookstores pay for your book!

Angela's POD Secrets Revealed Series can be found HERE.

Have a POD Book with another publisher? See if BookLocker can give you a better deal. (BookLocker offers "disgruntled author discounts" to those who want to move from other POD services.)

See BookLocker's publishing packages HERE.

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Read More Of Angela's Articles HERE