In this member-first Q&A on the Self-Publishing with ALLi podcast, host Michael La Ronn talks with Alliance of Independent Authors Business Adviser Joe Solari about how indie authors can think more clearly about the business side of writing. Joe explains why authors should focus less on revenue and more on profit, how to approach pricing without undervaluing their work, when going wide makes sense, and why intellectual property and audience are the real foundations of an author business. He also offers practical advice on print distribution, direct sales, and when it may—or may not—make sense to form an LLC.
Listen to the Podcast: Profit, Pricing, and Publishing Strategy
Thoughts or further questions on this post or any self-publishing issue?
If you’re an ALLi member, head over to the SelfPubConnect forum for support from our experienced community of indie authors, advisors, and our own ALLi team. Simply create an account (if you haven’t already) to request to join the forum and get going.
Non-members looking for more information can search our extensive archive of blog posts and podcast episodes packed with tips and advice at ALLi's Self-Publishing Advice Center.
Read the Transcript
Michael La Ronn: Welcome to the member Q&A with our business advisor, Joe Solari. Joe is here to answer your questions, and we've got quite a few queued up. This is your time to ask anything business-related. Joe, why don't you introduce yourself and give folks some background before we get started?
Joe Solari: Sure. My name's Joe Solari. I'm the Managing Director of AuthorNation and ReaderNation — the largest indie author conference. ALLi is a partner of ours, and we're excited to continue that partnership and help the two communities figure out what they need to do to build their best life through writing.
As for me and why ALLi asked me to be the business guy — I came into publishing in a weird way, not different from many people: my spouse is an author and I was helping her with things. This goes back to when you had to figure out how to load stuff on CreateSpace. The really gory old days.
Michael La Ronn: The bad old days, as we call them.
Joe Solari: Right — like that scene in Jaws where everyone's showing each other their scars. What I was doing is what I've always done: I've been an entrepreneur. I've built and exited multiple businesses, so I have a lot of experience around what it takes to own and operate a business across a multitude of industries. Bringing that knowledge into the author community morphed into something I didn't expect — it started with applying basic business practices, the things every entrepreneur needs to know when they start a business whether it's writing books or becoming a plumber. You start a business because of what you love to do, and then all this other stuff comes along that you have to deal with: paying taxes, structuring your business. So I went from helping with the basics to really investigating how this industry works as a giant, complex, self-organizing system, and how we can tackle some of the common mythologies we've embraced as a community that frankly hurt us if we keep believing them. I've now got experience across just about every genre, working with successful authors and with businesses that were in trouble, helping people understand the difference between an unhealthy and a healthy business.
Michael La Ronn: That's great. Writers and business don't always mix, which is exactly why we brought you on as our business advisor. Without further ado — are you good to get into some questions?
Joe Solari: Amen. Let's do it.
The Biggest Mindset Shift: From Writer to Business Owner
Michael La Ronn: First question, pre-submitted: what is the biggest mindset shift that authors need to make when moving from writer to business?
Joe Solari: I'll come at this two ways. At a high level — and this isn't specific to writers, it's a common myth about creators generally — think about your business as another thing you're creating. This isn't like having to learn geometry or calculus. There's some structure to learn, and it'll vary by situation and by country. But if you just shift your thinking to: this is all stuff I get to create, and it should fit together in a way that serves me as the business owner — that's the starting point.
When you make the decision to move from writing as a hobby to writing as a business, you now have multiple hats. You're already the creator. Now you're the business operator — the one making decisions about which levers get thrown. But there's a third hat that's often ignored: you're also the investor in this business. Too often the business operator treats the creator badly, overworking them, while also ignoring the investor — never thinking about getting money out of the business wisely, just taking every dollar the business produces and throwing it back in. You have to design the business to serve the investor too. And understand that this is a business with a lot of ups and downs, which matters for how you plan.
Michael La Ronn: That transition — understanding that writing is important but the business side is equally important, and that it has its own art and science just like writing does — that's what I hear you saying.
Joe Solari: Yes. Embrace it. Think of it as something fun to create. But from a practical standpoint — in the United States, the minute somebody pays you for a book, you're in business. There's a lot you might be thinking about — getting an accountant, setting up an LLC — and we'll touch on some of that. But as far as Uncle Sam is concerned, the minute you start taking money in, you're a sole proprietor, and that means you need to start thinking about some things. The bigger part of this question is just getting to: I'm going that way now, I understand this is going to be a business. Then we can start tackling the other stuff as it comes. A lot of creators are scared that the minute they pull that thread, the whole sweater starts unraveling. No — we'll work through it, and I'll give you frameworks to know when to actually start worrying about things.
Going Wide: ISBNs, Platforms, and What You're Really Trying to Build
Michael La Ronn: Our first live question is from Vasiliki, who has published eight books on Amazon and wants to know how to publish on other platforms by purchasing ISBNs from Nielsen. It sounds like there were some serious problems with a publisher and lost money involved — maybe we could start there generically.
Joe Solari: Sure. Specifically on where and how you sell your books — Amazon has Kindle Unlimited, and if you're putting your ebooks into that program, you're agreeing not to sell that ebook elsewhere. But it's only that one format and that one program. If you're not in KU, you have the flexibility to sell your books wherever you want.
The higher-level question for me is: what are we trying to do? Too often we think if I just put my books up everywhere, like I'm on every shelf, I should sell more. But every shelf — Barnes and Noble, Apple, direct selling — requires a strategy to get people not only to become aware of your brand, but to understand the emotional experience they're going to get from your stories, or if it's nonfiction, what problem you're solving. I would actually back up from the ISBNs question. What do you want to build in your business? Because there are ways through Draft2Digital and PublishDrive to go wide without that added cost of additional ISBNs. Direct selling is another option. There are platforms like Patreon that allow you to direct sell without a lot of upfront costs. But pick your battle. Don't spread yourself too thin.
Profit Over Revenue: The Number You Should Actually Be Tracking
Michael La Ronn: From Dina: should I be shooting for a certain percentage of my income to be profit? Is there a good number?
Joe Solari: Great question, and this is an area where I think we're collectively leading ourselves astray as an industry. We focus too much on revenue and scale. It becomes easy shorthand like ‘I want to be a six-figure author' — but you and I know a lot of people who hit six figures and probably lost money in the process. And we know people who were big deals on stage at shows who you have no idea where they are now. Why? They weren't thinking about profit.
From my experience working with six- and seven-figure author businesses, a lot of them run around 10 to 15 percent profit. That means if you're making a million dollars in revenue, you're taking home $100,000. It's a lot of sales for that take-home. When you change your focus from scale and revenue to profit, your whole economics change. If you move from 15 percent profit to 30 percent, you need half the sales to have the same take-home.
Working with businesses and really optimizing things around ads and profitability, we can typically get to around 45 to 50 percent margin. It takes time. But here's what typically happens: this is where the insistence on scale gets in the way. When we start doing this, revenue often drops. Profits may double or even triple, but revenue drops. When it falls below certain psychological thresholds — from seven figures to six figures, or from six figures into high five figures — people get scared and think their business is falling apart. It's not. It's optimizing. And the reality is that most of what makes a publishing business scale is completely out of your control anyway. You can set up conditions for it, but you can't force it. What you can control is your profit margin.
Short answer: first, find out where your profit actually is right now. If it's 12 percent, do the things you can do to get it to 15, 20, 30. Above 30 percent you're going to have to work at it. I've seen businesses as high as 80 percent — but those tend to be authors with a very enthusiastic audience that doesn't require a lot of marketing spend. Most of the money goes to heaven in advertising and marketing, so that's where to focus first.
Pricing a Specialty Print Book: Don't Get into Other People's Wallets
Michael La Ronn: From Mary: my book is relatively expensive to print. My cost is $27-plus via Ingram. I've priced it at $50 retail, $33 wholesale, and $45 on my website. What are your thoughts?
Joe Solari: On her direct site she's at about a 40 percent margin. The next question is how much is being spent to drive traffic and conversions to that site. But on pricing generally: don't get into other people's wallets. There are plenty of people who will look at that book and say ‘$50? No way.' And there are plenty who will say ‘$50? What a deal.' Go find the people who say what a deal. Think about that in your marketing. We don't need everybody — there are more than enough people in the world who would pay $50 or $60 for that book. We just have to find them, and then the question becomes what does it cost to find them.
Generally speaking, you want to be at 40 to 50 percent margin — otherwise by the time you factor in customer acquisition costs, general operating costs, maintaining a direct website, you're not actually making 40 percent, and that's how you end up in that 10 to 15 percent range. As a gut feel on the pricing: I don't see anything wrong with it. If it's a beautifully done limited edition, you probably underpriced it.
Michael La Ronn: I love that — not getting into other people's wallets. We get into our own heads about pricing so much. Any thoughts about targeting booksellers?
Joe Solari: You may have heard of Joe Pulizzi — he talks about figuring out what your tilt is, what you uniquely bring to the game, and then when you go into a channel, putting all your effort into that one channel. There's no end to channels. Even when we say ‘bookstores,' is that wholesale distribution? Is that local indie bookstores? Pick one and do it well. Understand it's going to take time to build.
If you decide you're going to hit local bookstores — ones near you or ones you'll visit while traveling — know what you're going to say to that person and what's in it for them. Why would they be excited about having your books on their shelf? Matt Dinniman and Dungeon Crawler Carl — 1,500 people paying to attend a book signing — you can trace that back to his commitment to building fans at local bookstores. If he was going to a town to visit a relative, he'd find a bookstore, connect with them, get his fans to show up. In the beginning, some nights only one or two people showed up. But he sold a book, and then things happened that were completely out of his control. It was the word-of-mouth audience that built from his commitment to that process.
My initial instinct for most authors would be direct sales on your own platform, because you control the experience. You can make sure everything aligns with the book. If you capture someone's email, you can build a relationship with them and be the obvious choice when the time is right to buy. And as you build that audience — even if your end game is traditional publishing — the onus is more and more on the author to build the audience and the brand. You want to reach the point where someone coming in contact with your brand isn't thinking about spending $50 — they're thinking, how can I spend $100 with you? I got so much from that $50 experience, I want the $500 experience.
Beyond Ebooks: Revenue Streams and the Experience Framework
Michael La Ronn: From Simon, who is an audiobook narrator: a lot of indie authors rely almost entirely on ebook royalties. What are the most overlooked revenue streams you're seeing smart indie authors build into their businesses right now?
Joe Solari: Hey, Simon. I think this is actually worse than Simon is presenting — it's not just ebooks, it's that most authors are just thinking ‘books,' when what they really have is intellectual property, storytelling. When we see this really turn into something big financially, it's two assets working together: your intellectual property — the story — and an audience that consumes it. You need both, and they feed each other. The surplus of those things working together is the profit you take out of the business.
Each medium you're in is a way to address a broader and broader audience. A lot of people love to read, but there's a much bigger audience of people who don't. If you're not doing audio, you're missing out on a significant audience. There was a time when audio wasn't really an option for authors like you and me. Then we could hire indie narrators, and now with synthetic voices, that opened up markets that were underserved.
Think about audiences served. Is it audio? Serialized fiction? Physical books? People think readers are all over a certain age reading on Kindle. That's not true. At our live event I can show you readers under 30 buying physical books. Don't get trapped in format or assumptions about how things are. You have great stories — how do you best connect with an audience that will eventually become something bigger?
A great example: there are authors like Shad Brooks and Nikolai Jankovič who started writing serialized fiction on a free platform called Royal Road. They started making money through Patreon — a subscription service where readers could get chapters early for $10 a month. Those guys were making decent money and happy. Then the industry came to them: ‘These are great stories, let's turn them into ebooks so we can put them on Audible.' The ebook was almost just a technical requirement to place the audiobook. Then the audiobook revenues became exponential — there was a much larger audience of people who would listen to fantasy in audio who didn't even know Royal Road existed and would never pick up the ebook. And the ebook generated lots of money too, because now there's this new fantasy series.
Don't get hung up on format. Back up and ask: what's right for my business and my writing style to tell my story to my ideal audience?
Michael La Ronn: What I hear you saying is that it's really about experience.
Joe Solari: Totally. The experience happens inside another human being's head when they listen to or read your book. I talked about this in my book Advantage — researchers put people in an MRI and asked them questions about friends and family, watched which parts of the brain lit up. Then they asked them about their favorite characters in books or their avatar in World of Warcraft. The same areas of the brain lit up. From your brain's perspective, a beloved character is the same as a friend. The electrical-chemical activity is identical. When you think about that as an author — that you can connect with your audience at that level — it's actually pretty powerful.
So think about giving people a taste of that experience in everything you do — your marketing, your advertising, all of it. Too often we don't lean into that. We go to the same tools everybody else uses: 99-cent deals and all that. People pay over the top for experiences. Once someone has picked up your book and read it and built a connection with your characters and your story world, your marketing just got so much easier. But too often we don't lean into that advantage.
Amazon vs. Ingram for Physical Books: A Practical Answer
Michael La Ronn: From Elise: how do we choose between Amazon, from which booksellers and libraries will not order physical books, and Ingram, which recommends a no-returns policy that can be dangerous?
Joe Solari: I think in today's environment you have to do a little bit of all of it. And it gets back to what you're trying to achieve. Just putting your stuff in Ingram and following their terms doesn't mean your book is going to take off — there has to be ongoing work by you to get people interested. Once that momentum is in the marketplace, they'll order through there naturally.
From a financial perspective, the last thing you want is to have retailers ordering books to fill shelves and then returning them. We've seen inside the ALLi community cases where authors go from a peak of ‘I sold all these books' to ‘I owe them money now.' No one has ever seen their book sales take off by accepting returns as a strategy — so don't agonize about it too much. The practical answer: if you're selling physical books and Amazon is the printer, use them because it's facilitated better on their platform. For everywhere else, use Ingram. And keep coming back to the core question: what are you doing to build your intellectual property and your audience?
Michael La Ronn: James made a good comment in the chat: you need to be with Ingram if only to allow your readers the option of ordering your book through their local independent bookstore.
Joe Solari: Absolutely. And that circles back to: are you pursuing an independent bookstore strategy? Just throwing your books at Ingram isn't going to do anything. But if you're genuinely going to pitch bookstores, have your book in hand, and help them sell books — always go in with a plan for how they can make money — you're going to get more traction. When you walk into a bookstore, see those shelves as their money on the shelf. Any way you can help them have fun, bring customers in, and sell more books so you both mutually succeed — that's what builds relationships.
How Can Profit Increase While Revenue Decreases?
Michael La Ronn: From Judy: how can profit increase while revenue decreases? Can you walk through how that actually happens?
Joe Solari: Sure. If you get wrapped around the idea of scale and you're spending heavily on advertising, you can be continuously increasing your ad spend while revenue increases with it — but not proportionally. It's not that for every dollar of ad spend you get $2.50 of revenue every time. It's all over the place. So say you're making $100,000 a year in revenue but your expenses are $75,000 — you're netting $25,000. We dig into the ad campaigns, optimize, and cut expenses by say 80 percent. Sales also drop with that. When it nets out, you might find you now have $80,000 in revenue but $40,000 in profit. That's how it happens, and I've seen it more often than the reverse.
Pretty much every business I've touched where the author is doing multiple six or seven figures, they come to me and say: ‘I had my best revenue year ever. I've worked so hard and I have less to show for it.' It's always in the expenses. The idea of scale — adding more people, adopting more marketing tools — creates bloat. When you remove the bloat, it will have an impact on top-line revenue.
Here's the big secret: what actually scales a business is the audience, not the backlist, not the size of the launch. The objective isn't selling more books. The objective is building an audience of people who will buy anything you put out. Think about Willow Winters — some readers have eight or ten versions of the same book of hers. Who knows if they've read all of them? But the experience is exactly what they wanted. You start looking for a different kind of customer, and that may mean making decisions about how you market that slow things down in the short term.
A perfect counter-example: a lot of people will show you how to sell a lot of books using a low ticket price with a bundled offer. When you're done with that process, you have a customer list full of bargain shoppers. Book five launches at full price — crickets. Why? Because that list's inherent feature is: we buy lots of books at a discount. That's not the audience that scales. So you set up your campaigns differently from the start — only selling full-price books. It may look like you're not getting the same traction someone else is bragging about on Facebook, but they're focused on something that's not the experience and not the ideal customer. That's the audience that doesn't scale.
When Should an Author Formalize as an LLC or Corporation?
Michael La Ronn: We've got a few minutes left. When should an author think about formalizing their business into an LLC or a corp?
Joe Solari: Good question. This gets back to the whole idea of profit. From a tax perspective — and I'll speak from the US, very much state by state — a general rule of thumb is that until you're making about $10,000 in profit, formalizing any kind of LLC and setting up S corps and doing salaries and all of that is break even from a tax advantage perspective. In some cases it's actually costing you money, depending on your state's extra fees, and now you're creating reporting obligations every year.
Let me crank this back and think about the best use of your money. I'm in Illinois — giving Illinois $150 to set up an LLC is not going to help me sell more books. And unless I'm writing something that could create serious legal liability, I don't need the legal protection. So what should you do first? Set up a separate bank account. Get an EIN — that's free in the US — which is a substitute for your Social Security number. The reason you do that is fraud protection: when you register on all your platforms with your EIN, if there's a data breach, they don't get your Social Security number. Use that EIN for your bank account too.
Most authors don't do this. They have everything sloshing around in one account, so they can't do good accounting or understand whether they're making a profit. The beauty of today's world: get a separate bank account, take your monthly statements, throw them into ChatGPT or Claude, and say ‘Tell me if I'm making a profit or not.' It's that easy now. I had a business I was closing that I'd neglected for a while. I took 12 monthly statements, threw them in, and said ‘Make me an income statement, balance sheet, and cash flow statement so I can do my final return.' It created them. I checked the numbers. Done.
Back to the original question: the easy answer is if you're making $10,000 in profit — not sales, profit — it makes sense to talk to a professional who knows your location about the best structure. If you start hearing things like ‘set up in Nevada and you won't have to pay taxes there' — that's nonsense. You're the business. Where you do the work, that jurisdiction expects you to pay taxes there. I have a Nevada LLC for the conference because we operate there. But the owning company is an Illinois company where I live, and that pays Illinois taxes because that's where Joe and Suze do most of their work.
And I've seen more authors use business structure questions as a distraction from getting the book written than actually benefiting from the structure.
Michael La Ronn: And I've seen people set up corporations who ended up in big trouble tax-wise because they didn't understand what they were getting into. So it's definitely not something you want to sleepwalk into. Keep it simple as long as you can.
Joe Solari: Yes. Operating as a sole proprietor and doing everything on your Schedule C, applying all your expenses — that's where authors make mistakes, by the way: not deducting all their expenses — then paying a bit of self-employment tax, which goes back to you in Social Security and similar programs anyway. In my view the financial cost of that setup outweighs all the extra work and fees of setting up a company, depending on your state.
Closing and Where to Find Joe
Michael La Ronn: That's a great overview, Joe. Thank you. Where can people find out more about you and what you're doing?
Joe Solari: I hang out here in ALLi, so there are resources within ALLi where you can access me, and you can always ping me with questions — I'm here as a resource. The other thing is AuthorNation — authornation.live. The conference is in November. We have a lot of great content that's free, including opportunities like our Kickstarter cohort, where we're really focused on how to launch books there and get profitable faster. Our core mission is: how can we give authors an unfair advantage? Not with hacks or shenanigans — with understanding how to market and sell books on a platform like Kickstarter, where you fix the profitability problem upfront because you get the money before you have to deliver. That's a structural advantage you don't get if you're dumping $10,000 into an Amazon launch and hoping for $20,000 back. So yeah — authornation.live and ALLi. You'll get enough Joe Solari there.
Michael La Ronn: All right. Thank you again, Joe, and thank you everybody for attending. We'll see you on our next session. Have a great day.
Joe Solari: Thanks everybody for being here.
