CreateSpace or Lightning Source Intl?

October 13th, 2011 → 7:02 am @

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I belong to a very active and helpful Yahoo group for self publishers.

Recently, a member asked about the pros and cons of CreateSpace and Lightening Source International (LSI).

Here’s an excellent reply from Pete Masterson along with price comparisons that does my CPA heart proud.

Create Space — PROS and CONS

Posted by: Pete Masterson, Aeonix Publishing Group

Sat Oct 1, 2011 8:09 am (PDT)

Here is a comparison of LSI vs CS that I wrote a while back:

There is no “one size fits all…” and it’s helpful to recall that my solution may not be your best solution to whatever situation you’re considering. (There is a tendency for some folks to be quite adamant that “their” choices are somehow the “best” choice for everybody.)

The distinctions between CS and LSI are:

CS is a subsidy publisher — one that is among the least toxic, but a subsidy publisher nonetheless. However, the CS contract is not particularly obnoxious. CS does not “tie you up” with a complex contract. I do not recommend their “author service” and the contract for that work is as unattractive as most other subsidy publishers — but is better than many.

Lightning Source, Inc. is a printer. It deals with publishers, not authors. The unique service it offers is distribution through Ingram Book Services — something that no other _printer_ offers. Subsidy publishers that offer distribution through Ingram do it by printing with Lightning Source and marking up the printing to charge the author a higher fee than they’d pay LSI directly. I’ve heard that there is a similar arrangement through Baker & Taylor for POD distribution — but I have not heard any feedback on that arrangement. (And most feedback suggests that may publishers have a serious love-hate relationship with B&T.)

CS, as a subsidy publisher owned by Amazon sets a 40% discount for sales via Amazon. You can sell through the CreateSpace “estore” with a 20% discount — this allows you to use a direct link from your own web site to the estore to maximize your revenues. However, the reality is that the bulk of sales will occur through Amazon in almost all cases. CS offers “extended” distribution at a cost of a 60% discount from list price. The “secret” is that CS lists the book with LSI!!! (You can do that yourself.)

LSI, in connection with Ingram allows you to set a variety of terms for the sale of your books. You may set a wholesale discount between 20% and 55%. You may make books returnable or nonreturnable. This allows you to have books at the usual 55% discount fully returnable terms that booksellers are accustomed to working with. (A portion of your discount goes to Ingram and a portion goes to the retailer — that split is between the bookseller and Ingram.) Amazon and other online booksellers ‘automatically’ list your book for sale once it’s in the Ingram catalog. All booksellers can obtain books from Ingram.

Both LSI and CS have comparable print cost, although differences in rates tend to favor CS for smaller quantities. Both CS and LSI allow you to order books for inventory and will ship to you at your expense. LSI offers discounts for large quantity orders. You can also order books directly shipped to a buyer from LSI (where you have received direct payment) — CS has it’s web store option for the competitive result.

CS will provide you with an ISBN — although this is rarely a good idea (since the CS ISBN belongs to CreateSpace and you can not use it if you print elsewhere — and you are tied to CS as your publisher). You may also use an ISBN you have obtained directly from R. R. Bowker.

LSI does not provide an ISBN. You are responsible for obtaining your own ISBNs. This is an added expense — but is generally a recommended expense in any event. Single ISBNs are available, but are usually a poor investment as a block of 10 is truly registered to your publishing entity name without an ‘asterisk’ associations.

The point about ISBNs is important. Books with ISBNs from subsidy publishers simply don’t get reviewed by the industry standard prepublication reviewers and are rarely reviewed by the most well respected review publications. While independently published books have poor odds of getting prepublication reviews or reviews from “well respected” publications, a small percentage of such books do get reviews. This may not seem fair. (It isn’t.) But it IS a reality that you must be aware of. (The choice is zero chance of review vs. a small chance of review. You can win “the lottery” — but you must buy a ticket to win.)

Ease of use. CS, in general, offers a simple and accessible method of signing up and submission of materials. LSI is a little more difficult and LSI specifically does not want to work with “authors” — but if you learn the basics of being a publisher, LSI is happy to work with small publishers.

Initial costs. LSI is slightly more expensive to set up than CS if you order a proof copy, etc. In the long run, the cost difference isn’t particularly significant. LSI costs a minimum of $105 for set up and proof copy, CS is either free (for a high unit cost) or has a $39 Pro Plan (highly recommended if you expect to order/sell more than 20 copies). Proof copies from CS are charged at the regular print cost plus shipping.

There are situations where CS could be beneficial in addition to LSI — if, for example, you wanted to offer a 55% discount to obtain interest from physical store booksellers, then you could use LSI for that market and use CS to sell to Amazon and only give up 40% on those sales (cutting out the 15% that goes to Ingram on Amazon sales). Amazon tends to favor CS over Ingram/LSI when ordering books.

Recently (2011) Amazon has been “playing games” with non CS POD titles that are selling well. It has become necessary to use CS for Amazon sales to ensure titles are listed as “available” instead of “3 weeks”…

CS can be used to (relatively) inexpensively ‘test market’ a title (using a CS-provided ISBN), and if the test proves actual market interest, re-issuing the book with your own ISBN and using CS and LSI together may be the best overall method to fully exploit the market opportunities.

The point is to analyze your costs and returns via all distribution methods and use those that are most beneficial to you in serving your market segments. It’s less a matter that CS or LSI is “better” than the other — it’s that you should be using the tools available to maximize your return on your marketing efforts.

In the end, the goals you have for your book makes a big difference. If you measure success as some number of sales less than 100 copies, then almost any subsidy publisher should be satisfactory — and for economic efficiency, I suggest using the least expensive provider possible — and CreateSpace is certainly a contender in that category.
If your goal is for sales of a larger number of books, then it is likely that making your book fully available to the usual book distribution channel (e.g. using LSI/Ingram) will be necessary and CreateSpace may not ultimately be your best choice.

Using the CreateSpace online calculator. These prices are all based on a color cover and a black interior book.

A softcover book of 212 pages, 6 x 9 with a list price of $16.00:
CS standard plan, sold via estore you receive a net $7.06
CS standard plan, sold via Amazon you receive a net $3.86
CS ProPlan, sold via estore, you receive a net $9.41
CS ProPlan, sold via Amazon, you receive a net $6.21
Purchased direct from CS in small quantities for delivery to the publisher, standard plan, you pay $5.74 per copy (plus shipping)
ProPlan, you pay $3.39 per copy (plus shipping). There is no discount available for quantity orders.

The CS ProPlan has a $39 start up charge per title. A $5 per year per title fee is charged to maintain the listing.

Using Lightning Source figures as comparison:
the same book with $16.00 list price:
With a 20% wholesale discount, you receive $9.14 per copy sold via LSI/Ingram
With a 40% wholesale discount, you receive $5.94 per copy
With a 55% wholesale discount, you receive $3.54 per copy
The print cost per copy (in all cases) is $3.66 per copy
There is a start up cost of $70 plus about $40 for a proof copy. A $12 per year per title fee is charged to maintain the listing.If you purchase copies direct from LSI for shipment to the publisher this book would cost $4.08 per copy plus shipping.
This charge also applies to shipments made direct to customer at order of publisher. (This charge is based on .015 per page instead of .013 per page for the interior. Cover charge is unchanged.)orders of
50-99 units receive a discount of 5% (reduces unit cost to $3.88)
100-249 units receive a discount of 10% (reduces unit cost to $3.67)
250 – 499 units receive a discount of 20% (reduces unit cost to $3.26)
Over 500 units receive a discount of 25% (reduces unit cost to $3.06)
(plus shipping).======

So, the CreateSpace ProPlan offers a slightly lower unit cost for books shipped directly to the publisher — but does not seem to offer any discounts for quantity purchases. (Per page rate is .012 for the CS pro plan and .013 at LSI — the ‘cover’ charge is .85 for CS Pro plan vs .90 at LSI — and this is the price difference.)

LSI gives greater flexibility in setting wholesale discount rates and terms. Using LSI/Ingram distribution, the book is available to all booksellers where CS is only available to Amazon. Using the CS ‘estore’ would allow a slightly better return on direct to buyer orders from your web site.

In the end, the deciding factor is if the 20% discount through LSI is more appropriate for your business plan or if limiting sales to Amazon (and the CS ‘estore’) is suitable.

The analysis I did a short time ago, gives a modest edge to CS for low volume sales through Amazon. CS books printed for delivery to the publisher are also less expensive in small quantities than from LSI. However, LSI offers volume discounts and above 100 copies is very close to CS in unit cost and beats CS on quantities over 250 copies.

I must say, I’m perplexed over the continuing discussion of CS vs. LSI. They each have advantages and disadvantages.

CS is probably the best choice for someone who has low to modest quantity expectations for sales of their book.

CS has a more user friendly interface.

CS pro plan prints books at a lower cost than LSI. (See opening comment.)

LSI has better market reach with distribution through Ingram, although the CS program for offering books through LSI for distribution through Ingram equalizes that reach — but at a very high cost (advantage to LSI).

LSI offers flexibility in wholesale discount. (20 to 55%) This is an advantage for those with particular marketing plans where they wish to take advantage of short discounts. CS requires a 40% discount via Amazon and requires a 60% discount for distribution via LSI/Ingram.

LSI offers both hard cover and soft cover (CS offers soft cover only).

The choice you make depends on the business and marketing plans you have for your book. In some cases CS offers an advantage. In other cases LSI offers an advantage. Both have comparable output quality (they’re using very similar equipment and processes). The financial differences between the two depend greatly on the discount you wish to use. Obviously if a 20% short discount is desired, then LSI is the only choice. Likewise, the “extended distribution” available from CS (at a 60% discount from list) does not look like a good choice but is offset slightly by the lower printing cost at CS — but the higher discount is probably designed to ‘cover’ the extra cost of printing through LSI (or Amazon has obtained a better ‘deal’ from LSI than we mere mortals can get).

Aaron Shepherd has a book, POD For Profit, that explains the business model that uses the 20% discount to good advantage.

Ultimately, this devolves into an argument like the old Certs mints ads: “It’s a breath mint” — “It’s a candy mint” — in the end, it’s just a matter of your perception and the advantage of one over the other depends on the specifics of your business plan.

Pete Masterson, Author of
Book Design and Production: A Guide for Authors and Publishers
Aeonix1@ Publishing Consultant
Aeonix Publishing Group

One Comment → “CreateSpace or Lightning Source Intl?”


    12 years ago

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