How to generate Passive Income from POD Low-Content Books for Teachers
Let's Talk About ROI, Royalty and Sales per Day/Month (Post #3 POD)
How can you generate a passive income stream from low-content books? In this series, I will share ideas and practical applications for teachers. It does not matter if you are still teaching or you already left the classroom. You have something that can be self-published in the Amazon platform. But first, make sure you’ve read the first two posts in this series:
about Amazon self-publishing, print-on-demand and low-content books
an actual example (plus video) of a low-content book on which your buyers can actually write-on like a workbook
Book Royalty is a Passive Income Stream
Income from books sales are called royalties. In the United States, the IRS consider it as part of “portfolio income” where it is “not derived in the ordinary course of a trade or business” - IRS Publication 925 (2022). In other words, a book royalty qualifies as a passive income stream. But don’t be misled by the word “passive.”
Incomplete Picture of Passive Income
Investopedia defines passive income as “income that requires minimal effort to obtain.” This definition shows an incomplete picture of what passive income really is. That income is the end-product of what you planted in the beginning and tended for with promotions so it can grow. In reality, you get passive income after putting some effort at the start. You need to prepare your ground and sow your seeds before harvesting any fruits.
Better than usual ROI
Business earnings are called net profit. It is gross sales minus expenses. Return on Investment (ROI), on the other hand, is “a measure of how much profit you make relative to the amount of money you invest” according to Newtopia. They added that “as a general rule of thumb, a good ROI for e-commerce is typically around 10-15%.” That means if you invest $10,000, a net profit of $1,500 to $2,000 is acceptable. This also means your gross sales should be $11,500 to $12,000. Amazon book royalty, on the other hand, is 60%. No, you do not get the whole 60% of the list price. The formula is (Royalty rate x list price) – printing costs = royalty. For the sake of simplicity, if your book price is $10 and the printing cost is $3, your royalty is $3. To generate $1500, you need to sell 500 books. That’s only 16 books per day. Okay, that might seem a lot at first, but stick with me as I simplify the process. And unlike building your own eCommerce store, self-publishing via Amazon’s KDP is:
free - you do not pay any subscription fee
generates free business reports like royalty estimator
you can get started without big business expenses using your current software or free alternatives
you can start with what you have like the simple addition and subtraction worksheets you lovingly made for your students
Earning Potential
To show the earning potential of low-content books, I used apps like KDP Spy Pro and Publisher Rocket. I fed the keywords “math addition and subtraction” and got the following reports:
Go ahead, enlarge the image. You will see that in KDP Spy Pro the lowest number of monthly book sales is 24 books and the highest is 2,883. In Publisher Rocket, the lowest daily sales is $52 and the highest is $406. What does that mean for you? Let’s zoom out.
This means there is an opportunity for you to explore an untapped passive income opportunity. Instead of letting your original worksheets just rot inside your hard drive, why not fish them out and convert them into a workbook. You can also do this with parent communication forms, IEP planners, lesson planners or student calendars. I’ll give you more ideas in my next posts in this series.
Your first $100 then $1000
Look at it this way. In order to earn a royalty of $100, you only need to sell 34 books. Why? According to our simplified computation above, you get $3 per sale if you price it at $10. Actually, if you are tired of xeroxing worksheets for homework, you can recommend your school or parent organization to buy your book, if that is allowed by your district. That will take care of your first 34 sales. To get $1000, you need to sell 334 books. If you create 4 more workbooks or low-content books, you can easily earn this monthly. The key is to start. We’ll tackle how you can start your self-publishing journey next post. Make sure that you subscribe for free so you’ll not miss a post.