What is your business model?

My goal is to help readers explore and discover books in fun and unique ways. 

And doing this while helping authors get their books in front of the most likely readers in new and unique ways. 

I will never charge authors to create a book recommendation list. 

I will never charge readers to read book recommendation lists. 

Are you making Scrooge McDuck money? 

Nobody goes into the book business to make Scrooge McDuck money 😁.

I love reading, and I am passionate about this business.

Every business needs to make money to build great things and be sustainable. My financial goal is to reach $240,000 a year in revenue. That would cover our small but mighty team, our software and infrastructure costs, and allow us to keep innovating and building new features.

Specifically, that number would allow me to hire 1 full-time developer in addition to our current part-time developer (everything you see was built with 1 part-time developer).

How much do you pay yourself?

Nothing. I've been working full-time at Shepherd since December 2020 and am passionate about what we are building. At some point, I will need a small salary to help pay some of my living costs. 

Who is funding Shepherd? 

I am funding Shepherd from my savings (more about me and why I am building Shepherd). We are bootstrapped and meet our small but mighty team. 

I started working on Shepherd in December 2020 and launched the website in April 2021 (here is a timeline of our progress and features). As we have grown, I am working to reach break-even on our costs, as I will run out of savings toward the end of this year.

My primary focus is on building features that delight authors and readers. And enticing people who love the website and what we are building to signup as annual members. 

How will Shepherd reach financial sustainability? 

Shepherd is primarily funded by memberships from authors and readers. That is 100% of my focus, given what I have learned over the last three years as I've tested different business models.

We also have financial support from affiliate book sales, display ads, and fun reader/book swag I am launching soon. I've tested many business models, and here is a longer breakdown of why it is impossible to earn enough from affiliate book sales to fund the website.

How do the membership programs work?

Our Founding Author Membership Program

This is an annual membership of $50 dollars, and 100% of what we raise goes toward building new features (and improving existing ones). I am so thankful to all the authors who have become Founding Members and joined our quest to build a unique indie book platform designed for readers and authors. Without their support, we wouldn’t be here.

What do authors get in return? There are some great perks, and I am working on a lot more. 

My long-term goal is to hire a full-time developer. Currently, we work with a fantastic developer named Marton. He works on a part-time basis. My goal is to hire a full-time developer in addition to Marton. This would allow us to speed up the development of new features. Imagine what we can do with 1.5 developers, given what we have accomplished with 0.5 :).

Soon, our Founding Reader Membership program will launch.

I have a few readers who have already signed up, and I am working to launch our reader memberships. That will come as we launch more reader features. In return for their support, they will get some fantastic perks!

What else funds Shepherd?

Affiliate Advertising

Bookstore partners like Bookshop.org and Amazon give us a small percentage of any book sold (this comes from them and not from authors/publishers). As our traffic grows, this helps to offset our costs.

One of the big reasons there are no better book websites online is that it is tough to make enough money from book affiliate sales. This is because of the low cost of books, the low affiliate payouts by Amazon, and the nature of how affiliate systems work (as they scrub a lot of sales you send).

As I have tested and gotten data over the last 18 months, I have now realized it is practically impossible to make enough to fund our operations through affiliate sales with Amazon or Bookshop.org. Basically, for every $1,000,000 in book sales we create, they only pay us ~$20,000. This makes it virtually impossible to fund the project fully through affiliate sales.

You can read a longer post on this subject here. 

Display Advertising

I dislike display ads, but I added ads in August 2022 to cover more of our costs.

I want to eventually make the site ad-free. For now, I will keep the ads minimal. I am looking at how I can replace all the display ads on the website with book ads from authors. 

The good news is that we got accepted into one of the most prestigious ad networks, and they are a pleasure to work with. Over time I've optimized ads to try to find a balance between having them so we can pay our bills and not annoying the crap out of everyone with them (it is a tricky balance to find). 

Donations

Authors and readers have asked me how they can financially support the project, and I have created an option to donate if the membership program isn't appealing. I am incredibly grateful for your support, and you can donate here 😄. 100% of donations go toward new features. 

What are your costs?

My goal with this project is to make it financially sustainable by the end of 2024 to fulfill its mission of helping readers find books in fun and unique ways while helping authors meet readers. To do that, we need to reach gross revenues of $240,000 a year.

What will you do once you hit profitability? 

Keep investing in the website and growing our development team. Imagine what we can do with 1.5 developers, given what we have accomplished with 0.5 :).

Feel free to drop me an email or comment if you have questions.