Setting Up an Account With Lightning Source

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Thunder Storm City by merrak


Part 4B of So You Want to Self-Publish?

I just recently got my LSI account approved, and thought it would be useful to share all the "little things you need to know" while they were fresh in my mind. We all know those "little things" add up quickly! ;)

It doesn't take much Googling to uncover the two popular options for POD printers/distributors. Comparisons between Lightning Source (LSI) and CreateSpace (CS) are a dime a dozen. In fact, I even had a thread in the Literature Forum about the topic not too long ago.

If you're currently in the decision process, I'll leave a few readings to help you out.
forum.deviantart.com/art/liter… - Lit forum thread
write2publish.blogspot.com/201… - Financial comparison. Useful!
www.thebookconsultant.com/LPMA… - Another  financial comparison
www.blogthority.com/460/cheape… - They mention Lulu as well
www.novelpublicity.com/2011/10… - Pros, cons, and selling through both. (Yes, you can do that).

So let's suppose you made it this far and decide you would like to set up an LSI account. Great! But there are a few important things to know.

First, their account application process is stricter than CS. Ultimately this is a good thing. At times it feels the process revolves around their making sure you know what you're getting into - before investing in their services. They could happily take your money and leave you clueless and stranded, but they don't. I've also found their application process to be much more personal - a plus I don't see mentioned often in the blogs.

Second, LSI only works with "publishers". This means you will need to incorporate yourself. I chose to form an LLC, but that's not the only option.

To prove that you're a publisher, LSI will want you to list a few ISBNs that you own. They want to know you're not just a "one book wonder." This means you will need to purchase a block of ISBNs. In the US, this is through Bowker. A block of 10 numbers costs $250, or you can buy 100 for $575. You'll need more than one number (even for a single book, more than one number would be recommended), so the minimum investment here is $250.

But first (yes, there's an order everything needs to fall into place in), you'll need to set up your company. Bowker will want to know. I wrote about my experiences here.

Next, you can create a new account at LSI and fill out the forms. Set aside some time to do this, there's quite a bit to fill out.

I did not apply for credit, although they will encourage you to do this. They even admit the minimum credit line (a few thousand dollars) is easy to obtain. You'll have to figure out what risks you're willing to take on your venture.

Once you submit the application, they'll contact you (for me, by email - since this is what I preferred), and request you sign the application and mail or fax it to them. This is where I made my first mistake - make sure you don't miss any signature boxes in the middle pages. (Such as if you list a credit card with them).

Here is where the process gets tricky - dealing with the IRS. The next step is they'll want you to fill out a W9. This part seems totally counter-intuitive.

I set up my LLC as a "disregarded entity", which basically means the IRS is treating me as a sole proprietor, and profits are reported on my personal income return. If you go this route, chances are this will be what you do. The alternative is to tax your company as a corporation, which has some benefits but also adds more complexity to the process. All the advice I read suggested to do this once the company is making a healthy profit. At the start, it's not necessary.

On the W9 form, this means that even though you're an LLC, you mark "sole proprietor" - because the only options on the W9 for LLC's are the two corporate classifications. It seems odd, but that's what it is. (Note: As of 2013. Not that tax codes are ever constant. We can't have that!)

But wait! Remember that LSI application? One of the very first questions they ask is "what type of business are you?" - and I happily marked "LLC" because that makes sense, forgetting that the world of taxes throws everything sensible out the window.

It took me a while to figure out what LSI wanted. They want you to mark "sole proprietor", not LLC, even though you're an LLC that happens to be classified as a "disregarded entity" which is government speak for "sole proprietor".

:iconthemoreyouknowplz:

But their customer service representatives are patient and will happily explain anything if you ask them. And now you can set up an LSI account, too!


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D-E-M-Emrys's avatar
Question - will you be able to sell ebook copies via Amazon, though you are publishing with LS (I mean on the same product page and all that jazz)?