Amazon’s markup of digital delivery to indie authors is ~129,000%

So my book about travel came out last week! Think about buying it directly from me:  This Book Is About Travel .mobi (Kindle Version) or This Book Is About Travel .pdf. A pretty exciting time.  I’ve decided to write a few posts covering the launch and lessons I’ve learned. I self published it (wrote, designed, marketed and even did the layout for it) and am really proud of the project.

This post is about the where the sales of the book are coming from, and why Amazon takes 48% of digital book sales.  Surprising eh?  I thought Amazon was the BEST for indie authors, right? We will get into that later.

The book had a great launch, even getting to the #1 Hot Releases spot for Amazon.com for the travel section.

#1 in the Travel Section

It started off with 17 straight 5 star reviews and a slew of people sending me pictures of the book, my book, on their devices.

kindle-this-travel-book

Hot damn!  Feeling great as an author.  A few months ago I ran a kickstarter for the book to raise the funds to be able to focus on the book, and people from around the world kicked in.

backers-by-city

That is a lot of people showing a lot of support for me.

So I wrote the book.  Finished up with 25 chapters and 52,000 words.  So, in plain terms, book book length.  A lot based on blog posts and places I visited exploring just what the last two years of my life were living on the road.

The book itself is a critique of travel these days, and the preorders say a lot to say about the way people read books.

kickstarter-piechart

So 51% of the orders were for Kindle.  I love my kindle.  I can see why.  I was amazed to see iBooks so high.  I thought .pdf would do better, although I don’t know many people that read books on a computer.  Note I didn’t offer .epub / nook until people asked for it, so take that with a grain of salt.

So let’s fast forward a few weeks.  Book is on sale and I launched a snazzy website with the help of the guys at What Cheer.  It looks like this, but you can check it out live here.

This Book Website

The book is on sale for $9.99 (I was betting that it was equally hard to get a $10 customer as it was a $1 customer).  I worked my ass off on it and thought, hey, $10 it is.  I read a lot (a book a week in 2011) and that seemed like my personal upper limit, but something I would expect to pay.

So how did the sales do?

Kindle CRUSHED on sales.  People have their credit cards stored in there and the user experience is amazing.  Nook is dead last again, not sure what to think of that.  iBooks is at 11% and .pdf at 12%.

So as an author, I should focus on Amazon Kindle 100% right?

I started to.  All my energy went to the amazon link (like this post on Facebook):

So the push worked and my supporters got behind the idea of getting me to #1 on the Travel Bestsellers!

Again, author high. It feels great having your content out there and even better when people are enjoying it (and telling their friends).

So, I’m at the end of my week, time to see just how the sales ended up and how much cash I’m taking home for a few months of work.

amazon-worst-for-authors-takehome

Wait, Amazon pays out the worst?  What? This can’t be right! They are the best right? Everyone loves them.  I love them.  I dig a bit deeper and find this little gem:

Avg. Delivery Cost ($) 2.58. 

So for every $9.99 book I sell I, the author, pay 30% to Amazon for the right to sell on Amazon AND $2.58 for them to deliver the DIGITAL GOOD to your device.  It is free for the reader, but the author, not amazon, pays for delivery.

The file itself is under their suggested 50MB cap Amazon says to keep it under at 18.1MB. The book contains upwards of 50 pictures and the one file for Kindle needs to be able to be read on their smallest displays in black and white and their full color large screen Mac app).  I’m confused.  Amazon stores a ton of the Internet on S3/EC2, they should have the storage and delivery down.  If I stored that file on S3/EC2 it would cost me $.01 PER FIVE DOWNLOADS. Hat tip to Robby for that one. Use Amazon to run your website: .01 to download a file.  Use amazon to sell your book: $2.58 per download + 30% of whatever you sell.

Amazon’s markup of digital delivery to indie authors is ~129,000%

Now that isn’t 100% apples to apples, as it includes 3g delivery (whispernet) of the files but gives me no way of knowing how many devices downloaded via 3g. My book has a lot of pictures. It is about travel after all, it should have those. Double checked the compression of the files, everything looks to be best practices. File size be dammed, this sucks. How do the other services stack up to this?

I’m selling the .pdf through gumroad.com which is a new service.  They take the credit card fees and you keep the rest.  So for that $9.99 I keep $9.25. Payday is once a month. They host the file for free. Dreamy. No DRM but I like it that way.

Apple is actually quite good at a flat looking $7 per $9.99 purchase.  They host the file and their iBooks Author is fantastic for book creation.  Their app store customer service is about as bad as I can imagine (no phone, email or ticket support).  You have to play by their rules and their rules happen to include error messages that block your book from being published with the descriptive “Unknown Error.” As a testament to their not giving a single fuck, their “Contact Us” is a FAQ with no way to send a message. The book looks amazing on iPads through iBooks though!

I would spend some time on Nook but it seems you all are not, so just passing over it.

So what to conclude?

Don’t buy my book on Amazon. Or do buy it. Or don’t. (UPDATE, I put the .mobi on gumroad) I could sell the .mobi file through gumroad but Amazon blocks commenting and rating for those customers that go around their buying habitat. I’m super happy with the project but really hate how much management of this type of stuff, time I could be working / consulting and actually making a $. Are books just really loss leaders for the authors careers? Big adverts in the fiction section? Not something I thought about until this part of the process. Shouldn’t writing a book be about creating the best user experience for the reader and honoring the art of story?

I’d like to think the latter. We need more art, more stories.  Self publishing seems to be a great enabler of this (and the creative class), but damn Amazon, you sure know how to take a great feeling and turn it sour.

So want the kindle version and don’t want to give Amazon 50% of the sale?  Buy here and I get 95% of the sale.  

UPDATE #2 Welcome Boing Boing.  I switched over selling .mobi first through gumroad with a link to Amazon. You can buy This Book Is About Travel .mobi (Kindle Version) here.

UPDATE #3 Welcome Radar readers.

UPDATE #4 Welcome Domino Project readers.

UPDATE #5 My kindle .mobi is now compressed and resubmitted, I will now (only) see a 36% cut from Amazon for selling the book.  You can buy it on Amazon here.

So what happens to the buying habits of my readers after this post? Amazon tanks, people buy directly.

Direct sales soar when users know about kindle

UPDATE #6 Welcome Daring Fireball.

UPDATE #7 Welcome Metafilter.

UPDATE #8 The full color 8.5in x 8.5in print version is on sale here. I see $8.37 of the $25 sale if you buy it through that link (33%), and $3.37 if you buy it through Amazon (13%). It is print on demand so there are no ongoing fees for storage or up front costs.

UPDATE #9 Some readers were saying it was hard to find out how to buy the book directly from me. Here you go!
This Book Is About Travel .mobi (Kindle Version)
This Book Is About Travel .pdf

  • Ernie

    Holy crap. Ok. Nice work. I don’t have the stones to try that. Had to use a company.

  • Hm. Perhaps because Barnes and Noble doesn’t sell internationally (even if you are a native american citizen, you cannot buy abroad). 

    Since the book is about travel, it is logical to assume that Nook owners do not travel as much. And, if they do, they take other devices with them.

  • That’s because you cannot use it outside the US (barring Canada, perhaps). You are not able to buy if you are not in the US.

    Note that it doesn’t even have non-US timezones.

  • bowerbird

    i had left a comment earlier.
    i thought you’d censored it.
    but i suppose it could have
    fallen through some cracks
    when disqus did their update
    (as i don’t see it in my archive).

    if that’s the case, i apologize. :+)

    it was good-natured ribbing
    anyway, although i suspect
    you wouldn’t have known that.

    i’m glad your compressed book
    gives you more what you expect.

    -bowerbird

  • fj

    You should just sell it on Monkeybars. Free to distribute, no download/transmission fees and the author can reward their readers for spreading the word on their social networks, increasing the potential for viral growth of sales. It is the most author friendly platform available

  • andrewhyde

    Gotcha, can’t say I saw it… well, hello!

  • stevenjklein

    “I will now (only) see a $36% cut from Amazon…”

    Is that dollar sign supposed to be there?

  • Guest

    Seems like you’re confusing your roles as author and publisher… Amazon has long been accused of screwing over book publishers or colluding with them to raise prices for readers. It’s not the authors who pay for downloads – it’s the publisher. Use this success to get a book deal with a proper publisher and let them worry about sales – then you can just concentrate on writing and promoting it…

  • Nomad

    The author had every right to complain about Amazon’s outrageous delivery fees. It is good information for other authors/ publishers. Sacrificing image quality by compressing the file gave the author %30 of his income back.

    Unless the fees change, Its pretty clear Kindle won’t be the place for art or photography books.

  • Craig

    Wonderful for AMZ to do that lol. Is there any easy way to get both a kindle version and ipad version? Or would they have to be purchased separately?

  • Xof

    You know what I love about the Internet? The thoughtful commentary.

  • Andrey

    amazon is charging me $11.99 for your book. apparently, this is their pricing politics for countries outside north america and eu. do you see any of those extra money?

  • Charles

    This is why when I have an option I always go through the Apple store. You can say what you want about their 30% (too high, too low), but at least you know where the money is going. I only buy Kindle if that’s my only option. I ready everything on the iPhone/iPad anyway. If I had a kindle maybe my habits would change.

  • etesla

    For what it’s worth, I recently ditched my Kindle (which broke), largely because I’m not real pleased with some of Amazon’s handling of their power in the market (including how they treat authors). I bought a Nook instead. My most preferred way to buy books is Nook-compatible DRM-free epub, and I’d happily buy your book off whatever service paid you the most for that format.

  • Weisswriter

    The days when photos had to be mechanically etched onto separate plates (or later, separately halftones and stripped into a negative) as part of the printing prep, thus creating an extra expense, have been gone for about 20 years – today, it is no more costly to create or print a page with a photo than one without a photo. You prepare a page in In-Design or your layout program of choice, and whatever is there digitally gets printed. Photo, line art, type. . .it doesn’t matter as far as cost goes.

  • andrewhyde

    Lots of people are saying this, but I’m seeing almost zero sales in their store.

  • Cay Hasselmann

    Given that Amazon still makes a loss on this I cannot see the fuss

  • Cay Hasselmann

    You write:
    Amazon’s markup of digital delivery to indie authors is ~129,000%
    If that is a true statement you pay Amazon 2.89 US Dollar for each book you publish. Something is wrong about that statement.

  • andrewhyde

    Fixing. Sorry about that.

  • andrewhyde

    Sure! Just buy one from gumroad and ask for another format, will happily provide both (DRM free, of course).

  • andrewhyde

    I love the pop music as well.

  • andrewhyde

    They are stil the only ones to charge the authors for delivery.

  • Same here. I had to google search for: gumroad mobi “this book is about travel”. Andrew – you should post a collection of links to all the different formats of the book somewhere on this page. (and make sure they work!)

  • melgross

    I don’t see how it’s fair. No one buys an iPad just for the purpose of buying books. But they do for a kindle. So comparing that makes no sense.

    The problem here is that Apple makes their money not by selling content, but by selling hardware. So the small profit off each sale, estimated at just 3 to 5% of the purchase price, it just there to prevent a loss. But Amazon needs to make a profit those sales, and at a 30% cut, can barely pay for the sale itself. So charging fees for delivery helps make some of that up.

    Just remember that before, Amazon was charging less for books than they were paying publishers. There is no way that could continue. Even for indie authors, a hammer would have come down as soon as they though the competition was gone. Let’s not have too much sympathy for them.

  • I think of Amazon as marketing. My work is there because people are there. Sure I don’t make as much money, but it’s worth it to me to be at Amazon to connect people with my brand, my writing. It’s kind of like selling to Wallmart. No one expects to make as huge revenues selling there. They sell there because people are there. Think the Sephora store in the mall. The huge makeup catalog makes a lot more money via catalog but are in the malls to get in front of people. It’s a type of marketing. If people get involved in my brand, or yours, they tend to buy other places and other products. That’s how it works for me.

  • andrewhyde

    odd, Gumroad was down? Will also provide direct links.

  • andrewhyde

    Fixing now, thank you!

  • Non-fiction Writer

    Um, my prescriptive non-fiction book has been out over a year with 46 photos and graphics. My file size is 1.18 and the fee is .17 per download. *scratches head*

  • Not reading it.

    So, low res photos that look like crap. Please, let us know the title of your book.

  • Shut up grandpa

    The future is different than the past. You can compare them, but how dare you try to force others to. They’re dealing with the realities of the present.

    Costs for publishers have gone way down.
    Costs for authors have gone way down.

    The middlemen are still taking too much.

  • andrewhyde

    How does it look on an iPad?

  • MathWhiz

    Read the two sentences before that.

    Then try doing some math.

  • Knute

    Seems to me that Kindles (Fires especially) were originally sold at a loss. The download charge appears a backdoor way to recoup some of that loss. Glad you outed them. 30% for digital publishing (Look Ma, no inventory!) should be more than enough.

  • MathFail

    The 129,000% is $0.01 vs $2.89 for *delivery fees* from different Amazon services. It’s in the damn title.

  • etesla

    And if I had my way, you wouldn’t see a B&N sale from me, but a direct sale for the ePub. I’d rather give you more money and have no mystery about the DRM status. 🙂

  • ReadFail

    Did you even read this article?

    Amazon was the least profitable route for Andrew. And he laid it out very nicely.

  • BenFranklin

    In other words, make your pretty images about travel look like crap to make a few more shekels from Amazon, only.

    Wow, good advice. Penny wise, pound foolish.

  • Fussy

    They don’t take a loss on that $2.89 delivery fee.

  • johnengler

    drop the price on the kindle format book to $.99 for 24 – 48 hours. watch yourself hit #1 in the travel bestseller lists, then jack it back up to $4.99, and sell thousands of your book. I know you think it’s worth $10, and while it is, you’ll sell 3x at $4.99 as you will at $9.99, meaning you’ll make more money. And dropping the price once a week for 24 hours won’t hurt you, and will keep you on top of the bestseller list, if your book is good.

    Now time to write a second book, and reference it in your first at the end, so that when people finish that first book on Kindle, they naturally buy the second one, if they liked the first.

  • JR

    Totally Agree.

    (1) The author’s title suggests Amazon is sneaky and evil, but in fact it is because of the file size issue, which he later realized and corrected!
    (2) I did an Excel calculation. Even if Amazon charges 48%, at the 73% market share, the author still gets in his pocket way more than he gets from direct sales.
    (3) The discussion is less relevant now, now that he has attracted tons of visitors (me included) to his own store. What about those less visible indie authors?
    In the end, I feel this article is informative and helpful, but it does disservice to those less visible authors (and Amazon). But again, thanks to the author for being open and honest and sharing!

  • Bezos, a self-described libertarian, proves the description of libertarians apt.

    “A libertarian is someone who believes the private sector should do the oppressing.”

  • andrewhyde

    I fear / respect that the readers and community are far too smart for the price drop throttling. Is the $4.99 price point common knowledge? Post anywhere?

  • HarveyMunchkin

    Andrewhy said Amazon was the least profitable per book, but he didn’t disclose overall sales figures. If he sold many more through Amazon, it seems likely that Amazon would still be the source of most of his profits. Higher quantity sold makes up for lower per unit profits.

  • Really wish your direct sales included all formats. I dislike when publishers/authors make you choose one, and love O’Reilly et al for getting this right. I hate having to make decisions like this, and almost never buy digital books because of it.

    I understand why it’s single format when you buy from Amazon/iTunes/etc, but please give users an even greater incentive to buy direct! Sucks because I would definitely be more of a book consumer if I wasn’t being locked into one ecosystem.

  • Doug Gerlach

    I agree, I’d prefer to buy epub direct from you for my iPad.

  • elmnt

    When will the big publishing houses (and small ones, for that matter) CATCH UP, hire a couple geeks in-house, and make their own digital versions of their books, and sell them from their own sites? For all the talk about all the POWER Amazon has, it really wouldn’t be that difficult to completely remove them from the picture (with the exception of paying them for a Kindle).

  • April Hamilton

    You opted in for delivery fees when you chose the 70% royalty option. If you’d selected the 35% option there would be no delivery fees. It’s not Amazon’s fault that for your specific book, with a large file size, delivery fees are high. You should have done that calculation before you selected the 70% royalty option, because you would’ve seen the 35% option was better for this particular book. See this Amazon FAQ for full details of how the calc works. https://kdp.amazon.com/self-publishing/help?topicId=A30F3VI2TH1FR8#2-13_calculate

  • Matthias

    Dont want to be overly correct but… You should take down that direct link to the iBooks file on gum road. I think you agreed (had to) not to do that when you chose to use iBooks author tool to create the book. Apple can be a dick about that. You know it. I won’t tip them off but I believe there may be some Cupertino folks reading your post from daring fireball.

  • mbac

    I see your pain but jeez, if I had to pay you as a writer, I’d give you 10% tops. This post is practically illegible; I hope your book has had better editing. Best line: “I would spend some time on Nook but it seems you all are not.” Golden.

  • Steve Trotter

    Hi, Andrew, Based on your experience I am grateful I published a 372 kb crime thriller, not a 2612 kb travel book. Amazon charges me only 5 cents a unit in delivery fees. As far as iBooks Author goes, regardless how fantastic the software might be, I personally would steer clear of it based on what I have read regarding Apple’s End User License Agreement, which states: “IMPORTANT NOTE: If you charge a fee for any book or other work you generate using this software (a “Work”), you may only sell or distribute such Work through Apple (e.g., through the iBookstore) and such distribution will be subject to a separate agreement with Apple.” This, in my opinion, defeats the very independence that indie authors seek and require to sell their creative works in the global marketplace.

    Steve Trotter
    http://www.stevetrotter.com

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