Andrew Hyde lives in Boulder, Colorado and travels frequently.

Kindle Sales Vanish When Users Know About Their Fees to Authors

A few things happend after my post about Amazon’s 127,000% markup. Well, there were 40k visits to this blog in 24 hours (which at one point actually brought the site down) thanks to Hacker News, Radar, Reddit, The Domino Project, The Next Web and a few smaller blogs. I met a ton of great authors, vendors and readers and talked about books from all angles.  There was this thing that happened, people started buying the book.

So, when presented with Amazon making authors pay for delivery fees, buyers abandoned Amazon (and authors like me wised up to selling direct, which it turns out, is super easy).

Direct sales soar when users know about kindle

I fixed my big file problem on amazon, reducing my mobi file size to 2MB. If you buy my book on Amazon I get $6.42, just below the Nook. Still, with this optimization Amazon wants a 36% cut of a digital good? Call you greedy, you didn’t add near that in value. They were THE BEST though, right? The conversation on the rights of content creators, as Seth Godin pointed out.

One of the things that’s happening in 2012 is that self-publishing of books is no longer a quirky outsider effort, but instead more and more often being seen as smart alternative to getting picked by the mainstream houses.

Amazon’s competition is now 0% of sales and authors are looking at this as they plan to launch their projects. The argument against that is that Amazon drives sales, which indie authors are finding out, isn’t the case. Your readers drive your future sales. The success of the book is the network that grows around it and the days of selling the wall around an author’s community are over.

If you want to say “bugger off, I support indie authors” you can buy the book from me directly here:

This Book Is About Travel .mobi (Kindle Version)This Book Is About Travel .iBooks (iBooks Version)

This Book Is About Travel .pdf

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Comments

34 responses to “Kindle Sales Vanish When Users Know About Their Fees to Authors”

  1. Kristen Stieffel Avatar
    Kristen Stieffel

    That. Is. Awesome.

    But I have to point out that you’re not really charting the formats; you’re charting the outlets: direct, Amazon, iBooks, B&N. Right?

    It’s still awesome.

  2. andrewhyde Avatar
    andrewhyde

    Yes, selling the formats directly.

  3. Matt Allard Avatar
    Matt Allard

    I was wondering why you weren’t doing this initially—selling it all from your own site. You already have an audience, why drive them to a third party and share the revenue? Good to be available for discovery on Amazon, etc. But the sales you drive yourself should be yours.

  4. Matt Allard Avatar
    Matt Allard

    I also wanted to add: Congratulations!

  5. Robby Grossman Avatar
    Robby Grossman

    Love it – glad to see you sell direct especially given that most of your readers are pretty savvy and easily able to get these on the device of their choice.

    Is it too late to suggest going the O’Reilly route and bundling all the open formats for a flat price? That way people who have Kindles and iPads or Nooks and Kindles or whatever can read them interchangeably.

  6. andrewhyde Avatar
    andrewhyde

    Looking back, this is what I should have done from the beginning. Same price?

  7. Gigi Griffis Avatar
    Gigi Griffis

    Any chance you’re planning on writing up a tutorial on direct selling (creating the .mobi file and delivering?)?

  8. Greg Cohn Avatar
    Greg Cohn

    Awesome. (Bought.)

  9. Robby Grossman Avatar
    Robby Grossman

    I don’t think it’s crazy to charge a little extra, but yes, O’Reilly does do it all at the same price. FWIW, this makes me buy direct from O’Reilly every time as opposed to buying Kindle editions or iBooks editions.

  10. Andrew Chapman Avatar
    Andrew Chapman

    I won’t repeat my lengthy comment from your original post here — so I’m just curious what you think would be a fair percentage for Amazon to take? I’m not out to make this a “poor Jeff Bezos” thing (LOL), but seriously, they have to pay for lots and lots of employees, office space, server space, e-commerce costs and security, programmers, and more. On top of that, their system largely runs without a hitch. And they’ve also created innovative ways for people to recommend books, for books to be automatically recommended, and for people to socially share their reviews and recommendations. On top of that, the company spent over 10 years *losing money* in order to build what we benefit from today. AND they’ve helped to drive the cost of books down for readers.

    So, again, I’m really at a loss to understand why you’re complaining that they want 36% of the ten bucks for your book. They don’t even charge you (otherwise) to sell it through their system.

  11. Andrew Chapman Avatar
    Andrew Chapman

    By the way, since you like to reference Seth Godin, you might want to read his current post that focusing on your digital book’s profit margin as the #1 priority is missing the big picture — http://www.thedominoproject.com/2012/06/more-on-the-economics-of-the-self-published-book.html.

  12. Andrew Chapman Avatar
    Andrew Chapman

    You know, I also just realized — I think you missed Seth Godin’s point. Amazon is not what he’s referring to as a mainstream publishing house.

  13. andrewhyde Avatar
    andrewhyde

    Good to read, a some fo the concepts we have been talking about.

  14. andrewhyde Avatar
    andrewhyde

    I think they are going to try to protect 30% for as long as they can, but creators are going to have a hard time with over 10% in the future.

  15. charlieok Avatar
    charlieok

    Looks like you’re steering the conversation

    http://radar.oreilly.com/2012/06/direct-sales-or-books-john-oakes-toc-podcast.html

  16. Cameron Mulder Avatar
    Cameron Mulder

    Now that you have fixed your file size issue the 36% cut for Amazon sounds fair to me. What % do you think would be fair?

  17. andrewhyde Avatar
    andrewhyde

    The price I see no users bail at 10%.

  18. Jed Diamond Avatar
    Jed Diamond

    This is the kind of sharing that all authors can use. I self published my first book 30 years ago, then did 8 books with major publishers, and have now gone back to publishing myself for my 10th book, MenAlive: Stop Killer Stress. Self publishing has changed so much your experiences and others’ comments are very helpful to me and many others.

  19. andrewhyde Avatar
    andrewhyde

    Thank you!

  20. eschapp Avatar
    eschapp

    Glad to see the margin improvement. This whole process has been really interesting to follow. Thanks for sharing your path.

  21. Matt Dowsett Avatar
    Matt Dowsett

    Only thing I buy from Amazon is the TV series that I like and the occasional Movie that pops out at me. Books I buy in hardcover (with a book mark cutout) so not to bend pages and I read them then shelve them in my nice looking hardcover collection. I’ve bought 1 book for Kindle and that was The Hunger Games because I didn’t feel like waiting from March til August for the digital video copy of the movie.

  22. Matt Dowsett Avatar
    Matt Dowsett

    I will buy this book direct from the author on the 1st of July just to spite Amazon for unfair business practices and since I have been a major reader of books my whole life, the book industry is the one media source I really hate seeing people taken advantage of. Please send me order information for a hardcover with real paper or soft cover if no hard cover is available. [email protected]

  23. James Katt Avatar
    James Katt

    Selling from your own site requires a lot of administrative work. It is a lot easier to sell through 3rd parties like Gumroad.

  24. John Smith Avatar
    John Smith

    Here from MetaFi. Two kindles, an iPad and a bunch of netbooks in the family. Never heard of you or your book. Don’t live anywhere you’ve travelled to (yet). Bought your book off Gumroad just because.

  25. Ben Avatar
    Ben

    I would attribute part of the success of your blog post and your book sales (and now those sales moving to alternative means) to your online reach. Do you think Amazon (and other digital marketplace services) provides a strong value and ability to drive sales for people without such an online presence?

  26. andrewhyde Avatar
    andrewhyde

    I don’t know, it would really depend on the book subject.

  27. andrewhyde Avatar
    andrewhyde

    Thank you!

  28. andrewhyde Avatar
    andrewhyde

    Emailed you.

  29. andrewhyde Avatar
    andrewhyde

    Thanks for being a part of it. More posts about it next week.

  30. Andrew Hyde Avatar
    Andrew Hyde

    If people want it, sure!

  31. Gigi Griffis Avatar
    Gigi Griffis

    I would love to see that! I’m self publishing next week in print form (with digital soon to follow)…

  32. April Hamilton Avatar
    April Hamilton

    Why have you not approved/acknowledged my comment, which totally refutes your contention that Amazon’s ripping off authors (and is backed up with facts)? I mean, once it’s been pointed out that your issue is a simple author-publisher oversight that’s easily remedied, why keep spreading this misinformation? Here’s my blog post – If You Think Amazon Is Gouging You On Delivery Costs, It’s Only Because You Didn’t Do The Math Up Front – goo.gl/FVN1M

  33. Andrew Hyde Avatar
    Andrew Hyde

    Didn’t see your comment… hmmm.

    Amazon’s markup on a .01MB file is 129,000%. The same for a 50MB file. Even after you read the TOS!
    They are the only one in the industry to charge this to authors.

  34. Rob Siders Avatar
    Rob Siders

    Barnes charges authors, too: the royalty split is 65/35 rather than the 70/30 at the others.

    To the broader point, unlike Apple, Amazon doesn’t consider authors to be its customer. Of course, this fact doesn’t mean that Amazon is hostile to authors, as most ebooks never see a delivery fee greater than a few pennies and a few pennies is — even at 129k percent — is still pretty cheap to have Amazon deliver a file via 3G. That your book’s size makes it an outlier doesn’t necessarily imply hostility.

    To illustrate:

    Amazon offers several 3G devices at a small upcharge above the price of the WiFi ones, so for $50 more the customer gets unlimited 3G delivery of ebooks for life. The delivery fee that Amazon charges authors pays for this delivery. While the markup for this service to authors is, as you say, 129k percent compared to S3, it’s not exactly an apples to apples comparison because it’s not calculating what it costs to deliver data over a 3G connection, but comparing it to the IaaS costs associated with hosting and Internet delivery. Of course, finding the 3G costs might be difficult, as these are typically borne by the person subscribing to the data plan.

    Which brings me to the others. Barnes has just one 3G device: the first generation Nook. It also has a small upcharge for lifetime 3G delivery of ebooks, but the downside is the device is awful assuming you can still buy one. Apple offers 3G devices at a significant upcharge and the user has to buy a separate data plan from one of its partners ($130 upcharge on the 16 GB iPad model, plus $15 to $20 a month for the lowest 3G data plan from AT&T and Verizon, respectively).

    In short, Amazon’s customer is the person who shops at Amazon, while content creators are business entities. Apple’s customer is the content creator, while people who buy Apple products and services are doing so at a significant premium. (Reference US v. Apple et al for more on this, and especially in regard to your post about Amazon driving up ebook prices. It wasn’t Amazon… it was Apple and five of the Big 6 publishers.) Barnes’ customer is a puzzle to me, but it does charge authors, via smaller royalty shares, although it’s not clear to me the reason why given it doesn’t offer a decent 3G device.

    The truth is that the fee to authors isn’t about mark up on its cloud-based services. That part of its business is secondary and always will be. It’s an important secondary concern because it illuminates that Amazon is betting that more and more content will be delivered digitally and that they want to be the place where people go to buy it. How do they do that? By making sure customers can purchase it where ever they happen to be without it impacting their data usage costs. And while this model carves into an author’s royalty (someone’s gotta pay for it, no?), isn’t making it easier to find and buy your content better for you in the long view?

    Full disclosure: Andrew contacted my firm to turn his source materials into a Kindle-ready ebook. For whatever reason we didn’t make a deal to work together. No harm, no foul. Maybe down the road, yes?

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