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


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Comments

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

  1. andrewhyde Avatar
    andrewhyde

    Great point. Just put it up for sale on gumroad: http://gum.co/AOKM

  2. Shawn H Corey Avatar

    These days, any writer who does think of eBay and craigslist as well as the big publishers for his ebook will get screwed. The second rule of business: do your own sales. Use the big publishers to get notoriety but don’t think they are the only option.

    And if you’re wondering what the first rule of business is, don’t quit your day job. If you don’t know this, your business is doomed to failure.

  3. Van Davis Avatar

    “Amazon is not paying a fixed monthly price for capacity it doesn’t use, it’s only paying for actual usage.”

    Can you give some links or something to where you get this information?  Or are you just supposing?  Because I feel pretty safe assuming that Amazon has negotiated a BETTER monthly price than consumers.

  4. JJColao Avatar
    JJColao

    Any thought given to Smashwords? They don’t use Amazon for this reason and many others. Might be nice to consolidate your non-amazon efforts in one place.

  5. andrewhyde Avatar
    andrewhyde

    I’ve thought about them but didn’t find a hook in using them with my layouts the way they are.

    Andrew

  6. Peter Turner Avatar

    Nook has very little market penetration outside of US, which may explain why the book isn’t selling well on that platform.

  7. nicolesimon Avatar

    Thanks for the information breakdown. Quick note: There is also international cross delivery, I for example have a .com account yet ‘download’ from Germany. That is not the amazon.de you see above, that is me using the US site to buy. If I had a kindle with wispernet, that would be international data traffic. I assume there is some cross financing on that problem for amazon.

    And I usually download three times: To my PC via cable, to my ipad and my ipod. So there could be double downloading via mobile as well into it.

    I agree with the other comment: you did know before how much it will cost you so it could not have been that much of a surprise (then again, you would not have a nice link bait … 😉 ) and with kindle outselling the others by so much and no cost for production for you it is a different calculation.

  8. Jim O Avatar
    Jim O

    A $4.99 price would get you $4.99 * 0.7 – 2.58 = $0.91

    …or am I doing the math wrong?

  9. slopduck Avatar
    slopduck

    I know I originally bought a Nook because of access to library books, I think a lot of others did as well. It set us up as bad purchasing consumers because, well, we just go to the library. Add onto that, it works with PDFs, so it could be Nook people are part of that PDF share. I’ll admit that I’ve never bought a book through B&N.

  10. andrewhyde Avatar
    andrewhyde

    Great to know, thanks! I’m finally getting why so many are on the nook!

  11. mii Avatar
    mii

    i was wondering why book apart does not sell their books on amazon, and i guess here is the answer. additionally, buying electronic books not from amazon does not hurt at all and i don’t mind the additional efforts i need to do to send the copy to the reader. so go on, and move the .mobi version to another channel

  12. andrewhyde Avatar
    andrewhyde

    Just did!

  13. Jumb Avatar
    Jumb

    $9.99 for an ebook from an unknown author? Eek….! Just electrons? I’d at least expect pages and a nice hardback with calorific value in case we have a cold winter. Not just Amazon taking the mickey is it!

  14. Nilaky Avatar
    Nilaky

    “Amazon ratings are blocked on the book unless you purchased the product from them.”
    Read the picture again.
    “You don’t need to have purchased the product you’re reviewing.”
    That means you just need to buy *any* product from amazon. If you’re not an amazon customer at all, then you have to buy something, and wait 48hrs after it gets to you.

  15. Troy Voelker Avatar
    Troy Voelker

    Andrew, that’s a very interesting post and I greatly appreciate the insight into the publisher/author experience.  I certainly see your point that your margins are a great deal lower on Kindle, but your volume is tremendously higher.

    Despite the reduced margins, you have earned over 3x as much revenue as PDF and nearly 5x the revenue realization from Apple.  That’s a powerfully large revenue differential.

    As the author, I can certainly understand why you are thinking of the product (the book) first and foremost.  The book is the same, regardless of where the reader acquires it.

    But for you, the channels really do matter.  One, they impact the margins you realize (your point in this post).  Two (and more importantly I think), they impact your revenue realization.  You need both margin and volume to make money.  Your publishing paths seem to offer you a clear trade-off decision on margin, but the decision goes the exact opposite way on volume.  Net, net, Amazon seems (to me) to be a pretty solid business partner.
    Now, certainly, anything you can do to steer an indifferent reader to PDF, the better things are for you.  But, while some readers may be platform indifferent (iPad readers can choose between all four platforms), many readers are not indifferent, they have their reader (Kindle or Nook) and they can only digitally read via that channel.

    Again, though, a very interesting read.  Thank you for sharing it!

  16. Andrea B Avatar

    Nilaky is right. This is just so that people don’t go creating multiple fake accounts.

  17. Anne-Marie Concepcion Avatar
    Anne-Marie Concepcion

    Old news! Frankly surprised that any author would sell an ebook without reading the terms first. Amazon makes the delivery fee pretty clear on their KDP portal.

  18. Jay Perkins Avatar
    Jay Perkins

    Can you charge more for Amazon purchases? I usually compare at least Amazon and Apple prices. I would buy the lower cost option of the two. I REALLY don’t like entering my Credit Card data for small purchases — but I would do PayPal for .mobi books.

  19. facebook-6600905 Avatar

    You need to be a lot more specific about that this is an issue isolated to you and others with books full of images.

    Most indie books of this length don’t take the financial hit that yours does, because most of them are novels that don’t include images. Take a look around, you’ll rarely find books that are much over 1MB. Meaning, where you are taking your average of ~$2.50 hit, they are taking about a ~$0.15 hit. Which means that most indie authors are making more via Kindle than they are via Nook!

    (fees from this post by kognate below:

    The delivery fee is (in the US) charged per MB at Amazon.com: $0.15/MB
    Amazon.co.uk: £0.10/MB
    Amazon.de: €0.12/MB
    Amazon.fr: €0.12/MB
    Amazon.es: €0.12/MBAmazon.it: €0.12/MB(found at https://kdp.amazon.com/self-pu… This also only applies to books that are in the 70% royalty program. Books in the 30% royalty program pay no delivery fee.)

  20. Tim in SF Avatar

    What about using the price structure against the sellers? Instead of setting the price of the book at ten bucks, why not set the price of your profit at eight bucks, and then adjust the fees on the different services respective to their cut? So, PDF would cost a reader $8.25, an iBook would cost about $11, a nook $12 something, and a kindle about $13. 

    Bonus points for letting people know in the book description on the different services about the different price structure per platform. 

  21. Michael Ward Avatar
    Michael Ward

    Amazon does not hide the cost to the publisher of their wireless delivery. So this problem is a valid complaint but it should not be a surprise. We at Hidden Knowledge had to decide if it made sense to price a book at US$2.99, knowing that at 70% and for an 8 megabyte file we would lose more than half of the royalty in their download fees. We smiled and bent over. (The book is a reprint of the 1922 Sears radio catalog.)

    The casino takes too much, but it’s the best casino in town.

    Thanks for the pointer to gumroad!

  22. Bart Avatar

    Why wasn’t ePub factored into this? You have a surprisingly high number of people who want your book in PDF, which actually isn’t ideal for reading ebooks. This says to me that people want a platform agnostic format. This is where I am and I would probably choose iBooks or Kindle given your options, but if I had the option to do ePub I wouldn’t even consider the others (I have an iPad I usually read Kindle books on, and a Kindle too).

  23. andrewhyde Avatar
    andrewhyde

    Take a look at iBooks Author and how their version of a fantastic user experience is based off both text an layout with images.
    The book is developing.

  24. CassiaBornInRio Avatar
    CassiaBornInRio

    Great entry! I also published my book last year, called Born in Rio (www.borninrio.com) . I only published it through Amazon. I used Createspace to publish the paperback version and the e-book in on Kindle only. I agree about the royalties, but yet noone can deny that Amazon has the best distribution system, and is a great way to get your name known out there. I take that into account, it is almost a “start-up cost” is the way that I see it. I am however now thinking of expansion, and this blog has helped me a lot to put things in perspective.
    By the way, I also talk a lot about Brazil and Rio de Janeiro in my book, have you ever been there?
    Great Post! Really enjoyed it!

  25. facebook-6600905 Avatar

    That has nothing to do with my comment.

    Your blog entry is implying that this is an issue for all indie authors. Obviously this is completely untrue. It’s an issue for authors with a large amount of images in their books, sure, but those represent a fairly small portion of indie authors.

    Whether those delivery fees are fair or not is a completely different (and legitimate) discussion. But your blog post as it is right now is nothing but attention-whoring. It’s written purely for shock-value.

    I haven’t actually purchased your book (and based off of this blog post and your handling of criticism for it, I won’t) but here’s a helpful free tip: go through your book, work on tweaking image compression where possible, and change images that don’t need to be color to gray-scale, and cut down the file size as much as you possibly can.Suddenly, you’ll be making more money off of each sale!

  26. andrewhyde Avatar
    andrewhyde

    amazon sets the upper limit of $9.99 for indies.

  27. Zak McKracken Avatar

    Just a hint: http://www.smashwords.com offers all formats (including epub) at the same time..
    I can’t comment on the service as such, but to me (as a non-author) it makes a pretty good impression.

  28. Michael J. Sullivan Avatar

    I don’t know how you build your file. I sell books on Amazon for $4.95 and my delivery cost is $0.07 – $0.16.  So, for the worst case scenario I get: $3.31 and best case $3.39.  

  29. Steve Avatar

    That is unfortunate for you but not for me. I ONLY buy through Amazon.

  30. andrewhyde Avatar
    andrewhyde

    Here is the link for you: http://amzn.to/KEN51k

  31. Donald Jordan Avatar

    Sticker shock sucks, and my first reaction (as someone who is about to publish using Amazon) was outrage, but then consider this: with a traditional publisher you would be lucky to get 6-10% and, after all, isn’t 50% of a-whole-damn-lot better than 95% of not-so-much? Sure, direct as many as you can to the place that pays you more, but realistically, after a certain point, most people will just stay where their credit card is for convenience.   

  32. MeiLin Miranda Avatar

    My “fattest” novel is 850k including the cover and a map; the average delivery fee is 13 cents and my price is $4.95. I’m okay with that. I also sell direct (via my own file system–I am a web developer as well). 15% of my sales are direct, 74% are with Amazon (the other sites fill in the rest of the 100%). I point people at Amazon more and more for the visibility it gives me; visibility is worth the 13 cents to me. That’s cheap advertising.

  33. zevenesh Avatar
    zevenesh

    VERY interesting. I sell many e books via click bank and my own shopping cart, had a book contract and the publisher essentially has independent contractors…. the Dude kept missing calls, missing this, that, etc and he bailed… I bought all my photos and now need to think about self publishing. SOunds like a PAIn in the ass, ha ha. We have 3,000 photos! Gotta trim it down BIG time as the file would be huge

  34. Jeff Goins Avatar

    Fascinating. Are you selling a lot of mobi version independent of Amazon? I’ve found the learning curve for the avg user is steep for this.

  35. Tim Leffel Avatar
    Tim Leffel

     My Nook sales are abysmal as well. Maybe 1 out of 100 at best, for two different books.

  36. bowerbird Avatar
    bowerbird

    ho-hum.  another author who feels entitled.
    this is getting to be something of a drag…

    you want access to amazon’s customers,
    and to make use of amazon’s infrastructure?
    then you must pay amazon’s fees for that…

    it’s really that simple.

    and it doesn’t matter if you think amazon’s
    fees are “fair”.  it doesn’t matter a single bit.

    see how much “more” money you make
    off of the gumroad platform, and _then_
    see if you want to continue your whining.

    i’m completely in favor of authors weaning
    themselves off of the amazon middleman.
    but jeez, stop the whining in the meantime.

    -bowerbird

  37. Jen Greyson | Author Avatar

    That’s really interesting math — and I had NO idea about amazon’s cute little fee.

  38. Billynomates Avatar
    Billynomates

     I call bull shit…

  39. Promod Sharma Avatar

    Thanks for the info and comments. Perhaps there are ways to compress the size of the ebook down from 18.1 MB. If you were printing the book, wouldn’t you face higher charges because of the photos too?

    Maybe the delivery fee is Amazon’s way of discouraging big files.

  40. Nan Cappo Avatar

    I think it must be all the photos in your book.  My Kindle novel on Amazon (318 pages, all text) has an Avg. Dleivery Charge of  $.06– six cents.  So for most authors, the price is still right.

  41. Billynomates Avatar
    Billynomates

    Agreed, of course a company the size of Amazon can get a better deal than you or I.  Dan that’s just BS.  You must work for Amazon…

  42. Linda Coles @ Blue Banana 20 Avatar

    Enlightening! Thanks for sharing it. I am just starting on book number 2 and thinking about my options as I went with a publisher last time. Definitely food for thought. Good luck!

  43. Harold Thompson Avatar
    Harold Thompson

    All this makes my brain hurt. Do you make enough to pay a mortgage ? It’s very informative but it might be good to have a condensed version. 

  44. Robert Drózd Avatar

    What is even more amusing (or annoying), in Europe your book from amazon.com costs $13.79 (which includes $2.00 fee for Whispernet!!! and VAT).

  45. Gregmaletic Avatar
    Gregmaletic

    It’s important to put this into perspective: before digital delivery, authors would typically get less than 5% of the retail price. Distributors were doing more to promote the sale, but it was also a much more exclusive club. Overall, I’m pretty sure authors are coming out of this fine

  46. bbbooks Avatar
    bbbooks

    I’ve never used either actual device, but I used to buy all my books through B&N and read them on the Nook app on my phone.  Now I’ve switched 100% over to Amazon because their app is way way better.  B&N must be losing a small but significant amount of business because I’m sure there are other people out there that want to use their phone (or iPad) instead of purchasing another device.

  47. Alexandria Avatar
    Alexandria

    My 10-11 MB book w 11 full color covers/photos, priced @ $2.99 is only 11 cents a download @ 70% royalty rate. Seems reasonable & fair to me. Far more than my NY publishers ever paid me.

  48. SBJ-IN-AZ Avatar
    SBJ-IN-AZ

    I read a lot on my iPod touch, but I won’t buy copy-protected (DRM)  e-books.  I don’t buy from Amazon or B&N or Apple.   I buy mostly ePub formatted e-books that I can read on multiple platforms.  The choice remains mine, not the book-sellers.   I’m an SF fan and buy a lot from Baen.  (
    http://www.baenebooks.com/ )  I’m hoping this is the model that prevails in the future.   Good luck finding the right market for your Travel book and thanks for the insightful read.

  49. Kate Avatar
    Kate

    Andrew, thanks for exposing this, it is a service to aspiring writers everywhere to know this going in. It’s apalling.  So now I will buy your book – but not on Amazon!

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