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.

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.

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.

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.

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.

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.

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.

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

Posted

June 11, 2012

Travel

Andrew Hyde

Tags:

Amazon, gumroad, ibooks, kindle, nook, pdf

Comments

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

Sadf

June 12, 2012

How dumb are you to publish this and not read that delivery cost? They tell you up front. You should have known this. Yes, it’s over the top expensive but you chose to publish with them.
Lisa Pelto

June 12, 2012

These numbers don’t add up at all. I went through all of my books (nearly 50) on different accounts and my numbers don’t look like yours at all. Perhaps you should look at your document — it may be costing you more than it should to upload.
cwaigl

June 12, 2012

I am surprised as well, as I’m a happy Nook owner. I do, however, prefer to buy through my favourite independent bookstores’ Google Books accounts than through B&N. Maybe you could put an epub version on, what’sit?, gumroad, and see how that goes.
Alexa Clark

June 12, 2012

It costs me $1 for every physical book I sell with Amazon because of the shipping fees from Canada to their shipping centre and their cut. COSTS me $1.
Rashkae

June 12, 2012

None of the links to buy the books on Gumroad seem to be working.. I just get sent back to this post
Rashkae

June 12, 2012

Following up to myself, I see. I was trying to open in a new tab (middle click)… bit overagresive on the scripting there 🙂
BJ Rooney

June 12, 2012

Oy. And I was still kinda hoping to sell through them. Thank you for sharing this and promoting gumroad, they appear to be a very desirable site. Hopefully it’s that simple with them.
Carol Morgan

June 12, 2012

Why is it that so many writers spend so much time writing about “hustling a buck” and not about the art of writing? Some writers need to ask themselves if they are in writing for the money or for the art. Too many authors have gone the way of John Locke, whipping out “dreck” with only the dollar in mind…Yes, of course, writers want to be compensated, but that should not be the whole of your writing. This is a very disturbing trend to me.
anglotopia

June 12, 2012

When I launched my eBooks, I decided to roll my own store using WooCommerce. It handles all the digital downloads (and permissions and user accounts), payment processing etc. I gave all my users instructions on how to get the PDF onto their various devices. My only cost for each transaction is the PayPal fee. It was pretty easy to do.
Eric_seale

June 12, 2012

Have you considered putting all formats of your eBook on gumroad? I’d like to read it on my iPad (epub), and wouldn’t mind cutting Apple out of the deal…
JPW11

June 13, 2012

I feel your pain, but as an independent publisher myself, I
took the time to read Amazon’s TOS and rates. They clearly state them in their
documentation. They have very strict policies for the sale of digital books.
Also, you could have charged more on the kindle store as well, but as you
obviously know the rate of return drops dramatically after $9.99.

I am a self-published author. I know exactly what Amazon
wants and expects for what they have created because as a publisher I took the
time to find out. You’re angry because of a business model you either did not
take the time to investigate, or you’re simply too greedy.

Raise the price of the kindle edition to $21.00. This will
force people to either go elsewhere to buy the book or not buy it at all. Your
problem is that you want to have your cake and eat it too. What are you
charging for the physical book? Did you print the book, or not even bother with
the expense of that?

Amazon should pull your book from the kindle store. If
you’re not happy with the income you’re getting from the Amazon store, you
should pull it. But like I said, you want to have your cake and eat it too at
the expense of everyone else.

From the looks of the percentage of sales you have on the
kindle store, you did pretty good and should be happy with that. $1,116.90 is
pretty good for a week worth of sales. It also helps raise awareness of the
book to have it on the Amazon top sellers for travel guides, which is also good
for you and will help you not only with this book but also with future books.
But your pathetic whining is shameful. Pull the book from Amazon or shut the
hell up.
Jumb

June 13, 2012

JPW, finally someone hits the nail on the head. If an author is unhappy with a channel to market then he has the perfect right to avoid it. The truth is that this author won’t because the value of this route to market is greater than the cost he has to endure. That is the power of a free-market economy at work.

Your post JPW stands on its merits, it would have been no weaker without the last paragraph.
andrewhyde

June 13, 2012

Perhaps one of my 900 other posts you didn’t read would be interesting to you. 🙂
andrewhyde

June 13, 2012

Or I should start a discussion on how to make it better.
andrewhyde

June 13, 2012

Doing this right now, thanks for the suggestion.
JPW11

June 13, 2012

I agree, Jumb. You are right. I apologize for my final paragraph and more specifically my final sentence. It was unprofessional and ultimately uncalled for.

I will leave it unedited only to show my faults. I do apologize for the statement though.
andrewhyde

June 13, 2012

Just compressed the file, my take home is now $6.48.
andrewhyde

June 13, 2012

Just compressed the file, my take home is now $6.48.
Jumb

June 13, 2012

Better for who Andrew? Certainly not better for Amazon. And not better for the reader as I don’t get a sense that you will share your savings with your reader will you? Sorry, but this isn’t about improving anything for anyone other than yourself. You wish to charge a premium price and reduce your go to market costs, all fine capitalist ideals, but don’t expect too much sympathy from those you wish to charge, they have the same right to value, and the same right to vote with their feet.

What I do find interesting is that the Apple AppStore proved that intelleUuctual property had been sold at vastly inflated prices for years. An app, often requiring as many hours creative input as a book can be sold profitably at a $1 rather than the $20 or $30 commanded via traditional routes. Higher sales volumes make up for lower per unit revenue. By being less greedy more people share the benefit.

Yet in books there is still a belief that we an eschew the physical costs but maintain a unit price without passing any savings along. There will be a rude awakening for this market in the years to come.
pdurrant

June 13, 2012

The Amazon delivery fee isn’t for a single download. It covers an indefinite number of downloads for an indefinite period, world-wide over 3G.
andrewhyde

June 13, 2012

or via wifi. Even for mac apps it seems.
jeroen

June 13, 2012

by the way: I am in Europe, and when I click on your Amazon link, the price is $13.79. Would be interesting to know who ends up with that extra 3.79
andrewhyde

June 13, 2012

Interesting, I’m in Zürich and it shows as $10.80. What country are you in?
Sandra

June 13, 2012

I wonder if users will get more savvy as they buy more digital products. I buy the .pdf versions so I can open it on my iPad and save it to my iBooks, email it to my Kindle or even print it if it is a non- fiction book I want to highlight and scribble notes on. Best of all possible worlds.
Shannon Ferguson

June 13, 2012

Forgive me, but I don’t see Andrew being dumb at all for wanting to reap the most profit from his work. He wants the same we all want–including Amazon, Apple, Gumroad, etc. Each and every person is setting their business models to reap some amount of profit. I don’t think there’s any shame in that.

I also don’t think there’s any shame in writing an article about the mighty dollar–especially one that’s directed at helping other self-publishing authors learn from his experience. The entire concept of “writing for art” I find ABSURB. Writing for the sake of art can be your passion but it doesn’t have to be mine. I write for myself and for my audience. My market is for those interested in learning how to keep the money they earn. It might not be art to you but it is to those who learn new strategies for protecting their money.

So, Andrew, as I simultaneously am working on two books and doing my best to enter a world I have never known I thank you for taking the time to share your experience. I am reading all of the agreements and can only understand them at an intellectual level, at this point. The real knowledge will come through doing. Thank you for taking the time to help others.
Cencibel

June 13, 2012

Any comment or experience out there about Amazon’s ability to change the price of your book whenever they want to? THAT’s the part that’s most upsetting to me.

I will be publishing soon and will go through Amazon for the reasons your data support, even though it is, by far, the least profitable route for authors. And we’re not even talking hardcopy here…that’s an even worse deal for authors… but that’s another post.
Kristen Stieffel

June 13, 2012

True. I often buy books from Smashwords and review them on Amazon.
andrewhyde

June 13, 2012

I’ve got the file down to 2MB now, so Amazon is taking 36% of sales (while the direct sales are 3-4% for credit card fees).
andrewhyde

June 13, 2012

The delivery fee for other services:

iBooks: $0/MB
Nook: $0/MB
Direct or .PDF: $0/MB

Seems like they have been able to get away with it so far, but authors are watching this with some very good alternatives and ways to market that to their readers.
andrewhyde

June 13, 2012

I sold a few copies yesterday. Interesting to see how it grows.
Kristen Stieffel

June 13, 2012

Smashwords is great but isn’t appropriate for complex layouts with photos. The platform is built around an automated system for converting Word docs to various e-book formats. To make it through the converter, the Word document needs to be really simple. I love Smashwords and recommend it to clients who are publishing fiction or non-fiction with no illustrations, but once youneed to include photos or charts or other illustrations, you need to use more robust software.
Kristen Stieffel

June 13, 2012

Thanks for disclosing all this financial information. Great discussion!
andrewhyde

June 13, 2012

The discussion and the new people I’ve met = the best parts.
Jodi Ralston

June 13, 2012

Huh, the breakdown on vendor’s percent take is interesting. Also, I never heard of gumroad before; I’ll have to check it out. Interesting post! Lots to think about.

Jodi, who is one of those non-existent nook users 😉
Shannon Ferguson

June 13, 2012

It’s obvious I’m a newbie (despite owning a Kindle for nearly four years now) but I didn’t know about placing PDF on digital devices. Confident I could google this–unless you have a recommendation for me to turn for the best instructions. Many thanks!
Brenna Lyons

June 13, 2012

Though my books are much smaller and average about 10 to 25 cents in delivery fee from Amazon, I agree with him about how wrong it is that it’s charged to the author and/or publisher. I know the amount I pay for file transfers, and I don’t get Amazon’s bulk discounts on it. There’s no way they are paying as much in fees as they are passing along to me.
Brenna Lyons

June 13, 2012

I’d hazard that you don’t have a book full of graphics and photos. That raises the size dramatically.
Brenna Lyons

June 13, 2012

You can display PDF on many devices, but you often (not always) have to sideload it via USB or SD card. They don’t always display well either, unless you want to hold your reader landscape instead of portrait.
Brenna Lyons

June 13, 2012

Many times, we make choices to get the exposure Amazon offers and “deal with” their problems. Doesn’t mean we LIKE dealing with it. It rankles, but you have to make choices as to how much crap you’ll put up with and balance it against the return. Believe me, if readers were willing to always purchase from the publisher site, we’d ditch every distribution channel today. A lot less muss, fuss, and profits lost, We can sell all the formats at the home site. But many customers want one-stop shopping. Do we deny them at the expense of our own growth? Or do well deal with it? Right now…we deal with it.
Tholzel

June 13, 2012

The only thing missing was the most important aspect:–how much money the author GROSSED with AOL–not what his percentage of the take was. (Typical of sly authors) (You can’t bank percentages.)
Also with a 129,000% markup, he should be losing a fortune for every book they sell.
andrewhyde

June 13, 2012

with AOL? 0.
Ernie

June 13, 2012

Did you use an online self-publishing service or did you do it some other way? If so, which one did you use?
rkt88edmo

June 13, 2012

As a nook user I am bummed to see the low nook response. Is the amazon ecosystem w/kindle really that much better? I’m a prime user but still think the nook (and hack friendly nook color) are better options
andrewhyde

June 13, 2012

All by hand.
Susie

June 13, 2012

Oops, the $1000 should have been 1000 books. But you still get the picture, I think.
Andrew Chapman

June 13, 2012

As someone who’s been both traditionally and self-published since 1987, let me assure you that this whole discussion is a complaint only because new authors have no basis for comparison.

Self-publishing such a book (in print form) only 10 years ago would’ve cost thousands of dollars. The traditional distribution/retail channels would’ve taken 55-65% of your cover price AND gotten up to 180 days to return unsold books (some of which would be damaged and now unsellable). Promotion and marketing would also cost you a LOT of time and money, without the benefit of social media; no one could quickly “share” your book or mention of it, other than by email. And as for the reader, instead of paying $9.99, she would’ve been likely paying over twice that for your book. And I won’t even go into the reality that there was no Kickstarter to (relatively) easily fund your pre-publication work.

Of course, you could’ve plugged away at getting a trade publishing deal, but guess what your cut would’ve been? Somewhere around a dollar or two, and you’d be locked into that for some number of years.

I could go on, but I hope everyone who’s relatively new to this business gets the picture. The situation for this book is something of an outlier. My Amazon delivery costs are about a nickel per book — so I’m getting darn near the 70%. And my readers get the books for only $2.99. And I get all the exposure of being on Amazon for free. And it cost NOTHING to get any of these published through Amazon’s KDP program.

So, I think the sentence in the first paragraph, “This post is about … why Amazon takes 48% of digital book sales,” is quite misleading and a misplaced complaint. First, it is not the case with the vast majority of Amazon’s digital books sales (most of which are mostly text), and second, as I mentioned above, it is HUGE progress that an author can retain even 52% of his book’s sales revenue. If you think of an author-publisher as a wholesale venture, it is perfectly reasonable to earn somewhere around 50% of a retail price on a product. But again, most Kindle self-published authors earn close to 70%.

Mr. Hyde: please accept this as a learning experience and be grateful for what you are earning and the success you’ve enjoyed. Trust me, this is so much better than where publishing has been for decades — indeed, centuries. Thank you for sharing your story.
Andrew Chapman

June 13, 2012

You are absolutely incorrect that Amazon is “the least profitable route for authors,” much less that it is “by far.” And on what exactly are you basing the statement that hardcopy is even worse for authors? I’ve published through both Amazon’s Kindle and CreateSpace programs, and I really have no idea what you could be comparing this to that makes it so bad. The author’s cut — in *most* situations — is better than any other self-publishing avenue out there. (Read the ebook “Publish a Book!” by J. Steve Miller for a breakdown.)

As for Amazon’s retail pricing, this has no effect on what you earn as the author. Both their Kindle and CreateSpace programs pay your royalty based on the price you set for your book — *not* what they sell it for. They occasionally discount books to drive sales, just as any retailer does with its products.
andrewhyde

June 13, 2012

They also wrote on typewriters. Times have changed.
bowerbird

June 13, 2012

so you’re not just a whiner,
but you’re a censor too!
you got a lot to learn, son.

-bowerbird
andrewhyde

June 13, 2012

???