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

Comments

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

1. 

   cee

   June 15, 2012

   I’d also be interested in an epub format. I’m in Canada, so my epub reader is a kobo, and I don’t think B&N DRM’d epubs would even work for me without lots of fiddling. Set up a direct epub option, and I’m in. The book sounds interesting.

2. 

   marovada

   June 15, 2012

   Still just getting sent back to your blog page – for all of the links. Am I doing something wrong?

3. 

   Michael Crumpton

   June 16, 2012

   Those roaming charges are robbery anyway because it has no relation to the actual cost to ATT, it is just a way to gouge customers who are trapped in their system. In any case I would hope that Amazon could get a better roaming price than I could.

4. 

   Michael Crumpton

   June 16, 2012

   Those roaming charges are robbery anyway because they have no relation to the actual cost to ATT, it is just a way to gouge customers who are trapped in their system. In any case I would hope that Amazon could get a better roaming price than I could.

5. 

   Michelle

   June 16, 2012

   If you had gone the traditional publishing route, how much would you get from each hardcover? Just wondering if its less than the 50% you were originally getting with Amazon

6. 

   Evan Currie

   June 16, 2012

   Checking your charts one question comes to mind… when you sell more direct to readers, what happens to OVERALL sales? Amazon sales are often dictated by ranking, and by diverting people from Amazon you have to be causing some harm to your ranking, thus lowering the book’s exposure, and possibly costing you readers. So, the question becomes, does the extra income per sale make up for that projected loss?

7. 

   andrewhyde

   June 16, 2012

   It would have taken me longer to type it too.

   Times have changed? Yes. They have.

8. 

   Chel Wolverton

   June 16, 2012

   It’s interesting that hardly anyone knows that they can ship the PDF to iBooks (through iTunes) or Kindle (using the email address that Kindle provides with you). I’d much rather pay you for the PDF than pay Kindle at that rate.

   Thanks Andrew for this research and run down, it’s helpful to me and will be to others that I know.

9. 

   Evan Currie

   June 16, 2012

   Traditional royalty rates are around 10 percent, maybe slightly higher if you have a name and a good agent… maybe lower if you have neither.

10. 

    Eunice

    June 17, 2012

    Of course distributing an iBooks file for a fee in .ibook format outside of the iBookstore violates the EULA of iBooks Author.

11. 

    drbukkake

    June 17, 2012

    That’s why I download these books with bittorrent, so no money goes to amazon!

12. 

    ericbb

    June 17, 2012

    Since *someone* erased my comment yesterday, I’ll try another one that doesn’t implicate Mr. Hyde. The comments (and post) started by being opposed to the delivery fee. Many now also seem opposed to the 30% cut Amazon takes. Consider that with print books, ANY bookstore in America takes 40% of every sale. That’s the wholesale rate; all stores buy at wholesale and sell at retail, or did you think stores stayed in business some other way? Amazon is taking a smaller %, and any well-prepared ebook file, even with photos galore, can be under 6.5 MB and thus still net the author more than 60% (which Mr. Hyde’s does now that he “got the file down to 2MB”). If authors can’t part with a decent % of each sale, then they can’t put their books in a store, be it physical or online. Simple as that.

13. 

    ericbb

    June 17, 2012

    bowerbird, I suspect my comment defending Amazon was also censored, as it also vanished shortly after I posted it. Curious, eh?

14. 

    Anon

    June 17, 2012

    Yes, a direct epub download seems to be the best idea. I’m also using a Kobo, and it works great with DRM free epubs.

15. 

    andrewhyde

    June 17, 2012

    Kobo is in the works.

    EPUB link for you: https://gumroad.com/l/byiA

16. 

    PRice

    June 17, 2012

    Thanks for the pointer to Gumroad.com!

17. 

    Eric Seale

    June 17, 2012

    You’re presuming Andrew used the iBooks author tool (vs. some other convert-Word-to-ePub path). If he used a non-Apple tool, he can do whatever he wants so long as he charges the same (or more) than the list price on iBooks.

18. 

    Eric Seale

    June 17, 2012

    Yeah, only problem is that for *most* indie authors, obscurity is a bigger problem than is margin.

19. 

    Kate

    June 18, 2012

    I haven’t read every comment here — but you did not address image optimization. I’m sure you could make much smaller image files without it being noticeable visually.

20. 

    andrewhyde

    June 18, 2012

    depending on device, sure.

    Kindle for iPad with a retna display? It now looks 1/4 of what it did.

21. 

    Jack Yamashita

    June 19, 2012

    Can you sell the book for diffferent prices, so like $12.99 or whatever on Amazon, iBooks, and Nook Store, but charge only $9.99 to get it through your own site or via gumroad? Providing a nudge to buyers. Are there restrictions on that kind of thing?

22. 

    Mark Baker-Wright

    June 19, 2012

    Shame on you for not considering Nook from the get-go! If Nook sales are low, it’s got a LOT to do with the fact that everyone just defaults to Amazon without even thinking, and that’s not going to change unless people are more intentional about promoting the other formats, as well!

23. 

    Mark Baker-Wright

    June 19, 2012

    Because it’s not being promoted!

24. 

    Mark Baker-Wright

    June 19, 2012

    I’m fine with epub. While I’m a big Nook fan, I’m less about promoting B&N, and more about Nook-compatibility. It frustrates me no end that people post links to free Amazon downloads left and right, while utterly ignoring the fact that Nook often has the EXACT same offer available. No one’s gonna download the Nook (or epub) version if no one tells them it’s out there!

25. 

    Mark Baker-Wright

    June 19, 2012

    A lot of the books I read on my Nook, I read through the library. A lot of the ones I get through B&N’s store, I found out about because someone posted a link on Twitter (often, it’s a “free today” promotion, and the author/promoter only posts an Amazon link. I then find out that Nook has the SAME promotion, but no one bothers to post THAT. Incredibly annoying!). But you are absolutely correct, I don’t do a lot of searching for content. If I find a book I’m interested in, I look to see if I can get it for Nook, but I don’t hardly ever browse online.

26. 

    Andrew Chapman

    June 20, 2012

    Please share exactly what you’ve heard, and where, about Amazon treating their authors badly.

27. 

    Andrew Chapman

    June 20, 2012

    How exactly does Amazon treat its authors badly? Amazon’s Kindle program has produced more self-publishing success stories in the past three years than has happened in print self-publishing in the past two decades. Amazon does not charge any fees just to participate (as many other self-publishing services do). Amazon does not take exclusive rights nor make an author enter into a contract for a term. Their system is nearly flawless and very easy to use. And Amazon pays more (and faster) than every other competitor under *most* circumstances. So, again, while I would never say Amazon is the only way to go for every author, I don’t see how they can be maligned for “how they treat authors.” Please explain.

28. 

    andrewhyde

    June 20, 2012

    Well, for one they charge authors the highest price for a download of their book no matter what device they download it on…

29. 

    etesla

    June 20, 2012

    There are two factors that trouble me: first, the huge markup for digital downloads as detailed above, and second, sale pricing (causing reduced royalty payments) without advance consultation with authors. Factoring in the pricing model used with publishers and the way that affects new authors trying to break in, I’m simply uncomfortable supporting Amazon to any great extent.

30. 

    Steven

    June 20, 2012

    Glad to buy the PDF directly! Or from Gumroad, at least. Good luck with this book going forward. Looks like a great read and I hope you have much success with it.

    Regarding this comment from your post:

    “I thought .pdf would do better, although I don’t know many people that read books on a computer.”

    Not sure what you mean — I read my own PDFs all the time, but on my iPad (of print books that I’ve had scanned, usually), and usually right in the Kindle app…PDF always works for me! I can read them on my “Kindle” (my iPad), and they’re more versatile than a Kindle book or mobi file.

31. 

    Andrew Chapman

    June 21, 2012

    Andrew, that is only one aspect of working with Amazon. And it only applies to a small percentage of authors. My delivery charge per book amounts to 5 cents — that’s it. I understand your argument about the digital delivery markup, but you are leading a parade of people (who don’t know better) to trash Amazon over a single aspect of their model. As a result, a lot of misinformation about Amazon is proliferating, by people who are just blindly sharing what you’ve written and focusing on this one issue. By the way, I truly do appreciate all that you have shared, as well as calling out this issue, and I’m glad for you that is has generated a lot of interest in your book (as well as led you to better delivery methods).

32. 

    Andrew Chapman

    June 21, 2012

    etesia — As I’ve commented elsewhere on here, the “huge markup” is only an issue for a very small percentage of Kindle authors. Do you want to know what the digital delivery fee is for my books? Five cents. The vast majority of (mostly or all text) Kindle books have a similar charge.

    As to your second point, it is actually incorrect. When Amazon discounts the retail price on books, whether those from its Kindle or CreateSpace (print) programs, it does *not* pass that discount along to the author. If it has started doing this, please point me to that policy or some verification, because I have not heard of this.

    As for new authors trying to break in, as I wrote above, Amazon has fostered more new-author success stories in the past few years than any of the trade publishers.

    My beef with Andrew Hyde’s post, and so many of these comments, is that it is perpetuating (and creating) a lot of misinformation. I’ve been in indie publishing (and have been traditionally published) for 25 years. I’ve worked with many authors as a consultant and service provider. I’ve given over 300 seminars on publishing throughout the U.S., U.K., and Australia. I was the president of a major publishers and writers association for seven years. My goal in all of that has been nothing less than to raise the status of self-publishing, make self-publishing a better option for authors, and educate authors and aspiring authors about this business.

    As such, it frustrates me to see someone like Mr. Hyde share all his great information, create an excellent forum for discussion, raise an important issue — and yet, also lead an anti-Amazon charge that’s misleading a lot of people. As a result, many prospective authors are going to blindly ignore Amazon as an option and potentially get scammed by a truly bad publisher.

33. 

    andrewhyde

    June 21, 2012

    Every book on iBooks that is designed (not a dump from a .doc) would have the same problems. A clash that will happen as iBooks author becomes used more and more (over the kindle tools of hard coding html).

    Books used to have the photos in the center only because it was the only way to do it economically, now their is no reason to do that.

34. 

    etesla

    June 22, 2012

    Alright. First off, I switched from the Kindle and primarily purchasing from Amazon before Andrew’s article came out. Andrew is not leading an anti-Amazon charge – or at least, if he is, I am not part of it. I switched ebook readers for several reasons, one of them being I simply like the Nook hardware (the new one, with Glowlight) better than the Kindle models I’ve owned. I was in the market in the first place because I broke my Kindle’s screen. So those are two reasons that I switched that have nothing to do with anti-Amazon sentiment; cool your heels.

    However, I do have issues with Amazon that far eclipse the narrow scope of the issues Andrew spoke of. I congratulate you on not having encountered the problematic discounting and resultant loss of royalties, but that does not mean they don’t exist. If you look at Amazon’s self-publishing pages, it does in fact say that Amazon reserves the right to reduce the price of an ebook in response to a competitor selling at a lower price, and pay you at a rate based on that reduced price. However, author Jim Hines highlighted that Amazon plays pretty fast and loose with that “lower price elsewhere” clause – because Kobo had sold his book at a reduced price sometime several months prior, that counted, and they sent him reduced royalties. Details here: http://www.jimchines.com/2012/02/amazon-ebook-price/

    Those are just the issues that impact authors, but I have a few others as well. First, I was uneasy with Amazon’s promotion they ran offering discounts for scanning UPC codes in brick-and-mortar stores with their price check app. (Details: http://www.nytimes.com/2011/12/13/opinion/amazons-jungle-logic.html) Had I done things like that before (checked an Amazon price in a brick-and-mortar bookstore)? Sure. Around the time they did that, I grew uneasy with the idea, and stopped – pitting the two against each other on price, of COURSE Amazon is going to win. But price isn’t the only factor I consider (nor the only one I should). The greater economics of Amazon purchasing are full of losses from people who are pretty indistinguishable from myself; Amazon’s fulfillment model for tangible goods (so not ebooks) requires hiring fulfillment workers at extremely low wages, working them frequently to injury, and offering them few if any benefits (via contract worker status). Purchasing from Amazon when there are local alternatives means fewer dollars going to those local alternatives, and to my local tax base, and therefore to my local schools and other public services. That last part isn’t actually a dig at Amazon at all – it is simply a cost of doing business globally rather than locally. There’s a local bookstore up the street that sells ebooks via Google books, and on the rare occasion I buy books other than direct-from-seller (or from the publishing house, for those that offer DRM-free, another reason I don’t care to buy Kindle books), I go through their online store. My community profits.

    If any one of these factors were the only reason not to shop with Amazon, I probably wouldn’t go that route. But in combination, I see costs – to me, and to those around me – that far exceed the couple of bucks I might save.

    I’m not leading an anti-Amazon charge, nor following one. I am a single person making purchasing decisions that I believe to be both in my best interests long-term, and also most compatible with my sense of ethics, using the best information I have available. I encourage you to continue dealing with Amazon, as it appears to be working out for you just fine.

35. 

    pxl8

    June 23, 2012

    Andrew, if you haven’t already, send an e-mail (or basically this blog post) to Jeff Bezos and/or whatever e-mail addresses are floating out there for kindle support and feedback. Amazon takes customer service pretty seriously, and authors are customers, too. You may not see immediate improvements, but constructive feedback like this can change Amazon’s position over time.

36. 

    Martin Greening

    June 25, 2012

    Great article Andrew. I always forget about the delivery costs at the 70% royalty rate Amazon charges. Definitely an incentive to keep your file sizes low when using Amazon to sell the Kindle version of your book. I wonder what will happen when they are really the only game in town once BN.com folds.

37. 

    Andrew Chapman

    June 25, 2012

    I truly appreciate your taking the time to elaborate on your opinion. I misunderstood your original comment by putting too much focus on that aspect of author treatment (probably in the context of Andrew Hyde’s post). I see now that your position is a reflection of Amazon’s overall actions.

    So, you might be surprised to hear that we agree quite a bit on most of what you wrote. For example, I’m a big believer in buying local and supporting independents. (In fact, I helped to start Read Local: San Diego, which a program to support local authors and indie publishers there.) I was also definitely not a fan of Amazon’s scan thing, and I need to read more on the current status of that. So, in short, how I view Amazon from a customer perspective is different than I do as an author-publisher, though I understand that may not be philosophically congruent. I’ll have to think through that now that I’ve read your position.

    Lastly, thank you for pointing me to the info on Amazon’s ability to adjust royalties based on a price-match. I’m not sure if that wasn’t there last I looked (a while ago), or if I’d just overlooked it. Either way, it’s excellent information to know. I guess another reason it’s never been an issue for me is that I’ve only been selling (my self-published titles) through Amazon to take advantage of their KDP Select program, which outweighs lost sales through other online retailers.

    Anyhow, again, I appreciate your thoughtful reply — it’s given me much to consider. And I’ll cool my heels. 🙂

38. 

    Andrew Chapman

    June 25, 2012

    Good point about iBooks — I’ll have to look into that.
    And I know what you mean about photos in the center. Very true.

39. 

    etesla

    June 25, 2012

    *grin* Sorry if I got a touch combative! I usually make decisions based on a whole ton of factors, and so posting a brief thought on the Internet winds up being fraught with headache danger as I start out eliding a lot of background. Best of luck finding your way through the maze that is what’s best for you – nothing is simple. 🙂

40. 

    Andrew Chapman

    June 25, 2012

    No problem. I think you hit a good blend of “passionate, but respectful.” You must be a writer. 😉 And best of luck in whatever maze you may be in at the moment!

41. 

    Laura Roberts

    June 27, 2012

    Andrew, thanks for posting this. I definitely don’t like the idea that a variable delivery fee is being cut from my author sales (why does it vary if the size of the book doesn’t? how do we know that we’ve reached our “cap”? if we keep our book’s file size under the limit, why are we being penalized? etc.). I, too, would like to know why they are taking those fees from authors at the 70% royalty rate but not the 35%. Is there any way to find out?

42. 

    NepotismIsDomesticTerrorism

    June 27, 2012

    Imagine little Amazon wanting to shove it up the ass of an independent book publisher…

    Gotta admire Jeff Bezos, though. He’s got money – and the independent writer doesn’t and in America, money’s all that matters. Well, money and how many people you can screw to get it.

43. 

    BTRIPP

    June 27, 2012

    I’m surprised that you’re surprised that Amazon’s taking a big chunk of the sale.

    I ran a (dead tree) publishing business for 10 years and I’m pretty familiar with the distribution “food chain” for books. While an individual store might get a 40% discount, and a wholesaler get a 55% discount, and a “distributor” get a 67% discount (each of those levels encompassing the one before it), Amazon would typically get a 66% discount, with no wholesalers or retailers in between them and the purchaser. This is why they’re able to offer 40-60% discounts and still make money. This is also why most self-published authors (unless they went through Amazon’s service) don’t end up on Amazon, because you’d have to price a book from, say, Lulu, WAY above its “market value” to be able to absorb that 2/3rds-of-cover hit and not be losing money on the printing.

    What amazes me is the cost of e-books. If I published a book with a $10 cover price, I had to figure that I’d only have 33% of that to cover ALL my costs. That’s $3.33 to pay for “editorial/production”, printing, shipping, storage, shipping again, promotion/advertising, author royalties, and, hopefully, a few pennies profit. Of those, printing, shipping, storage, and shipping again, were pretty much fixed amounts that I couldn’t shift, and (obviously) printing was the biggest chunk of all that. E-books have NONE of those costs. I’d guess for this hypothetical $10-cover book, those costs would be AT LEAST $1.33 (and considerably more if the quantity being ordered was small), so ALL the costs that would be reflected in an e-book version would have to come out two bucks or less. That’s why it makes me crazy to see Kindle versions listed for more than Amazon is selling discounted hard-cover books … SOMEBODY is making “windfall profits”, and I doubt it’s the authors. An e-book that’s priced at more than 25% of the “trade paperback” version is over-priced … all the costs can be, should be, and typically are covered by that much of the cover price.

44. 

    Steven

    June 27, 2012

    Why should the printing/shipping/storage costs, or lack of them, have anything to do with the price of a book? I think they’re irrelevant. It’s about supply and demand. Sellers charge the price that will maximize their profits.

    Say you have two movies, one cost $100 million to make, and the other cost $10 million. You don’t expect the ticket to the 2nd movie to cost around $1 if you paid $10 for the ticket to the 1st movie, do you? The cost to produce the movie was completely irrelevant. The tickets are at the price that sellers believe will maximize their profit.

    If printing and distributing costs suddenly went down 90% tomorrow due to some big technological breakthrough, the cost of print books wouldn’t change at all. It’s about supply and demand.

    You might spend $10,000 to improve your home right before you sell it. And then you might get an offer that’s $30,000 more than what you were offered before you made the improvement. You wouldn’t give back the $20,000 difference, would you? 😉 You as seller accept the price that the buyer values the house at. And that’s what the booksellers are doing. They do research on pricing, they try different prices and make adjustments based on the fluctuating demand — and the costs that went into producing the book don’t factor into those decisions at all.

    Personally, I’m willing to pay more for e-books in part because of the convenience and instant gratification. Same reason I’ll pay more for an item at the corner convenience store than it costs elsewhere. Many ebooks that I’ve paid $10 for I could have bought for $1-2 used on Amazon. But I didn’t want to deal with the hassle.

45. 

    Jim Kukral

    June 27, 2012

    Yeah, your fee is high because your book is big. You should update your post clearly so that people realize you’re not typical. But… I am glad you brought this up. I’d love to see Amazon drop the charge completely.

46. 

    Surfer

    June 29, 2012

    @andrewhyde:
    1) In my country
    your book on Kindle costs $11.99.

    2) For books at the cost of $2.99-9.99 Amazon pays 70% royalty (minus delivery
    cost) ONLY in the following 19 countries: Andorra (population 84,825), Austria,
    Belgium, Canada, France, Great Britain, Guernsey (65,068), Germany, Italy, Isle
    of Man (84,655), Jersey (98,000), Lichtenstein (35,236), Luxembourg (503,302), Monaco
    (30,539), San Marino (31,817), Switzerland, Spain, United States, Vatican City
    (population 932). Practically for sales of
    English books Amazon pays 70% only in USA, UK and Canada. And in the rest of
    the World, including India and other English speaking countries, the royalty is
    ONLY 35%.

47. 

    Tim Wilkins

    July 6, 2012

    Great article and congrats on the success of your book!

48. 

    eyen1

    July 7, 2012

    You are AWESOME for sharing your experience ! ! ! Thank you for sharing ! ! !

49. 

    Lavinia Thompson

    July 19, 2012

    That’s a good way of looking at it. How do you find out what the delivery fees on your book are? It is something I never really thought about, though it the fees must be minimal if I didn’t notice it before. 🙂

50. 

    Lavinia Thompson

    July 19, 2012

    I love using Smashwords as an author and prefer it over Amazon. I still publish through Amazon, but I much much prefer Smashwords. Everyone complaining there are no other options besides Amazon are sadly mistaken. They just don’t have their eyes open. I also buy most, if not all, the books I read on Smashwords as well. I have a Kobo ereader.