It’s Time to Wake Up
TweetPosted By Scath on November 22, 2009
More knowledgeable minds than my own may have already thought about this, but I’ve yet to see it mentioned as I’m about to do.
I personally think this is what’s happening, but recent dissatisfaction may be coloring my perception of matters.
The normal split between distributor/publisher or distributor/independent author appears to be 50/50.
Any small press or independent is aware the standard split at Amazon is 35/65, with them receiving the lion’s share from each sale. We also know that Amazon determines when our titles are placed on sale and for what percentage off, and that it doesn’t affect our 35% because Amazon eats the loss.
Example:
On a $5.25 title, I receive $1.84 per sale, while Amazon receives $3.41.It’s been placed on sale at 20% off in the past. I still received my $1.84, while Amazon received $2.36.
The past five or so months, I’ve noted that none of my titles have been placed on sale there, and frankly, it hasn’t hurt my sales. In fact, I had a few of the best months in sales since I began self-publishing, and they increased quite a bit compared to the first five months of 2009.
I did wonder why, in a vague sort of way. Also, despite or maybe because of the fact Amazon accounts for 51.5% of my overall sales, I began feeling dissatisfied with that 35/65 split.
It is below the norm of 50/50. Amazon doesn’t offer anything different than other distribution channels I’ve chosen to use, so why do they take such a huge chunk?
I think I know why.
In my reading about the trouble the traditional publishing industry is facing, and how they’re ineptly handling their entry into the ebook market, I’ve seen it mentioned that Amazon is A) either working much higher splits with them or B) using the same agreements used for physical books.
Basically, it boils down to Amazon losing money on ebooks from traditional publishing companies. This is actually not news; several have pointed it out.
Example:
I’m pulling this out of thin air. Say they work a 40/60 split with Big Name publishing company.The publisher sets the price for a new release ebook at $24.97.
Their profit would be $14.98 per sale.
Amazon, due to pressure from Kindle owners and their own advertising promises, places the title on sale for $9.99.
Amazon goes into the hole $4.99 with each sale of the ebook at that price. Let’s say it’s a title by a really popular author right now, and sells 2,500 copies the first 48 hours.
Amazon owes the publisher $12,475 over the $9.99 actually collected per sale.
Multiply that by 100 new releases among several different traditional publishers with the same deal, and the red ink rises sharply.
So where is Amazon making up their loss?
From us: the independent authors and small publishing presses who’ve chosen them as a distribution channel. The ones who receive a paltry 35% of our cover prices. And how many of us have chosen Amazon as a distribution channel? I’d guess at least a few thousand, as a bare minimum.
Based on that, we are carrying or partially carrying the weight of traditional publishers where ebooks are concerned. What should be coming to us in the form of a fair split is going into the pockets of those publishers.
That pisses me clean off.
I work as hard as any traditionally published author. I struggle with the learning curve of promotion and trying to build a readership.
Yes, I do make more per sale than a traditionally published author, and I’m not attacking them. They deserve every penny they earn for their hard work, and often have to do their own promotion too, just like independents.
This is about traditional publishers and Amazon.
One is too blind to see that you can’t price ebooks like you do physical books. The other is aiding and abetting that delusional blindness by shafting independents and small presses.
And it’s not just Amazon. All the major ebook distributors, save a few, are working those same deals/under the same agreements. It’s just that many of them offer a higher standard split to us.
They’re distribution channels, not publishers. They offer limited services: file conversion (which we have to properly format for), storage of the files, delivery, transaction handling and a listing page with some onsite cross-promotion (which we have to input all the information for and upload the cover to).
So does Smashwords, and I get 82% of my cover price there per sale, after their 15% and a tiny transaction fee. Plus, Smashwords widens my distribution channel net by having brokered/continuing to broker deals with the big ebook distributors like B&N, Sony, etc.
Independents and small presses need to wake up and push for higher splits from distributors. We work hard, have expenses associated with each of our titles and deserve to earn more from our sales.
Would petitions do it?
What would happen if we yanked all of our titles from those who don’t offer better splits and only chose those that did?
The major distribution channels would lose their crutch and no longer be able to support the ridiculous ebook pricing strategies of the traditional publishers. The traditional publishers would have to face the fact that ebook prices can’t follow their print pricing models.
Readers will follow. They’ve been vocal about lower ebook pricing and wanting authors to receive higher royalties. They’ll move to where the big selection is.
The tipping point looms. Independent authors and small presses who concentrate on ebooks have the power to usher in the needed changes.
The question is, will we? Or will we just continuing being happy with crumbs?
What do you think?
About the author
Scath
I'm a gun-toting alien with a fetish for fur and four-legged creatures who writes fiction & tweets. Bonus! I have a katana. Indie author/self-publisher.Comments
7 Responses to “It’s Time to Wake Up”
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35/65 makes no sense to me on so many levels. Printed books are 45/55 in favor of the bookstore, and they have to keep inventory and ship. There is no way to make the case that ebooks require more space and employees, so what is the 65% for if it isn’t “Because we can!”
I doubt petitions would do it, only a social media uproar causing bad press would make it happen, but it’s not as volatile as the recent accidental mislabeling of gay titles or the as yet unresolved issue that they can erase anything they want from Kindle.
“Because we can” is a predominant theme among big business.
Yeah, I feel the shoulder shrugs from here about trying to attempt any change concerning splits.
It’s a shame something has to be hugely controversial in order to raise awareness.
Perhaps independents and small presses will begin working together to do it. To make a big stink about how unfair splits are.
I could go for 45/55 split, with me receiving the higher.
I think it’s a reasonable one, even though I know most of the effort Amazon puts into each ebook title is automated and doesn’t require much, if any, human interaction.
In fact, I assume the only human effort at Amazon is creating the listing page, since that often takes 3 days to appear onsite.
Which is weird; Smashwords, your listing page appears practically instantly. Granted, I guess it’s not as ‘pretty’ as an Amazon page, with all the image cross-promotion they put on them.
Oh well, I’ve tossed the damn gauntlet out. Let’s see if anyone is willing to take it up with me!
I can’t imagine the listing on Amazon requires much, if any, human effort, at least for print books. Everything I’ve published or helped set up there is taken word-for-word from the Bowker listings. I assume they import newly released ISBN’s from one database to another and the page generates itself once all the information is spooled through the servers. I bet it takes three days because it’s put into a queue and there are so many servers to deal with.
I think the way Amazon sees it, you are paying them for the privilege of using their storefront since they are the biggest marketplace.
They would rather not list any books self-published outside of iUniverse, for example, but they have to allow people to order anything with a valid ISBN just like a brick store or risk a lawsuit. If they can make it more difficult for small presses not affiliated with their publishing company while convincing shareholders they are trying for the highest profit possible (required by law for any publicly-owned corporation based in the US), it’s a win-win for them.
I think the only thing that will change it is an uproar/boycott, but I also think people who are making money there will be afraid to rock the boat by telling people not to shop there, if you know what I mean.
I think you’re exactly right about that ‘paying them for the privilege’ bit.
(Edited to add) And it should be them paying US for the privilege of selecting them as a distribution channel!
They’re ignoring the fact that the number of ebooks they boast is partially due to the content providing efforts of independents and small presses.
You’re also right about people who do sell there; they’re unlikely to rock the boat if they’re seeing high sales.
I think those like me, who see sales, but not really enough to brag about, are the ones who’ll rock the boat, because we’re not really making money there. We’re still trying to cover our costs in producing each title because the split’s so low, but Amazon’s the place we have the most sales.
Even then, some won’t in order to ‘protect’ what they are earning there.
I wonder what the blog subscription program Amazon has offers as a split?
I’m gonna go check that out.
HAHA…screw that. Their publish your blog for Kindle subscription program offers a royalty of 30% to blog authors.
For which you have to jump through all kinds of hoops to properly format for.
Won’t be taking that step.
I thank you for being in my world. With you lighting the way. such rooks will enjoy a short life.
You’re so sweet, Anna!