Less Revenue for Authors from Amazon?

Amazon Revenue

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Did you read Amazon’s Newsletter last week?  One of the sentences in the text was: “Starting with the November fund, we will work to take these marketplace differences into account and payouts per country will differ based on local country factors.”
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Sounds rather unassuming, doesn’t it? However it might mean LESS MONEY FOR AUTHORS…who are signed up with KDP Select.  In India for example Kindle Unlimited subscription service is much lower priced: $3 only per month.  So a revenue pay-out per book on KU will also be much lower than for those in the USA, where customers pay more than three times for monthly subscriptions.
But Amazon might also reduce the subscription prices for other countries in order to eliminate competition… Or am I too suspicious?
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Making KindleUnlimited available in India also taps into a market with a lot of growth potential.  According to Digital Book World, e-books currently account for just two percent of the country’s $2- billion-market, but that amount is expected to grow as more people get their hands on inexpensive smartphones and tablets, and the biggest competitor Flipkart is outnumbered by Amazon (maybe).
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What Bloggers Say:
Mark Cocker wrote: “None of this should come as a surprise, yet thousands of authors will be surprised once they realize the slippery slope that is KDP Select.  It’s an inevitable outcome when authors surrender full pricing and compensation control via their KDP Select enrolment to a company whose entire business model is predicated upon commoditizing and devaluing products by stripping suppliers (authors) of pricing control.  Amazon does this in the name of offering customers the lowest possible prices.”

And Nate Hoffelder blogged a while ago:
Following the launch of KindleUnlimited, the payout from KDP Select declined by 25%, and it continued to decline ever since.  The payment hit a new low in October, dipping to $1.33, and according to the latest KDP newsletter it increased slightly in November, 2014 to $1.39.  Authors are wondering whether KDP Select in particular, and Amazon’s subscription e-book service in general, are such a great idea.”

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What are the Pro’s and Con’s of KDP Select?
In exchange for giving Amazon exclusivity for your e-book for 90 days, you receive five days to make your digital content available for free or in a Kindle Countdown Deal, and you also get paid during these 90 KDP Select days for any of your e-books that are lent through the Amazon Prime library or through KindleUnlimited. Since June 2015 only the pages that were read will be paid by Amazon.  Also, you will earn 70% revenue for sales to customers in Japan, India, Brazil and Mexico.
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Pro’s

  • If you are a new author with only one book, then building an audience on Amazon before branching out to other venues might be an good choice.  Often new authors are receiving higher numbers of lends while more established authors are getting less.
  • If you sell exclusively through Amazon, you only have to manage one site and one set of changes.
  • Multiple-book authors might rotate content through KDP Select if they are getting a significant number of paid lends and new readers from the program. Or use KDP Select to launch a new project, getting reviews and feedback on Amazon before distributing the title elsewhere. If your free days land you on the Top 10 or 20 (first page) of the free bestseller list, that exposure might! Increase sales for the days following a free promotion due to the exposure and higher ranking.
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But consider this: you don’t need to be on KDP Select to offer your book for free.  A great option are “Pay-with-a-Tweet” or to have one of your books permanently free on Amazon!

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Con’s

  • As an indie author, you should not be dependent on any single income stream. In business it is never good to work only with one customer or one supplier – nor is it smart to have only one product / one book to sell. Consider only during the initial period exclusivity, in order to earn your tiny share of the KDP Select Global Fund amount when your book purchasers read more than 10% of your book from KindleUnlimited, or to borrow your e-book from the Kindle Owners’ Lending Library (KOLL).  Enrolling in KDP Select means your books are automatically included in both programs.
  • As writers have to remove their books on all other platforms to be exclusive for KDP Select campaigns, the timing of price changes for sales is a real hassle.  You never know if scheduling a price change on Kobo, Barnes & Noble and iBooks works smooth and timely – nor will it always work perfect on Amazon.  After the campaign you have to change back everything on all platform, which can really be a pain.  And even if you use any aggregator services, errors can and will happen.
  • Global growth of digital markets: Apple iBook and Kobo sell in 58 countries.  Amazon may be the biggest player in the USA, but there are more online retail stores and devices that are dominating in other countries.  Sales in Canada for example are coming primarily from Kobo.  And don’t under-estimate the future massive Asian markets…
  • Selling on more platforms – on- and off-line – allows readers all over the world to buy your work in any way they want. Don’t limit the amount of money you might make.
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Bestselling author Dean Wesley Smith mentioned in one of his blogs: “In regular publishing, if your book is all over the world in every store and not limited, your sales potential has no ceiling. Think J.K Rowling book sales numbers.”
“In KindleUnlimited, you only have the amount in the prize pool that Amazon sort of sets after the fact and decides to give you – considering pages read… Being exclusive to one bookstore is for sure a mistake.”

 

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