6 ms·

I'm surprised that you're giving it a positive spin from the "indie author" perspective, or maybe I'm just missing something about the way you do your marketing

I'm surprised that you're giving it a positive spin from the "indie author" perspective, or maybe I'm just missing something about the way you do your marketing & distribution. If you want your ebook on Amazon, then Amazon will take 70% (The 30% might be available to you if you plan on retailing at a low price and in mainstream markets, but an indie author serving niche topics will often want to set a higher price; Also you can't do public domain content on the 30% option). 70% commission strikes me as being extremely high. Compare that to bandcamp, which takes 15% for being an extremely well-known platform for indie music. Competitors who try to eat at least a little of Amazon's lunch (like Rakuten's Kobo, or national book chains like Barnes & Noble's Nook in the U.S., Thalia's Tolino in Germany etc) are following Amazon on pricing. Only outsiders like Google & Apple offer better deals, but those platforms aren't all that interesting for e-books. Of course you can try to sell e-books by offering downloads from your own store, but you'll have to work a lot harder and spend more on marketing, plus I'm not sure that, outside of specialist techie audiences, people would be willing to endure the friction around downloading an EPUB, connecting an ebook reader via USB, transferring the file etc.

paulsutter 7y ago
Whoever owns the customer relationship will take the lion’s share of profit, true in books as in everything. Amazon takes 70% because people are willing to share 70% to get distribution, because Amazon is where anyone searches for books. It raises interesting questions about the definition of monopoly. Especially as Google gradually fades the distinction between ads and results and starts to take over categories like travel. (not proposing anything, just making an observation)
- stakhanov 7y ago
  That is certainly not true of everything. Ask a car dealer how much commission/margin they get.
  - Transfinity 7y ago
    I would argue that reinforces the point. Car customers don't really have a relationship with a dealership until they're far into the process of selecting and buying a car. Even then the dealership doesn't own the relationship, there's lots of competition and the customer can play dealers against each other. OTOH, a customer certainly has a relationship with the car manufacturer, through advertising and mental image. When you shop for a car you choose the make and model first, then find a dealership that will sell it to you. If you get your media from Amazon, you go to Amazon to see what they have and choose from that. Amazon controls the relationship in a way the dealer does not. IIRC, this is basically why car dealerships exist and you can't just order a car out of a catalog.
  - ethbro 7y ago
    It's probably more accurate to say 'Whoever owns the numerically limited chokepoint will take the lion’s share of profit.' There are many car dealerships. There are only a few car manufacturers. So the latter have forced the former into a bad deal.
    - ghaff 7y ago
      I'm not sure it's a bad deal. New car dealership owners are often pretty successful and politically connected small local businessmen. It is generally true though that distribution isn't a business that the auto manufacturers wanted to be in at the time the current system developed. It's not a wildly profitable business to be in but, like other types of franchises, it's a decent enough living for many of the owners.
      - pkAbstract 7y ago
        It's not that they didn't want to be in the business, but that manufacturers couldn't scale their own dealerships across the country fast enough. So they opened up ownership to third parties. Tesla, however, was in the unique position of having enough capital to open their own dealerships, which has caused a lot of friction with more traditional, "family-owned" dealerships.
  - 7y ago
michaelt 7y ago
70% commission might sound bad to you - but imagine an industry where the standard commission had historically been 85-90%. Of course, historically an 90% commission on a print book would cover expenses like editing, printing, and marketing which Amazon doesn't provide; and the risk/cost of unsold copies, which ebooks don't have. Still, if you think your publisher wasn't putting much effort into the marketing anyway....
- stakhanov 7y ago
  Yes, as you correctly point out, the economics behind that royalty structure became obsolete when the ebook came around. The new thing was the low unit costs. The other new thing was channel economics. The latter triumphed and gave Amazon the bargaining power they needed to make sure that none of the economic advantage of e-books would find their way into creators' pockets. That is what I'm lamenting.
  - ghaff 7y ago
    And discounting generally. New book sales used to be pretty much a list price operation. Publishers did a lot more gatekeeping and tended to provide more services for the authors they selected. I've gone both the indie route and the traditional publisher route and I'm honestly not sure the publisher is worth the other tradeoffs. TBH, the biggest value of the publisher was that it still carries a certain (not entirely warranted) gravitas.
    - thaumasiotes 7y ago
      Editing is still valuable, judging by the writing quality of self-published books.
      - ghaff 7y ago
        You can hire someone to do that though--along with cover design etc. And publishers often don't do an awful lot of heavy editing in my experience. (I'd argue that if you're doing a book by yourself without a co-author, you pretty much have to hire at least a copy editor but that's pretty inexpensive.)
syshum 7y ago
>>then Amazon will take 70% You have a source on that? Everything I see and read shows amazon takes the "standard" 30% platform rate that Apple started years ago, I think 30% is way to high as well but I see nothing in any of Amazons documentation where they take 70% of revenue for selling an ebook
- stakhanov 7y ago
  https://kdp.amazon.com/en_US/help/topic/G200644210 https://kdp.amazon.com/en_US/help/topic/G200644210 On the "70% royalty option" (=30% commission), the retail price of the ebook must not exceed $9.99 If you write a college textbook that normally retails at $80, that $9.99 will be a joke to you. This way they keep prices down (at the author's cost), or when there is real profit opportunity on the table, take the lion's share.
  - syshum 7y ago
    Well IMO no ebook should be more than $9.99 in the first place, and no TextBook should be $80 either The prices of TextBook has long been insane largely because they are "required" by the professors that write them or getting kickbacks from publishers No Free Market will support $80 textbooks I am sure we are not going to even come close to agreeing on this topic so.... as to 35% royalty, how do that compare to a standard publishing contract from a publisher? I have a feeling that is still more than what the Traditional Publishers give their Authors
    - ethbro 7y ago
      I have as much beef with textbook prices as anyone else, but they have their own screwy economics. I'd be 110% in favor of mandating open source textbooks, where available, for any course taken by a student receiving government educational grants. Essentially, you get to have (a) high textbook costs, or (b) monopolies over categories (e.g. one single mathematics textbook publisher). Legacy / static topics (intro linear algebra) and evolving topics (intro biology) also have very different economic models.
grey-area 7y ago
If you think 70% commission is high, you should look into the deals authors get from publishers. Typically author gets low single digits, the shop gets around 50% and the publisher gets the rest. Sometimes the author gets only a fee, then zero commission. 30% is the norm from Amazon anyway, though I agree the terms are onerous and a world in which Amazon (or any other large corp.) dominates distribution would not be a pleasant one for authors. The nice thing above the that though is that the Internet means that monopoly on digital distribution can be broken relatively quickly by a superior solution.
galangalalgol 7y ago
How is author compensation for library ebook rentals like overdrive, or subscriptions like kindle unlimited?

paulsutter 7y ago

Whoever owns the customer relationship will take the lion’s share of profit, true in books as in everything. Amazon takes 70% because people are willing to share 70% to get distribution, because Amazon is where anyone searches for books. It raises interesting questions about the definition of monopoly. Especially as Google gradually fades the distinction between ads and results and starts to take over categories like travel. (not proposing anything, just making an observation)

stakhanov 7y ago
That is certainly not true of everything. Ask a car dealer how much commission/margin they get.
- Transfinity 7y ago
  I would argue that reinforces the point. Car customers don't really have a relationship with a dealership until they're far into the process of selecting and buying a car. Even then the dealership doesn't own the relationship, there's lots of competition and the customer can play dealers against each other. OTOH, a customer certainly has a relationship with the car manufacturer, through advertising and mental image. When you shop for a car you choose the make and model first, then find a dealership that will sell it to you. If you get your media from Amazon, you go to Amazon to see what they have and choose from that. Amazon controls the relationship in a way the dealer does not. IIRC, this is basically why car dealerships exist and you can't just order a car out of a catalog.
- ethbro 7y ago
  It's probably more accurate to say 'Whoever owns the numerically limited chokepoint will take the lion’s share of profit.' There are many car dealerships. There are only a few car manufacturers. So the latter have forced the former into a bad deal.
  - ghaff 7y ago
    I'm not sure it's a bad deal. New car dealership owners are often pretty successful and politically connected small local businessmen. It is generally true though that distribution isn't a business that the auto manufacturers wanted to be in at the time the current system developed. It's not a wildly profitable business to be in but, like other types of franchises, it's a decent enough living for many of the owners.
    - pkAbstract 7y ago
      It's not that they didn't want to be in the business, but that manufacturers couldn't scale their own dealerships across the country fast enough. So they opened up ownership to third parties. Tesla, however, was in the unique position of having enough capital to open their own dealerships, which has caused a lot of friction with more traditional, "family-owned" dealerships.
- 7y ago

michaelt 7y ago

70% commission might sound bad to you - but imagine an industry where the standard commission had historically been 85-90%. Of course, historically an 90% commission on a print book would cover expenses like editing, printing, and marketing which Amazon doesn't provide; and the risk/cost of unsold copies, which ebooks don't have. Still, if you think your publisher wasn't putting much effort into the marketing anyway....

stakhanov 7y ago
Yes, as you correctly point out, the economics behind that royalty structure became obsolete when the ebook came around. The new thing was the low unit costs. The other new thing was channel economics. The latter triumphed and gave Amazon the bargaining power they needed to make sure that none of the economic advantage of e-books would find their way into creators' pockets. That is what I'm lamenting.
- ghaff 7y ago
  And discounting generally. New book sales used to be pretty much a list price operation. Publishers did a lot more gatekeeping and tended to provide more services for the authors they selected. I've gone both the indie route and the traditional publisher route and I'm honestly not sure the publisher is worth the other tradeoffs. TBH, the biggest value of the publisher was that it still carries a certain (not entirely warranted) gravitas.
  - thaumasiotes 7y ago
    Editing is still valuable, judging by the writing quality of self-published books.
    - ghaff 7y ago
      You can hire someone to do that though--along with cover design etc. And publishers often don't do an awful lot of heavy editing in my experience. (I'd argue that if you're doing a book by yourself without a co-author, you pretty much have to hire at least a copy editor but that's pretty inexpensive.)

syshum 7y ago

>>then Amazon will take 70% You have a source on that? Everything I see and read shows amazon takes the "standard" 30% platform rate that Apple started years ago, I think 30% is way to high as well but I see nothing in any of Amazons documentation where they take 70% of revenue for selling an ebook

stakhanov 7y ago
https://kdp.amazon.com/en_US/help/topic/G200644210 https://kdp.amazon.com/en_US/help/topic/G200644210 On the "70% royalty option" (=30% commission), the retail price of the ebook must not exceed $9.99 If you write a college textbook that normally retails at $80, that $9.99 will be a joke to you. This way they keep prices down (at the author's cost), or when there is real profit opportunity on the table, take the lion's share.
- syshum 7y ago
  Well IMO no ebook should be more than $9.99 in the first place, and no TextBook should be $80 either The prices of TextBook has long been insane largely because they are "required" by the professors that write them or getting kickbacks from publishers No Free Market will support $80 textbooks I am sure we are not going to even come close to agreeing on this topic so.... as to 35% royalty, how do that compare to a standard publishing contract from a publisher? I have a feeling that is still more than what the Traditional Publishers give their Authors
  - ethbro 7y ago
    I have as much beef with textbook prices as anyone else, but they have their own screwy economics. I'd be 110% in favor of mandating open source textbooks, where available, for any course taken by a student receiving government educational grants. Essentially, you get to have (a) high textbook costs, or (b) monopolies over categories (e.g. one single mathematics textbook publisher). Legacy / static topics (intro linear algebra) and evolving topics (intro biology) also have very different economic models.

grey-area 7y ago

If you think 70% commission is high, you should look into the deals authors get from publishers. Typically author gets low single digits, the shop gets around 50% and the publisher gets the rest. Sometimes the author gets only a fee, then zero commission. 30% is the norm from Amazon anyway, though I agree the terms are onerous and a world in which Amazon (or any other large corp.) dominates distribution would not be a pleasant one for authors. The nice thing above the that though is that the Internet means that monopoly on digital distribution can be broken relatively quickly by a superior solution.

galangalalgol 7y ago

How is author compensation for library ebook rentals like overdrive, or subscriptions like kindle unlimited?