10 ms·

Amazon Digital Markup: 129,000%

241 points by dfield 14y ago

tytr 14y ago
This kind of thing only works when users looking for "ebooks" are channeled through Amazon. Paid placement on Google may help them in that regard. What happens when users learn they can download ebooks elsewhere? It's nonsensical to pay a fee for distribution when the distribution channel is the internet. Project Gutenberg's and Archive.org' ebooks are better than this e-paper or super hi-res screen nonsense. Reading books on these devices is dog slow and awakward. It is just text. It should be searchable using Boyer-Moore algorithm. Fast. searchable ebooks.
evanprodromou 14y ago
Can the market beat this? Or is the gravitational pull of the giant Kindle market too great?
- alanfalcon 14y ago
  Step one is to make this cost transparent to people considering selling via Kindle (and to readers who care about this sort of thing). I'm preparing my first novel for sale right now. It's a novel, not a travel book, so I'm basically just delivering a cover image and text so I would expect my "delivery fees" will be much lower, but I didn't even realize that it would be in the realm of possibility that delivery fees would add up to any kind of significant expense. How could I know? Amazon doesn't advertise this anywhere. So we need blog posts like this in order to inform authors so they know that there's strong incentive to look into the other markets.
bradmccarty 14y ago
This is a pretty huge piece of free advertising for Gumroad and its ilk. I know Andrew, and I know he's put his heart and soul into this book. It's a downright shame to see Amazon taking that size of a cut for self-published works.
cs702 14y ago
I strongly suspect Amazon is offering well-known, "must have" authors a much better deal -- possibly even losing money on sales of some of their books -- and making it up by giving a raw deal to less-well-known, independents like Andrew Hyde, the author of this blog post. Does anyone here know if this is indeed the case?
- notatoad 14y ago
  The well known must have authors don't self-publish directly on amazon, they have publishers who handle all that sort of negotiation for them. And part of that negotiation surely includes talking amazon down on the delivery fees. However, authors who publish heir work through a publisher also don't make 55% royalty, so the author of this blog post is still better off than he would have been.
  - cs702 14y ago
    notatoad: I didn't write or even imply that well-known authors self-publish. FWIW, I have heard from a second-hand source that one well-known author is receiving net royalties from Kindle sales that are greater than the Kindle price of his books. I don't know if this is really true, but it rings true; hence my question to the HN community.
    - notatoad 14y ago
      you said that amazon is offering deals to authors. my point is that amazon doesn't interact with well-known authors, they interact with those author's publishers. if any author receives better royalties than the kindle price of their books, it may be because their publisher is receiving even more money from amazon, or it may be the publisher that is taking the loss.
xxpor 14y ago
ctrl+f whispernet 0 results found He's forgetting about the cost of delivering over a cell phone network.
- pilom 14y ago
  Over a cell phone network a user would pay about $0.27 to download a 18MB file. There is no way an author should have to pay an order of magnitude more.
  - xxpor 14y ago
    What if you have a US kindle in say, the deserts of Australia? It's going to cost a LOT more than $.27. I mean a LOT.
    - damian2000 14y ago
      Wrong - most deserts of Australia don't have any 3G access. But anywhere in Australia with 3G access (i.e. populated areas) all have the same data tariff, which is comparable to the US price.
      - xxpor 14y ago
        >But anywhere in Australia with 3G access (i.e. populated areas) all have the same data tariff, which is comparable to the US price How do you know the details of AT&T's roaming agreements with Australian carriers? I know you don't, because your statement is 1000% incorrect.
        takluyver 14y ago
        I would assume Amazon can negotiate with local carriers in each region, rather than paying through a US carrier for data sent to Australia.
        xxpor 14y ago
pilom 14y ago
If you use the end user cost you can get a high end estimate for total cost of 3g service. $30 for 2GB of data makes $0.015/MB * 18.1 MB file makes for a total cost to user of $0.27 for delivery.
- cperciva 14y ago
  The fact that you can get 2 GB of data for $30 doesn't mean that you can get 18 MB of data for $0.27. Most people paying $30 for a 2 GB data plan are using far less than 2 GB of data.
  - pilom 14y ago
    Very true, but the fact that the author is paying a distribution fee an order of magnitude more than the $.27 seems pretty fishy.
    - robryan 14y ago
      Doesn't amazon promise delivery to anywhere in the world? These high prices might be subsidising places with crazy high data rates.
- Retric 14y ago
  Sure, on paper you get 2GB for 30$, but really your paying 30$ to be part of a pool of people that use below 500MB on average and some of them pay a lot more than that in overage feels for downloading 2.01+GB. A more realistic number might be 15$ for 200 MB with the risk of overage fees = 1.35$ for 18.1MB. Amazon may pay more per MB than you do because of that lack of subscription good for life of the device thing or less, but they also have overhead to track that etc.
sjtgraham 14y ago
This is naive as it fails to consider that Amazon has probably made a considerable loss on the Kindle hardware business to create this market the OP is lucky enough to participate in. This investment alongside the investment in their own AWS infrastructure is why there is a reasonably sized market for ebooks right now. Also how about the cost of cellular data? The cost might be a little high but if you don't like it, you have the choice to take your business elsewhere.
- ashconnor 14y ago
  So the $2.85 delivery isn't so much the digital download but the digital download + the kindle subsidy.
- veyron 14y ago
  I think the complaint focused on other costs that were pushed onto the author. If amazon presented a larger cost structure (increase their per-unit charge) but covered costs like content delivery, I don't think the author would have as much of a problem.
ChuckMcM 14y ago
This is confusing. Here is someone with a FANTASTIC first outing of a book and he's whinging about it? The author raises $8K on Kickstarter, sells his book for $10, and is complaining that the 'gorilla' is taking a bigger percentage of the take? Using his numbers: of 73%/11%/12%/1% his money was $1117/$231/$333/$20 respectively. So he made three times as much money selling through Amazon as he did on the next closest service (PDF). So what is his complaint? That he didn't read the contract completely? Would he have forgone selling his book on Amazon if he had? Assuming he was trying to get $7/book out of them would he have raised his book price to $15 to pump that price up? And what would that have done to his volume? Its all well and good to posit that you could store your book on an FTP server at Hurricane electric but how would people find it? How would they read it? And then why all this angst over the first few months? The kickerstarter [1] only funded in April, here it is June he has his book out, most travel magazines have like a 3 month lead time on their content, plus folks need to review it etc. What was he expecting? And more importantly since this reads like he is hugely disillusioned by the experience exactly why was he expecting what he was expecting? Didn't he 'get' that he could not have published this book at this level of success at all prior to Amazon? [1] http://www.kickstarter.com/projects/andrewhyde/this-book-is-about-travel?ref=live http://www.kickstarter.com/projects/andrewhyde/this-book-is-...
- earl 14y ago
  At a guess: the author feels ripped off in the same way I feel ripped off when I buy an airline ticket and have to pay $25 to check a bag, $12 for a sandwich, etc. If amazon's fee is $4.50 they should say so instead of burying a cost almost equal to their quoted fee in fine print. Edit: also, amazon grants themselves MFN status [1] at the authors' expense. So they exploit their market size to make sure authors can't make up for the kindle being nearly 100% more expensive than competitors. By "price-match" we mean where we sell the Digital Book in one or more of the Available Sales Territories at a price (net of taxes) that is below the List Price to match a third party's sales price for any digital or physical edition of the Digital Book, or to match our sales price for any physical edition of the Digital Book, in any one of the Available Sales Territories. [1] https://kdp.amazon.com/self-publishing/help?topicId=A29FL26OKE7R7B https://kdp.amazon.com/self-publishing/help?topicId=A29FL26O...
prbuckley 14y ago
It seems like the telco's are the ones making out here. They charge Amazon some ridiculous fee to deliver the content and they charge the consumer for a data plan for the device.
- dangrossman 14y ago
  Most Kindle purchases are coming from a Kindle, which never has a consumer data plan. 3G Kindles' cell usage is paid by Amazon.
  - kennethcwilbur 14y ago
    At https://kdp.amazon.com/self-publishing/help?topicId=A29FL26OKE7R7B https://kdp.amazon.com/self-publishing/help?topicId=A29FL26O... it shows that the delivery charge in the UK for a 18.2MB book is $2.82. That rate is actually pretty good. According to this page, http://www.wireless.att.com/learn/international/roaming/affordable-world-packages.jsp#data http://www.wireless.att.com/learn/international/roaming/affo... AT&T sells a 120-MB international roaming data package for $30/month. That implies an effective download charge of $4.55 for an 18.2-MB file. Now if Amazon's data charge is $2.82 in the UK, where they do significant volume and the wireless market is competitive, imagine how much higher it must be in less developed countries where the company has less pull. I got charged approximately $800 for 40 megabytes of data usage in Lithuania last year, where AT&T did not have a partnership with any local carrier. I talked AT&T down to about $400 but they would not budge beyond that. And think about the target audience for this book. Probably a lot of people spread out all over the world. It might not take all that many downloads in places like Lithuania to push the average delivery fee up to $2.48. The only problem I see is that, arguably, Amazon should give authors the ability to opt out of paying for international downloads, or let them set different prices in different countries. But it seems that the current delivery charge is pretty good - certainly it's not the enormous markup the headline claimed.
    - pja 14y ago
      The author is charged the delivery cost whether the delivery happens over 3G or Wifi. Personally, I doubt the cost to Amazon to deliver the average e-book is anywhere near their quoted rate. If they wanted to charge separately for 3G or wifi delivery I'm sure they could do so: they have simply chosen not to. Possibly it's simply inertia: the original Kindles were 3G only IIRC, so they would have had to pay steep costs themselves for data delivery back then for all downloads. Now they've discovered that authors are willing to eat those charges, why change them? The consequence of course is that it's uneconomic to sell image-heavy works through the Kindle platform, despite the move to wifi delivery & full-colour tablet Kindles which could exploit them to their full potential. Even books like the OPs find a huge chunk of their profit margin swallowed up by these delivery charges.
mark_l_watson 14y ago
I don't get his complaint. I have written books for Springer-Verlag, McGraw-Hill, J. Reilly, Apress, etc., etc., and I am used to seeing 10% to 15% royalty. About 50% royalty from Amazon seems pretty good, but regular publishers provide a lot of help producing a book. Publishing books with Apple's AppStore also looks pretty good. It is all good(!), one just has to appreciate having multiple markets available and choose which ones you like.
fennecfoxen 14y ago
Personally, I'd be more depressed by something that says "Amazon charges authors $2.58 to deliver an e-book (after 30% cut)" than some big fancy number like that 129,000%. It's more meaningful.
- MBCook 14y ago
  I agree. "Amazon's takes 55% of my ebook sales" or "Amazon's hidden 25% ebook fee" would have meant quite a bit more.
- smackfu 14y ago
  Actually, it seems like the delivery fee reduces the effective retail price of the book, like: royalty = 70% x ($10 - delivery fee) He just has a really big delivery fee.
tylerneylon 14y ago
Some commenters say the post is wrong to complain when the author is making money through amazon's distribution, or when amazon takes a loss on selling kindles. I disagree with both sentiments. Main point: It does not cost amazon an average of $2.58 to deliver the author's pdf. Amazon is being dishonest by calling this a delivery cost. I consider it unethical to name a fee something that it is not. "Be grateful for what you do get" is not a valid argument against dishonesty. If Amazon makes a business decision to take a loss on kindles, this also does not justify dishonesty.
- nandemo 14y ago
  It's called "delivery fee", not "delivery cost". It makes no sense to require a business to charge fees solely based on variable costs.
- smackfu 14y ago
  So many commenters seem to see the $2.58 as Amazon saying "this is what it really costs us". I'd think it means something more like "this is punitively high so please make your book smaller."
ThomPete 14y ago
Sms 150.000 times Voice 1500 times
bootload 14y ago
"... Don’t buy my book on Amazon. Or do buy it. Or don’t. I could sell the X through Y ..." That's a new startup idea right there.
pbreit 14y ago
Two misconceptions: 1) services are properly priced at what the market will bear, not the cost to deliver them. 2) Many Kindles get their content over a regular cellular network which the Kindle owner does not pay a monthly fee.
h1bsearch 14y ago
Check how much Amazon pays to its employees http://www.visasquare.com/visa-greencard/salary/amazon-corporate-llc-324660.html http://www.visasquare.com/visa-greencard/salary/amazon-corpo...
mahyarm 14y ago
How about re-downloading books several times over over roaming 3G for the lifetime of the user? I don't think it's a one time delivery charge fee.
jchavannes 14y ago
I don't like the AWS pricing either (or at least how it's communicated). I have considered AWS but no matter how much time I spend looking at their pricing, I can't figure out how much I should expect to be charged each month. I agree the tone of the article is a little over-victimized though.
droithomme 14y ago
OK, so for a $10 book, Amazon collects 30% for themselves, which is $3. For a 19MB download delivered via 3G to a Kindle, Sprint, the wireless carrier, charges .15/MB, or $2.85/19MB. This is paid to Sprint, not Amazon.com. The article errors by comparing this fee to the cost for server bandwidth using S3 to come up with his markup value, but S3 bandwidth covers the internet only and does not include fees involved with passing through any sort of cellular network.
- teamonkey 14y ago
  If I were to buy the author's book and download it to my non-3G Kindle over my own wi-fi connection, the author would still be charged $2.85 for it. Surely the 3G Kindle owners should be paying for it - and only then if they use whispernet. Or rather, I always thought they were because the 3G Kindle touch is $50 more expensive. A cellular radio only costs a dollar or two, I always figured that most of the $50 price difference represented average download costs over the expected lifetime.
  - mdiep 14y ago
    The article does not say that downloading it over your wi-fi connection will result in $2.58 in delivery fees. It says that the average delivery fee for the book was $2.58.
    - teamonkey 14y ago
      Amazon apply the fee regardless of delivery method. Check out the link posted by kennethcwilbur elsewhere in this thread. https://kdp.amazon.com/self-publishing/help?topicId=A29FL26OKE7R7B https://kdp.amazon.com/self-publishing/help?topicId=A29FL26O... Amazon charge $0.15/MB and the book was approximately 18MB in size.
      - frozenflame 14y ago
        I don't particularly approve of their pricing, but to be fair the book could be downloaded many times over 3G in the future included in that initial delivery cost.
balloot 14y ago
This post is ridiculous. Amazon has spent billions upon billions of dollars building and maintaining a ridiculously efficient delivery system for electronic content. THAT is what the markup is paying for. And from a common sense standpoint, if Amazon were really charging the crazy markup this guy claims, then some other company would mark up a mere 1000% or whatever and massively undercut Amazon's offering. Given that this hasn't happened, it is pretty safe to assume that the true costs are much higher than his math suggests. Either that or other companies have just ceded massive eBook profits to Amazon out of the goodness of their hearts. I'm going to guess it's the former.
- Karunamon 14y ago
  $3 to transmit 15 megabytes is fucking absurd, regardless of the delivery medium. Full stop, end of story.
  - balloot 14y ago
    It's not $3 to transmit a file. It's $3 to: Design a great UX Handle Credit Cards safely Give you access to a robust infrastructure that won't crash Market the site Build and research a top quality e-Reader Build data centers all around the world etc etc etc Bottom line is the guy made WAY more selling with Kindle/Amazon than with any other format, even given their large cut. That didn't just happen by magic. He is free to sell only with other vendors and make less money if Amazon's fees upset him so much.
    - zem 14y ago
      and what is amazon's percentage cut of the price for?
    - Karunamon 14y ago
      No, it is indeed $3 to transmit a file. They even call it a "delivery fee". Consider that the percentage cut they take should cover all of the above. I can get a physical pizza delivered for less than Amazon charges to send me an electronic file. That's just messed up. Hell, I can get physical goods delivered, from Amazon, with 2 day shipping, for less than they charge to send an electronic file! And how much do you want to bet that the infrastructure involved in sending me physical goods is a lot more expensive and finicky than the infrastructure required to blast a file out over 3G?
gfodor 14y ago
The separation of "service fee" and "delivery fee" is disingenuous, you are basically paying amazon 50% for the use of the marketplace. If you think it's an unfair price, don't put your book in the marketplace. If you think it's fair but deceptive, say so, don't pretend like it's deceptive and unfair at the same time. Complaining about a 50% margin for Amazon when they have basically created the entire ecosystem for ebooks feels a bit like complaining about the large markups on pharmaceuticals to make up for the millions are poured into R&D.
bcl 14y ago
These fees are part of the 70% royalty deal he signed up for. See https://kdp.amazon.com/self-publishing/help?topicId=A29FL26OKE7R7B https://kdp.amazon.com/self-publishing/help?topicId=A29FL26O... (updated with direct link to Amazon's royalty page)
xbryanx 14y ago
You've gotta divide by the usability factor of a digital book, which I'd loosely equate to a value of 3.26 times print. Still the markup is sorta ridic.
tlb 14y ago
The pricing scheme may explain why so many Kindle books have crappy lo-res images. Text is small (the whole bible is 5 MB == $0.75 delivery charge) but quality images, like in the travel book in the article, bulk it up.
stevewilhelm 14y ago
The author doesn't mention if the delivery fee includes the credit card transaction fee.
cheatercheater 14y ago
Mathematician here. Anyone care to clarify how he came up with 129,000%? That is, one-hundred twenty-nine thousand percent? I'm not good with numbers. Thanks in advance.
- ricree 14y ago
  He's comparing the stated delivery fee to Amazon's S3 costs for outgoing data, which he says costs $0.01 per 5 books.
  - smackfu 14y ago
    Of course, if he had a 50 kB book that had a $0.01 delivery fee, it would still be the same percentage markup, but he wouldn't care. So I question whether percentage is useful here.
stickfigure 14y ago
Consumer here. What I don't like about this absurd per-megabyte price is that it discourages authors from including quality pictures in their books. This finally explains why the Kindle version of some books I've bought were garbage. In particular, I was enormously disappointed with Lonely Planet books - the maps are poor quality and split out among several pages so it's almost impossible to find anything. It was a terrible mistake not to buy the PDF. Between the awful maps in Lonely Planet and the absurd number of OCR glitches in Modern Times, I've spent my last Kindle dollar.
- danmaz74 14y ago
  Completely agree on this. Moreover, the price of a Kindle book is often HIGHER than for the printed version, which is outrageous, especially because of the poor quality of the layout of many kindle books layouts.
shalmanese 14y ago
Why not make it $10 on Amazon and $9.50 on all the other services. That way, people who are indifferent will go for the service that nets you the highest margin while people who prefer kindle won't care that much about the price differential. Personally, I'm pretty much indifferent to iBooks vs Kindle since both are just apps on my iPad. If they're both $10, I choose Kindle simply because it's a bigger brand name. If there's even a tiny price differential, I'll choose the iBooks.
- pja 14y ago
  You can't. Amazon reserves the right to drop the asking price on your book to the lowest price listed anywhere else. ("Most favoured nation status" is the term used to describe this kind of clause in a contract.)
  - vellum 14y ago
    An alternative solution might be to just sell DRM-free pdfs, mobis and epub files on a non-Amazon service, since most people hate DRM.
jrockway 14y ago
It's not 129,000% markup. You're paying for outgoing bandwidth (at S3 prices) and you're paying for the Kindle's incoming bandwidth, which could be over an internationally-roaming 3G network. Yes, it's dumb that Amazon charges authors and not themselves, but would you prefer they take 40% instead of a fixed $2?
- brazzy 14y ago
  Realistically, how many downloads are really done via international 3G roaming? Much less than 1% I would suspect. And while it's true that there are some plans with absurdly inflated roaming costs that could still drive up the overall average to $2+, it would be beyond incompetent for Amazon to agree to such plans for their Kindles. One factor that nobody seems to have mentioned so far: was this massive delivery fee in any way knowable to the author beforehand? I'd consider it a bit disingenuous of Amazon if they hide it.
  - jrockway 14y ago
    My guess is that you're not paying a lot for each bit transferred internationally, you're paying for the ability to be able to download content internationally. (Authors may be subsidizing the devices, as well. It makes sense, though; if Kindles were less ubiquitous, how much money would you make selling e-books.) It's kind of like complaining that your ISP charges you the same monthly fee even if you don't download anything. The charge is for having the ability to transfer bits, not for each bit transferred. I guess the complaint is that Amazon transfers much of their financial risk to authors via a $2 delivery fee. All I know is that I wrote a traditionally-published book and saw about $5 for every $40 the publisher charged. I would gladly take $38 instead of $5 and they could call the fee whatever the fuck they wanted.
mikecane 14y ago
The delivery fee is not hidden. I found it right away when I was investigating digital comics and why so few are available via Amazon. That fee is why. We're not bound to see comic fanzines in digital form via Amazon explode as they did with mimeo and ditto. Bit of a shame.
benholmen 14y ago
I'm curious if anyone has experimented with educating potential customers about the fees associated with each delivery option. For example: 1. Buy on Amazon.com for $9.99 (I earn $5.10) 2. Buy on iBooks for $9.99 (I earn $7.00) 3. Buy a PDF for $9.99 (I earn $9.25) If I felt any connection or goodwill toward the author (highly likely) I would be inclined to pick the best option for me _and_ the author.
tvorryn 14y ago
Most US authors pay only a few cents per delivery. [1] Books with lots of images can become expensive but it seems like the images are likely unnecessarily big for an ebook, and that is why his costs are so disproportionately large. 1 - http://www.thepassivevoice.com/06/2012/amazons-markup-of-digital-delivery-to-indie-authors-is-129000/ http://www.thepassivevoice.com/06/2012/amazons-markup-of-dig...

241 points by dfield 14y ago

tytr 14y ago

This kind of thing only works when users looking for "ebooks" are channeled through Amazon. Paid placement on Google may help them in that regard. What happens when users learn they can download ebooks elsewhere? It's nonsensical to pay a fee for distribution when the distribution channel is the internet. Project Gutenberg's and Archive.org' ebooks are better than this e-paper or super hi-res screen nonsense. Reading books on these devices is dog slow and awakward. It is just text. It should be searchable using Boyer-Moore algorithm. Fast. searchable ebooks.

evanprodromou 14y ago

Can the market beat this? Or is the gravitational pull of the giant Kindle market too great?

alanfalcon 14y ago
Step one is to make this cost transparent to people considering selling via Kindle (and to readers who care about this sort of thing). I'm preparing my first novel for sale right now. It's a novel, not a travel book, so I'm basically just delivering a cover image and text so I would expect my "delivery fees" will be much lower, but I didn't even realize that it would be in the realm of possibility that delivery fees would add up to any kind of significant expense. How could I know? Amazon doesn't advertise this anywhere. So we need blog posts like this in order to inform authors so they know that there's strong incentive to look into the other markets.

bradmccarty 14y ago

This is a pretty huge piece of free advertising for Gumroad and its ilk. I know Andrew, and I know he's put his heart and soul into this book. It's a downright shame to see Amazon taking that size of a cut for self-published works.

cs702 14y ago

I strongly suspect Amazon is offering well-known, "must have" authors a much better deal -- possibly even losing money on sales of some of their books -- and making it up by giving a raw deal to less-well-known, independents like Andrew Hyde, the author of this blog post. Does anyone here know if this is indeed the case?

notatoad 14y ago
The well known must have authors don't self-publish directly on amazon, they have publishers who handle all that sort of negotiation for them. And part of that negotiation surely includes talking amazon down on the delivery fees. However, authors who publish heir work through a publisher also don't make 55% royalty, so the author of this blog post is still better off than he would have been.
- cs702 14y ago
  notatoad: I didn't write or even imply that well-known authors self-publish. FWIW, I have heard from a second-hand source that one well-known author is receiving net royalties from Kindle sales that are greater than the Kindle price of his books. I don't know if this is really true, but it rings true; hence my question to the HN community.
  - notatoad 14y ago
    you said that amazon is offering deals to authors. my point is that amazon doesn't interact with well-known authors, they interact with those author's publishers. if any author receives better royalties than the kindle price of their books, it may be because their publisher is receiving even more money from amazon, or it may be the publisher that is taking the loss.

xxpor 14y ago

ctrl+f whispernet 0 results found He's forgetting about the cost of delivering over a cell phone network.

pilom 14y ago
Over a cell phone network a user would pay about $0.27 to download a 18MB file. There is no way an author should have to pay an order of magnitude more.
- xxpor 14y ago
  What if you have a US kindle in say, the deserts of Australia? It's going to cost a LOT more than $.27. I mean a LOT.
  - damian2000 14y ago
    Wrong - most deserts of Australia don't have any 3G access. But anywhere in Australia with 3G access (i.e. populated areas) all have the same data tariff, which is comparable to the US price.
    - xxpor 14y ago
      >But anywhere in Australia with 3G access (i.e. populated areas) all have the same data tariff, which is comparable to the US price How do you know the details of AT&T's roaming agreements with Australian carriers? I know you don't, because your statement is 1000% incorrect.
      - takluyver 14y ago
        I would assume Amazon can negotiate with local carriers in each region, rather than paying through a US carrier for data sent to Australia.
        xxpor 14y ago

pilom 14y ago

If you use the end user cost you can get a high end estimate for total cost of 3g service. $30 for 2GB of data makes $0.015/MB * 18.1 MB file makes for a total cost to user of $0.27 for delivery.

cperciva 14y ago
The fact that you can get 2 GB of data for $30 doesn't mean that you can get 18 MB of data for $0.27. Most people paying $30 for a 2 GB data plan are using far less than 2 GB of data.
- pilom 14y ago
  Very true, but the fact that the author is paying a distribution fee an order of magnitude more than the $.27 seems pretty fishy.
  - robryan 14y ago
    Doesn't amazon promise delivery to anywhere in the world? These high prices might be subsidising places with crazy high data rates.
Retric 14y ago
Sure, on paper you get 2GB for 30$, but really your paying 30$ to be part of a pool of people that use below 500MB on average and some of them pay a lot more than that in overage feels for downloading 2.01+GB. A more realistic number might be 15$ for 200 MB with the risk of overage fees = 1.35$ for 18.1MB. Amazon may pay more per MB than you do because of that lack of subscription good for life of the device thing or less, but they also have overhead to track that etc.

sjtgraham 14y ago

This is naive as it fails to consider that Amazon has probably made a considerable loss on the Kindle hardware business to create this market the OP is lucky enough to participate in. This investment alongside the investment in their own AWS infrastructure is why there is a reasonably sized market for ebooks right now. Also how about the cost of cellular data? The cost might be a little high but if you don't like it, you have the choice to take your business elsewhere.

ashconnor 14y ago
So the $2.85 delivery isn't so much the digital download but the digital download + the kindle subsidy.
veyron 14y ago
I think the complaint focused on other costs that were pushed onto the author. If amazon presented a larger cost structure (increase their per-unit charge) but covered costs like content delivery, I don't think the author would have as much of a problem.

ChuckMcM 14y ago

This is confusing. Here is someone with a FANTASTIC first outing of a book and he's whinging about it? The author raises $8K on Kickstarter, sells his book for $10, and is complaining that the 'gorilla' is taking a bigger percentage of the take? Using his numbers: of 73%/11%/12%/1% his money was $1117/$231/$333/$20 respectively. So he made three times as much money selling through Amazon as he did on the next closest service (PDF). So what is his complaint? That he didn't read the contract completely? Would he have forgone selling his book on Amazon if he had? Assuming he was trying to get $7/book out of them would he have raised his book price to $15 to pump that price up? And what would that have done to his volume? Its all well and good to posit that you could store your book on an FTP server at Hurricane electric but how would people find it? How would they read it? And then why all this angst over the first few months? The kickerstarter [1] only funded in April, here it is June he has his book out, most travel magazines have like a 3 month lead time on their content, plus folks need to review it etc. What was he expecting? And more importantly since this reads like he is hugely disillusioned by the experience exactly why was he expecting what he was expecting? Didn't he 'get' that he could not have published this book at this level of success at all prior to Amazon? [1] http://www.kickstarter.com/projects/andrewhyde/this-book-is-about-travel?ref=live http://www.kickstarter.com/projects/andrewhyde/this-book-is-...

earl 14y ago
At a guess: the author feels ripped off in the same way I feel ripped off when I buy an airline ticket and have to pay $25 to check a bag, $12 for a sandwich, etc. If amazon's fee is $4.50 they should say so instead of burying a cost almost equal to their quoted fee in fine print. Edit: also, amazon grants themselves MFN status [1] at the authors' expense. So they exploit their market size to make sure authors can't make up for the kindle being nearly 100% more expensive than competitors. By "price-match" we mean where we sell the Digital Book in one or more of the Available Sales Territories at a price (net of taxes) that is below the List Price to match a third party's sales price for any digital or physical edition of the Digital Book, or to match our sales price for any physical edition of the Digital Book, in any one of the Available Sales Territories. [1] https://kdp.amazon.com/self-publishing/help?topicId=A29FL26OKE7R7B https://kdp.amazon.com/self-publishing/help?topicId=A29FL26O...

prbuckley 14y ago

It seems like the telco's are the ones making out here. They charge Amazon some ridiculous fee to deliver the content and they charge the consumer for a data plan for the device.

dangrossman 14y ago
Most Kindle purchases are coming from a Kindle, which never has a consumer data plan. 3G Kindles' cell usage is paid by Amazon.
- kennethcwilbur 14y ago
  At https://kdp.amazon.com/self-publishing/help?topicId=A29FL26OKE7R7B https://kdp.amazon.com/self-publishing/help?topicId=A29FL26O... it shows that the delivery charge in the UK for a 18.2MB book is $2.82. That rate is actually pretty good. According to this page, http://www.wireless.att.com/learn/international/roaming/affordable-world-packages.jsp#data http://www.wireless.att.com/learn/international/roaming/affo... AT&T sells a 120-MB international roaming data package for $30/month. That implies an effective download charge of $4.55 for an 18.2-MB file. Now if Amazon's data charge is $2.82 in the UK, where they do significant volume and the wireless market is competitive, imagine how much higher it must be in less developed countries where the company has less pull. I got charged approximately $800 for 40 megabytes of data usage in Lithuania last year, where AT&T did not have a partnership with any local carrier. I talked AT&T down to about $400 but they would not budge beyond that. And think about the target audience for this book. Probably a lot of people spread out all over the world. It might not take all that many downloads in places like Lithuania to push the average delivery fee up to $2.48. The only problem I see is that, arguably, Amazon should give authors the ability to opt out of paying for international downloads, or let them set different prices in different countries. But it seems that the current delivery charge is pretty good - certainly it's not the enormous markup the headline claimed.
  - pja 14y ago
    The author is charged the delivery cost whether the delivery happens over 3G or Wifi. Personally, I doubt the cost to Amazon to deliver the average e-book is anywhere near their quoted rate. If they wanted to charge separately for 3G or wifi delivery I'm sure they could do so: they have simply chosen not to. Possibly it's simply inertia: the original Kindles were 3G only IIRC, so they would have had to pay steep costs themselves for data delivery back then for all downloads. Now they've discovered that authors are willing to eat those charges, why change them? The consequence of course is that it's uneconomic to sell image-heavy works through the Kindle platform, despite the move to wifi delivery & full-colour tablet Kindles which could exploit them to their full potential. Even books like the OPs find a huge chunk of their profit margin swallowed up by these delivery charges.

mark_l_watson 14y ago

I don't get his complaint. I have written books for Springer-Verlag, McGraw-Hill, J. Reilly, Apress, etc., etc., and I am used to seeing 10% to 15% royalty. About 50% royalty from Amazon seems pretty good, but regular publishers provide a lot of help producing a book. Publishing books with Apple's AppStore also looks pretty good. It is all good(!), one just has to appreciate having multiple markets available and choose which ones you like.

fennecfoxen 14y ago

Personally, I'd be more depressed by something that says "Amazon charges authors $2.58 to deliver an e-book (after 30% cut)" than some big fancy number like that 129,000%. It's more meaningful.

MBCook 14y ago
I agree. "Amazon's takes 55% of my ebook sales" or "Amazon's hidden 25% ebook fee" would have meant quite a bit more.
smackfu 14y ago
Actually, it seems like the delivery fee reduces the effective retail price of the book, like: royalty = 70% x ($10 - delivery fee) He just has a really big delivery fee.

tylerneylon 14y ago

Some commenters say the post is wrong to complain when the author is making money through amazon's distribution, or when amazon takes a loss on selling kindles. I disagree with both sentiments. Main point: It does not cost amazon an average of $2.58 to deliver the author's pdf. Amazon is being dishonest by calling this a delivery cost. I consider it unethical to name a fee something that it is not. "Be grateful for what you do get" is not a valid argument against dishonesty. If Amazon makes a business decision to take a loss on kindles, this also does not justify dishonesty.

nandemo 14y ago
It's called "delivery fee", not "delivery cost". It makes no sense to require a business to charge fees solely based on variable costs.
smackfu 14y ago
So many commenters seem to see the $2.58 as Amazon saying "this is what it really costs us". I'd think it means something more like "this is punitively high so please make your book smaller."

ThomPete 14y ago

Sms 150.000 times Voice 1500 times

bootload 14y ago

"... Don’t buy my book on Amazon. Or do buy it. Or don’t. I could sell the X through Y ..." That's a new startup idea right there.

pbreit 14y ago

Two misconceptions: 1) services are properly priced at what the market will bear, not the cost to deliver them. 2) Many Kindles get their content over a regular cellular network which the Kindle owner does not pay a monthly fee.

h1bsearch 14y ago

Check how much Amazon pays to its employees http://www.visasquare.com/visa-greencard/salary/amazon-corporate-llc-324660.html http://www.visasquare.com/visa-greencard/salary/amazon-corpo...

mahyarm 14y ago

How about re-downloading books several times over over roaming 3G for the lifetime of the user? I don't think it's a one time delivery charge fee.

jchavannes 14y ago

I don't like the AWS pricing either (or at least how it's communicated). I have considered AWS but no matter how much time I spend looking at their pricing, I can't figure out how much I should expect to be charged each month. I agree the tone of the article is a little over-victimized though.

droithomme 14y ago

OK, so for a $10 book, Amazon collects 30% for themselves, which is $3. For a 19MB download delivered via 3G to a Kindle, Sprint, the wireless carrier, charges .15/MB, or $2.85/19MB. This is paid to Sprint, not Amazon.com. The article errors by comparing this fee to the cost for server bandwidth using S3 to come up with his markup value, but S3 bandwidth covers the internet only and does not include fees involved with passing through any sort of cellular network.

teamonkey 14y ago
If I were to buy the author's book and download it to my non-3G Kindle over my own wi-fi connection, the author would still be charged $2.85 for it. Surely the 3G Kindle owners should be paying for it - and only then if they use whispernet. Or rather, I always thought they were because the 3G Kindle touch is $50 more expensive. A cellular radio only costs a dollar or two, I always figured that most of the $50 price difference represented average download costs over the expected lifetime.
- mdiep 14y ago
  The article does not say that downloading it over your wi-fi connection will result in $2.58 in delivery fees. It says that the average delivery fee for the book was $2.58.
  - teamonkey 14y ago
    Amazon apply the fee regardless of delivery method. Check out the link posted by kennethcwilbur elsewhere in this thread. https://kdp.amazon.com/self-publishing/help?topicId=A29FL26OKE7R7B https://kdp.amazon.com/self-publishing/help?topicId=A29FL26O... Amazon charge $0.15/MB and the book was approximately 18MB in size.
    - frozenflame 14y ago
      I don't particularly approve of their pricing, but to be fair the book could be downloaded many times over 3G in the future included in that initial delivery cost.

balloot 14y ago

This post is ridiculous. Amazon has spent billions upon billions of dollars building and maintaining a ridiculously efficient delivery system for electronic content. THAT is what the markup is paying for. And from a common sense standpoint, if Amazon were really charging the crazy markup this guy claims, then some other company would mark up a mere 1000% or whatever and massively undercut Amazon's offering. Given that this hasn't happened, it is pretty safe to assume that the true costs are much higher than his math suggests. Either that or other companies have just ceded massive eBook profits to Amazon out of the goodness of their hearts. I'm going to guess it's the former.

Karunamon 14y ago
$3 to transmit 15 megabytes is fucking absurd, regardless of the delivery medium. Full stop, end of story.
- balloot 14y ago
  It's not $3 to transmit a file. It's $3 to: Design a great UX Handle Credit Cards safely Give you access to a robust infrastructure that won't crash Market the site Build and research a top quality e-Reader Build data centers all around the world etc etc etc Bottom line is the guy made WAY more selling with Kindle/Amazon than with any other format, even given their large cut. That didn't just happen by magic. He is free to sell only with other vendors and make less money if Amazon's fees upset him so much.
  - zem 14y ago
    and what is amazon's percentage cut of the price for?
  - Karunamon 14y ago
    No, it is indeed $3 to transmit a file. They even call it a "delivery fee". Consider that the percentage cut they take should cover all of the above. I can get a physical pizza delivered for less than Amazon charges to send me an electronic file. That's just messed up. Hell, I can get physical goods delivered, from Amazon, with 2 day shipping, for less than they charge to send an electronic file! And how much do you want to bet that the infrastructure involved in sending me physical goods is a lot more expensive and finicky than the infrastructure required to blast a file out over 3G?

gfodor 14y ago

The separation of "service fee" and "delivery fee" is disingenuous, you are basically paying amazon 50% for the use of the marketplace. If you think it's an unfair price, don't put your book in the marketplace. If you think it's fair but deceptive, say so, don't pretend like it's deceptive and unfair at the same time. Complaining about a 50% margin for Amazon when they have basically created the entire ecosystem for ebooks feels a bit like complaining about the large markups on pharmaceuticals to make up for the millions are poured into R&D.

bcl 14y ago

These fees are part of the 70% royalty deal he signed up for. See https://kdp.amazon.com/self-publishing/help?topicId=A29FL26OKE7R7B https://kdp.amazon.com/self-publishing/help?topicId=A29FL26O... (updated with direct link to Amazon's royalty page)

xbryanx 14y ago

You've gotta divide by the usability factor of a digital book, which I'd loosely equate to a value of 3.26 times print. Still the markup is sorta ridic.

tlb 14y ago

The pricing scheme may explain why so many Kindle books have crappy lo-res images. Text is small (the whole bible is 5 MB == $0.75 delivery charge) but quality images, like in the travel book in the article, bulk it up.

stevewilhelm 14y ago

The author doesn't mention if the delivery fee includes the credit card transaction fee.

cheatercheater 14y ago

Mathematician here. Anyone care to clarify how he came up with 129,000%? That is, one-hundred twenty-nine thousand percent? I'm not good with numbers. Thanks in advance.

ricree 14y ago
He's comparing the stated delivery fee to Amazon's S3 costs for outgoing data, which he says costs $0.01 per 5 books.
- smackfu 14y ago
  Of course, if he had a 50 kB book that had a $0.01 delivery fee, it would still be the same percentage markup, but he wouldn't care. So I question whether percentage is useful here.

stickfigure 14y ago

Consumer here. What I don't like about this absurd per-megabyte price is that it discourages authors from including quality pictures in their books. This finally explains why the Kindle version of some books I've bought were garbage. In particular, I was enormously disappointed with Lonely Planet books - the maps are poor quality and split out among several pages so it's almost impossible to find anything. It was a terrible mistake not to buy the PDF. Between the awful maps in Lonely Planet and the absurd number of OCR glitches in Modern Times, I've spent my last Kindle dollar.

danmaz74 14y ago
Completely agree on this. Moreover, the price of a Kindle book is often HIGHER than for the printed version, which is outrageous, especially because of the poor quality of the layout of many kindle books layouts.

shalmanese 14y ago

Why not make it $10 on Amazon and $9.50 on all the other services. That way, people who are indifferent will go for the service that nets you the highest margin while people who prefer kindle won't care that much about the price differential. Personally, I'm pretty much indifferent to iBooks vs Kindle since both are just apps on my iPad. If they're both $10, I choose Kindle simply because it's a bigger brand name. If there's even a tiny price differential, I'll choose the iBooks.

pja 14y ago
You can't. Amazon reserves the right to drop the asking price on your book to the lowest price listed anywhere else. ("Most favoured nation status" is the term used to describe this kind of clause in a contract.)
- vellum 14y ago
  An alternative solution might be to just sell DRM-free pdfs, mobis and epub files on a non-Amazon service, since most people hate DRM.

jrockway 14y ago

It's not 129,000% markup. You're paying for outgoing bandwidth (at S3 prices) and you're paying for the Kindle's incoming bandwidth, which could be over an internationally-roaming 3G network. Yes, it's dumb that Amazon charges authors and not themselves, but would you prefer they take 40% instead of a fixed $2?

brazzy 14y ago
Realistically, how many downloads are really done via international 3G roaming? Much less than 1% I would suspect. And while it's true that there are some plans with absurdly inflated roaming costs that could still drive up the overall average to $2+, it would be beyond incompetent for Amazon to agree to such plans for their Kindles. One factor that nobody seems to have mentioned so far: was this massive delivery fee in any way knowable to the author beforehand? I'd consider it a bit disingenuous of Amazon if they hide it.
- jrockway 14y ago
  My guess is that you're not paying a lot for each bit transferred internationally, you're paying for the ability to be able to download content internationally. (Authors may be subsidizing the devices, as well. It makes sense, though; if Kindles were less ubiquitous, how much money would you make selling e-books.) It's kind of like complaining that your ISP charges you the same monthly fee even if you don't download anything. The charge is for having the ability to transfer bits, not for each bit transferred. I guess the complaint is that Amazon transfers much of their financial risk to authors via a $2 delivery fee. All I know is that I wrote a traditionally-published book and saw about $5 for every $40 the publisher charged. I would gladly take $38 instead of $5 and they could call the fee whatever the fuck they wanted.

mikecane 14y ago

The delivery fee is not hidden. I found it right away when I was investigating digital comics and why so few are available via Amazon. That fee is why. We're not bound to see comic fanzines in digital form via Amazon explode as they did with mimeo and ditto. Bit of a shame.

benholmen 14y ago

I'm curious if anyone has experimented with educating potential customers about the fees associated with each delivery option. For example: 1. Buy on Amazon.com for $9.99 (I earn $5.10) 2. Buy on iBooks for $9.99 (I earn $7.00) 3. Buy a PDF for $9.99 (I earn $9.25) If I felt any connection or goodwill toward the author (highly likely) I would be inclined to pick the best option for me _and_ the author.

tvorryn 14y ago

Most US authors pay only a few cents per delivery. [1] Books with lots of images can become expensive but it seems like the images are likely unnecessarily big for an ebook, and that is why his costs are so disproportionately large. 1 - http://www.thepassivevoice.com/06/2012/amazons-markup-of-digital-delivery-to-indie-authors-is-129000/ http://www.thepassivevoice.com/06/2012/amazons-markup-of-dig...