# A thought on how it could get much tougher



## blakebooks (Mar 10, 2012)

This will probably be one of the most unpopular posts ever posted on KB. I would ask that before anyone responds, that readers make a distinction between their hopes, and what is likely to happen. The purpose of the post is to examine a possibility nobody, including me, would much like, but which, I believe, posits a chilling possible future.

I was thinking last night about how the biz is going to develop over the next 24 months. The conclusion I came to wasn't good.

First, I looked at things from Amazon's perspective. I have no idea how big their revenues are from books, but lets use a round number for ease of calculation: $100 million. Whether that's high or low is immaterial for the purposes of this exercise.

Once B&N fades to black, there is Apple and Kobo. But Amazon will likely have the vast majority of sales, and with it, market share.

I believe at that point, it will do something nobody wants to contemplate, but which makes perfect sense: It will double its bottom line revenues overnight from indie publishers.

How?

Cut the royalty rate from 70% to 35% on all self-pubbed books. Presto. Double the net margin on the majority of their sales with the flick of a switch.

Before everyone jumps in and argues that can't or won't happen, because it's not in our best interests, consider honestly how many authors would pull their books from the channel that accounts for 90% or so of their sales, due to this lower rate. Maybe a handful, but the majority would stay in, because 35% is still way better than nothing from that channel. So sales on the top line number wouldn't suffer for Amazon, because readers wouldn't know or particularly care, and the bottom line would effectively double on every book they're paying 70% on now. Double the money, with no measurable loss of anything, except goodwill from a segment that would gripe, but still keep their books for sale via Amazon.

In this scenario, most of us would see a halving of our revenues. It would be zero sum. 

Amazon would still reasonably argue that it's a better deal than trad publishers are offering at 25%, and it would be correct.

We could posit that it would empower Apple and Kobo to get more business, but that's BS. How? If anything, it would mean Apple and Kobo could also follow suit, cut their royalty rate to 35% as well, doubling their take, with no ill effects.

I see exactly zero reason this won't happen. Once you control the channel, it's time to make money. This change wouldn't alter book sales one iota, so it would be a massive win for Amazon, with literally no downside.

I'm not sure what we could do to prepare for this, other than getting ready for it psychologically. But I thought I'd throw it out there, because my hunch is it's a matter of when, not if.

Fire away.


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## valeriec80 (Feb 24, 2011)

Well, someone predicts this every three months or so. It has yet to happen. Amazon could do it. I was actually self-publishing back when they only gave us a 35% royalty across the board. That wasn't that many years ago.

Anyway, I think it's highly unlikely.

But this is why the best defense is a good mailing list, who will buy direct from you if necessary.


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## Quiss (Aug 21, 2012)

Well, actually, I've carried that possibility around in my head since I got into this. Given their share of the market, it seems almost inevitable.
The response may well be higher prices and some authors simply dropping out.


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## Jim Johnson (Jan 4, 2011)

valeriec80 said:


> But this is why the best defense is a good mailing list, who will buy direct from you if necessary.


That was my thought as well.


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## Mark E. Cooper (May 29, 2011)

Also, and this is something I have thought about a lot since going full time, Amazon "could" just say 70% ONLY for those who sign exclusive with Amazon. 35% for everyone else. Now I know I hate that, but to live on my royalties I would probably have to pull all my stuff and go exclusive. Way to revitalize Select you think?

The numbers can be anything of course. They could say 50% for exclusivity and 35% for the rest. It really is just numbers to them after all. We see how they are often tinkering with algos. This would just be another experiment for them.


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## Leanne King (Oct 2, 2012)

I wouldn't be so quick to assume that Apple would follow suit. They started the whole 70% shebang, and those are their terms in other stores than books (apps etc). They make a bit of cash from their iStores, but it's peanuts compared to the hardware business. Their stated aim is to make cash on hardware and provide the ecosystem to encourage hardware sales. Screwing indies wouldn't help that aim, so I don't think they'd do it.

Apple isn't Amazon, but as many have reported here, they are selling more and more books. If Amazon halved their rate, I think you're right that very few authors would leave, but I bet many more would put a huge effort into driving sales to Apple. Every sale via Apple is a lost sale to Amazon.

The same applies to Kobo and Google. Maybe less so at the moment, but offering double the royalty of their biggest competitor would be a hell of a way to motivate authors and publishers to help drive sales their way.


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## 41413 (Apr 4, 2011)

Sure, it's possible. It's hardly a new idea. Like Valerie, I published my first book on DTP when 35% was standard, and I had as much control over the change to 70% as I would a change back to 35.

What's the point in worrying about it? Merry Christmas. Go get drunk on egg nog and find something more productive to think about. Like your dogs.


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## 69959 (May 14, 2013)

After seeing what FB has been doing, I believe it.



valeriec80 said:


> But this is why the best defense is a good mailing list, who will buy direct from you if necessary.


Exactly why I'm now focusing on building my list rather than anything else.



Pelagios said:


> If Amazon halved their rate, I think you're right that very few authors would leave, but I bet many more would put a huge effort into driving sales to Apple. Every sale via Apple is a lost sale to Amazon.


Authors would definitely have to band together in something like that.



markecooper said:


> Also, and this is something I have thought about a lot since going full time, Amazon "could" just say 70% ONLY for those who sign exclusive with Amazon. 35% for everyone else. Now I know I hate that, but to live on my royalties I would probably have to pull all my stuff and go exclusive. Way to revitalize Select you think?
> 
> The numbers can be anything of course. They could say 50% for exclusivity and 35% for the rest. It really is just numbers to them after all. We see how they are often tinkering with algos. This would just be another experiment for them.


That would suck, but I could see that happening too.


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## blakebooks (Mar 10, 2012)

Quiss: Sure, some might drop out, but they won't matter, because their sales won't move the needle. As to higher prices, as we've seen, it's the market that determines what it's willing to pay, not authors. So that tactic will likely stall pretty fast.

Valerie: Mailing lists will certainly help, but nowhere nearly enough to offset the sales from the biggest channel in the world.

Pelagios: Not sure that indie authors have all that much clout in herding consumers to sites they prefer. I haven't seen any evidence of that. As to "screwing indies" I'm not sure they'd view paying more than trad pubs do as "screwing" them.

Marekcooper: That's a good point, and would be entirely consistent with what we've seen to date in their motivation. And you're correct, it could just as well be 50% as 70%.


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## Pnjw (Apr 24, 2011)

Of course they could change the royalty rate, but there isn't much about their business model to suggest they will. Amazon has always been a high volume-low profit outfit. Customer service is king and we (authors) are a type of customer. I don't see them willingly giving up marketshare to Kobo or Apple. 

No sense in worrying about it anyway. You either roll with the punches or drop out of the fight.


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## Joe_Nobody (Oct 23, 2012)

I just posted this response over on Miss Grace's thread (clobbered). I think it has relevance here as well:

Si vis pacem, para bellum (If you want peace, prepare for war)

While my sales have been strong, I feel changes are in the air. I can't describe it... can't point to facts or metrics, but my instincts are bristling. Something is happening. 

The last time my little-inner voice tugged on my ear, well, bad things happened. We'll just leave it at that.

So I'm preparing for war. I'm getting ready for a shake-down, last man standing type of year in 2014. I believe it is a combination of things:

- The big houses leveraging their girth
- The flood of indies hitting the market
- The public's ever-evolving expectations of ebooks and pricing

Eventually, one of two trends will begin to impact our business: Either the ranks will be thinned, or the market will expand. In reality, it will probably be a combination of both.

Personally, I feel well positioned for any looming engagement. My sales are strong, my fan base is growing, I have well-stocked war chest in both cash and IP, and the prices of my books allow for maneuver. That being said, I wouldn't want to be a new writer starting out... not now... not in today's environment.

I don't want a fight, wish it wasn't necessary. But I don't think any of us will have a choice.


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## Sam Rivers (May 22, 2011)

There is another factor at play.  Having lots of Indie authors allows Jeff to keep sticking it to the big publishers who stuck it to him early on. 

I doubt he will rock the boat since he is getting what he wants - sweet revenge!


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## Hudson Owen (May 18, 2012)

Could happen.  But hey, I work in Terror Target Number One.  Not long ago a home-grown jihidi parked a van at the curb in front of the building where I work in Lower Manhattan with a 1,000 lb bomb in it.  He returned to his Queens apartment and made a cell phone call he thought would trigger the bomb.  Turns out to have been a fake device and the feds swooped in on him.  If A-zon drops the bomb and 35% percent of me crawls away--hey, I'll live to scribble another day.


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## a_g (Aug 9, 2013)

Yeah, this is something I've considered ever since I first decided to do this. Amazon isn't exactly known for their altruism toward anyone except their own bottom line. While I'm not worrying about it at the moment, it is something that stays in the back of my mind.

I also have to wonder how this will affect smashwords and d2d for those who distribute to Amazon through them. 

There is also the possibility, as Quiss suggested, that prices will go up. If that happens, how are the readers going to react now that they've also gotten used to the current pricing for self-pubbed?

Since we already have the tools at our disposal to format books into the major reader formats, I also see the possibility of moving to selling direct from our websites.  Not that Amazon will feel it, I guess. Who's to say? For those who were used to the old way of doing things and moved on out because of a change, there will be those coming in fresh who may willing accept this new standard percentage.


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## JRTomlin (Jan 18, 2011)

markecooper said:


> Also, and this is something I have thought about a lot since going full time, Amazon "could" just say 70% ONLY for those who sign exclusive with Amazon. 35% for everyone else. Now I know I hate that, but to live on my royalties I would probably have to pull all my stuff and go exclusive. Way to revitalize Select you think?
> 
> The numbers can be anything of course. They could say 50% for exclusivity and 35% for the rest. It really is just numbers to them after all. We see how they are often tinkering with algos. This would just be another experiment for them.


I think this is a much greater possibility than Amazon just arbitrarily cutting royalty rates across the board. We have to keep in mind that Amazon says a substantial portion of its book income comes from indies. They don't want to kill the golden goose (so to speak) but they may well want to get more from it.

On the other hand, predictions about what will happen in publishing are so rarely correct, I tend not to take them too seriously, not even those from Blake. 

ETA: I could easily raise my prices a dollar and probably not seriously hurt sales. It wouldn't make up the difference but would reduce the pain slightly. I wouldn't raise them more than that though even at a reduced royalty rate. And I might... might... consider going exclusive with Amazon again although I wouldn't like being arm twisted into it.


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## Edward W. Robertson (May 18, 2010)

Deanna Chase said:


> Of course they could change the royalty rate, but there isn't much about their business model to suggest they will. Amazon has always been a high volume-low profit outfit. Customer service is king and we (authors) are a type of customer. I don't see them willingly giving up marketshare to Kobo or Apple.
> 
> No sense in worrying about it anyway. You either roll with the punches or drop out of the fight.


This would be my take. Seems antithetical to their business model to allow others to out-compete them. Slashing royalty rates would be an end-game move, a sign that Amazon has won forever. But there's no "victory" here. It's like a game of Space Chess that never ends. The moment Amazon takes the pressure off their competitors is the moment the other stores start reclaiming the board.


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## thesmallprint (May 25, 2012)

I think J Bezos is a genius in business. Amazon's long term strategy appears to be domination of all markets in which they're involved. Third party sellers of other goods are already moving from Amazon to Google where it's much cheaper to do business. 

Google Play will become Amazon's potential nemesis in the book market. I believe Mr Bezos could accomplish just about anything in business, except beating Google.

Happy Christmas to all KB folks from Bonny Scotland!

Joe


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## Blerch (Oct 17, 2013)

I could see them making KDP a requirement for 70% royalties. That would essentially kill the indie market for other distributors, which can be either good or bad (Amazon can promote having the most indie authors, but with no barrier to entry, that could backfire).

I agree with Joe Nobody. Something is changing, but what, I can't say. I haven't been publishing for long, but I've done a lot of research on how it involved over the past few years. I predict some sort of barrier to entry for indies, but I have no idea how that would look.


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## blakebooks (Mar 10, 2012)

Joe: Like minds think alike. Can't put my finger on it, but I feel the sea change, like the water being sucked out before the tsunami. My hope is that with B&N in the game they can't afford to do it just yet.

Deanna: We are not Amazon's customers. We are vendors. If we don't like the royalty/commission they pay, we are free to go elsewhere. The customer wouldn't know or care if a bunch of indie authors went elsewhere. In other words, we need them far more than they need us, especially now that the DOJ decision gutted the price fixing by the trad publishers.

Everyone: I'm not saying this is the end of the world. Many would still make more than nice livings. Just half as nice as before.

JR: Cutting royalties to 35% would kill no golden gooses. I'm pretty sure all of the indies who are selling decent amounts would still be writing and selling. They'd just make less. More than with trad pub, so still a good deal, but no longer a borderline windfall.

Ed: Amazon's royalty rate has very little that I can see to do with how well they're doing as a vendor. And frankly, I don't see how slashing it would enable their competitors to reclaim the board. How would you see that working?


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## Leanne King (Oct 2, 2012)

blakebooks said:


> Pelagios: Not sure that indie authors have all that much clout in herding consumers to sites they prefer. I haven't seen any evidence of that.


Oh I don't know. If most Bookbub promotions only included links to Apple (and other 70% stores), that would have a noticeable impact on Amazon's bottom line, and would increase visibility of the iBookstore among consumers. And that's just one channel authors can use.

Amazon also have an image problem to worry about. Particularly in Europe they are being very publicly bashed (unfairly I believe, but comprehensively nonetheless) about their tax affairs, employment practises, and in France at least, their perceived anticompetitive behaviour. Cutting the royalty rate of "hard working independent authors" would do nothing to improve that image. Maybe they don't care, maybe they can wait until the current fuss has died down, but it's something they have to take into consideration.

Whatever happens, it's out of our control. At the end of the day they're just one channel among many. I'll continue to develop all available channels, diversify where possible, and not worry about what could happen.


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## Ben Mathew (Jan 27, 2013)

Pelagios said:


> I wouldn't be so quick to assume that Apple would follow suit. They started the whole 70% shebang, and those are their terms in other stores than books (apps etc). They make a bit of cash from their iStores, but it's peanuts compared to the hardware business. Their stated aim is to make cash on hardware and provide the ecosystem to encourage hardware sales. Screwing indies wouldn't help that aim, so I don't think they'd do it.
> 
> Apple isn't Amazon, but as many have reported here, they are selling more and more books. If Amazon halved their rate, I think you're right that very few authors would leave, but I bet many more would put a huge effort into driving sales to Apple. Every sale via Apple is a lost sale to Amazon.
> 
> The same applies to Kobo and Google. Maybe less so at the moment, but offering double the royalty of their biggest competitor would be a hell of a way to motivate authors and publishers to help drive sales their way.


+1

I rest easy on this. By reducing royalties Amazon will become vulnerable to Apple and Kobo and scrappy startups. It wouldn't be a smart move for Amazon, and so far Amazon has not sacrificed long-term growth to short-term profits. Online retailing is a tough market where competition is always just around the corner--no matter what your current market share is.


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## JRTomlin (Jan 18, 2011)

blakebooks said:


> Joe: Like minds think alike. Can't put my finger on it, but I feel the sea change, like the water being sucked out before the tsunami. My hope is that with B&N in the game they can't afford to do it just yet.
> 
> Deanna: We are not Amazon's customers. We are vendors. If we don't like the royalty/commission they pay, we are free to go elsewhere. The customer wouldn't know or care if a bunch of indie authors went elsewhere. In other words, we need them far more than they need us, especially now that the DOJ decision gutted the price fixing by the trad publishers.
> 
> ...


It might for them if a lot of authors went to Google and Apple. Drastic changes in a good income stream that costs Amazon relatively little from its own funds doesn't seem like something they'd do in a hurry.


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## Edward W. Robertson (May 18, 2010)

Or let's put this another way. If you were Jeffy B, is this a move YOU would make?

I wouldn't. I'd never take the boot off the throat of the competition. Dang man, now I want a Death Star.


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## JRTomlin (Jan 18, 2011)

Steeplechasing said:


> I think J Bezos is a genius in business. Amazon's long term strategy appears to be domination of all markets in which they're involved. Third party sellers of other goods are already moving from Amazon to Google where it's much cheaper to do business.
> 
> Google Play will become Amazon's potential nemesis in the book market. I believe Mr Bezos could accomplish just about anything in business, except beating Google.
> 
> ...


Happy Christmas back at you, Joe, and a good hogmanay. 

The kind of strategy that Blake is talking about is more in line with Walmart than Amazon but that doesn't mean it couldn't happen. More than a few people have predicted it over the past couple of years. I am a bit skeptical since I don't see Amazon ceding the playing field to their competitors, but that's one person's opinion and the only opinion that matters here in the end, on Amazon policy, is Uncle Jeff's. So we'll see.


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## Zoe Cannon (Sep 2, 2012)

Meh, it's possible, but I doubt it. If Amazon lowers their royalty rate, a lot of indies will raise their prices, and that combined with the way traditional publishers have been lowering their ebook prices over the past few months would likely mean fewer people willing to take a chance on an indie book (not to mention readers being able to afford fewer books in general). Amazon makes more money off indie books than trad-pubbed books, don't they? I don't think they would want to diminish the indie market the way this change would. Maybe having to pay less in royalties to authors would be enough to offset the overall drop in sales, but it seems like a risky move for them.


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## Becca Mills (Apr 27, 2012)

blakebooks said:


> I believe at that point, it will do something nobody wants to contemplate, but which makes perfect sense: It will double its bottom line revenues overnight from indie publishers.
> 
> How?
> 
> Cut the royalty rate from 70% to 35% on all self-pubbed books. Presto. Double the net margin on the majority of their sales with the flick of a switch.


I've been expecting this to happen for ages. What seems more likely to me is that the 'Zon will try to cement its dominance by giving 70% only to those in Select, as it's already doing in some of the newer sales channels. I think they're less interested in using us to squeeze out a few more bucks and more interested in using us to crush the competition. Once there's no competition, well, they can do a they please.

Fingers crossed that I'm just being cynical.


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## blakebooks (Mar 10, 2012)

JR: As a further thought, even though now my income from other streams is about 15% of my revenue, if it were a matter of 70% vs. 35%, the decision to go exclusive would be a no brainer. Perhaps not so much at 50%, as in dollars, that 15% would jump to more like 30% or so of my bottom line, so it would be more of a sales growth at alternative channels vs. immediate financial benefit equation.

Pelagios: I'm pretty sure that Amazon's not going to be altering their business model based on what the French do or don't think about their tax strategies, which, BTW, pretty much involves sensible avoidance of high tax jurisdictions to the extent the law permits. As to anti-competitive French sentiment, I'm also pretty sure that if they took a hard look at Airbus' history, they'd quiet down pretty quickly.

Ed: Again, I'm not sure exactly how cutting royalties to indies would hand Apple or Kobo a big advantage. Would there be an exodus of authors from Amazon? Doubt it. Would Apple do something new and different to attract customers and grow the channel? Like what?

Bezos' job is to build the ultimate online retailer. He's done so. Offering ongoing sweetheart deals that will be completely unnecessary in a world without B&N doesn't strike me as either smart or business savvy. That's my take...


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## Lady Vine (Nov 11, 2012)

JimJohnson said:


> That was my thought as well.


And mine. But it goes beyond just that. Get your websites search engine optimized from now. Secure your place on page one of all the search engines. This is something everyone can control. Then it's a case of getting your readers to buy direct by offering them discounts in the form of codes, so as not to fall into the price matching trap.

I've had my strategy mapped out from day one, because I've dealt with Ebay for many years - I know how these companies work.


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## Guest (Dec 20, 2013)

As there is nothing I can do about , there is no sense worrying about it. It is a very good reason to expand your markets beyond kindle - which is what I'm trying to do now. My first audio book went live and it seems to be doing very well, and I'm about to start hitting the brick and mortar store heavily.


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## Edward W. Robertson (May 18, 2010)

blakebooks said:


> Ed: Amazon's royalty rate has very little that I can see to do with how well they're doing as a vendor. And frankly, I don't see how slashing it would enable their competitors to reclaim the board. How would you see that working?


Because, as mentioned, it would incentivize all indie authors-whose sales represent 25%+ of the ebook market-to direct all the customers they can to Apple, Kobo, Google, etc.

I'll totally admit that's a difficult task. If I were all, "Hey mailing list, here's my new book, can you buy it from Apple instead because Amazon is boning me?", I doubt more than a couple would bother to do so (and would probably still continue to shop in the Kindle store, at least for now).

But right now, almost every indie out there is working _for_ Amazon, pushing customers there above all other stores, because that's where the riches are. If suddenly Amazon puts the riches elsewhere, and we all start to work _against_ Amazon, it's not hard to believe that, five or ten years later, they're going to find their market share has shrunk, and that in another five or ten years, their projected earnings from ebooks could be less than if they'd stuck at 70%.

I dunno, could be wrong. Amazon is ruthless, that's for sure. But I think in this arena, that ruthlessness is working in our favor.


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## Usedtoposthere (Nov 19, 2013)

That's one reason I'm thinking about pursuing the interest in trad publishing a new series--just having a little more diversity in my approach, being better positioned. Also doing the audiobooks. Not having all the eggs in one basket.

I keep thinking I should leave Select for this reason, but Select has been very, very good to me, so . . . here I stay! Knowing I could go, though, which helps. 

Always interesting to think about. And I laughed at Joe Nobody's military analogy. I read today about shotgun shells loaded with seeds, so you can plant your flowers WITH A SHOTGUN. Yeah, baby!


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## Jan Thompson (May 25, 2013)

Tell me it isn't so. For now anyway. 

I'm on the precipice of publishing my first short story to be followed by other longer books in various genres, and I don't need any disturbances in the space-time continuum right now.

I feel like I'm behind the self-publishing curve, late to the party and all that, but I'm determined to self-publish all these books to make a statement that you don't need traditional publishers to validate your ability to write (though I would gladly welcome agents who could get me print distribution).

And now these rumblings?

Having said all that, like others have pointed out, Amazon began with 35% royalties, and only went up to 70% after Apple jumped into the ring. Considering that vanity publishers and agents have been trying for 50% I can see that being the next number to watch.

However, before that happens, my personal prediction is that Amazon will try to make nice with traditional publishers and get more business from them, and that's good for readers. For self-publishers, yes, I agree that the competition will get tougher.


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## Becca Mills (Apr 27, 2012)

Edward W. Robertson said:


> Because, as mentioned, it would incentivize all indie authors-whose sales represent 25%+ of the ebook market-to direct all the customers they can to Apple, Kobo, Google, etc.
> 
> I'll totally admit that's a difficult task. If I were all, "Hey mailing list, here's my new book, can you buy it from Apple instead because Amazon is boning me?", I doubt more than a couple would bother to do so (and would probably still continue to shop in the Kindle store, at least for now).
> 
> ...


But what if they didn't just take 70% away, Ed? What if they dangled it there but demanded exclusivity? I think a lot of people would bite.


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## burke_KB (Jan 28, 2013)

It's certainly possible, but I don't think it's plausible.

The tech world is obsessed with 'disruptive technologies.' Amazon knows it disrupted the traditional publishing game, and it is very wary of other startups disrupting them. Disruption means a little nobody like facebook puts MySpace out of business in less than a year. You can bet Amazon is terrified of someone disrupting them. Bezos has actually talked about it in several interviews. He knows that all businesses are transitory, and all giant businesses eventually die.

Look at IBM and Hewlet Packard. In the 1980s they were titans. Now they are business niche companies compared to Google and Apple. Even Microsoft is on the way down thanks to several product stumbles over the last few years.

Speaking as a software developer, this is what drives tech folks. Every developer dreams of creating a new SaaS site in their garage and becoming a billionaire 

I doubt Amazon would give all these subscription startups such a big opening to go after their market share.

Also, if this does happen, ebooks will enter the next phase of being indie: ecommerce. Indie video game companies, bands, artists and movies make money selling stuff on _their own sites_. Mailing lists are a start, but look at Woo Commerce for wordpress and realize how simple it would be make 100% on each sale through your own site. This is how almost all the other indie artists make a living, and it is inevitable for ebooks. Once you have a decent mailing list, and decent conversions rates, the math speaks for itself. Right now, it makes more sense to target rankings on Amazon, but if they change the rules, converting customers on your own site will become normal.

Like Joe said, prepare for war.

Worst case scenario, Amazon becomes a glorified New York Times best seller list, and indies start making real money from their own sites. The true fans buy direct and you keep 100% of your $5 price, while a little bit of discoverability happens on Amazon. Maybe you put the first 2 books of a trilogy on Amazon for 35% and link to your own site for the third book where you recoup 100%.

Meanwhile, Kobo or Apple or some unknown startup offers 70% again and lures indies away with their own select program. The reality is, authors and publisher do a lot of leg work to sell books. All that free marketing helps Amazon tremendously--it fuels the juggernaut.

I really doubt Amazon will give it's competitors such an obvious opening. Not only does it lose free content, but it looses a small army of a salesforce giving it free publicity. If that tidal wave shifts to a competitor their market share will begin to erode. They won't go out of business, but like traditional publishing, they will be disrupted. They will be on defense, and I doubt they would inflict that wound on themselves.

I'd be more afraid of Amazon segregating 'vetted book' from some kind of 'indie ghetto.' I'd be really afraid of algorithms that decide if a book is 'vetted' because maybe you spent $1000 on editing and that algorithm thinks the editing wasn't good enough


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## Leanne King (Oct 2, 2012)

blakebooks said:


> Pelagios: I'm pretty sure that Amazon's not going to be altering their business model based on what the French do or don't think about their tax strategies, which, BTW, pretty much involves sensible avoidance of high tax jurisdictions to the extent the law permits


Like I said, I think the bashing is unfair. But I'm not talking about just France, they have a huge image problem all over Europe, especially the UK where the media are leading calls for people to boycott Amazon entirely. We've seen what the Daily Mail (the most widely read "news" website in the world) could do to Smiths and Kobo, I can just see the headlines when they decide Amazon are screwing hard working indies. No doubt it will all blow over, but will they take the risk of making Google (of all people) look like the good guys? It doesn't take much to shift the momentum...


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## zzzzzzz (Dec 6, 2011)

Not looking forward to BN folding. I still get 30% of my income there. That's not a lot compared to what some of you make, but it's a significant cut and I'm already barely scraping by.


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## gorvnice (Dec 29, 2010)

From the time I started publishing in 2011, I always felt that it would be easy for Amazon (as well as the other platforms) to drop their royalty rates down.  If we want to scare ourselves, why not suggest they'd go lower even...maybe down to 25%? None of us could do a thing about it.

This is a possibility.  There are other, equally gloomy predictions to make.

If you factor in exponential growth of indie writers testing the waters, but flattening ebook sales, you get a crowded market--and if B&N drops out of that market, then you could get Blake's theory coming to pass.  Lower royalty rates as well as a very crowded marketplace with tons of good competition at plummeting profit margins.

That sounds like a bad recipe for making millions.  People who were making millions will be making hundreds of thousands, people who made hundreds of thousand will make a hundred thousand or less, and those eking out a decent income will be down to making peanuts.

Do I really believe this scenario is coming to pass in 2014?  I think it's possible, but unlikely.  Like Joe Nobody and Blake, I trust my gut.  My gut has often gotten me to leave a company right before they tank, and I've always had a sixth sense about when things are about to go down the tubes.  What my gut is telling me right now is that selling books is getting more competitive, but the writers who are good at it and know how to sell are doing just fine.  

I've been making a great living through my ebooks (almost seven figures this year) and continue to do so. But it is getting tougher.  

My hunch is that this coming year will be bumpy but still strong.  Now, if we go TWO YEARS out, I'm much less confident.  Why?  I can't say.  I feel like even if some changes happen this year, we'll still be going strong for awhile...but within two years, the changes will have started to pile up and the sledding will have gotten much, much tougher.

So maybe I don't see things that much differently, just the timeline.

And, beyond that, I have a lot of faith that even if things get really hard--my writing and business acumen will carry me through those hard times.  It's not going to be diamonds and caviar forever, my friends.  Get it while the getting's good.


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## 68564 (Mar 17, 2013)

> But this is why the best defense is a good mailing list, who will buy direct from you if necessary.


This. 


Edward W. Robertson said:


> Or let's put this another way. If you were Jeffy B, is this a move YOU would make?
> 
> I wouldn't. I'd never take the boot off the throat of the competition. Dang man, now I want a Death Star.


This. But that is me, I duno what he would do. 

Honestly, I think the potential threats to Amazon are not Apple and Kobo - but Oyster, NokBok, ScribD and the others. So I am positioning myself to be part of them. Time will tell - but the market is changing and subscription based commodities appear to be on the rise.


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## Maya Cross (May 28, 2012)

People have already mentioned Google, but I don't think enough are taking them seriously. I think they're going to be a key reason why this won't happen. They've been constantly revamping their platform over the last six months, and some of the people who have waded through their bizarre upload process have already found royalties that exceed the other minor players. I've also had some contact with a rep from Google books regarding some of their plans in the future, and while they NDA'd away my ability to give details, they certainly seem to be taking the ebook space seriously.

That gives me hope. With hundreds of millions of android devices out there, their unrivaled creativity, and a warchest as large as Amazon's, they're well positioned to become a legitimate player if they continue down this path, and a single sizeable competitor would definitely halt any move like this on Amazon's behalf. 

I also think Apple will step up their game in the future. They have an innumerable prepackaged customer base, a similarly limitless budget, and every incentive to step up their game if/when Nook topples.

Despite a lot of people here feeling like epub elders, the industry is still relatively young. In the beginning, Amazon had a natural leg up by being the most efficient storefront on the planet that already specialised in books, but the other big tech companies are their equals in a lot of other regards, and they're going to catch up. I predict the market will move towards a more even distribution in the next year or two, rather than towards monopoly.


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## blakebooks (Mar 10, 2012)

Ed: I guess I don't see happy Amazon customers going to Apple because some authors aren't happy with Amazon. And frankly, I think after a honeymoon period, 35% would become the new 70%. Still more than you'd make from a trad pub. So still a good deal. 

Or maybe it's 50%, with exclusivity. We already see the 70% with exclusivity being tried across a handful of their markets. They flip a switch tomorrow, and say, "70% in the US only with exclusivity" and how many would walk away from that? Would you? Show of hands - who would take a 50% cut in income to prove a point?

As to 10 years from now Amazon adjusting their vendor comp scheme translating into a loss of market share, we have to disagree on that.

This is all part of my annual "what's possible, and what's likely, moving into the new year" exercise. Last year it was the determination that being exclusive no longer was a smart idea, and pulling my titles out of Select, which turned out to be the smart decision, at least for me. Next year, I might be singing the praises of exclusivity again, if they move the goalposts and force me to decide between 70% or 35%. At 50%, it wouldn't be as big an issue.

All just food for thought. Again, I sincerely hope this doesn't happen. But that's not the point. The point is to determine what, if anything, you would do, if it did.

Pelagios: Gee, the media, owned by the same companies that largely own the trad publishers, are calling for people to boycott Amazon. Huh. Nobody's going to see through that. Something tells me Jeff's sleeping pretty well.

Maya: I don't use Google because of their ridiculous discounting policy. Most I know don't use them for that reason. Until that's fixed, they're going to be minor players, and frankly, to me it displays a stunning lack of understanding of the market.


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## Avis Black (Jun 12, 2012)

People need to keep in mind Amazon's overall business strategy.  They're perfectly willing to make no profit for long stretches of time to establish market share.  Also, Amazon's gone for the McDonald's marketing strategy for ebooks, which is high volume instead of high price.  In business, you've got two choices:  You move a lot of units at a lower price or fewer units at a higher price.  You can make a ton of money either way.  But the McDonald's strategy makes better sense during recessions (such as the one the US is in right now) when everyone's pocket books are squeezed, and when you're trying to capture market share in poorer countries where people don't make a lot of money--and are likely to stay that way.

Remember, Amazon still has competition, and various other ebook sites are sprouting up.  This is the gold rush time period for ebook startups.  If Bezos tries to seize more of his authors' royalties, he's only going to be helping his competition.


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## Gone To Croatan (Jun 24, 2011)

blakebooks said:


> Cut the royalty rate from 70% to 35% on all self-pubbed books. Presto. Double the net margin on the majority of their sales with the flick of a switch.


About half of my '70%' sales only get the 35% rate anyway.

Even at 70%, e-books are much higher margin products than most things Amazon sell.


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## ElHawk (Aug 13, 2012)

They certainly could do it.  If it happens, I can see app writers making good money by writing direct-delivery apps for authors to sell from their own websites.  That way, even if Amazon still handled the majority of sales, getting a few sales via one's own site and going directly to the reader at 100% instead of 70% or 35% would give a bit of a boost back to authors.  Not a huge one, but enough to take away a little bit of the sting.


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## gorvnice (Dec 29, 2010)

I also think that when we get too specific with these predictions, we miss the overall point.

Things are changing.  This market WILL get tougher.  It has to.  Every market that ever existed got tougher.  Whenever there is a boom period, there will inevitably come a bust period.  Poker is a great example.  There was a huge poker boom when Chris Moneymaker won the World Series of poker.  For years, everyone and their neighbors had home games, poker was on TV all the time, and people were making a great living off of playing full-time.

Eventually, due to changes in the law as well as glutting the market, people lost interest, games got tougher, and profits became smaller and smaller.  Now only the very best can survive in the current poker economy.

Ebooks are certainly not poker, but all you have to do is look at what happens when ebook retailers go after erotica to see how quickly profits can be taken from you.  It might be royalties, it might be an algorithm change, it could be anything at all.  But we all know that this boom period isn't going to last.  

Trying to exactly predict or shoot down these predictions to make ourselves feel better isn't really the point, for me.  For me the point is to see clearly that things will get more difficult in this space, to prepare myself for leaner times in the future, and press my advantage while I can.


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## Jan Thompson (May 25, 2013)

blakebooks said:


> Ed: I guess I don't see happy Amazon customers going to Apple because some authors aren't happy with Amazon. And frankly, I think after a honeymoon period, 35% would become the new 70%. Still more than you'd make from a trad pub. So still a good deal.


This could hurt small presses that are already giving their authors 35-40% royalties. A drop in Amazon royalties means they give their authors less. I guess the winners could be bigger publishers.


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## ElHawk (Aug 13, 2012)

Edward W. Robertson said:


> This would be my take. Seems antithetical to their business model to allow others to out-compete them. Slashing royalty rates would be an end-game move, a sign that Amazon has won forever. But there's no "victory" here. It's like a game of Space Chess that never ends. The moment Amazon takes the pressure off their competitors is the moment the other stores start reclaiming the board.


This is a great point...and a nice illustration of why it's probably not worth fretting over too much. Changes are surely coming -- they always do with business. It could be painful and difficult to compete, but the smart guys will figure out ways to keep their businesses going, and hopefully to continue making as much money or more than they made in previous years.

One of the things I love so much about the lessening of the power of the old publishing model is how much room it allows for innovative business tactics. That goes for distributors like Apple, Kobo, and even Amazon, not just for authors.


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## David J Normoyle (Jun 22, 2012)

blakebooks said:


> Ed: I guess I don't see happy Amazon customers going to Apple because some authors aren't happy with Amazon. And frankly, I think after a honeymoon period, 35% would become the new 70%. Still more than you'd make from a trad pub. So still a good deal.


I don't see why you are comparing the 70% you get from Amazon with the royalty from a publisher. They are apples and oranges. Amazon is not the publisher, Amazon is the vendor. The 30% they take is the 30% as vendor. (In the same way that B+N might take 30% cut of a print book it sells.) You are suggesting that Amazon take 70% as the vendor cut on sales. Which seems extremely large. Do you think they are suddenly going to double their vendor take on other products? I doubt it. Prices on Amazon would go up, and long term people will start buying there.

Raising their vendor cut on indie book sales will make short term sense, but long term, they'll be shooting themselves in their foot. They have a great market position right now, do they really want to threaten that with a ridiculous increase in their cut on ebook sales? What happens to other books, are they going to start taking 70% on trad books as their vendor cut too? That would make some famous books unavailable on Amazon and other books dearer than in other vendors--both bad for Amazon.

Right now, indies want their fans to buy on Amazon. If Amazon start taking 70%, long term authors will start pushing their fans to other vendors.

Do you know who would be happiest about Amazon raising their vendor cut? Apple, Kobo and B&N. Amazon seem pretty smart and longterm looking, I seriously doubt they'd do something that dumb.


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## Mark E. Cooper (May 29, 2011)

gorvnice said:


> I've been making a great living through my ebooks (almost seven figures this year) and continue to do so. But it is getting tougher.


I can't resist, and believe me I tried. How many of those figures are on the left of the decimal point?


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## 41413 (Apr 4, 2011)

I'd just like to point out that indies aren't amazon's competitors. The big 5 are. The way Amazon treats indies isn't merely as a weapon against other _retailers,_ but against those other publishers, too. We are a tool. We keep prices low and competition high. By making indie publishing more appealing to trad authors, they drain the lifeblood of their competitors.

Cutting royalties wouldn't serve Amazon well at all in that regard. Not for the foreseeable future.

Anyway, even if Amazon did this, it would hardly be a 50% drop in income for me. Maybe 25%. It would suck, but it wouldn't be devastating.


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## blakebooks (Mar 10, 2012)

David: Amazon only pays 35% on plenty of sales. That hasn't exactly made B&N, Apple or Nook the go-to guys. I'm suggesting that there's zero reason for them to not simply pay 35% on all sales, take it or leave it.

I keep hearing about how that would be handing a competitive advantage to their competitors, but nobody's articulated what that competitive advantage would be. As an example, right now, Kobo or Apple or B&N could easily offer 75% to authors if they really felt that paying authors more was an advantage. They don't. Because it isn't. 

If I had to predict the future, I think I'd see one where Amazon reduces their take and everyone acknowledges that they are kind of acting as the de fact publisher for indie books, and shortly thereafter, Apple and Kobo do the same. That's my take.

I don't really see this happening until B&N rolls over, though.


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## Edward W. Robertson (May 18, 2010)

Becca Mills said:


> But what if they didn't just take 70% away, Ed? What if they dangled it there but demanded exclusivity? I think a lot of people would bite.


I honestly have no idea. In that case, I guess we beseech Hugh to found Indie House so we can Voltron our way to a better deal. ;P

I'm sure lots of people would bite. Presumably most people who make at least 67% of their money from Amazon would go exclusive. So, all those people would lose the non-Amazon share of their income and gain nothing.

Everyone who didn't stay exclusive would lose 50% of their income on any Amazon titles they have at $2.99+ while gaining a completely unpredictable opportunity to increase their sales in the other markets due to the sudden, drastic decrease in competition outside Amazon.

Hm. You know what, basically it would stink for everyone, but no one would lose more than a third of their income (and most would lose a lot less than that). Crappy, but not exactly the end of indie publishing.


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## Jana DeLeon (Jan 20, 2011)

As a former CFO, I considered this possibility back in 2010 when I first self-published, but as the years have passed and I've gotten to meet directly with Amazon folks and learn more of their business practices, I honestly don't think it will ever happen, even for exclusivity. I can see offering a higher rate for exclusives, but I don't think the non-exclusive rate would ever be so much lower than what they're paying now.

What I DO think could happen is that they start charging a fee for authors with sales below a certain threshold. That would cover the cost of doing business with those that don't make them money and answer part of the problem of the glut of bad books. People who aren't serious about writing won't stick around long if it costs them money.


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## cinisajoy (Mar 10, 2013)

Pelagios said:


> Oh I don't know. If most Bookbub promotions only included links to Apple (and other 70% stores), that would have a noticeable impact on Amazon's bottom line, and would increase visibility of the iBookstore among consumers. And that's just one channel authors can use.
> 
> Amazon also have an image problem to worry about. Particularly in Europe they are being very publicly bashed (unfairly I believe, but comprehensively nonetheless) about their tax affairs, employment practises, and in France at least, their perceived anticompetitive behaviour. Cutting the royalty rate of "hard working independent authors" would do nothing to improve that image. Maybe they don't care, maybe they can wait until the current fuss has died down, but it's something they have to take into consideration.
> 
> Whatever happens, it's out of our control. At the end of the day they're just one channel among many. I'll continue to develop all available channels, diversify where possible, and not worry about what could happen.


Hi. Here is the problem with Bookbub linking to only say Apple, Kobo and B&N. There are many people that do not do Apple products, Kobo needs to improve their website, and B&N ties your purchases to a credit card.

And why would Bookbub care what the author makes in royalties? Last time I looked the author paid BB to showcase their book. Last time I looked at a BB ad, there were both trad and indie books advertised. Do trad authors get the same royalties?
Advertisers don't care how much someone makes only how much they can get.


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## blakebooks (Mar 10, 2012)

Ed: Oh, by no means would this be the end of indie publishing. It would just signal a change in it, and make it considerably less attractive for those on the margins (actually for everyone, but frankly, bigger sellers wouldn't exactly go out of business - they'd just make less, but still plenty).

Jana: I would have no problem with that. I frankly think it likely.


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## Rachel Aukes (Oct 13, 2013)

I only thing I know with certainty is that things will change. The past couple years have been the Gold Rush in self publishing. Just like any business, we'll have to adapt or get squashed.


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## ElHawk (Aug 13, 2012)

I've also been secretly assuming that Amazon charging a fee to use KDP is likely to happen sometime in the next couple of years.  I don't think it would be a bad thing, as long as the fee wasn't outrageous.


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## 68564 (Mar 17, 2013)

I still think y'all are missing the rise of subscription based entertainment. I think that will be the real attack that Amazon will have to defend against, and I think they know that. Look at prime video, and select books for example.


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## David J Normoyle (Jun 22, 2012)

blakebooks said:


> David: Amazon only pays 35% on plenty of sales. That hasn't exactly made B&N, Apple or Nook the go-to guys. I'm suggesting that there's zero reason for them to not simply pay 35% on all sales, take it or leave it.
> 
> I keep hearing about how that would be handing a competitive advantage to their competitors, but nobody's articulated what that competitive advantage would be. As an example, right now, Kobo or Apple or B&N could easily offer 75% to authors if they really felt that paying authors more was an advantage. They don't. Because it isn't.


There's not much difference between 70% and 75% (compared with the advantage on Amazon), but there is between 70% and 30%. You don't think indies would start to promote their other book links and direct sales a lot more if it reduced to 30%? You don't think the other companies wouldn't see if they could take advantage in some way?

It's pretty hard to become a monopoly in a competitive business. And Amazon have worked smart and worked hard, and been through many loss making years to achieve what they have. And I'm sure there are many short term ways they can take advantage of their position. But long-term, they would be hurting their position of staying at the top with most of those short term grabs.



blakebooks said:


> If I had to predict the future, I think I'd see one where Amazon reduces their take and everyone acknowledges that they are kind of acting as the de fact publisher for indie books, and shortly thereafter, Apple and Kobo do the same. That's my take.
> 
> I don't really see this happening until B&N rolls over, though.


Why would they treat indie authors so different from trad published companies? For example, I'm sure there are many one and two person operations selling products (golf balls, toys, whatever) on Amazon. And I'm sure they pay Amazon a certain cut. And I'm sure there are large companies selling on Amazon. I don't think Amazon is suddenly going to start charging the one and two man operations a huge % as a vendor cut, and charge the large companies a much much smaller one.

And if they do, shouldn't indie authors just go through some third party publisher, called indie publishing co. Indie publishing co., takes books from indie authors, puts them unchanged on Amazon. Amazon takes it's vendor cut (same amount as for other large publishers), indie publishing co. takes a small cut and indie authors are much better off. (For example D2D could instantly take this role to start off with if that worked.)


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## ElHawk (Aug 13, 2012)

VydorScope said:


> I still think y'all are missing the rise of subscription based entertainment. I think that will be the real attack that Amazon will have to defend against, and I think they know that. Look at prime video, and select books for example.


I think you're right about that. I think it's no coincidence that we've seen a couple of ebook subscription companies spring up in recent months. Putting some serious focus into establishing a presence there is probably a very smart move right now. 

Was it you who posted on disruptive innovation in tech? Or somebody else? Anyway, I think it's smart and true. Tech-heavy businesses are hyperaware of this.


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## Becca Mills (Apr 27, 2012)

Edward W. Robertson said:


> I honestly have no idea. In that case, I guess we beseech Hugh to found Indie House so we can Voltron our way to a better deal. ;P
> 
> I'm sure lots of people would bite. Presumably most people who make at least 67% of their money from Amazon would go exclusive. So, all those people would lose the non-Amazon share of their income and gain nothing.
> 
> ...


Yeah. But I worry that a big increase in exclusivity would concentrate more power in Amazon's hands, sending other platforms closer to extinction. Though I guess iTunes and Google are too big to crush, at this point. iTunes because of iPad/iPhone popularity, and Google because it's the single most dominant force of modern society, and all that.


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## blakebooks (Mar 10, 2012)

David: Amazon already treats indies differently. Witness not being able to price above $9.99 as one example. 

As to running everything through an intermediary, sure, that could work, if the financial incentive was appropriate for all concerned. I'd have no issue doing that.

I have no reason to believe that indies directing their links to Amazon's competitors would result in any change whatsoever. I'm reminded of the old joke about the mouse and the elephant. The mouse climbs up and begins, er, having romantic liaison with the elephant. A coconut falls on the elephant's head, and it says, "Ouch!" The mouse says, "sorry, I'll be gentler."

EL: I have seen no evidence that book subscription services are any more viable than HomeGrocer.com was. Just because you have several upstarts who feel there's a market, doesn't a market make.


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## Pnjw (Apr 24, 2011)

blakebooks said:


> Deanna: We are not Amazon's customers. We are vendors. If we don't like the royalty/commission they pay, we are free to go elsewhere. The customer wouldn't know or care if a bunch of indie authors went elsewhere. In other words, we need them far more than they need us, especially now that the DOJ decision gutted the price fixing by the trad publishers.


Dang authors getting so picky over word choice.  I just meant that they want to do business with us. I don't disagree that we need them far more than they need any one of us individually. But Amazon has shown time and time again that they want to grow their collective Indie offerings. And if they do drop royalties to 35% you can bet your pretty little buns that a lot of authors will start putting a lot more focus on pushing other outlets. That's not a move I see Amazon making. I agree with Ed on this one. If they do slash royalties it's because they think the game is over and they've won.


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## cinisajoy (Mar 10, 2013)

Question to the authors that are saying build your mailing list and just sell on your site.
I know Amazon, I trust Amazon.  I don't know you or how long you have been in business.   How do I know, what guarantee do I have, that you did not just write your book to get credit card numbers?   Why should I trust you?  

Just a little food for thought.


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## Kathy Clark Author (Dec 18, 2012)

First, thank you for the early Christmas present Blake. Bah whatever.

Second, I'm going with Burke's _disruptive technologies_ but coupled with Moore's law idea.

As the open markets influences the indie publishing I think the technology will eventually support a direct author to reader platform that has the capacity to bundle offerings so as to appear to the reader like a search within a site like Amazon or B&N but in fact is owned and operated by the talent, the authors themselves and some niche _ePublishers_ for technical support. Sort of a higher powered virtual book fair that operates 24/7 but the purchase transaction is in the hands of the author. Or maybe it's like a micro-crowd funding with millions of transactions a month.

The stable ground between the technology sweet spots will always be rough for the participants. I look back on my publishing career as an author in the old world then an online book seller that got run out by Amazon after my first year and now as an Indie author one word comes to mind. _Cockroach_. They've survived millions of years and if you don't view it from a human pov life's not too bad for cockroaches. Their homes are often air conditioned for example and their publicist have even had some success with terms like Palmetto Bugs in Florida. Recently their public acceptance has ranked higher than the Congress but that's another story.

Authors have to continue to adapt and the frequency of adapting is higher than it was in the first ~560 years of book publishing. The Eagles were right all along..._Get Over It_.


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## Usedtoposthere (Nov 19, 2013)

cinisajoy said:


> Question to the authors that are saying build your mailing list and just sell on your site.
> I know Amazon, I trust Amazon. I don't know you or how long you have been in business. How do I know, what guarantee do I have, that you did not just write your book to get credit card numbers? Why should I trust you?
> 
> Just a little food for thought.


Excellent point!


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## Pnjw (Apr 24, 2011)

Edward W. Robertson said:


> Because, as mentioned, it would incentivize all indie authors-whose sales represent 25%+ of the ebook market-to direct all the customers they can to Apple, Kobo, Google, etc.
> 
> I'll totally admit that's a difficult task. If I were all, "Hey mailing list, here's my new book, can you buy it from Apple instead because Amazon is boning me?", I doubt more than a couple would bother to do so (and would probably still continue to shop in the Kindle store, at least for now).
> 
> ...


Slightly related...eBay did something similar to what RB is talking about. The jacked up sellers fees and basically made the online marketplace for artists undesirable. That's right about the time Etsy opened their doors. Ten years ago, every artist I knew had an eBay account (most of them making a decent sum of money each month. It was the place to be. Finally artists were able to make a living selling art). These days? There are a few holdouts. But they ALL have Etsy stores.


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## Atunah (Nov 20, 2008)

You guys really think that readers that have kindles, buy at amazon, trust amazon, have the archive at amazon, are just going to jump ship to Apple? Or buy their books from a gazillion different author sites where they have to sign up and enter payment info and personal info sever hundred + different times? 

What good does apple do me when I have a kindle. There is a reason I buy books from amazon. Having a kindle and the best customer service. 

Customers want easy, in one place, safe and customer service oriented shopping. 

Overall, most readers won't really care if a few thousand books disappear out of the kindle store. They won't notice. 

eta: edited for math problems.


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## Jana DeLeon (Jan 20, 2011)

cinisajoy said:


> Question to the authors that are saying build your mailing list and just sell on your site.
> I know Amazon, I trust Amazon. I don't know you or how long you have been in business. How do I know, what guarantee do I have, that you did not just write your book to get credit card numbers? Why should I trust you?
> 
> Just a little food for thought.


Because any legitimate business would use a shopping cart service with encryption and take Paypal. I've sold print books directly and had no access whatsoever to buyers credit card info. Nor do I want it.


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## David J Normoyle (Jun 22, 2012)

cinisajoy said:


> Question to the authors that are saying build your mailing list and just sell on your site.
> I know Amazon, I trust Amazon. I don't know you or how long you have been in business. How do I know, what guarantee do I have, that you did not just write your book to get credit card numbers? Why should I trust you?
> 
> Just a little food for thought.


There are ways around this. There are payment companies set up to do the selling. There are things like paypal. Small one man operations accepting credit cards is generally not a good idea for either side.


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## Kathy Clark Author (Dec 18, 2012)

Good point Deanna...that's the platform idea I was referring to but with additions.  

There can be a site that looks like an Amazon to the buyer but that actually isn't one large site.  That's the beauty of technology.  A secure financial GUI to the buyer, a means to bundle hundreds of thousands of authors and tens of millions of books but no single amazon company behind it.  Great reader experience. secure transactions, author centric and lowered prices with solid royalties.  Not that far away.


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## Greg Banks (May 2, 2009)

This sort of thing has always been a possibility, and always will be. But if you look at their entire history, they've done nothing to suggest that they would suddenly penalize self published authors that way. Now if Bezos ever leaves and someone else with a different vision takes the helm, all beys are off.

But your suppositions are no more than that, because there's not even enough evidence to suggest that Barnes & Noble will just fade into the dust so quickly (it's a valuable asset that someone may likely buy and keep going, at least the Nook store part), let alone to support the rest of your predictions.

I'd be more likely to believe that Amazon would start charging fees to publish on the Kindle than to cut our royalties in half. The size of their inventory is in large part what made them successful, and self published authors are a big part of that inventory. I don't see Amazon doing anything that could so greatly impact that.


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## Marti talbott (Apr 19, 2011)

If it does happen, I don't see selling from our websites as an option. Readers won't give their credit card information to just anyone. 

The idea that Amazon would charge new authors has been tossed around a lot, and if the price is reasonable, then I would be in favor of it too. Of course, that would make them a vanity publisher.

I can see more specialized genre in the future. The guy who sells erotica and beyond is sitting pretty right now, probably.

I too, do not envy the new author these days. It is much, much harder now than it was in 2010.


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## Atunah (Nov 20, 2008)

Jana DeLeon said:


> Because any legitimate business would use a shopping cart service with encryption and take Paypal. I've sold print books directly and had no access whatsoever to buyers credit card info. Nor do I want it.


But it would still mean you have to sign up to yet another site, give your email, your address, your name etc. 
Because the first thing authors want to do is mine your email to put you on a mailing list. . 
Amazon already has all that info.


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## Monique (Jul 31, 2010)

Let's say all of this comes to pass in 2 years, 1 year even, what is it I should be doing differently _now_?


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## Hugh Howey (Feb 11, 2012)

Never happen. Never. And not because of my wishes, but because it would be a dumb move on Amazon's part, and Amazon isn't dumb.

Show me an example in history of a monopoly driving down prices, and then jacking them up once the competition is crushed. It doesn't work. Because you just allow new competitors into the market. This was the threat of Standard Oil, but oil prices when down the bigger Standard Oil got.

It's just fear mongering. Don't contribute to it.


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## Gone To Croatan (Jun 24, 2011)

tkkenyon said:


> However, I think you're underestimating the future influence of Google Play and the increasing number of Android devices. Google Play is already a player and, I think, will increase market share, especially globally.


Yes.

My Kindle is tied to Amazon, though I can side-load if I have to, if the books don't have DRM.

My Amazon tablet can buy books from anywhere other than Apple.

An iPad can buy books from anywhere.

The more people who read on devices other than Kindles, the more books we can sell on sites other than Amazon.


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## Jan Thompson (May 25, 2013)

Hugh Howey said:


> It's just fear mongering. Don't contribute to it.


Whew. Thanks. And I thought the world is grinding to a halt and throwing off self-publishers.


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## David J Normoyle (Jun 22, 2012)

Deanna Chase said:


> Slightly related...eBay did something similar to what RB is talking about. The jacked up sellers fees and basically made the online marketplace for artists undesirable. That's right about the time Etsy opened their doors. Ten years ago, every artist I knew had an eBay account (most of them making a decent sum of money each month. It was the place to be. Finally artists were able to make a living selling art). These days? There are a few holdouts. But they ALL have Etsy stores.


Yeah, this is the beauty of the open marketplace. Ebay, massive monopoly, everyone on it, impossible to imagine anything else. They do something to make themselves uncompetitive and a few years down the line something else has taken their place for that segment.

Right now Amazon is in such a strong place, it feels like they can do whatever they want and it won't matter. But if they start doing stuff like this...

Also, right now as well as being an Amazon vendor, I'm a customer. I spend plenty of money on Amazon, both on ebooks and other things. Do they really want to start taking an unfairly large chunk out of my indie sales just because they are big and they can. What if all indie authors became p*ssed off and started buying stuff on other sites and telling their friends to avoid Amazon. Mightn't make a huge difference but it would be a step in the wrong direction for them.


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## Duane Gundrum (Apr 5, 2011)

The lower that Amazon offers for a royalty, the more likely the big publishers are going to end up being the winner, as more indies will gravitate back to the big publishers (who get their own deals from Amazon that Amazon doesn't dare try to change one sided like). The reason they'd be going back is that for such a small percentage difference (35 versus 25 percent), you'd also be getting the clout and distribution of the big publishers, the one thing that Amazon's independent market has been using as its one advantage. Then Amazon would basically be destroying its own future productivity, forced back into legacy deals only.


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## Jana DeLeon (Jan 20, 2011)

Atunah said:


> But it would still mean you have to sign up to yet another site, give your email, your address, your name etc.
> Because the first thing authors want to do is mine your email to put you on a mailing list. .
> Amazon already has all that info.


Not at all. When I sold print books, ALL that was required was to provide a mailing address to send the book. How the reader paid was not even something I was aware of. The third-party processed the payments and deposited them to my Paypal, then sent me an email for order fulfillment. I never, ever require people to sign up for my newsletter for any reason. That's just asking to hack people off. These days a lot of people have more money than time. I don't waste people's time.


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## Terrence OBrien (Oct 21, 2010)

> Fire away.


There is nothing to fire at. Its a plausible scenario. All such scenarios should be identified in a good analysis. Then the positive and negative factors affecting each are used to assign probabilities to each.

There is a danger in focusing on one scenario without acknowledging all the others. The probabilities of the alternatives are another way of determining the probability of the subject scenario. For example, the following comprise a short list of what we have to acknowledge prior to doing a good analysis of any one of them.

1. Amazon cuts royalties in half.
2. Amazon leaves royalties as they are. 
3. Amazon drops KDP and demands the exclusivity of Select for anyone who wants to sell. 
4. Amazon charges an annual fee for each book. 
5. Amazon drops any book that does not sell X copies in a year.
6. Amazon raises minimum price to $5.
7. Amazon drops all independent authors.
8. Amazon drops independents from all best seller lists.
9. Amazon drops all royalties language and institutes a wholesale model where it pays $2 for any independent book. 
10. The comet Kohoutek returns and destroys the earth.

All these are plausible scenarios. No scenario exists without all the others. So each of these plausible scenarios exists in the environment Amazon and the market face.

So why should Amazon cut royalties in half rather than take one or more off these other paths?


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## Jim Johnson (Jan 4, 2011)

Monique said:


> Let's say all of this comes to pass in 2 years, 1 year even, what is it I should be doing differently _now_?


Write and publish faster.


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## Guest (Dec 20, 2013)

I've said this before, but eventually the royalty program will be changed. Amazon has been in the process of changing it for a long time now by conditioning indies through creep.

Background, before KDP became a big deal, I used Mobipocket to source my books to Amazon. Amazon bought Mobipockets and for a long time nothing changed. I got 50% net profits from sales, regardless of whatever price the vendor actually sold it for. It was a true wholesale distribution program. If my book was priced at $4.99, I was paid $2.50. It didn't matter if Amazon decided to price the book at $4.99 or $3.99 or 99 cents. I got paid $2.50. I did very well with Mobipocket, because retailers routinely put my books on sale all by themselves and I benefited from those promotions.

Then Amazon closed Mobipocket and forced everyone into KDP. Of course, we were promised 70% royalties and on the surface, that was an increase. But in reality, I lost money. Here is why:

At 70%, I am paid 70% of whatever price Amazon decides to sell it for. If Kobo puts my book on sale, Amazon lowers its price and I earn less. Nobody puts my books on sale anymore because they can't. Thanks to crying from Amazon authors, most distributors dropped wholesale pricing and forced agency pricing. Now I no longer get those organic boosts from retailers placing books on sale. The only way I can put a book on "sale" is to drop my retail price...which impacts my pricing at all vendors. Anyone who has played the price-matching dance knows how problematic this is. In short, I make less with Amazon now than I did when I was sourced at 50% through Mobipocket.

Not sure who remembers this, but at one time Amazon did not charge a delivery fee at all. That was added later. So your 70% royalty isn't really 70%. It is 70% minus whatever the delivery fee is. But nobody blinked when they added it. Most people think it has always been there. But it was a reduction of royalties. Nobody noticed, because it wasn't presented as a reduction. It was just an inconsequential fee added on. There is no reason for the fee to even be charged, other than Amazon can. And that delivery fee gets charged whether someone downloads to their computer or downloads wirelessly over their Kindle. BN doesn't charge me a delivery fee.

Over the last year, each new store Amazon has launched has required exclusivity to get the 70% royalty. This is not arbitrary. It is a deliberate conditioning of vendors to accept lower royalties for non-exclusive deals. Amazon wants exclusive content because not only does it choke off competition, but it drives more traffic to their site because all of those exclusive authors spend all of their marketing budgets promoting Amazon. Everyone defends this with the refrain that "Well, we never got 70% in those countries to begin with!" But nobody actually asks _why that is._ There is no actual reason other than Amazon made a decision to not pay 70% for sales in those countries.

Amazon will eventually change the royalty program. I don't think they will go to 35% on non-exclusive. That would be suicide because Apple and others still pay better than that. I suspect they will decide to go with two programs: exclusive and wholesale. Exclusive authors will get 70% and an assortment of promotional benefits (like Select and whatnot) while wholesale suppliers will get 45-50% (industry standard discounts for wholesale books). And they will "sell" it as a royalty INCREASE, and everyone will cheer and say how awesome Amazon is for "increasing" the royalties for non-exclusive authors. Because they have already conditioned everyone to not expect 70% in many cases unless you ARE exclusive.


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## BBGriffith (Mar 13, 2012)

It's in Amazon's interest to continue selling Kindles, which is why I think they'll continue to try and keep us indie authors who primarily put out ebooks happy. But I do think change is in the wind, especially if B&N fails. It would be very bad for everyone here if B&N fails, and not least because Nook sales are a decent percentage of a lot of people's income here. Hopefully they'd find a way to sell or separate their Nook Press division and keep things going there, at least.


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## Ty Johnston (Jun 19, 2009)

Hugh Howey said:


> Show me an example in history of a monopoly driving down prices, and then jacking them up once the competition is crushed. It doesn't work. Because you just allow new competitors into the market.


That's just what I was thinking. Yes, Amazon is king of book sales, all hail Amazon, but plenty of king's have been toppled. Cutting back drastically on indies would open a door wide for some little start-up to come along and become the _next big thing_. The modern online world moves much too fast for any kind of monopoly to last permenantly without some new, trendy, potentially major threat coming along. I just don't believe Bezos is that stupid, and so far evidence has shown he is far more interested in long-term growth than short-term earnings.

But if it happens, it happens. I'll gripe about and deal with it then.


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## Sam Rivers (May 22, 2011)

If Amazon wants to make more money, an easier way than reducing the royalty rate would be to get rid of all free books and raise the lowest book price from .99 to 2.99.  That would have an immediate increase on Amazon's profits.


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## Gone To Croatan (Jun 24, 2011)

BBGriffith said:


> It would be very bad for everyone here if B&N fails, and not least because Nook sales are a decent percentage of a lot of people's income here.


I used to sell a decent number of books at B&N, but now I sell more at Sony. My non-Amazon sales almost all come from Apple and Kobo, so B&N have become pretty much irrelevant.


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## Monique (Jul 31, 2010)

JimJohnson said:


> Write and publish faster.


LOL, Jim. But most of us area already doing that just about as fast as we can. That's a basic rule of success. I'm asking what we should do differently now to prepare for this Indiegeddon? Or is this all just drama for drama's sake?


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## Jim Johnson (Jan 4, 2011)

Monique said:


> Or is this all just drama for drama's sake?


Ding ding ding! That's what the internet is FOR. (That and p0rn and kitty videos.)


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## Edward W. Robertson (May 18, 2010)

Additionally, lowering royalties to 35% across the board (be it for everyone, or just those not in Select) will drive down prices. Right now, with equal visibility, you will always make more at $2.99 than $0.99, because the extra royalties more than make up for the loss of volume. When you're paid 35% whether you're priced at $0.99 or $2.99, though, the math gets a whole lot closer.

If you're going to earn the same either way, you might as well sell two to three times as many at $0.99.

So Amazon lowers the floor of the market, makes less money on a chunk of their sales (30% + delivery fees of $2.99-3.99 is less than 65% of $0.99), and loses an unknown number of higher-priced sales to all the new $0.99 books; consumers can only read and buy so much.

I don't know how many people decide to price at $0.99 instead of $2.99+, or what happens from there, but that's kind of the point. A shift like that would destabilize their ecosystem in all kinds of ways. Even Amazon can't predict the changes to a complex system if they change the incentives and attractors that system is based on.


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## Monique (Jul 31, 2010)

JimJohnson said:


> Ding ding ding! That's what the internet is FOR. (That and p0rn and kitty videos.)


The way Zod intended it. (I've blocked the newer Zod out of my brain.)


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## Jim Johnson (Jan 4, 2011)

Monique said:


> The way Zod intended it. (I've blocked the newer Zod out of my brain.)


The what, now? New Zod? There is no such thing. That, and Christopher Reeve is the only Superman that matters.


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## Moist_Tissue (Dec 6, 2013)

burke_KB said:


> Look at IBM and Hewlet Packard. In the 1980s they were titans. Now they are business niche companies compared to Google and Apple. Even Microsoft is on the way down thanks to several product stumbles over the last few years.


I think what's truly dragging down Microsoft was their employee ranking system. It pushed out talented individuals and it deterred creativity. I think that's what fueled the stumbles.

For me, I see the trade publishers as Amazon's may competition when it comes to publishing. I don't think they want to push indies towards trade publishing when they can welcome indies onto the platform. If anything, I could see Amazon driving authors to sign up for author accounts and we pay a monthly fee to sell to their customers.


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## Guest (Dec 20, 2013)

Blake, you miss one key thing.

There's ZERO Actual FRICTION between authors and readers now.

There's just convenience.

Let's say Amazon changes its cut to 35%.

Some other company would come in and say: We'll give you 35%, we'll take 15% and we'll give readers 50%.

Instantly, they have HALF the prices of Amazon.

Game Over!

It doesn't matter how easy and convenient and customer 'servicey' Amazon has made things, 95% of readers will switch to the new store that offers the SAME books for HALF the price.

Now you'd say - Amazon would just change back to 70% and then switch back when the new entrant is dead.

However, there are an infinite number of companies that would keep doing this.

Why?

Because there are ZERO barriers to entry now.

What barrier is there?

Earlier, with Publishers and print books, we had -

Advances
Printing
Shipping
Distributor Agreements
Store Agreements
Staff
Stores
Publishing Staff
etc. etc.

Now - nothing. It's just some electrons in bit form and these can be stored, distributed, sold, etc. very very easily.

*******

This is the model we've all been trained to think of


Author  ->  SOME MAGICAL PIPELINE without which we wouldn't have books and reading -> Readers

This is the REAL model now, with ebooks -

Author -> Enabler Pipeline -> Readers

Right now, the companies that own the enabler pipeline (Publishers, Amazon, B&N) are trying very hard to maintain the illusion that 'there's just one pipeline' and 'users can't go anywhere else'. That's not true.

ABSOLUTELY ANYONE with a server (which costs just $215 a month) can become an ENABLER.

*******

And there are lots of companies that will undercut Amazon gladly - Apple, Google, B&N, Kobo, etc.

Amazon switched from 35% to 70% when Apple introduced a 70% cut. It didn't wait to see what impact it would have. It increased to 70% IMMEDIATELY.

*******

Without indie authors, Amazon would lose. This might not be clear to indie authors yet, but it will be soon.

Indie Authors provide -

1) The ability to say 'more books than anyone else'.

2) The ability to say 'more free books than anyone else'.

3) The cheaper book possibility, which Publishers can't ever provide.

4) Much better value proposition.

*******

I'm seeing the ebook landscape since 2007 and people don't understand that the inflection points are crossed already

A) No company can dominate ebooks now. That ship has sailed. Because domination requires ACTUAL DEFENCES and actual competitive advantages. With ebooks you don't have any fortresses or gates or walls.

B) Indie authors now have more power than Publishers. This isn't clear yet because most indie authors have spent 10 to 20 to 30 years in the grand illusion that 'without publishers and stores you can't reach readers or be successful'.
It's lots and lots of brainwashing.

*******

Your primary concern should be -

If one company tries to abuse its power, how can I get my books to readers DIRECTLY.

There are lots and lots of ways to sell.

*******

Different companies will keep trying to dominate the pipeline from authors to readers. But they can't write the books. So indie authors shouldn't fall into the trap of thinking 'my content is worthless and I have zero power because I'm too short-sighted to create a direct channel to my readers'.

Just create a direct channel. Then you dictate terms to the stores and not vica versa.


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## horse_girl (Apr 9, 2010)

Changes have been happening since Amazon started DTP (what KDP was when it started). It culminated in a great 2012, at least from my perspective. Things started getting tougher in the second half of 2012 and throughout this past year. The opportunities and challenges will continue to change into perpetuity. We can't stop it. We can't forecast what those will be. All we can do is ride the waves that come, up and down, like any small business does. We'll deal with whatever comes when it comes. We've done so to this point. The best thing we can all do is write the best books we can.

Worrying about the future takes away the enjoyment of today. Stop it!


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## ElHawk (Aug 13, 2012)

blakebooks said:


> EL: I have seen no evidence that book subscription services are any more viable than HomeGrocer.com was. Just because you have several upstarts who feel there's a market, doesn't a market make.


That's absolutely true. I just think with the popularity of Netflix and Hulu and similar subscription services for other forms of entertainment, it seems plausible and even likely that something similar will catch on for ebooks. It's still very early to call it a sure thing, but it's really interesting and worth following closely.


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## Leanne King (Oct 2, 2012)

cinisajoy said:


> And why would Bookbub care what the author makes in royalties?


They wouldn't. I was merely using them as an example of how indies could try and push sales away from Amazon and towards other channels. And one way would be to advertise deals that aren't available on Amazon, using services like Bookbub.


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## Moist_Tissue (Dec 6, 2013)

Deanna Chase said:


> Dang authors getting so picky over word choice.  I just meant that they want to do business with us. I don't disagree that we need them far more than they need any one of us individually. But Amazon has shown time and time again that they want to grow their collective Indie offerings. And if they do drop royalties to 35% you can bet your pretty little buns that a lot of authors will start putting a lot more focus on pushing other outlets. That's not a move I see Amazon making. I agree with Ed on this one. If they do slash royalties it's because they think the game is over and they've won.


Vendors are definitely considered customers within Amazon.

I think we should also remember that KDP is just one small piece of what Amazon does. I think people are concerned that Amazon sees this area as the place to earn more profit; focus goes towards retail, building out Amazon Local and Fresh, and expanding Amazon Media Group (digital advertising). I would see them acquiring smaller ebook sellers then make a quick move on authors.


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## ElHawk (Aug 13, 2012)

Atunah said:


> You guys really think that readers that have kindles, buy at amazon, trust amazon, have the archive at amazon, are just going to jump ship to Apple? Or buy their books from a gazillion different author sites where they have to sign up and enter payment info and personal info sever hundred + different times?


Not at all. But if they receive a direct email from an author they already know and trust and that author gives them an app that can deliver a Kindle-compatible ebook directly to them just by clicking, why not?


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## jackz4000 (May 15, 2011)

Russell, I think it will continue to be tougher for an author, but it has always been tough. During the brief Goldrush there were shiny nuggets lying on the ground big as baseballs and those are long gone. 

The Amazon lower royalty thread appears every few months over the past couple years and I don't think it will. In interviews JB is very proud when he mentions the 70% an author receives. I think he is looking far out to sea and in 20 years there will be many more authors, many very popular who will want that 70%. 

Many corporations would now go for an increase, but Bezo's has usually gone the other way giving up a chance for short term gain for long term results.


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## RJJ (Oct 29, 2013)

35%? Never again. When the source of a product is an internet connection, as is Kindle, there is no such thing as a monopoly.Too many others are always nipping at the heels. Remember Apple nipping at Kindle? That's why we're at 70% now. Even if Amazon were to grow in domination, it would never alienate the producers of what it sells. Even if it could force a reduced rate for a temporary time period to when someone else could catch it, someone else always would catch up. Amazon doesn't view the world in short term victories. It's guided by long-term visions.

What I worry about much more is is every-changing algos. Every single change always seems to work against me.


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## blakebooks (Mar 10, 2012)

Hugh: Actually, history is filled with monopolies squeezing their vendors to get more profit. In fact, one only has to look at companies like Walmart and Costco (although not monopolies) and their approach to vendors, which is predatory, to say the least. I think where everyone gets it wrong here is the assumption that indie authors are customers. They aren't. They are vendors/suppliers. And getting the best possible price from vendors is one of the tenets of business, all other elements being equal. Regardless of how the Amazon rhetoric is that vendors are customers, the fact is that they are vendors, selling via Amazon. 

Everyone: If you think that indies will just "raise prices," you're ignoring that they have essentially no pricing power. Don't believe me? Go raise your prices a buck or two and report back, assuming you're priced optimally right now. When you watch your sales dwindle, you'll quickly understand why that won't work.

Ed: That's a valid concern. I'm just wondering how hard it would be to establish a similar, two-tier pricing as they have now. Maybe it will go three tier: 35% for up to $2.99, 45% for all others, 55% for exclusive. Or some permutation. My point is simply that Amazon is an extremely astute player, and they're leaving money on the table the day B&N closes its doors.

Abhi: I hope you're right. My experience is that the channel generally wags the dog eventually, because even though there are always alternatives, once you hit critical mass with a channel, customers are likely to stay with it rather than switch. 

It will be interesting to watch. We should re-convene this time next year and see what's happened. Will it be no change, boiling of frogs, or massive dislocation? Fascinating to hear all the different takes.


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## Lisa Grace (Jul 3, 2011)

valeriec80 said:


> Well, someone predicts this every three months or so. It has yet to happen. Amazon could do it. I was actually self-publishing back when they only gave us a 35% royalty across the board. That wasn't that many years ago.
> 
> Anyway, I think it's highly unlikely.
> 
> But this is why the best defense is a good mailing list, who will buy direct from you if necessary.


I've been saying this for two years now. However, I believe they'll cut our commissions slowly. Like 10% a year.

When we first got our season tickets to the Tamp Bay Bucs, the Glasiers charged double that first year, with the promise you would get back the other half in ten years. But what they did, was raise ticket prices enough every year, so that what you would have gotten back was "absorbed" by the new, higher price.


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## SBJones (Jun 13, 2011)

I think the Sith Witch is right.  We are being 'conditioned' bit by bit.  No one is going to leave Amazon if they cut the royalties in half, because your options are 0% at Amazon or 35% at Amazon.  Your Amazon sales will not follow you to another website.

I think the most likely shift in the near future is a form of passive quality control.  You will see larger delivery fees.  Starting with charging them for 99c books and even going as far as charging them for free books (even if it's a discounted fee like 1c per ten freeloads).  Uploading and change fees.  $25 to set up a new title, $10 to change a cover or interior, and $30 a year for extended distribution outside your home domain.

This won't impact authors who put out quality books that sell and have built their platforms and mailing lists.  It will financially block a lot of the low end mass uploaders as well as make new authors take a second look at their work to make sure it's ready for upload.


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## Leanne King (Oct 2, 2012)

Bards and Sages (Julie) said:


> Over the last year, each new store Amazon has launched has required exclusivity to get the 70% royalty.


Well, apart from Australia. Which coincidentally was the most recent one to be added.


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## Some Writer Cat (Sep 22, 2010)

Hugh Howey said:


> Never happen. Never. And not because of my wishes, but because it would be a dumb move on Amazon's part, and Amazon isn't dumb.
> 
> Show me an example in history of a monopoly driving down prices, and then jacking them up once the competition is crushed. It doesn't work. Because you just allow new competitors into the market. This was the threat of Standard Oil, but oil prices when down the bigger Standard Oil got.
> 
> It's just fear mongering. Don't contribute to it.


Seconded. Amazon has consistently made things _better_ for indies, year after year. If anything, I'd say the chances of them increasing the royalties paid to writers is just as likely if not more so than them paying less. Maybe give another 5-10% royalty as an incentive to go exclusive, though even that isn't likely. I predict that they'll abandon the exclusivity tactics within the next two years.

When I saw the title of the thread, I assumed you were going to talk about what I see as the real game changer going forward: *the downward price pressure on ebooks.* Yes, there's lots of holiday pricing going on, and the DOJ settlement let Amazon and other retailers price ebooks at a loss, but traditional publishers are getting a lot more aggressive with their backlists now, too. And let's face it. Indie writers primarmily used cheap prices as the main way to attract potential readers. Without that differential, it's certainly going to be tougher.

The solution? Be really, really good. And take some chances to stand out in an interesting and remarkable way. You know, like a purple cow.


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## gorvnice (Dec 29, 2010)

It's always best to be prepared.  What can we do to prepare for something like a royalty cut or algo change?

The answer is still diversity.  People focus so hard on trying to find ways to make it big on Amazon.  For a while, between B&N and Kobo, I was getting 50% of my royalties and Amazon was the other 50%.  And it wasn't a small chunk of change either.  That's starting to go sideways for me now, with Amazon probably more at 70% because I've lost some steam at Kobo.  But I'm thinking hard for ways to try and get that back so that I don't depend fully on Amazon.

We can't do a lot about it, but having your eyes open to the possibilities and sniffing the wind is important.  Maybe there WILL be something you can do in the near future to help protect yourself from such machinations.  If you can but you have blinders on, you'll be screwed.

The way I'm looking at it is that I've got a few years to make all of my money, and after that I anticipate going back to making very little.  It keeps me saving and being careful not to spend as though this will be my salary forever.  It keeps me thinking of ways to use the money I earn with ebooks to accrue money in other areas (stocks, real estate, etc).  

Panic isn't a good thing.  But a cold, realistic view of the situation is smart.  Things will not stay like this forever, so if we're lucky we might get ten good years.  But I'm not planning for ten good years.


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## Rykymus (Dec 3, 2011)

It's all speculation, and quite frankly, it's kind of pointless. The market will change, we will adapt. Some will make more, some will make less. It's no different than any other aspect of life.

Keep writing good books that please your audience and you will survive, regardless of the changes. The genie is out, never to be put back.


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## Vaalingrade (Feb 19, 2013)

Unlikely that they'll become that secure in their position before one of the many, many ebook projects and advancements currently underway on the internet snakes them.

Fact is, time moves faster on the internet. Amazon may be King Monkey now, but that's because all the major players are dumber than they are. There's a lot of cash in the ebook pinata and it won't be long before a LOT more people take a swing and someone's going to get some solid whacks in. Amazon won't stay on top by screwing over the talent.

Everyone acts like they're so successful because they're infallible and because they're inherently the best at selling anything, but they only big with ebooks because they were first. Like I said on the other thread, the dungeon thing means they haven't even learned what Betamax learned thirty years ago concerning selling sex. It's a bad bet to think they're so invincible that they could carry out the course of action in the OP without bleeding for it.

Remember: there was a time that no one even considered Sears wouldn't be making all the rules in retail.


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## Monique (Jul 31, 2010)

Rykymus said:


> It's all speculation, and quite frankly, it's kind of pointless. The market will change, we will adapt. Some will make more, some will make less. It's no different than any other aspect of life.
> 
> Keep writing good books that please your audience and you will survive, regardless of the changes. The genie is out, never to be put back.


Yup. And honestly, I'm shocked that Russell is the OP of this. While I might not always agree, although I usually do, his posts have a point. A clear, definitive point. This one feels like a yoink.


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## Greg Banks (May 2, 2009)

tkkenyon said:


> I have long thought that Amazon may make the 70% royalty to be contingent on enrollment in Select and thus exclusivity. They're already doing this with new markets.
> 
> However, I think you're underestimating the future influence of Google Play and the increasing number of Android devices. Google Play is already a player and, I think, will increase market share, especially globally.
> 
> TK


IF Google refines their system. It's hard to publish with, and I'm not sure that readers like searching for content there. Considering that Google is already a power player, the fact that they aren't more of an influence in the digital content marketplace shows that they still have a lot of work to do. They have the consumer base already, but people are still going elsewhere for content.


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## JeanneM (Mar 21, 2011)

Thoughts are energy...energy creates...maybe we shouldn't be thinking worst case scenario. If this were to happen, someone inventive would come along and offer better.

You can live in fear or do what I do and just say, "Whatever." I think you are all creative enough to take any blow and still come out on top.


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## Eric C (Aug 3, 2009)

What you're fearing is "monopsony" power, if I recall my old econ classes corrrectly. The closest comparative situation would be with Walmart, I'd say, and a lot of Walmart suppliers have gone belly up or are having a tough time. Unfortunately the feds seem only concerned with monopoly power and I don't think it likely that they'd interfere if Amazon got strong enough that it thought it could get away with putting the squeeze on its suppliers. (I think it is already putting the squeeze on big and small publishers to some extent.)


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## Desmond X. Torres (Mar 16, 2013)

Making adjustments on the royalty rates would be a game changer, and no matter how smart the gang at Jeff’s garage is, a tectonic shift creates unforeseen results. Whether it gives a leg up to Apple et al, or inspires some sort of Indie Alliance, the new playing field would have shadowed corners that surprises would be hiding in.

That said, are there discussions over at KDP HQ on how to increase profits? I’m sure they go on every day, and the plan that gets approved and works will enhance some careers no doubt. 

The current model is ‘I don’t make money until you make money’, at least from Amazon’s perspective. I want to put a book up, I write it and publish it. Yes, yes, I can pay for editing, covers, promotions etc, but the actual setting my eBook on Amazon’s shelf doesn’t cost me a dime until something gets sold, and it’s not an out of pocket dime.

As usual, Julie (Bards and Sages) called it in a way I can see happening. Right now there’s ‘delivery fees’ and other creeping cuts to our profit margins. I can see that being a more plausible route they would take.

If we look at writing as a ‘craft’, what are the current models out there for other craftspeople marketing their work? Etsy was mentioned, and I just cruised through their site superficially. What I saw was they chare about .20 USD for a listing, and take a 3.5% commission. Right now Amazon takes between 30-70% commission but no ‘posting fee’. 

Question for the class: if it cost you a quarter to put your book up on Amazon, how many nanoseconds of delay would there be? And if you had to pay a buck a year for each of your listed books, how much would that hold you back from hitting the publish button? It’s a small amount, and I don’t think it would be a huge change in the current status quo. We’d gripe, sure; but I don’t think many of us would take on the additional work of going to another outlet with our work.

Except it would put additional tens of millions of pure profit into Amazon’s coffers.

In ‘The Godfather Pt 2’ the phrase ‘I just want to wet my beak’ was used. You don’t kill the goose, you just squeeze it a little. Not too much, just a little. For me, a scenario like I just laid out is much more plausible than a massive royalty payment change. A lot safer for Amazon to implement in terms of their competitors.

Frankly, I’m surprised—heck, astonished—that they haven’t done it yet. Tens of millions of additional profits, with not too much of a downside.


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## Guest (Dec 20, 2013)

Rykymus said:


> It's all speculation, and quite frankly, it's kind of pointless. The market will change, we will adapt. Some will make more, some will make less. It's no different than any other aspect of life.


It isn't pointless. Being adaptable means planning for change, not knee-jerk reacting to things that already happened. Just like Bezos himself is always planning for changes, so too should we. Planning for the worst case scenario is smart business. Plan for the worst, hope for the best. Then when the "worst" happens you are ready and when it doesn't you can just be happy. In the real world, the final result is generally somewhere in between worst case scenario and nothing. But if you plan for nothing, even a minor shift becomes catastrophic.


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## blakebooks (Mar 10, 2012)

Monique: The reason I posted it is because I'm always deeply distrustful of the tendency for humans to engage in normalcy bias.

The only way to ensure you don't is to openly consider, on its merits, a scenario, and its likelihood, with no bias whatsoever.

As an example of normalcy bias, one only has to look at Germany under the Nazis. Most of those who were ultimately persecuted simply couldn't envision a world where the unthinkable could happen, even though the indicators were clear to others. The same goes for all populations, including those who simply can't believe in false flag attacks, financial chicanery, their government's penchant for genocide, etc. etc.

People tend to believe that unpleasant outcomes simply can't happen, or are unlikely to happen, because of normalcy bias.

This was my contribution to stimulating a discussion to consider the unthinkable.


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## Monique (Jul 31, 2010)

Nazis!


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## Some Writer Cat (Sep 22, 2010)

Monique said:


> Nazis!


Proving that Godwin's Law is alive and well.


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## Guest (Dec 20, 2013)

Monique said:


> LOL, Jim. But most of us area already doing that just about as fast as we can. That's a basic rule of success. I'm asking what we should do differently now to prepare for this Indiegeddon? Or is this all just drama for drama's sake?


Change your hair style. 
Eat more chocolate. 
Take a walk with a beagle. 
Tell 7 white lies in one hour. 
Read _Crime and Punishment_. 
Call up your first lover and tell him it was all a mistake. 
Do yoga on a bed of nails. Then repeat all steps.


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## Hugh Howey (Feb 11, 2012)

blakebooks said:


> Hugh: Actually, history is filled with monopolies squeezing their vendors to get more profit. In fact, one only has to look at companies like Walmart and Costco (although not monopolies) and their approach to vendors, which is predatory, to say the least. I think where everyone gets it wrong here is the assumption that indie authors are customers. They aren't. They are vendors/suppliers. And getting the best possible price from vendors is one of the tenets of business, all other elements being equal. Regardless of how the Amazon rhetoric is that vendors are customers, the fact is that they are vendors, selling via Amazon.


Dude. We set the prices. How is squeezing us the same as getting costs down from vendors so Walmart can pass along savings in the form of lower prices to customers? It isn't. Lowering our commission is the exact same thing as jacking up prices. It's a profit grab. I repeat: Amazon doesn't set the price of my e-book. I do. If they discount, that comes out of their pocket. Your comparison to squeezing vendors makes zero sense, and I'm sure you can now see that quite clearly. Whether you persist in making this comparison is up to you.

What you are fear mongering about is precisely like gaining market share and then raising prices. And it doesn't happen. It doesn't work. Economists have debunked this for generations.

Why don't you set a timetable for this prediction of doom and gloom. Let's have some kind of public wager. I'll bet anything you want. Anything. The Jeremiads are never right, my friend. Never.


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## Christa Wick (Nov 1, 2012)

blakebooks said:


> ....
> 
> We could posit that it would empower Apple and Kobo to get more business, but that's BS. How? If anything, it would mean Apple and Kobo could also follow suit, cut their royalty rate to 35% as well, doubling their take, with no ill effects....


Apple owned the app market for the longest time and still gave a 70% royalty rate to app developers. I don't see it following Amazon in any future royalty rate price slash. And other companies could step up as major competitors, but not who you think. Imagine Wal-Mart (which is already one of the largest booksellers in America) creating a KDP/NookPress back end and selling ebooks. Wal-Mart is probably the only company in the world that could, if it was determined to do so, meet Amazon on all fronts.


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## Hugh Howey (Feb 11, 2012)

Desmond X. Torres said:


> Except it would put additional tens of millions of pure profit into Amazon's coffers.


Tens of millions! Jeff is happy to lose this much money over breakfast. The PR hit would cost them far more than they would earn.

The reason royalty rates can be so high is because we are effectively paid employees. We create content. Lots of it. Once the framework is in place, it doesn't cost very much to keep the pipeline for this content open and flowing. The key is to get more people creating more of it.

As a bookseller, we typically got 40% discounts on the books we ordered. That means we were happy to keep 40% of the profit and send 60% back to publishers (which they split with the printer, author, etc.) 40/60 isn't far off from 30/70. And the difference in overhead is enormous.

So the fear mongers want us to be terrified of a profit split that is nearly identical to the profit split that bookstores have employed for decades. And other retailers routinely use (my mother used to get some of her yarn at 35% discount).

When I hand Amazon a book to sell, I'm telling them they can have it for 30% off my retail price. I do all the work of producing and delivering the product, they get 30%. What blinds people to the FAIRNESS of this rate is the comically UNFAIRNESS of author royalties from major publishers. We have come to think of 12.5% as fair. But that's a bad comparison. Royalties to authors aren't the same as profits to publishers. WE are the publisher when we self-publish. So start comparing our 70% take to their 60% take -- while keeping in mind that we don't have a physical store and employees to pay for -- and you'll see that this is a very fair and sustainable and permanent rate.


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## Guest (Dec 20, 2013)

Hugh Howey said:


> Amazon doesn't set the price of my e-book. I do. If they discount, that comes out of their pocket.


No, it comes out of ours (unless the book is set at 35%. At 70%, Amazon "price matches" and only pay 70% of what they sell it for. If Amazon decided to "price match" my book to $1.99, even if I had no control over some other place selling the book for $1.99, they dump me down to 35% and only pay me on that. of course, the only way to avoid that is to be exclusive with Amazon so there is no chance of price matching. Which is, of course, what Amazon really wants. Exclusivity.

And Amazon DOES influence the price of our ebooks. We can't sell them for less than 99 cents (or even offer them for free without jumping through price-matching hoops). If you try to sell above $9.99, even in non-fiction fields where higher prices are the norm, you can't earn the 70% royalty and have to accept 35%. It's the primary reason I don't sell digital RPG products on Amazon. I have a couple of products priced at $14.99 (PDF) that sell well. On Amazon, I would either have to take a significant pay cut to 35% or drop the price to $9.99 to get 70%. We can claim it is "my choice" to set the price, but the reality is the price parameters are solely in Amazon's control when you sell on Amazon.


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## cinisajoy (Mar 10, 2013)

I want to address a couple of more points.
#1.  Why do some of you insist that free is costing Amazon money?   If this was the case, then why would they A) give their select members 5 days of free books?   Also why if they losing so much money on free then why can I get a different free App (that is normally priced from 1.99 and up) every day if I so choose.   Also why free shipping over a certain amount.  And why free MP3's.
Free is a very good advertising tool.   Matter of fact for Amazon's costs it is a very cheap advertising tool.   Free gets me in the door and therefore they make more money.    And yes on the free shipping thing, I have bought more stuff just to get the free shipping.
Note generic you.
#2.  Let's for arguments sake, say that Amazon does lower its rates.   Ok, you are an author and pull all your books from Amazon.   Let's say I have previously picked up one of your books at Amazon.    I go to buy one of your books and you are no longer there.    Do you really think that I am gonna take the time to go find you?  I will figure you just wrote that one book and gave up.
More than likelyI am just going to say ok I will just find another author in the same genre.   I am not going to waste my time clicking on links that may or may not be valid and if I am on an e-ink ereader, it basically only goes to amazon without major lag.    So therefore how much have you lost?


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## blakebooks (Mar 10, 2012)

Hugh: I believe this will be an issue, not a certainty, when B&N fades to black. My crystal ball is hazy, but my gut says 18 months, mas o menos. I find Bards and Sages' take about boiling frogs to be an equally plausible scenario, so I'm not married to it.

As to fear mongering, I'm not. I'm certainly not "afraid" of this happening. But if I believe it's likely, I can take steps to offset the effect it might have on me. If I believe it's unlikely, I can do nothing. 

I'm quite accustomed to being told that "it will never happen." I was told that by dozens when I began saying that Select was going to be declawed to the point where it was meaningless. The logic went the same way: that Amazon would never do anything to harm its valued indie authors, that we were too important to it, etc. Even when folks like Joe K were questioned, he basically said Amazon had told him they'd never changed their algos - something anyone who has paid even remote attention during the last two years recognizes is, well, not entirely true based on all observable data.

It's not fear mongering when one raises a question, floats an idea, or disagrees with the consensus opinion. In investing its called being a contrarian. There's often good money being one - when the crowd believes everything's great, take positions that assume that won't last, and when the crowd believes it's all going to hell, buy.

The overwhelming majority here seems to feel that Amazon would never, ever do anything that would A) cut into indie profits to make Amazon more money, and B) do so understanding that there's nothing we could do about it, within reason. I simply don't see it that way.

But I always love a good bet. I'll bet you a dollar that within a few months of B&N going into the freezer drawer, the royalty rate is adjusted down - if not before.

No disrespect, obviously. I have no dog in this fight, no agenda, other than contemplating the what if.

Edited to fix all the typos. Another argument for editors!


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## LilianaHart (Jun 20, 2011)

I agree with Hugh on this. Amazon is very good at business, and this model you describe wouldn't be good business. I promise you that they want us to keep writing books and selling well.And Hugh's right. We set the prices for our books. If they dropped the royalty percentage I'd just charge a higher price for my books to make up the slack. We'd all probably have to do that. But 35% of my $5.99 books is still more money than a trad author makes per book. 

Also, this is why I tell writers over and over again why you shouldn't put your eggs all in the Amazon basket. Be diverse, as all good businesses are. My Amazon sales aren't 90% of my income. My Amazon sales are between 35-40% of my income.


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## Guest (Dec 20, 2013)

Dewey Defeats Truman


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## dalya (Jul 26, 2011)

It will continue to get tougher, but not because of this doom scenario alone.


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## Lydniz (May 2, 2013)

Of all the scenarios posited here, I find the listing fee the most likely one.


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## Edward W. Robertson (May 18, 2010)

Well, then if this is likely, what's the takeaway? Diversify? On the other hand, if you think Amazon is going to make 70% for Select only, and that BN is months away from ceasing to exist, there's an argument that you should double down on Amazon and return to Select right now, since BN's dead and none of the other stores can threaten Amazon anyway.


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## blakebooks (Mar 10, 2012)

Liliana: I have to take issue with the notion that authors will raise prices to make up the slack. That's akin to a restaurant that starts seeing fewer customers due to its pricing, raising prices to make up for the lost profit. Guess what happens? Even fewer customers, even less overall profit.

If you thought you could raise your prices and it wouldn't negatively affect your volume, why haven't you already done so? I mean, why wait for Amazon? My gut says it's because you're at your best-selling price - a conclusion you've arrived at by looking at price, vs. diminished sales at a higher price. 

What those declarations leave out of the mix is the customer. The customer isn't going to pay more for your product because your profitability changes. The customer will pay what it thinks is fair value, and not a penny more. Market efficiencies at play.

No, what I would see happening in the event this all happens is lots of shock and grumbling and declarations, but in the end, most, or all, the authors continuing to sell their wares through Amazon, customers continuing to buy only if the price was right, and Amazon pocketing roughly double the money.


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## Rusty Bigfoot (Jul 6, 2011)

I've also been sensing a change in the wind. I don't believe anyone can predict the future, but when you start seeing more and more disfavorable threads about Amazon on the internet, you begin to wonder if Amazon's more questionable business practices are becoming more and more known to the general public. If you read up on some of what the Zon had done to decimate their competition (and the new book about Bezos is a good read on that), you begin to wonder if they're really the good fairy some of us who have done well with them would like to believe. And their working conditions aren't the best, though some of that is psychological and stressful, rather than monetary.

One thing I'm seeing more and more about is how Amazon can delete your account and not give you a reason, keeping your funds for quite some time before reimbursing you, with gift cards never reimbursed. This has happened to some really big sellers there, and I'm sure most deletions are for good reason (selling blackmarket items, etc.), but there has been a good deal of collateral damage among the innocent. This has happened to big sellers and little sellers, as well as customers. You can do a search on this and find days of interesting reading. It has the effect of creating a lot of fear - I know one person who deleted their Prime account because the Zon supposedly will also shut down accounts of those you have on your Prime membership also. It seems that now that the Zon has so many customers, they're more than eager to close accounts of those who aren't making them money (be careful how many returns you have). This breeds a climate of fear, which Bezos has been accused of fostering throughout the company, even though eh says it's all about the customer.

But what's really getting to be a big item is that more and more people are realizing that they don't actually own the books they purchase for their Kindle, but lease them. When their Kindle's gone, for whatever reason, so are the books. This puts a different light on ordering from Amazon. Sure, you can download them, run the DRM through Calibre and keep the books that way, but doing so is a violation of your purchase rights and may get your account deleted if the Zon finds out.

Also, more and more people are seeing Azon as the new Wal-Mart in that they're putting local retail shops out of business. This isn't setting well with those who are more socially conscious, and some are refusing to buy if it's not local. I'm now finding local businsses who will match Amazon's prices if you buy local, and I've found a few things that were actually much cheaper locally. But people will pay for convenience.

Add to this the perception (or maybe reality, I don't know) that Prime members have different prices on their items than non-Prime - that is, they pay more for items to help the Zon make up for all that free shipping. I've read several accounts about this that had some pretty convincing evidence in the form of screenshots, etc., but only Azon knows how often it goes on, if any.

And we won't even get into how the Zon tracks your buying habits and may be selling that data. Even if it's not, who wants someone to know what you're doing and some say that tracking goes beyond the Zon website.

All of this negativity on the net has to be changing public opinion, and how much it will actually affect the Zon nobody knows. I do think we indies are in for some changes also, but I don't have a clue what. Bezos is a ruthless businessman. He's successfully run a business that pays investors only in stock, not in dividends, for many years, and peope keep coming back for more. I know of no other business that's done this.

I make most of my living from Amazon, so all this gives me pause, and I don't think it's fearmongering at all. You can sarch any of these topics and find lots of examples on the net, some seemingly legit, some not. I think Amazon is at some kind of crux or soon will be.

And finally, here's a good read on how some feel about the Zon on a local/environmental level:

http://www.transitionnetwork.org/blogs/rob-hopkins/2013-12/day-i-closed-my-amazon-account


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## Ty Johnston (Jun 19, 2009)

LilianaHart said:


> Also, this is why I tell writers over and over again why you shouldn't put your eggs all in the Amazon basket. Be diverse, as all good businesses are. My Amazon sales aren't 90% of my income. My Amazon sales are between 35-40% of my income.


Agreed, and my percentages are bout the same as yours. I also always suggest writers have print editions, however they're printed (or with whomever), and other options should always be considered (audio, etc.).

On a related note, what if instead of a percentage, Amazon offered indies a deal more like print publishing? What if they offered a flat price per e-book (based upon size or some criteria) and above that we could charge whatever we'd like, with Amazon always having the option of running a sale price while allowing us our expected cut?


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## blakebooks (Mar 10, 2012)

Ed: I think you diversify. B&N isn't dead yet, and frankly, I see no reason to forego the roughly 3X revenues (over what I saw as borrows) I see from other channels until absolutely necessary. And you don't get complacent. 

Let me put it this way. The odds of this happening are probably better than the odds of you being in a horrible traffic accident on the way to the market. But most still put their seatbelt on. If we try to quantify what the odds of Amazon doing this are, everyone will come up with a different number. I might say it's one in 4. You might say it's one in 10. Hugh might say it's one in a million, or more.

Note that I'm not saying, "Take action!!!" I'm saying, consider this scenario, and ask yourself whether you're prepared for it. If you're not, then perhaps taking steps to prepare for it, just in case, is prudent, not silly. Just as wearing your seatbelt even though the odds are low that you'll get T-boned at the intersection are low isn't silly.

Or, ignore it, dismiss it as unworthy of your attention, and go on with your life. All the same to me.


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## Hugh Howey (Feb 11, 2012)

Bards and Sages (Julie) said:


> No, it comes out of ours (unless the book is set at 35%. At 70%, Amazon "price matches" and only pay 70% of what they sell it for. If Amazon decided to "price match" my book to $1.99, even if I had no control over some other place selling the book for $1.99, they dump me down to 35% and only pay me on that. of course, the only way to avoid that is to be exclusive with Amazon so there is no chance of price matching. Which is, of course, what Amazon really wants. Exclusivity.
> 
> And Amazon DOES influence the price of our ebooks. We can't sell them for less than 99 cents (or even offer them for free without jumping through price-matching hoops). If you try to sell above $9.99, even in non-fiction fields where higher prices are the norm, you can't earn the 70% royalty and have to accept 35%. It's the primary reason I don't sell digital RPG products on Amazon. I have a couple of products priced at $14.99 (PDF) that sell well. On Amazon, I would either have to take a significant pay cut to 35% or drop the price to $9.99 to get 70%. We can claim it is "my choice" to set the price, but the reality is the price parameters are solely in Amazon's control when you sell on Amazon.


How do they price-match? To a price you set somewhere else! Or because you published with someone else who does control your price. Amazon doesn't do this. You'll notice I don't publish on the Google Play store because they have this as a policy.

And pointing out that the royalty rate is variable doesn't change the fact that you get to set the rate. You're just disagreeing because it's in your nature. And I love you for it. But you're still wrong.


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## Hugh Howey (Feb 11, 2012)

blakebooks said:


> But I always love a good bet. I'll bet you a dollar that within a few months of B&N going into the freezer drawer, the royalty rate is adjusted down - if not before.


Bet accepted! No offense taken, man. I'm just disagreeing with the disagreers.


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## Quiss (Aug 21, 2012)

M.H. Lee said:


> What I think is a bigger issue that Amazon is going to start attacking aggressively is a quality/mainstream reader issue.


To that I say: bring it on. 
As long as they do it intelligently and as fairly as possible, this can only benefit everyone. However, given their current porn purge, it would not be an easy task even for Amazon.


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## David J Normoyle (Jun 22, 2012)

blakebooks said:


> The overwhelming majority here seems to feel that Amazon would never, ever do anything that would A) cut into indie profits to make Amazon more money, and B) do so understanding that there's nothing we could do about it, within reason. I simply don't see it that way.


Of course they would do A, they care about themselves about all, and I agree with you pretty much on B, there's not much indie authors can do. But that's a short term gain for Amazon. Long term, it's a terrible model for sustainability of the Amazon/Indie relationship and long term it's bad for Amazon and great for its competitors. Hard to know exactly how these long terms effects will come about, because market adjustments to something like this aren't predictable.


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## LilianaHart (Jun 20, 2011)

blakebooks said:


> Liliana: I have to take issue with the notion that authors will raise prices to make up the slack. That's akin to a restaurant that starts seeing fewer customers due to its pricing, raising prices to make up for the lost profit. Guess what happens? Even fewer customers, even less overall profit.
> 
> If you thought you could raise your prices and it wouldn't negatively affect your volume, why haven't you already done so? I mean, why wait for Amazon? My gut says it's because you're at your best-selling price - a conclusion you've arrived at by looking at price, vs. diminished sales at a higher price.
> 
> ...


Not really. NY was charging higher prices before indies came along. We'd basically be pricing the same as NY. My books now range are between $4.99-$6.99. I'd never gouge my readers, but if it wet came to it I would certainly charge as much as NY publishers do. Why wouldn't I? My books are as good as theirs.

And this is also on the assumption that Amazon even gives a crap about BN. Yes, BN will go out of business. So what? Apple is the #2 ebook retailer. I make a high 5 figures a month just at Apple. And almost that much at Kobo. Amazon isn't the end all be all of our careers.


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## Guest (Dec 20, 2013)

cinisajoy said:


> I want to address a couple of more points.
> #1. Why do some of you insist that free is costing Amazon money?


Amazon has overhead. Just because there is no physical inventory doesn't mean a digital file does not have associated costs. There is server space, customer service employees, IT employees to make sure all of that software does what it is supposed to do to deliver the file to the Kindle. Processing the "sale" of a free product requires the same output of resources as processing the sale of a non-free product. If Amazon doesn't recover its expenses on a free product, it must recover them elsewhere. This means that either:

A. It takes a "loss" on those free books as a loss leader, using them to increase overall sales cart.
B. Passes the cost of processing those free sales onto other products.

The elephant in the room is that Amazon functions on razor-thin margins as it is. Amazon's profit margin (it's "profit" after accounting for its fixed and variable costs) has been in the negative the last two quarters. It hasn't had a profit margin above 1% since December 2011. If those "free" sales are generating additional sales that can cover all fixed and variable costs, then there is no problem. But if it gets to a point where "free" is all anyone downloads, then you have a problem. If those free sales aren't converting to other sales, you have problems.

And we KNOW these free sales are a problem because earlier this year Amazon changed its affiliate terms to block sites that focus exclusively on freebies. Does everyone remember those conversations? Amazon deactivated tons of affiliates that were focused on promoting just freebies. They also put in new requirements regarding the ratio of free to non-free sales affiliates needed to get paid. Amazon would not have gone after free promo sites like that if free was not becoming an issue.


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## Greg Banks (May 2, 2009)

Saying that "change is in the wind" is like saying "I sense rain coming sooner or later". Of course things will eventually change. It's the nature of life, and especially of business. It is very much smart to plan ahead for when times get hard, but it's impractical to plan ahead for the apocalypse that will take place on the 28th of June, 2016, at 10:45am, when the meteor from Necromancia strikes the earth and a horde of zombies come pouring out of its ruins (unless you've gotten inside info on the likelihood of such a thing, of course!). I just think that predicting that Amazon will do this or that in this or that time frame only distracts us from the bigger and more important issue of being prepared for the future IF things change.

Otherwise, you might as well start building that anti-zombie fortress now, because right now my apocalyptic prediction has as much merit as this Amazon royalty-raising one (although I did hear a guy telling another guy that his girlfriend's hairdresser's boyfriend heard that there is this meteor...aw, forget it...).


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## blakebooks (Mar 10, 2012)

Lilliana: I'm not sure I understand. You believe that your readers would pay more, and that your sales wouldn't be negatively impacted, and yet you don't charge more? I mean, that's fine, but it runs contrary to most business principles I know, which generally encourage efficiency - maximizing return at maximum sales volume.

We agree on everything else.


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## LilianaHart (Jun 20, 2011)

blakebooks said:


> Lilliana: I'm not sure I understand. You believe that your readers would pay more, and that your sales wouldn't be negatively impacted, and yet you don't charge more? I mean, that's fine, but it runs contrary to most business principles I know, which generally encourage efficiency - maximizing return at maximum sales volume.
> 
> We agree on everything else.


I believe between $4.99-$6.99 is the sweet spot RIGHT NOW. If the business model changes, which you're saying it will, then we'll have to change with it. That's business. I'm throwing out scenarios just like you are. There's no need to react unless there's something to react to. Which there won't be


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## Redacted1111 (Oct 26, 2013)

Oh noes newbs, better run for cover and quit. Reminds me of that other forum.


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## blakebooks (Mar 10, 2012)

Lilliana: Agreed that there's no need to take action right now. I just have a hard time believing that readers who will pay $5.99 for my new releases will suddenly sign up to buy them at $9.99, because my net margin shrank. Some will, but a lot won't. Which is why I don't price there. Joe does, and has no problem, so that's also determined by genre, but hey.

I love the smell of scenarios in the morning...


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## cinisajoy (Mar 10, 2013)

@Rusty,
If my Fire dies, I can put all the books I have bought at Amazon on my K4PC or another Kindle or just leave them in the cloud.  The thing is I can only have them on up to 6 devices at one time.

Julie:
They just changed the way affliates made money.
And yes I well remember that because I do get the websites that tell the freebies.


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## Guest (Dec 20, 2013)

Hugh Howey said:


> How do they price-match? To a price you set somewhere else! Or because you published with someone else who does control your price. Amazon doesn't do this. You'll notice I don't publish on the Google Play store because they have this as a policy.


First, what I said was that Amazon INFLUENCES pricing. I didn't argue that I have to decide on what price to set. But those decisions are made based on how Amazon dictates its terms. It is disingenous to claim that Amazon's influence doesn't impact price considerations. Show of hands: how many people would make their books free if Amazon allowed it? How many people would price certain works lower than $2.99 or higher than $9.99 if Amazon didn't penalize you on the royalty? How many people, like you, avoid selling on certain outlets because of Amazon's policies? if Amazon's policies didn't punish you for third party sale decisions, would you be on Google Play?

I never set different prices at different vendors, because I come from a retail background where the retail price is in fact the retail price and you don't change it more often than you change your socks.  (in some states, stating different retail prices (not sale prices) to different customers is actually against the law. NJ is one of them.) And read what you just wrote. You avoid a potential sales outlet because of AMAZON'S policy. Google Play's policy isn't a problem. If they want to place my book on sale and still pay me the same agreed to price, how is that a problem? If someone wants to buy my book for $4 a copy and sell it for $3 because they think it will drive traffic to their shop, why would I possibly complain about that? That is how normal retail works. When WalMart price matches Target on a sale, they don't go back to the manufacture and say "Hey, we're going to pay you $2 less for each can of coffee because we matched a competitor's sale price." And YES, I know this for a fact because I work in contract packaging and I've seen the distribution contracts. if WalMart agrees to pay X per can of coffee, they are expected to pay X regardless of what price they decide to sell it for.

Now if I supply WalMart and Target with two different retail prices, then WalMart could come back and say I was in breach of contract. But so long as my retail prices are the same and I didn't give Target a special deal that I didn't offer WalMart, WalMart can't just arbitrarily change what they agreed to pay because someone else placed something on sale.


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## vrabinec (May 19, 2011)

Mimi (was Dalya) said:


> It will continue to get tougher, but not because of this doom scenario alone.


These threads make me want to write The KBoards Tragedy. Detective Sim Carstairs is baffled when thousands of indie authors are found at their computers in one day, the apperent victims of suicide. Carstairs is convinced there's foul play because this many people couldn't possibly go suicidal at the same instant..


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## Jay Allan (Aug 20, 2012)

Bards and Sages (Julie) said:


> No, it comes out of ours (unless the book is set at 35%. At 70%, Amazon "price matches" and only pay 70% of what they sell it for. If Amazon decided to "price match" my book to $1.99, even if I had no control over some other place selling the book for $1.99, they dump me down to 35% and only pay me on that. of course, the only way to avoid that is to be exclusive with Amazon so there is no chance of price matching. Which is, of course, what Amazon really wants. Exclusivity.
> 
> And Amazon DOES influence the price of our ebooks. We can't sell them for less than 99 cents (or even offer them for free without jumping through price-matching hoops). If you try to sell above $9.99, even in non-fiction fields where higher prices are the norm, you can't earn the 70% royalty and have to accept 35%. It's the primary reason I don't sell digital RPG products on Amazon. I have a couple of products priced at $14.99 (PDF) that sell well. On Amazon, I would either have to take a significant pay cut to 35% or drop the price to $9.99 to get 70%. We can claim it is "my choice" to set the price, but the reality is the price parameters are solely in Amazon's control when you sell on Amazon.


I would think your anger would be focused at the other site dropping your price without permission and triggering the price match. Yet you seem to do a backflip and blame Amazon for doing exactly what they told you they would if your as price was lower elsewhere.

Sony did this to me. It took me six weeks to get my books off of there, and the price match cost be thousands of dollars. Not Amazon's fault. Sony's fault. Which is why my books are all off of there.

There's this bizarre sense of entitlement people have, as if Amazon exists to do whatever they want. I've been in a number of businesses my whole adult life, and I've never had a partner or busy counterparty that was as fair to deal with as Amazon.

Does that mean they won't make changes in their own interest? No, of course it doesn't. But I have seen no evidence to date to expect overly abusive behavior from them. Considering the power dynamic between them and us, they're pretty warm and fuzzy as companies go. They already have an essential monopoly. Very few of us do more than 20% of our business anywhere else. And all the stuff about selling from our own web sites in volume is a pipe dream.

Yes, I agree the $9.99 is a drag. It gets in the way of big collections too. But Amazon wants books in the 2.99-9.99 price band, and they've always been clear about it. It's no different than choosing to stock Monopoly in your store but not Parcheesi. A retailer decides what they want to sell.

I'd suspect any changes will be far more moderate than halving the rate. And I agree completely, the biggest changes will come to push people toward exclusivity.

Still, Russell is dead on in one respect. Markets change, businesses change, customers change. If you aren't adaptable, you don't survive for the long term. In any business. A lot of people think Amazon owes them something...even to the point of endlessly complaining about every algorithm change or modification to the site's design. Nobody owes you anything. Be ready to turn reality into something that works for you instead of getting upset that things change.


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## Vaalingrade (Feb 19, 2013)

Wouldn't it be better for them all around just to put out another Fake Thing That Doesn't Work to trick people into Select again? Countdown seems to have done good by them, after all.

That way, you get all the benefits of screwing over the talent without all the bad PR are blatantly screwing over the talent.


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## Jay Allan (Aug 20, 2012)

I agree with Hugh and Liliana. 

Some change wouldn't stun me, especially in the context of promoting exclusivity more forcefully.

And, yes, technically free does cost them money.  But it also brings people to the site.  There have been all sorts of articles about how much more kindle owners spend at Amazon overall.  If all Bezos can squeeze $500 a year extra out of kindle owners, he's happy as a clam.  I'd wager ebooks overall serve more to bind customers to Amazon than as a profit center.  It's an ongoing relationship, unlike buying a lawnmower every ten years.


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## blakebooks (Mar 10, 2012)

I have to apologize to everyone. I think because it's the holidays, I miss the big family get-togethers, with the odd personality quirks in evidence - the judgmental parents, the all-knowing brother, the spacey sister, the drunk uncle you want to keep the kids away from.

I'm thinking I wanted some of that dynamic, and so threw this grenade onto the forums.

But I do feel better now. Ho ho ho.


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## Usedtoposthere (Nov 19, 2013)

Things change--that is the one constant in life. And it's for sure the one constant in publishing. 

I'll keep doing what's working now. When things change, I'll do something different. 

I'm still in Select because it still works for me. When it doesn't, I'll get out. 

I'm not sure I have to think about it until then.


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## Jay Allan (Aug 20, 2012)

Vaalingrade said:


> Wouldn't it be better for them all around just to put out another Fake Thing That Doesn't Work to trick people into Select again? Countdown seems to have done good by them, after all.
> 
> That way, you get all the benefits of screwing over the talent without all the bad PR are blatantly screwing over the talent.


Amazon doesn't need to trick you into Select. All they need to do is say, enroll in Select or get your books of our site. Very few indies would refuse, and the ones who did would lose a huge percentage of their sales.

Do you really think Amazon is bending over backwards trying to think of ways to trick you into listing your book for 90 days? Seriously?

No one in the industry has ever treated the "talent" as well as Amazon has.

Maybe it's good that they try things. They could emulate BN and do the same things they did to sell books in 1914 and see what happens


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## Joseph Turkot (Nov 9, 2012)

Blame it on whiskey.


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## cinisajoy (Mar 10, 2013)

Russell,
You forgot the cousin that spikes the younger ones drinks.


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## PhoenixS (Apr 5, 2011)

XXXXXXXXXX


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## Diane Patterson (Jun 17, 2012)

My bet would be on Amazon charging a fee to publish on KDP. Even a nominal fee, like $10 a year. Because in a hurry you will see lots of people drop off of KDP.

You see this with bulletin boards all the time. If a board is free, you get all sorts of wankers posting alongside normal people. Charge even $1 a month (that would, of course, be associated with some real-world payment system, like Visa or Paypal) and the number of wankers drops by 95%. 

Apple charges app developers $99 a year to publish via the App store. It might cover costs, it might not. If there are a million developers, that's $99m. That's not real money for Apple; for them that's a rounding error. But it definitely means the app developers have some skin in the game.


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## cdtooch (Aug 27, 2012)

We could always start a UNION.


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## Guest (Dec 20, 2013)

Jay Allan said:


> I would think your anger would be focused at the other site dropping your price without permission and triggering the price match. Yet you seem to do a backflip and blame Amazon for doing exactly what they told you they would if your as price was lower elsewhere.


But why would I be mad at a company that places my product on sale and still pays me the same amount? I am NOT talking about me playing games with retail pricing and me setting a lower price elsewhere. I am talking about company A paying be 50% of the list for a book, but placing it on sale and still paying me the 50% off the LIST. Why would I be mad at a company that pays me my agreed upon amount AND takes a hit on their profits to place my book on sale?


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## Cherise (May 13, 2012)

Monique said:


> I'm asking what we should do differently now to prepare for this Indiegeddon?


Publish on as many different vendor sites as we can.
Build our mailing lists.
Direct our advertising and our lists to all our different vendors, not just to Amazon.


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## Guest (Dec 20, 2013)

Dear Sir or Madam, will you read my book?
It took me years to write, will you take a look?
It's based on a novel by a man named Lear
And I need a job, so I want to be a paperback writer
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It's the dirty story of a dirty man
And his clinging wife doesn't understand
His son is working for the Daily Mail
It's a steady job but he wants to be a paperback writer
Paperback writer

Paperback writer

It's a thousand pages, give or take a few
I'll be writing more in a week or two
I can make it longer if you like the style
I can change it round and I want to be a paperback writer
Paperback writer

If you really like it you can have the rights
It could make a million for you overnight
If you must return it, you can send it here
But I need a break and I want to be a paperback writer
Paperback writer

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Paperback writer, paperback writer


----------



## heidi_g (Nov 14, 2013)

cinisajoy said:


> Question to the authors that are saying build your mailing list and just sell on your site.
> I know Amazon, I trust Amazon. I don't know you or how long you have been in business. How do I know, what guarantee do I have, that you did not just write your book to get credit card numbers? Why should I trust you?
> 
> Just a little food for thought.


^^^^^ This

I've been an Amazon customer for years, maybe since the first year they started selling books. I had a friend at work and we talked about all sorts of fringe philosophical theories. He turned me onto Amazon. It was like Netflix when it started. Huh? Order books online and forego the bookstore experience. You have to understand book stores were my sanctuary and my starbucks back then. HOWEVER, I quickly became a big Amazon devotee. I've always read weird books that local/chain book stores can't afford to stock. I quickly learned I could get any book I ever wanted to read on Amazon. It was awesome. At that time, I had to pay shipping, and I didn't mind, if I could get my hands on that obscure book I was craving! When I met my husband, I turned him onto Amazon. Now, we buy tons of other stuff from Amazon too.

Amazon "hooked us" by being a trusted, reliable, equal-opportunity bookseller. I <3 Amazon. Sorry, I do. I tried to be loyal to B&N as one of the last bookstores standing, but they allied with traditional publishers, in a way that harmed readers, i.e. by limiting what was available to them to buy. My first ereader was one of the first Nooks, but now I have a Kindlefire and Kindle Paperwhite.

That's probably why the others haven't broken through Amazon's wall. Amazon has massive amounts of customer goodwill. As an ex-CPA, I'd say that is their hugest biggest asset.

When I first published, I published on all platforms. Nobody told me that as an unknown author that really didn't make any sense at all Or if they did, I didn't hear or listen. I finally released some books through Select in October. They actually did better than the first book I published across all platforms. They actually got some reviews

After doing some soul-searching, I was like I love Amazon as a customer and reader, WTF am I doing killing myself to keep up with all the other platforms when 90% of my sales come from Amazon? It just wasn't logical. Now, I'm going to put everything in Select for the first time. The last book goes in tomorrow. I know, people will think I'm an idiot, and I'm leaving money on the table, but next year I want to write.. a lot&#8230; as much as I possibly can. I need the sales side to be simple and as effective as it can be. If Amazon cuts the life-blood of indie authors, I will be totally screwed. Oh, well It's been a frickin INCREDIBLE ride even with my&#8230;uhmm.. .lesser than others sales


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## Guest (Dec 20, 2013)

Phoenix Sullivan said:


> 3. Amazon lifted the minimum required amount to pay out royalties via EFT. Amazon is voluntarily giving up the interest previously earned on these accounts. _(We can speculate that keeping this minimum in place should have been helping to stop some folk from pubbing up books that don't sell well because they're not actually getting money in hand for the few sales they do make. Ergo, Amazon isn't going to be doing anything in the future to curtail anyone publishing anything up.*)_


This is probably more an accounting issue than a benevolence. There comes a point that you want to get all of those nickels and dimes off your books. Stuff rolling over from year to year can get cumbersome. I know end of fiscal year where I work is always a mad rush to "clean the books". And with all of the new tax laws that went into effect this year, I can imagine Amazon wants their books as clean as possible.


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## Guest (Dec 20, 2013)

Best advice I can give is for someone to cut/paste this whole thread, rewrite it, get a cover, and put it out as a $0.99 doomsday title - Is The 70% Royalty Dead?

I mean, there's already a book here.  Who'll be the first to jump on this amazing opportunity?


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## Monique (Jul 31, 2010)

Cherise Kelley said:


> Publish on as many different vendor sites as we can.
> Build our mailing lists.
> Direct our advertising and our lists to all our different vendors, not just to Amazon.


LOL, right, but that's the current common wisdom. I mean, it's not revelatory. I'm already doing all of those things. Many, many people are.

I guess Russell was just "having a bit of fun" with this thread after all.


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## Jan Thompson (May 25, 2013)

Greg Strandberg said:


> Best advice I can give is for someone to cut/paste this whole thread, rewrite it, get a cover, and put it out as a $0.99 doomsday title - Is The 70% Royalty Dead?


Wouldn't that be plagiarism?


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## heidi_g (Nov 14, 2013)

Greg Banks said:


> Now if Bezos ever leaves and someone else with a different vision takes the helm, all bets are off.


Yep. This I think is absolutely true.


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## Guest (Dec 20, 2013)

JanThompson said:


> Wouldn't that be plagiarism?


Oh, boy, here comes another 7 pages!


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## Jay Allan (Aug 20, 2012)

Bards and Sages (Julie) said:


> But why would I be mad at a company that places my product on sale and still pays me the same amount? I am NOT talking about me playing games with retail pricing and me setting a lower price elsewhere. I am talking about company A paying be 50% of the list for a book, but placing it on sale and still paying me the 50% off the LIST. Why would I be mad at a company that pays me my agreed upon amount AND takes a hit on their profits to place my book on sale?


Because it causes you to violate the terms of your agreement with another, almost certainly more important, retailer.


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## BokkenRecord (Nov 17, 2013)

Actually I think it is possible to look at this differently.

I would say the main competition for book sales is other media (games, films tv etc)

Would you rather read a good book than watch a mediocre film? Play a decent game over a sub-par book?

For me the answer here is yes to both. As a long term high volume reader when I find an author I like I tend to buy ALL their books eventually. The most valuable commodity I have is time, so cost is secondary to quality. For example - I would have happily bought 4 Iain M Banks books a year. But for a writer I consider a bit meh, I'm not going to waste my time, I'd rather find some other form of entertainment.

Now perhaps this is a simplistic argument but look at the distribution of sales from Amazons perspective: most book sales are probably from a small segment of writers, and I'm guessing they can't produce books fast enough to meet demand. So a full time writer may produce 2 - 10 a year, a part time writer might sustain a third of that?
I don't think it would be that hard to do the maths. If they drive down the potential for repeat sales on the mid list Amazon may actually make less at 35% royalty than 70%, depending on where the cut-off point for valuable midlisters lies. Amazon policy seems consistently geared towards high volume & wide selection, with a emphasis on long term REPEAT custom.

A lot of my reading comes from that mid-list, and I tend to go to Amazon for a lot of other products because I find what I want there most consistently. It's not just repeat business in books that flow from my owning a kindle.

I'm not saying the % won't change over time, but I also think the 70% has never been altruistic. 

I don't think storing 10x as many books on servers adds much to the overall operational costs, as most of these are sunk costs anyway. So why would Amazon penalise people for putting books up? Who knows where the next FSOG will spring from, and when it arrives they want to be one of the businesses selling it.

I think the real risk to indies short to mid term is facing smarter competition from bigger publishing companies, dropping the prices on old titles for popular authors as a way of dragging in new readers. I've already seen TOR doing this with the ebook of one author I follow ($5.99 -> $0.99 for a number of weeks), and I know the price drop came from the publisher as he commented on it in his blog. And the price pushed his book back to the front page of his categories in the UK. I bought it and read it instead of something else.


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## Lydniz (May 2, 2013)

I like the way "[jerks]" gets past the swear filter. It's cultural hegemony, I tell you!

_Fixed that, thanks!_


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## heidi_g (Nov 14, 2013)

Rusty Bigfoot said:


> And finally, here's a good read on how some feel about the Zon on a local/environmental level:
> 
> http://www.transitionnetwork.org/blogs/rob-hopkins/2013-12/day-i-closed-my-amazon-account


Great post and thanks for sharing. This is what's most fascinating to me, as I became an Amazon customer when it was like, what? Amazon who? I think the future is global/local. I have readers from all over the world. That is AMAZING to me. How would this be possible, today at this point, to have sold a book in France w/out Amazon?

I'm super-green and do all I can to support local businesses.

Why can't we be friends? [music notes] 
Why can't we be global and local?



JohnMarch said:


> I think the real risk to indies short to mid term is facing smarter competition from bigger publishing companies, dropping the prices on old titles for popular authors as a way of dragging in new readers. I've already seen TOR doing this with the ebook of one author I follow ($5.99 -> $0.99 for a number of weeks), and I know the price drop came from the publisher as he commented on it in his blog. And the price pushed his book back to the front page of his categories in the UK. I bought it and read it instead of something else.


This does seem more likely to be next big challenge&#8230;.


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## Diane Patterson (Jun 17, 2012)

Lydniz said:


> I like the way "wankers" gets past the swear filter. It's cultural hegemony, I tell you!


SHHHHHH.


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## Decon (Feb 16, 2011)

Things are already tougher than last year and last year was tougher than the year before  - for the majority. I wouldn't worry about what Amazon may do, the worst damage was done by the our own self-published community with the downward spiral to 99c, then to free.

Amazon stepped in and brought some order to what was a chaotic market and led to a big shakeout. Tweaks to algorithms in a new chart to favor higher priced books, the introduction of KDP select with the limited free price promotion, hiding the free chart with the extra effort of a click to reveal it alongside the paid chart, slowing down price matching. Changing terms with associate sites offering free ebooks and now they've introduced countdown to further cut free promotions. It's all a question of balance with free and low pricing. Too much and the balance is lost with no one making  profit. If the balance is right they will leave it alone, if not they'll step in like they already have in the past.

As for the OP's scenario, anything is possible. Indies were useful for Amazon to boast a catalog of cheap eBooks in quantity for them to sell kindles, so don't be fooled be the owner of Amazon claiming to be the champion of indies other than for business advantage when it suits.  

Others have now joined the market and just like computer sales are in decline, tablets will eventually reach saturation point.  At that stage, having the cheap books available as a carrot to sell hardware is no longer an advantage. Under those circumstances I could see them messing with royalties along with any other distributor who is in the market at the time.


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## Hudson Owen (May 18, 2012)

LilianaHart said:


> Apple is the #2 ebook retailer. I make a high 5 figures a month just at Apple.


Power to you. I've had two run-ins with Apple on style or content. First, it objected to heavily ghosted nudity on a book cover, which the Apple rep described to me in lascivious detail--the areola this, and the nipple that. I thought, my god, where did they dig up Mrs. Grundy and replicate her genes? Most recently, Apple rejected a 7,700 word essay because it lacked a TOC. OK, it's a long essay, but still, how many short stories or essays have a table of contents? Call it a book, if you want; it's still an essay. Don't Apple devices have a bookmark feature like Kindle?

Nary a peep from Amazon and the other distributors on either issue. Apple is being prissy and stupid, erecting barriers to the author that do not benefit the broad base of readers. Apple had better watch out in the post-Jobs era. It may well become the Montgomery Ward of the e-content business. Amazon will crush them. Fluff Apple.


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## valeriec80 (Feb 24, 2011)

Phoenix Sullivan said:


> So let's look at some recent Amazon changes that provide evidence for Amazon being concerned about its profit margins where self-pubbed books are concerned.
> 
> 1. CreateSpace voluntarily rescinded its distro fee. _(It would be just as productive to look at this move and hypothesize the imminent removal of the delivery fee for ebooks.*)_
> 
> ...


Phoenix Sullivan beat me to it.

I was just going to say that it seems the trend is going the opposite way and cite some the same stuff she's saying.  Also, they opened the Canada store and didn't require exclusivity for 70%. Right now, there are like four international stores that require exclusivity for 70%. Japan, India, Brazil, and Mexico. I'm not sure that four international stores indicates a trend in the idea of 70% for exclusivity.

Honestly, Amazon has never made a move in this direction, people. They have never taken things away from indie authors that they had previously given. Heck, they even let us do things that are against the TOS (permafrees) and created a new report style to helpfully let us track them.

I'm not saying Amazon is a fluffy bunny that just wants to make our lives better, but I think Amazon wants to _look_ like a fluffy bunny that makes our lives better. They wouldn't make a move like that unless they were suddenly on the decline and were in trouble, in which case, we'd all have moved on to the thing that had trounced them anyway. Amazon may be evil, but their evilness will probably always come from the fact that they're just so darned great at keeping people happy... while they're busy shoring up world domination.


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## ChrisWard (Mar 10, 2012)

Could happen, but then so could a lot of things. To be honest, I have better things to do on a Saturday morning than read eight pages of speculation about what might happen next year.

First up is dig 15cm of snow out of my car park and the street outside so that I can take the cat to the vet.

*sigh*


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## Some Writer Cat (Sep 22, 2010)

Dean Crawford said:


> The "stigma" of self-publishing is rapidly being eroded by so many SP authors finding success, and it would seem to me a possibility that Amazon might soon choose to slice away the plethora of titles deemed unprofessional as a result of their poor sales ( and I'm not thinking of anybody other than _wannabees_ who write a few lousy, unedited words and call it a novel, then vanish when it doesn't sell a single copy ) and start moving toward a more conventional bookstore orientated style of selling. They've already dominated in terms of quantity - sharpening up the storefront would seem to me to be the next logical step, just like any other business would seek to do.


I doubt it. Amazon's philosophy of curation is now widely accepted as eCommerce 101: let the customer decide. Any other form of gatekeeping is worse, and we have no better evidence of this than the indie publishing revolution itself. Traditional publishing, as curated an industry as there is, missed the boat on many, many possible successes. But what Amazon has done lately is make it harder for writers to game the system, which then places more emphasis on customer choices and less on authors trying to ride some algorithm wave. De-emphasizing free, changing the weighting of short-term sales spikes, trying to cut out the shadow puppet reviews, these are all attempts to give more power to customer choices. So the really bad stuff just sinks and nobody even sees it.


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## valeriec80 (Feb 24, 2011)

blakebooks said:


> Lilliana: I'm not sure I understand. You believe that your readers would pay more, and that your sales wouldn't be negatively impacted, and yet you don't charge more? I mean, that's fine, but it runs contrary to most business principles I know, which generally encourage efficiency - maximizing return at maximum sales volume.


I just had another thought!

Why don't we all charge more for ebooks? I think it's because no one raises their prices when things are going well. You don't change anything when things are going well. When things are going well, you keep things the same, because they are working.

So... is giving indies 70% going badly for Amazon? I kind of don't think it is. I seriously doubt they'd just up and decide to do it because they wanted to make more money. Amazon has a history of operating on razor-thin margins, barely making a profit, all because they are trying to stay competitive.

It also reminded me of how back in the day, Amazon gave you 35% cut. And if they price-matched, they still gave you the same 35% of your list price. (This is still true if you want to use the 35% option, in fact.) So, since Smashwords gave you a much deeper cut, I sold all my books on Smashwords for $5 and all my books on Amazon for $7. I made way more money on Smashwords than I did on Amazon (which was mostly because I was hand-selling at that point, and my website said that it was cheaper on Smashwords, so that was where everyone went. And... by "way more money," I mean, like $300 for the year as opposed to $100 or something. I made very little money back then.) Anyway, then Amazon introduced the 70% thing and made the rules about how if you offered stuff for a lower price, they'd only give you 70% of the sale price, blah blah. So, I lowered my prices on Amazon, and I started to make more money on Amazon.

I think Amazon's goal is less that they want to be the most profitable business in the world and more that they just want to be the *only* business in the world. So, whatever they do, it's going to be to keep people from buying stuff anywhere else. Ever. If there's a scenario where lowering the cut to indies makes it more likely that people will only buy from Amazon, then they'll do it, and only then.


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## LilianaHart (Jun 20, 2011)

Hudson Owen said:


> Power to you. I've had two run-ins with Apple on style or content. First, it objected to heavily ghosted nudity on a book cover, which the Apple rep described to me in lascivious detail--the areola this, and the nipple that. I thought, my god, where did they dig up Mrs. Grundy and replicate her genes? Most recently, Apple rejected a 7,700 word essay because it lacked a TOC. OK, it's a long essay, but still, how many short stories or essays have a table of contents? Call it a book, if you want; it's still an essay. Don't Apple devices have a bookmark feature like Kindle?
> 
> Nary a peep from Amazon and the other distributors on either issue. Apple is being prissy and stupid, erecting barriers to the author that do not benefit the broad base of readers. Apple had better watch out in the post-Jobs era. It may well become the Montgomery Ward of the e-content business. Amazon will crush them. Fluff Apple.


The thing with Apple is that you have to play the game. Yes, they are extremely prudish. They don't care. They're Apple. (And that is a direct quote from my Apple rep). If you want to sell books on their platform you'll have to adjust covers and content to their liking. That's how I started selling well on Apple. I did what they asked. If they want a TOC then do it. The only person you're hurting by not selling with them is you. It's not just Apple. When Amazon told me my covers were too hot and I needed new ones, I spent $5k (twice) until I got covers that made them happy. I'm not going to dig my heels in and refuse to do something just on principle because I don't like it or think it's ridiculous. It's their business. They can demand what they want. Just like it's my business, and I can make the changes needed to be successful.


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## Herc- The Reluctant Geek (Feb 10, 2010)

Haven't read all the thread, so I apologise if this point has already been made. 

I can't see Amazon lowering the royalty because it will open up room in the market for other players. I do, however, believe there is change in the air and it's being driven by the new all-you can-read services like Oyster and Scribd. My major concern is that 'zon will broaden it's select program and demand exclusivity for inclusion. 

All the books you can read on your Kindle for one low monthly price has probably cropped up in the mind of more than one 'zon executive in the recent past.


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## Book Master (May 3, 2013)

I thought about all of these "what if" questions when I started. All companies are out there to make the max in profits. Sooner or later Amazon will make those changes to secure more revenue.

Authors would be angry about it but how could they be when books are given away for nothing in the five day or permafree promotion technique. For those that have hit the gravy train, better spend that money wisely because you just never really know who is trying to place a hand in your pockets!

Another thing to consider is that at 35 percent, you are really going to have to make the sales to see some good money. You also will have to pay the tax beast for tha past year's sales. 

Unless you sold thousands upon thousands of books, your revenues would be dismal and not hardly worthwhile for all the hard work you put into this. This is hard work and if Amazon cut the profits to Authors, it would be devastating to say the least.

Sure, they are quite a few making some serious money but they did it through working their a**s off. This topic reminds me of employees working for a company. The company tells them they will have to take a pay cut. What do those employees so? They become angry and bitter. Some look elsewhere for jobs paying more money. Others slack off their production work flow.

Those same things would happen with Indie publishing. Authors would become discouraged because "they are doing all the hard work," and Amazon and the tax man are taking the profits!

Don't think that this can't happen because nothing is guaranteed in this world. Greed is abound in all marketplaces and businesses. Never underestimate the hand that may feed you!

Expect the unexpected and hope for the best are words to live by, at least I believe in them each day I live.

BM


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## cinisajoy (Mar 10, 2013)

Herc- The Reluctant Geek said:


> Haven't read all the thread, so I apologise if this point has already been made.
> 
> I can't see Amazon lowering the royalty because it will open up room in the market for other players. I do, however, believe there is change in the air and it's being driven by the new all-you can-read services like Oyster and Scribd. My major concern is that 'zon will broaden it's select program and demand exclusivity for inclusion.
> 
> All the books you can read on your Kindle for one low monthly price has probably cropped up in the mind of more than one 'zon executive in the recent past.


Only one problem with these services. It is not all the books you can, it is a select group of books that you can read all you want. I looked at the list and it was unappealing. So not all readers would want that.

Face it no one knows what any big business is gonna do so it is all speculation. 
But remember you need Amazon more than they need you with a few exceptions.
Oh and I would love to have a 1% profit margin on the level of Amazon. Their profits were over 1 million dollars.


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## Gone 9/21/18 (Dec 11, 2008)

Ho, ho, ho, to you too, Russell, and Merry Christmas.


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## Mike_Author (Oct 19, 2013)

I've got a background in Game Theory for commercial strategy and I know that Amazon have people like me except considerably smarter and with more information at their finger tips.  I have thought about this a bit and my 2c is that Amazon will be mapping out the chain of cause and effect to estimate the long term effect of each action.  Amazon and a couple of the other retailers are in an arm wrestle with Amazon holding the advantage and the others pushing back hard.  To take the pressure off now by handing Indie/self-pubbed to the others would be bizarre.

Some key points - 

- Amazon is the gorilla at the moment but would always be mindful of Apple's power across multiple markets.  Opening the door (even a crack) for Apple now would be lunacy
- My guess is the revenue that Amazon knows they forsake by being at 70% i/o 35% would be dwarfed by the revenue created when customers buy higher priced stuff on the site - ie - Customer X comes to Amazon to buy a 2.99 book on Liver Detox Recipes and stays to buy other, higher priced stuff.
- Prime is a cornerstone strategy for them, so they wouldn't do anything to reduce the attractiveness of Prime at the moment
- I can, however, definitely imagine them trying to sweeten KDP Select further or instigating a new strategy.  One that I can imagine, is incentivising suppliers to give Amazon exclusive periods (say 4 weeks, for example) before books are released to other retailers.

However, if I was forced to guess at the changes ahead, my guess is on something happening that absolutely none of us have considered, like Rumsfeld's 'known unknowns'...


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## Moist_Tissue (Dec 6, 2013)

I think the better bet for generating revenue is to follow the gym membership formula.

Around the first of the year, many people will run down to their local gym and sign up for a membership. They will promise themselves that they will be more active. They'll pay for classes. Maybe even sign a contract with a personal trainer. At this point, they have every intention to succeed.


By March, other things have come up. The desire to get healthier has faded. They hope to get back into the gym, but not today. Maybe next Monday or maybe the first of the month. They could cancel their membership, but they believe that they'll eventually get back into the gym. Just not now. Or, they may have a gym that requires you to pay an early cancellation fee and they calculate that it is cheaper to keep paying the monthly fee rather than the cancellation fee.


A year goes by. They have made monthly payments towards a membership that they haven't fully utilized. There's a segment of people who use the gym daily, sometimes multiple times a day, but there is a large amount of people who just pay and don't play.

That's where I see growth for Amazon. Pushing people to pay for a select service. People want to pursue their dream of being a writer so they sign up. They only have to pay $10 which isn't much when you consider they could be making hundreds or thousands of dollars if they work at it. But, then life catches up and they realize just how hard it is to turn a profit. They'll get back around to writing and publishing again, but not right now. Meanwhile, they'll continue paying their membership fee because it isn't that much money.


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## Justawriter (Jul 24, 2012)

Amazon could cut royalties, but I don't think it's likely. As a few others have also said, it's just not good business to do so. We are not just vendors, the vast majority of us are also customers, probably very good customers. 

One thing that most businesses have learned is that you don't take something away from someone once you give it to them. When companies cut salaries or benefits, it is generally because the company is in trouble. Granted, we are not employees, but I think the analogy stands, the only reason that would make sense to cut the percentage would be if Amazon is in trouble....they're not.

Amazon prides itself on happy customers and they absolutely do consider us customers. There's just no good reason to cut royalties. They've never been about short-term profits. They've always been about expansion and you don't grow and expand by weakening your assets.

Amazon always wants to have the best prices, the best deal, if they were to cut royalties, they would no longer have that. Apple would or Google or BN. Even if BN goes away, there's still Apple and Google is only an infant in this space, they could easily catch up to Amazon...so why give them any edge to do so?

I think the big change in the wind that's coming is from the Big 5 continuing to cut prices, which lessens the Indie's edge, and the volume of new books coming from every direction. Discoverability is what we need to be most concerned about. Not worrying about royalty cuts.


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## Terrence OBrien (Oct 21, 2010)

> Hugh: Actually, history is filled with monopolies squeezing their vendors to get more profit. In fact, one only has to look at companies like Walmart and Costco (although not monopolies) and their approach to vendors, which is predatory, to say the least. I think where everyone gets it wrong here is the assumption that indie authors are customers. They aren't. They are vendors/suppliers. And getting the best possible price from vendors is one of the tenets of business, all other elements being equal. Regardless of how the Amazon rhetoric is that vendors are customers, the fact is that they are vendors, selling via Amazon.


A monopoly has no more buying power than any other business. They have to buy on the open market just like everyone else. In a monopolistic situation, the monopoly is due to the power of the seller, not the buyer. Regulations against monopolies are designed to protect buyers, not sellers.

Walmart and Costco do push for lower prices. So do I. But that is not because we are monopolies since we are not.

I agree independent authors are suppliers

For those who think Amazon will become a monopoly, can you show us any other retail monopolies so we know how they behave and how we would identify them? That would help in analyzing Amazon. It also would help to have an example of a monopoly that does not control production.

We might consider dropping references to monopolies until we discover a retail monopoly that does not control production.



> Monique: The reason I posted it is because I'm always deeply distrustful of the tendency for humans to engage in normalcy bias.


Normalcy bias is dangerous attitude. But so is the bias of insisting on some specific future scenario. Both are biases that distort objective analysis. Both should be rejected in favor of more rational and rigorous analysis.



> Why don't you set a timetable for this prediction of doom and gloom. Let's have some kind of public wager. I'll bet anything you want. Anything. The Jeremiads are never right, my friend. Never.


God Bless the risk-takers, for they challenge the bias.



> It's not fear mongering when one raises a question, floats an idea, or disagrees with the consensus opinion. In investing its called being a contrarian. There's often good money being one - when the crowd believes everything's great, take positions that assume that won't last, and when the crowd believes it's all going to hell, buy.


I agree raising an idea is not fear mongering. Im responding to your OP statement that,
_ I see exactly zero reason this won't happen. Once you control the channel, it's time to make money. This change wouldn't alter book sales one iota, so it would be a massive win for Amazon, with literally no downside. _

I challenge the zero probability of any other scenario. And Ill take a dollar of that bet if its still open.



> Amazon has overhead. Just because there is no physical inventory doesn't mean a digital file does not have associated costs. There is server space, customer service employees, IT employees to make sure all of that software does what it is supposed to do to deliver the file to the Kindle. Processing the "sale" of a free product requires the same output of resources as processing the sale of a non-free product. If Amazon doesn't recover its expenses on a free product, it must recover them elsewhere.


That is a step function. Amazon does have those expenses, but they are fixed for a given capacity. There is no incremental cost for adding a single book to KDP. We don't know how much capacity Amazons current structure will accommodate. It may be able to take a million more books without increasing any of the resources mentioned. This is a case where financial accounting and overhead allocation leads to the wrong answer.



> Lilliana: I'm not sure I understand. You believe that your readers would pay more, and that your sales wouldn't be negatively impacted, and yet you don't charge more? I mean, that's fine, but it runs contrary to most business principles I know, which generally encourage efficiency - maximizing return at maximum sales volume.


For a single book I agree. But in the case under discussion, it would depend on the prices of close substitutes. The demand curve for a single book will change with the prices of substitutes. This is why people form cartels.


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## NoCat (Aug 5, 2010)

For me at the moment, Amazon is my worst-selling vendor. I know I'm in the minority, but my Amazon sales have dropped to barely anything, so for now, a change like that would hardly touch my bottom line.  

Long as they allow me to keep making audio books, I'm good.


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## Andrew Ashling (Nov 15, 2010)

blakebooks said:


> If you thought you could raise your prices and it wouldn't negatively affect your volume, why haven't you already done so? I mean, why wait for Amazon? My gut says it's because you're at your best-selling price - a conclusion you've arrived at by looking at price, vs. diminished sales at a higher price.
> 
> What those declarations leave out of the mix is the customer. The customer isn't going to pay more for your product because your profitability changes. The customer will pay what it thinks is fair value, and not a penny more. Market efficiencies at play.


This would be true (maybe) if only a few indies raised their prices. Not if most do. Even now, in one genre, you see novels of 50k words selling for $6.99 and 150k doorstoppers selling for 3.99.

This would not be akin to your restaurant example, but more to gas stations raising the price of gas because their profitability changed. Would customers pay more than what they think is "fair" to pay for gas? Yep, they would, provided all gas stations raise their prices.

Maybe _that_ is what Amazon wants. Raise the average price of ebooks in general. This could amount to a natural selection process, since maybe readers will indeed not pay the asking price of some authors.

Anyway, whatever the case, there is a high probability they will do it at the same pace as they tinkered with the algorithms. In fact, that is already happening with all the new 35% countries, and even Amazon dot com the 70% is only for US sales. The average is more something like 60%.


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## Terrence OBrien (Oct 21, 2010)

Who sets price on Amazon?

_5.3.4 Customer Prices. To the extent not prohibited by applicable laws, *we have sole and complete discretion to set the retail customer price at which your Digital Books are sold* through the Program. We are solely responsible for processing payments, payment collection, requests for refunds and related customer service, and will have sole ownership and control of all data obtained from customers and prospective customers in connection with the Program. _

[My bold face]


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## Vaalingrade (Feb 19, 2013)

Let's all be honest here: Amazon is probably the biggest seller here for most of us due to our own complacency, not because Amazon is magic.

It's just easier. There's surrounding infrastructure thanks to sites using the affiliate system and really all we have to do is throw a book on Amazon, gen up some reviews with ARCs, then throw some money at an affiliate site until sales happen.

Marketing on the other platforms is work. It requires thinking and searching for pockets of users to pitch to and doing things without an infrastructure. I don't know about you, but I'm very, very lazy, so I put the links on my site, link the site to my sig and call it all Hakuna. Then I act all surprised when B&N and Apple are giving me 10% of what Amazon does.

The position we're so scared of is born of a strategy of writing a lot, napping and occasionally scratching oneself. We need to get out, get moving and learn to network, to raise one another up and to find other venues to champion to readers so we don't end up boxed in by Amazon or whatever other site gets to be Strong Dong Kong in the industry after them.


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## Terrence OBrien (Oct 21, 2010)

> Let's all be honest here: Amazon is probably the biggest seller here for most of us due to our own complacency, not because Amazon is magic.


It can also be because maximum profitability comes from devoting the suggested marketing time to some other endeavor. Magic is not involved.


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## dalya (Jul 26, 2011)

Vaalingrade said:


> ...
> The position we're so scared of is born of a strategy of writing a lot, napping and occasionally scratching oneself. We need to get out, get moving and learn to network, to raise one another up and to find other venues to champion to readers so we don't end up boxed in by Amazon or whatever other site gets to be Strong Dong Kong in the industry after them.


I'm changing my name to M. Strong Dong Kong right now.

But you're absolutely right. Whenever I say "heads down, just keep writing little prawns," it is with tongue firmly in cheek. I like to look around a lot, research, forget about writing, then nearly murder myself trying to meet an insane deadline. I don't recommend this strategy.


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## Becca Mills (Apr 27, 2012)

Phoenix Sullivan said:


> What happens if Amazon decides to woo that audience by, who knows, buying NookPress and rebranding Nook into Amazon? Seems as likely a scenario as anything else being speculated about in this thread. Buying up the competition is a tried-and-true domination tactic... (Mobipocket, Goodreads... don those tinfoil hats now!)


Buying Nook would be a genius move for Amazon (in my not very business-savvy opinion).


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## Greg Banks (May 2, 2009)

Vaalingrade said:


> Let's all be honest here: Amazon is probably the biggest seller here for most of us due to our own complacency, not because Amazon is magic...


I don't think it's complacency (or at least not _just_ complacency). We all know and have to admit that Amazon, more so than any other retailer out there, is best set up to help us actually sell ebooks. They aren't the number one online retailer because they are bigger, they are bigger and number one because they do it better than anyone else. The other websites don't have as great a site search, as great a presentation, or an online community aspect that is, or at least for long while was, a huge benefit to us authors in trying to network with our potential audience. All of those things that connect one book to other books can be a detriment, but it can also really help boost your book's visibility. No one else does it as well.

Amazon is by far a superior platform for selling content. Yes, with hard work you can probably get good sales on other sites. But it's like buying a house. If one lot comes with a wonderful pre-built structure where all you have to do is customize the interior and furnish, where another lot, for the same price, comes bare and you have to build your own house from scratch, is it an act of complacency to choose the lot with the pre-built structure as a starting point? Amazon has the pre-built structure in place to help us sell books. Personally, I think focusing on them is called being smart.

Just my opinion, though.


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## LilianaHart (Jun 20, 2011)

Mimi (was Dalya) said:


> I'm changing my name to M. Strong Dong Kong right now.


I'm calling you that from now on.


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## 68564 (Mar 17, 2013)

Things WILL get much tougher if I spend all my writing time reading/responding to this thread!  

Anyways - I suggest in response to all this we all do the best we can to ...

1) Build and protect our mailing lists cause it is good business sense 
2) Work on putting out the best product we can
3) Write and release more books
4) Pay attention to what works in the current marketing environment and adapt as needed

Oh wait... that is what we should do REGARDLESS of anything else. Huh, imagine that...


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## Usedtoposthere (Nov 19, 2013)

I also think there's something to be said for pursuing the strategy that allows one to spend 90% of one's work time just writing/editing/presenting books. There are payoffs to sticking with one vendor. Everyone has to do what works best for them, of course.


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## valeriec80 (Feb 24, 2011)

Vaalingrade said:


> Let's all be honest here: Amazon is probably the biggest seller here for most of us due to our own complacency, not because Amazon is magic.


I don't know about this. I think the strategy of all publishers up until the ebook revolution has basically been: Publish book. Put in bookstores.

Now, it's also entirely possible that the reason that no one knows how to effectively market books is because basically no one ever really has. Big publishing companies apparently don't do the kind of market research and testing that major studios do. They don't give books out to and do "test screenings" and then come back and tell authors to rewrite so that the books sell better or anything like that. And, in fact, even with what we do here in the WC, which--let's face it--is like the cutting edge of book marketing, we spend more time on packaging than we do on actual product. (Such conversations are considered "craft threads" and we all know that there's a good way to make your book cover, but that, when it comes to writing, there is no good or bad, only different people's equally valid opinions, yeah?  )

But it's also possible that books are an entirely different animal product wise. They are consumed individually, privately, and they require the consumer to really participate in the consumption in a way that basically no other product requires. It's possible that because books are so personal, they are extremely difficult to market. Possibly it's impossible to market them in any way other than just sticking them on a shelf--whether it be physical or virtual--and hoping that some people see them and decide to try experiencing them.

I sure as heck don't know. I know that as a reader, when I look for new books, it generally comes down to two things. One, either other people are talking about a book (word of mouth). Or two, I have read something so freaking transformative and amazing that I wished it had never ended. And what I want desperately, more than anything, is to read that freaking book again, only for it to be fresh, like I'd never read it before, and so I go out looking for something _just like_ the last really awesome thing I read. I think any kind of book marketing has got to speak to one of those two points of customer desire. And I don't know how a writer could really effectively do that beyond the general idea of trying to get eyes on your book.


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## Cherise (May 13, 2012)

Greg Banks said:


> We all know and have to admit that Amazon, more so than any other retailer out there, is best set up to help us actually sell ebooks. They aren't the number one online retailer because they are bigger, they are bigger and number one because they do it better than anyone else.


True.

"It makes me feel sad for the rest..."


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## heidi_g (Nov 14, 2013)

valeriec80 said:


> They are consumed individually, privately, and they require the consumer to really participate in the consumption in a way that basically no other product requires. It's possible that because books are so personal, they are extremely difficult to market.


excellent point


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## Hudson Owen (May 18, 2012)

LilianaHart said:


> The thing with Apple is that you have to play the game. Yes, they are extremely prudish. They don't care. They're Apple. (And that is a direct quote from my Apple rep). If you want to sell books on their platform you'll have to adjust covers and content to their liking. That's how I started selling well on Apple. I did what they asked. If they want a TOC then do it. The only person you're hurting by not selling with them is you. It's not just Apple. When Amazon told me my covers were too hot and I needed new ones, I spent $5k (twice) until I got covers that made them happy. I'm not going to dig my heels in and refuse to do something just on principle because I don't like it or think it's ridiculous. It's their business. They can demand what they want. Just like it's my business, and I can make the changes needed to be successful.


In the first instance, with the cover, I folded and uploaded a passable new version. No solid evidence to say it helps or hurts sales. In this latest flap, I told D2D, which formatted the essay for the different platforms, to wait until after Christmas to try and reformat the essay including a few subheads, which D2D seems willing to do--they are very good people, in my brief acquaintance with them. Apple's guidelines are too vague. If they were to say, put in a break every 1.500 words, that would be helpful.

But it makes no sense to the customer and it irritates the author. As Apple grandly puts it, WE DON't CARE. It's that attitude that I think will sink them. Is their e-content owned by Hallmark Cards? Who is this prudish audience they are catering to? Apple is still riding high on the dominance of its devices and, I am guessing, music sales on iTunes. They are being challenged on the devices by Samsung and others, which will make the battle for content a more valuable branch of their business. However, We Don't Care.

Apple is lucky to have your business, not the other way around. They haven't made you a better writer, have they? If I offered you 100 shares of Apple or Amazon as a long term investment, which would you choose? Amazon has given me no grief whatsoever.


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## Jay Allan (Aug 20, 2012)

Vaalingrade said:


> Let's all be honest here: Amazon is probably the biggest seller here for most of us due to our own complacency, not because Amazon is magic.
> 
> It's just easier. There's surrounding infrastructure thanks to sites using the affiliate system and really all we have to do is throw a book on Amazon, gen up some reviews with ARCs, then throw some money at an affiliate site until sales happen.
> 
> ...


Amazon's dominance doesn't have anything to do with any of us. They brought that dominance to the table when they opened up KDP. They have massive customer relationships, significant trust in the marketplace, huge web traffic, and a reputation for good customer service. Amazon's dominance is the one constant in this market, at least for the near term. A bunch of indies stomping off in a snit wouldn't change that a bit. It's one thing to be happy with our success, but we should stop short of filling hot air balloons with our egos if we want to continue to prosper.


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## blakebooks (Mar 10, 2012)

Jay: Hear, hear.


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## Jay Allan (Aug 20, 2012)

Becca Mills said:


> Buying Nook would be a genius move for Amazon (in my not very business-savvy opinion).


That would be shot down by the government on anti-trust grounds, but if they could do it, I'm sure they would. I wouldn't be shocked if they bought the brick and mortar too. They'd manage to integrate the stores with the web in ways no one at BN could imagine.


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## jdcore (Jul 2, 2013)

I haven't read every post, but here's my response to the OP.

If Amazon did that, writers would have several options - one being to take their readers and go elsewhere - another being to raise prices on Amazon and drop them elsewhere so that readers abandon Amazon. It would take some of the big name writers with substantial followings getting on board, but it could happen. Besides, Amazon is already making substantial money from a very simple hosting model, so there's really no reason for them to try something like that UNLESS they also find a way to increase promotion of indie titles - which they seem to have no interest in doing.

Anyway, that's my two cents.


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## Vaalingrade (Feb 19, 2013)

Greg Banks said:


> I don't think it's complacency (or at least not _just_ complacency). We all know and have to admit that Amazon, more so than any other retailer out there, is best set up to help us actually sell ebooks. They aren't the number one online retailer because they are bigger, they are bigger and number one because they do it better than anyone else.


They _don't_ really do anything for us though. That's the point. All they've really done to 'help' us to be big and have the exact same site they have for everything.

Everything that's done to actually sell the books is what we do. Even the things Amazon has like also boughts and lists are only useful for we who know how to and do manipulate them. It's only after a writer makes it big that Amazon makes any move to promote them.

There are retailers out there that do a hell of a lot more for the vendors, but suffer the sin of not being big.

Amazon isn't actually best, they were just first into an industry everyone else was slow to throw into and that (thanks to rampant stupidity naive to corporations) still hasn't firmly solidified, much like Sears and the catalog system.


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## Gone To Croatan (Jun 24, 2011)

Vaalingrade said:


> Amazon isn't actually best, they were just first into an industry everyone else was slow to throw into and that (thanks to rampant stupidity naive to corporations) still hasn't firmly solidified, much like Sears and the catalog system.


Amazon may not be the best at dealing with writers, but they're the best at selling books. Just look at B&N, for example, where the book reviews are used as chat rooms by teenagers. Or Apple, where I can't even find my own books on their store.


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## 54706 (Dec 19, 2011)

Good lord, this thing is already 9 pages long.  I only read page 1, but here are my thoughts:

1.  Amazon stays the leader as long as there is no other competitor out there.  Right now, the only one coming close with my books is B&N and they are a distant second.
2.  I don't care about the above because Amazon is very good to me (i.e. 70% commission).
3.  If Amazon changes that being-good-to-me stuff (lowers the rate), I'm going to get really cranky and start looking elsewhere to put my books.
4.  Door opens for major competitor to step in and take my business.  I'll funnel all my readers over there along with everyone else who's cranky.
5.  Amazon loses market share from a very important group of people that only gets bigger every year.
6.  Google Play is going to be big.  Do not discount their ability to swoop in and be the hero for indies.  I am adding my stuff over there very soon.

In summary, I don't expect Amazon to be so short-sighted.  They are in it to win it and you don't get there by fleecing (plucking?) your golden goose.  Will they shave a few points off?  Maybe.  That's how you boil a frog, right?  Just keep turning up the heat little by little.  I solve the problem by writing a lot of books and building my mailing list.


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## WG McCabe (Oct 13, 2012)

I agree about Google. They're going to get there sooner or later. And one of these days, Apple is going to start taking ebooks as seriously as they take music. Why? Because they like money and loathe Google.


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## Jay Allan (Aug 20, 2012)

Vaalingrade said:


> They _don't_ really do anything for us though. That's the point. All they've really done to 'help' us to be big and have the exact same site they have for everything.
> 
> Everything that's done to actually sell the books is what we do. Even the things Amazon has like also boughts and lists are only useful for we who know how to and do manipulate them. It's only after a writer makes it big that Amazon makes any move to promote them.
> 
> ...


I have no idea how you sell your books, but for every customer I find myself, I get a few thousand from Amazon's traffic and platform. Maybe if you count something like Bookbub as "me" going out and finding them this changes a little. But then I get tons more from being ranked higher in Amazon's platform.

What, exactly, do you think Amazon should be doing for you that they aren't? Because, other than sending somebody to clean my house, they do just about everything I can expect from a good sales partner.


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## Terrence OBrien (Oct 21, 2010)

> They don't really do anything for us though. That's the point. All they've really done to 'help' us to be big and have the exact same site they have for everything.


Do anything for us? Who cares? They do stuff for the consumer. They make it easy for him to find and buy books. Thats all I want. I figure they see me as just another ASIN.



> Everything that's done to actually sell the books is what we do.


Search, selection, sampling, and reviews are all provided by Amazon. I don't provide that. Who here does? That stuff sells books.



> Even the things Amazon has like also boughts and lists are only useful for we who know how to and do manipulate them.


there is no evidence that one cannot be on a genre best seller list without manipulation.



> It's only after a writer makes it big that Amazon makes any move to promote them.


Could be. But the commercial environment they provide the consumer sells lots of books for people who have not made it big.



> There are retailers out there that do a hell of a lot more for the vendors, but suffer the sin of not being big.


Could be. What do they do? And how does what they provide the consumer compare to what Amazon provides the consumer?



> Amazon isn't actually best, they were just first into an industry everyone else was slow to throw into and that (thanks to rampant stupidity naive to corporations) still hasn't firmly solidified, much like Sears and the catalog system.


What standard is being used to identify what is best?


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## Fast Typist (May 9, 2013)

Wow.  I skimmed all nine?? pages.

What will I do if Amazon lowers royalties?  Write.  Publish.  Have fun.

I could be in a car accident tomorrow, but I still get in the car every day and drive to work.

I'm not earning boatloads of money now, but it's paying some bills, and I'm grateful.

Do I want to make more money?

Sure.  So I come to kboards to get marketing ideas and try some of them.

I read "what if" scenarios and am reminded that nothing in life is certain.

All I do know is that I love to write stories and after many years of getting rejection letters, I now have complete strangers reading my books -- and some of them even write reviews.

Life is good.

Beverly


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## ElHawk (Aug 13, 2012)

Jay Allan said:


> That would be shot down by the government on anti-trust grounds, but if they could do it, I'm sure they would. I wouldn't be shocked if they bought the brick and mortar too. They'd manage to integrate the stores with the web in ways no one at BN could imagine.


OH PLEASE, GOD, MAKE THIS HAPPEN.

Not only would I love to have an intelligently run, efficient, shoppable brick and mortar bookstore again, but I'd love the delicious irony of B&N shrieking for years that Amazon is driving them out of business (and never doing anything smart to compete) and then actually being bought out by Amazon. I'd lol for days.


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## AngryGames (Jul 28, 2013)

I was going to say, "Oh...no...another 'sky is falling' thread where some company _*might*_* do something that might be bad for <insert person/industry/career here>," but then I made it to the end and saw Elle's post, so I'll just quote her instead since what she said is far less ridiculous than the "Oh...no...another 'sky is falling' thread where some company might do something that might be bad for <insert person/industry/career here>," that we've seen a hundred times this year alone.



ellecasey said:



Good lord, this thing is already 9 pages long. I only read page 1, but here are my thoughts:

1. Amazon stays the leader as long as there is no other competitor out there. Right now, the only one coming close with my books is B&N and they are a distant second.
2. I don't care about the above because Amazon is very good to me (i.e. 70% commission).
3. If Amazon changes that being-good-to-me stuff (lowers the rate), I'm going to get really cranky and start looking elsewhere to put my books.
4. Door opens for major competitor to step in and take my business. I'll funnel all my readers over there along with everyone else who's cranky.
5. Amazon loses market share from a very important group of people that only gets bigger every year.
6. Google Play is going to be big. Do not discount their ability to swoop in and be the hero for indies. I am adding my stuff over there very soon.

In summary, I don't expect Amazon to be so short-sighted. They are in it to win it and you don't get there by fleecing (plucking?) your golden goose. Will they shave a few points off? Maybe. That's how you boil a frog, right? Just keep turning up the heat little by little. I solve the problem by writing a lot of books and building my mailing list.

Click to expand...

*


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## Ty Johnston (Jun 19, 2009)

Since it has quite a bit related to this discussion, here's a link to the recent article "Amazon Stock May Be up, but the Company Still Doesn't Make Any Money: http://www.thedailybeast.com/articles/2013/10/25/amazon-stock-may-be-up-but-the-company-still-doesn-t-make-any-money.html

I make no judgements about the quality or lack of within the article. I'm simply providing it as part of the ongoing discussion.


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## Mit Sandru (Aug 19, 2011)

Amazon can do that and worst. But there is a bigger kid on the block. Competition. This guy, Competition is the biggest equalizer, and if Amazon wants to loose, ignore Competition. Amazon will do what’s in best interest for Amazon, but in the process of dominating the e-retail it created a new class, and Amazon belongs to it, the e-commerce class. Believe it or not, Indie Authors are part of the e-commerce class. And if you consider yourself part of it think of the new empowerment it gives us, and what we can do. No, I’m not stroking our egos, but we learned to become author-businesspeople. We became business savvy.
Imagine, what would happen if the clock is rewound to year 2000, but we know what we know today and we know of each other? Freedom and knowledge is deadly to the slave masters.


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## EC (Aug 20, 2013)

A delicious troll topic. Well done OP.


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## LilianaHart (Jun 20, 2011)

Harper Alibeck said:


> How in the hell can I get to the point of making a high five figures a month on Apple? I am deeply impressed and would LOVE to see a breakout session at a conference on selling well at Apple and Kobo. Seriously, Liliana, that's amazing and good for you!


I'll be speaking on breaking out at Apple at several conferences in 2014. I should amend my earlier statement I said about them "Being Apple" so they can do what they want. That's a true statement, but the people at iBooks are very supportive of authors and they want to see us do well. They're just going to use a different approach than Amazon. Kobo is going to be really important too. Both of these vendors are the reasons everyone should be getting their work translated.


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## 41419 (Apr 4, 2011)

I don't get the logic that says once Amazon capture X% of the market, they will radically change strategy from that which won them the game to something else (whether that's Russell's vision of 35% royalties, or fears expressed elsewhere that they will jack up the price for customers).

Don't forget what is pretty much Bezos' motto: "*Your margin is my opportunit*y." It doesn't matter if you are talking about changing terms for suppliers or customers, both are margins that would be opportunities for competitors if changed. You might argue that indie authors couldn't or wouldn't jump ship/divert traffic/focus promo on other stores/start selling direct, but Bezos doesn't take chances.

I think this entire fear is predicated on a common misconception about Amazon - that it doesn't make any money. Have you ever read their financial statements? They make billions and billions every quarter, but all of that is plowed back into an unprecedented level of global expansion.

In other words, Amazon doesn't have to jack up prices or slash royalty rates if it decides one day that it wants to collect. All it has to do is slow the pace of expansion (or hang up the Gone Fishing sign once the last Kindle Store is opened in Tuvalu).

tl:dr why change a winning formula when all they have to do to make bank is stop expanding?


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## Gennita Low (Dec 13, 2012)

blakebooks said:


> I have to apologize to everyone. I think because it's the holidays, I miss the big family get-togethers, with the odd personality quirks in evidence - the judgmental parents, the all-knowing brother, the spacey sister, the drunk uncle you want to keep the kids away from.
> 
> I'm thinking I wanted some of that dynamic, and so threw this grenade onto the forums.
> 
> But I do feel better now. Ho ho ho.


I KNEW it. I knew it was just because you're feeling a little depressed about the impending doom of the dollar as world currency and just wanted the rest of us to start worrying too. Oh, wait, you're in Mexico.

***

I've only been in this self-pubbed venture since 2011 and only seriouly, since 2012. During that time, there have been so many changes, it's like one of those fair rides that throw one in different directions--fun, scary, and different all at the same time. I don't doubt there will be more changes ahead. I don't have the IP and cash reserves like Joe Nobody and that's why I'm still roofing (everybody eventually needs a new roof, hahaha) but through hard work and adjustments (and with the ever-wise KB business people here), my writing income has grown every year.

It does* get harder but I think it's mainly we're all still in the investing in ourselves period--always writing, always trying to maintain visibility, always willing to do more for a little more income. From my limited 3-year experience, I have seen:

1) Amazon encouraging more self-publishing through its Select
2) Amazon then corrects its bestseller lists through its algos
3) Amazon taking care of too many freebies in the market
4) Amazon (through ACX) offering some authors $$$ for their first audio book (it's like start-up money for a small business!)
5) Amazon going to book conventions to talk about self-publishing (as Coker from Smashwords have been doing)
6) Amazon upping some of the 35% markets to 70% to all non-Select
7) Amazon paying up for all markets instead of holding back small sums
8.) Amazon asking authors to offer their CS books with 99ct/$1.99 ebook tie-in
9) Amazon offering matte covers
10) Amazon now encouraging 99cts and above for books instead of FREE through Select

All the above points tell me they want to make money through their self-publishers. They want indie authors to make money by giving them a combination of options. They encourage the successful ones by putting their books on Kindle Daily Deals and other ways (look at our great KB authors).

Yes, there have been a lot of downers too. The erotica authors aren't too pleased with them at the moment. There was also the big affiliate kill-off (but I think that was their way to purge the thousands of freebies given out each week). There is the cover-your-man-boobs thing going on now.

Those are only a few things from a three year report. I'm sure the veterans from 2009 and 2010 have an even bigger list of changes since the early days of publishing.

I plan to adjust and hope that 2014 will bring more book sales. I wish the same for all my KB friends here. The Blake Man will be doing great because he doesn't keep his $$$ in American dollars . Or at least, not the majority of it.

And perhaps, that's the lesson here. Diversify. Amazon is Queen, but diversify. Look at Liliana (my heroine). She has, through sheer hard work and a well-defined PLAN, become a top-tier author for Amazon, Nook and Apple. I'm in awe of all the hard-working folks here on KB, top-, middle- or beginning tiered. Your posts keep us all informed and help each and every one of us to stay ahead of the biz.

Happy 2014!

Edited to change my #8 because apparently 8 and close-parenthesis gives me that smiley icon with the sunglasses!


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## psychotick (Jan 26, 2012)

Hi,

My two cents worth is that Amazon wouldn't do that - and not because of any altruistic reason but for simple practicality. They'reusing the 70% deal to make authors sell their books for more money. They reduce it to 35% across the board they reduce the incentive for authors to raise prices. (I know it sounds counter intuitive but there it is - there are so many books listed at 2.99 simply because of that 70% and they wouldn't want to mess with that - especially when they are now trying to get authors to limit free and raise prices. If they got rid of that price point,which lets face it is a strong indicator to writers of what they shoul charge for a book, there'd be a much greater percentage of authors coming in at 1.99 or 99c and they woul make less money.)

What they might do, and this wouldn't surprise me, is leverage that 70% some more so that you only get it if your book is at 2.99 AND in Select. That would be about market share against the other players in the industry.

They might however graduate and finess it a little more - depending on how hard it is to work the accounting for them. So 70% might come in at 3.99, 50% at 2.99, 35% below that. That would be about selling more books at better prices.

Whatever they do however, I don't think smashing indies over the head with a huge income slash is their game. We provide stuff for them to sell. Their game is to sell as much as tey can to as many as they can for as much as they can (on a high volume basis), and it isn't uss who costs them. It's their competitors. And let's face it if they did as the OP suggests more woul be going to their competition and selling their books through them. It might only be a small percentage, but it would still be feeding their competition and they absolutely don't want to do that.

Cheers, Greg.


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## Hugh Howey (Feb 11, 2012)

dgaughran said:


> I think this entire fear is predicated on a common misconception about Amazon - that it doesn't make any money. Have you ever read their financial statements? They make billions and billions every quarter, but all of that is plowed back into an unprecedented level of global expansion.


It's also predicated on not knowing the difference between a royalty and a distribution fee. We give Amazon 30% of our profits on a fully-delivered and salable good. That's 30% in order to distribute electrons. Publishers give bookstores 40% to warehouse and distribute *physical books*.

Blake and others who contribute to this fear are comparing 70% to 12.5%. They think this is unsustainable. They should be comparing a very normal 60/40 retail split to a 70/30 digital retail split and wondering why the rate isn't even better, not worrying when it will "correct itself."

A complete misunderstanding of what we are being paid for and how other retail sectors work is what leads to this.


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