Moving Toward Amazon-Only

And the craziness continues. Yesterday The Sex Club, which is now selling well again, was suddenly being discounted on Amazon from $2.99 to $.99. Which means, I was suddenly making a third of the money. After cursing loud and long, I tracked down the culprit. Kobo was selling the title at $.99—even though I requested they take it down two weeks ago.

I requested the takedown because I enrolled The Sex Club in the Kindle Select program and it requires exclusivity. So the fact that it’s still selling there could also get me kicked out of the program. I’m doing everything possible to correct this, but retailers are notoriously slow about taking down books, especially if they’re selling.

I distribute to Kobo, Sony, and various other retailers through INgrooves, and this is not the first time I’ve had to deal with the discounting issue. For those not familiar, here’s the short version: Amazon will not be underpriced. If a competitor puts an ebook on sale, Amazon matches the price. This can be a serious problem for authors who make most of their money from Amazon and need to control what price their books sell for on Amazon.

When I starting losing money on Amazon, I see my mortgage payment for the next month disappearing. Which leads me to strongly consider withdrawing all my books from INgrooves. The small amount of money I make from other retailers is offset by the profit I lose from the discounting issue.

My only hesitation, as always, is readers. I want them to have full access to my books, regardless of their e-reader device. But I’m running a small publishing business (Spellbinder Press), and I have to make smart business decisions. I have to be able to track and predict profit.

Also, I have to remind readers that my ebooks are available for purchase from my website.

Other writers tell me I should upload to Smashwords as my distributor, but that doesn’t fix the discounting issue. And I’m tired of continuously having to scan the other retailers to ensure they’re not undercutting my ability to make a living from Kindle sales.

Pulling my books from INgrooves would leave me with ebooks available on Kindle and Nook only. But what I sell on B&N/Nook every month won’t even pay my cell phone bill.

After I see my first bonus payment from Amazon for enrolling in the Select program, I’ll have to decide whether keeping my Detective Jackson books on B&N is actually worth it. I predict I’ll be exclusive to Amazon by the end of the next year. Some people may see this as a sell out. But I have to make a living, and I’m worth more than minimum wage.

Readers: Can you sympathize with this decision?

Writers: How do you deal with the discounting issue?

11 Comments
  1. I would like to thank you all for this informational post and your comments. I learned a lot about ebooks from your side of the issue. As a public librarian and a Nook owner, I see another side. We are struggling to offer ebooks and eaudiobooks to our patrons without any increase in funding while still keeping up our print collections for patrons who have not jumped on the ereader bandwagon. We have to deal with everything from publishers who won’t sell to libraries at all, publishers who charge libraries up to 10 times the price of what an individual pays, publishers who limit the number of times the item we purchase may be used, etc. We have access to one company (Overdrive) who will maintain our ematerials, but we are bound by their policies or we can go independent, but the costs and knowledge base required are so astronomical that it currently isn’t possible to maintain our own ematerials. Seems like everyone is trying to figure out the best way to do this.

    I, of course, get a lot of ebooks from the library, but I also buy a lot for my personal collection. I see this pattern in a lot of our patrons. The reasons they purchase the ebooks instead of getting them from the library are the same reasons they have always bought the print versions instead of borrowing them from us – they don’t want to wait their turn for the item, they want to own them, and they don’t like being told they have to read them within a 2 – 3 week time span. I buy all the ebooks for my county system and I still buy ebooks for my personal use. In fact, I am seeing a huge upswing in demand for Barnes & Noble and Amazon gift cards so people can buy these books. It worries me when I read that some of you want to be Kindle exclusive. As I said, I have a Nook and I don’t want to switch to an Amazon ereader for many reasons. It worries me that some day there might be only one ereader and we would all be at the mercy of one company. None of you mentioned selling through Overdrive and I wonder your thoughts on that.

    Please know that the library community wants you to make money. We are author’s biggest champions and want you to flourish in whatever medium is popular at that time.

  2. Heya LJ —

    Thanks for the post. I started to comment, but it got too long and detailed, so I turned it into a blog-post reply, which you can find here:
    http://jdsawyer.net/2012/01/10/why-the-flight-to-amazon/

    Short story: I think that in the long term there are compelling reasons to be wary of pulling books from the non-Amazon markets that are worth bearing in mind.

    All the best, and success to you in your endeavors!
    -Dan

  3. I’m not really familiar with INgroves, but I’d give Smashwords another look if I were you. It’s not the sales ON Smashwords you want – it’s the distribution to Kobo, Apple, Sony, and (for works you select) B&N. For NO up front fees (they do take 5% of the cover price on the sales to places they distribute).

    So you get 85% on sales at Smashwords. You get a flat 60% on sales at B&N, Kobo, Sony, Apple – for ALL prices. Particularly relevant for those of us selling short stories at 99 cents – since 60 is a lot better than 35!

    And best of all, those retailers are locked into agency pricing agreements with Smashwords, so they cannot discount the price.

    Now, getting books up via Smashwords can take some practice. And getting into the distribution takes time, as does getting back out. But none of that retailer-discounting-a-book messing with your Amazon pricing.

    And no up front charges.

    Worth a peek. 😉

  4. Hi LJ, I’m in the process of pulling my books from Nook & others precisely for these reasons. I make cents there compared to $ on Amazon so what’s the point. Also, these other platforms aren’t as global as Amazon and I am a British author. We don’t even have the Nook here!
    KDP makes it so easy & I agree, the price matching is like a constant concern. I also want to use Select which I consider more of a promotional than an income play, but I’ll look forward to your analysis on it since you are way ahead of the game on this. Thanks, Joanna

  5. L.J. I hope you won’t mind posting a link here about my “Amazon is Winning the Indie Battle” : http://readingandraytracing.blogspot.com/2011/12/how-amazon-is-winning-indie-battle.html

    (If you do mind, please moderate away).

  6. Jim – I find Smashwords clunky and difficult to buy from. It wouldn’t be my first choice.

  7. I do agree with you. The publishing world is getting crazy and you have to do what’s best for you.

  8. Thanks, Jim, for your thoughtful post. The thing about INgrooves is the setup cost. If I take all my books down with them, they might make me pay to start up again in six months. So I expect that decision will be permanent, if I do it. Still haven’t decided for sure. I also wonder how long Kobo and Sony are going to hang in there with so little market share. They might become a moot point soon.

    And with tablets becoming so popular, anyone who wants to read a Kindle book can. The other issue for me is simplification. I learn toward streamlining whenever I can, especially business dealings, leaving me more time to write.

  9. LJ – I feel the pain there! The distribution via Smashwords to others can take some time.

    It leaves us hanging, especially those who use pricing changes to attract sales (such as $0.99 for a limited time, etc.).

    Personally, I try to set a price and stick to it. So far *knocks on wood* it’s worked for me.

    The problem is that the communication between vendor and distributor is too far apart and maybe rightfully so since there are SOOO many ebooks to maintain.

    What are the choices?

    Well, one would be to align with these vendors directly – i.e. – selling on Kobo directly. Can you do it? Yes. But it’s a process. I’ve been in contact with Kobo for the past week and they are very nice and professional, but it’s a new monster for myself (and our publishing company). You need an ISBN, which are expensive. A single ISBN is $125 while a block of 1,000 is $1,000 (go figure…). You also need the metadata file which depending on experience can be a hassle.

    For us, to click a price change is easy, but if you’re Smashwords trying to update file and after file, it takes time, which in turn leads to as you said, losing profit on Amazon, which hurts if that’s your money-maker.

    The lining in all this though is that YOU are the one making the choices! If you decide to be exclusive with Amazon and it doesn’t work out in a few months, you can change it. It’s only the 90 days.

    Also, don’t forget that readers can download the Kindle App to their computers, phones, etc. Of course this doesn’t help with those who own a Nook… oh, so many tough choices to make! (NO wonder people sign with publishers, right? – haha!)

    Hope I didn’t ramble too much. 😉

    -Jim

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