I'll bet that is one of the most confusing titles you've ever read.
This post is not for the faint of heart. It's going to have some math, so if you are the non-math or financial calculator type of person—run away quick.
Amazon has become a powerhouse. It's undeniable. When they first start back in the day, I remember reading about all the red ink. The tremendous annual deficits. Everyone I knew was sure that the company was going to die the death of bleeding money. But it didn't happen, and the rest is history.
Now it's 2021. And it's the reality that the vast majority of books sold worldwide are handled by Amazon. I believe the U.S.A. percentage is something like 80% of the book market is Amazon. The latest data that seemed reliable was that 83.3% of ebooks in the USA are Amazon. Would you call that a monopoly? And therein lies the pain. Anytime one company can control so much of the market...on the other hand, perhaps there is something good. Let's investigate.
The growth of KDP (Kindle Direct Publishing) has allowed pretty much anyone on the planet to write a book and get it published. Doesn't that sound great? But here's the truth in the numbers. Let's take a typical ebook and the royalties that the author actually receives.
Let's use a real-world example. Recon Time, book one of my first trilogy. Recon Time sells for $2.99 in ebook format. How does that play out for real? If a book gets sold there are two possible scenarios:
35% Royalty rate yields a royalty of $1.05. This applies if your book is sold below $2.99 or above $9.99. In the case of Recon Time, the price is $2.99 so,
70% Royalty rate yields a royalty of $2.02. That sounds pretty good on a book that sells for $2.99, right? But there is a caveat. To get that royalty rate, you are all-in with Amazon on your ebook. That means that you are committed to distributing your book with Amazon exclusively in certain markets. The instant you tell someone that they are being restricted in distribution, it feels like a red flag. HOWEVER, since Amazon is the elephant in the room in the USA market and the UK market, it could be very worth it to stick with them.
And I agree. The competition to sell your ebook is intense. If you decide to put pen to paper and dash out your fantastic sci-fi book, be prepared to price it LOW. Only the big guns get to price their ebooks above $5.99. In that regard, Amazon is really your best friend, they give the newbie a chance to sell their books. But the downside is that the shrinking book world (see my last blogpost), and the flood of books rushing through Amazon, is making it hard to be noticed for most authors. On top of that, a lot of really awful books are listed on Amazon. There are books that sell one per year, because someone had the notion that they would publish a fantastic novel about fictional tooth decay in velociraptors—not really a hot topic.
The double-edged sword of Amazon ebook publishing is more like an opportunity for some writer who is producing worthwhile fiction (like me, I hope).
By the way, to the traditional publisher, Amazon truly is a vampire. With the demographics of people who read books aging and shrinking, everyone is getting a smaller cut of a smaller pie. But Amazon is a saint to those indie authors who want to venture out like pioneers in the wilderness.
So what about print books? Now here is an area where Amazon is truly and angel and a devil. Let's do the math:
Take a 400 page paperback. Amazon will publish that book on-demand. Can you see how fantastic that is? An author doesn't have to rely on a traditional publishing house and also doesn't have to handle distribution. That means not having to stockpile 1000 copies of "Velociraptor Fingernail Trimmer Manual" in his or her garage.
But the money...what about the money? Here's an example of an Amazon Royalty on print books:
Book length 400 pages
print cost: about $5.70 That amount is not the author's..that goes to Amazon. So if the truth is that Amazon pays $1.75 to print it, then the rest is profit for Amazon.
Royalty. Here's where the author gets stabbed in the heart. Here's the math for an example:
(Royalty rate x list price) – printing costs = royalty
(60% x $12.99) - $5.70 = royalty
$7.794 - $5.70 = $2.09
And so now you can see the real world numbers. Print books are dying on the vine. In order to make a profit on print books, the author must price them at $12.99 (for a 400 page book), or higher. That is why print books sell so poorly, and the author has to focus on ebooks primarily because Amazon has re-written the rules of reading.
Draw your own conclusion. As a writer, I'm happy when someone buys a paperback, but the cost of on-demand printing is high. The ebook is just a matter of sending a file to a device.
To conclude, something about holding an actual book in my hands. The joy of going to a bookstore and buying a real book. These are things that are slowly becoming a relic. The traditional publishers are keeping paperbacks and hardbacks alive, but the vampire (Amazon ebooks) is draining the lifeblood out of print. A traditional publisher, therefore, sells mass market paperbacks for $7.99 or maybe $9.99 and they make a profit. The indie author on Amazon can't compete and so the only paperbacks that make to market are the ones that will generate huge sales. That is why Walmart or other retailers only have the bestsellers sitting on the shelves—it's about selling as many as possible because the profits are low.
That leaves Barnes & Noble, etc. the real bookstores to sell a broader variety, and that sliver of the market is a sad facsimile of what it was before Amazon.
My 88-year old father-in-law (a former professor), reads almost exclusively on his Kindle. That is a testament to the adaptability of readers to the reality of books. Ebooks are the present and future. So, go buy a book. If it is print then fantastic. If it is an ebook, then be happy that you are putting a little change into the pocket of a writer trying to make it in the world that Amazon has created. Here are some important links:
Comments