You may or may not have heard about the Amazon vs Hachette debacle. In a nutshell, Amazon (the e-retailer) and Hachette (a publishing company who publish many authors around the world, including some multi-millionaires as well as a lot of ‘small fry’ authors) have been scrapping recently because Hachette resisted Amazon’s efforts to dictate the price of e-books online.
Amazon wants to control the prices of ebooks – that ubiquitous $9.99* – and level the market, thus wrangling customers and better controlling the system at large. Hachette wants to set its own prices, scaling them depending on the author, release date, the book’s success, etc.
So therein lies the battle. Or lay the battle, I suppose, since an agreement has been reached. Ultimately, Hachette has emerged victorious – in a sense. They have the right to set their own pricing (although they get financial incentives from Amazon to sell books at $9.99) on Amazon. What they now have to work out is whether their authors will continue to be satisfied with receiving 25% royalties on the sales of their books. Percentages being relative to the book’s price, after all – 25% of $19.99 is $4.99. 25% of $9.99 is $2.49. Which would you rather earn? (More on royalties later.)
But here’s the thing. Before denouncing Amazon for being evil, for trying to force publishing companies to sell books to them at a lower cost, thus reducing the authors’ royalties (and Hachette’s profit margin!), let’s take a look at what Amazon offers the little guy – the self-published author.
I self-published Dare to Dream and How the Unicorn Lost His Horn on Amazon through their Kindle Direct Publishing program. I can set the prices for my books and receive up to 70% in royalties for my work. For writers like me, who are from a small country and write for a niche audience, Amazon KDP is the perfect platform, and it offers me far more money for my work than any traditional publisher would.
Contrastingly, I self-published Flying Changes through an online company who did the distribution (of paperbacks (printed to order) and e-books) for me. They made the book available in both formats across multiple platforms (including Amazon), which on paper is fantastic. In reality, not so much. I have received minimal payments (less than $400 all up) for my sales in the three years that the book has been available online. (And I was paid in cheques made out in Australian dollars, meaning I had to pay NZ$15 in bank fees plus the exchange rate before banking each one. Several were so small that this was not even worthwhile doing.) Their systems have made it very difficult to track sales and communicate with them. I earned 40% royalties for all sales on those books, aside from the copies that I had printed and posted to me to sell privately. Those cost me $20 to get in my hands, which meant that in order to make a profit, I had to sell the books at more than $20 (generally I sold them for $30 each). Personally I baulk at paying more than $20 for a paperback, so I was never easy about asking for this price, although many people (bless their souls) did so. It also made it very difficult to get my books into commercial bookstores, because naturally every store wants a cut of the profit. If I need $20 in order to break even, the bookstore then has to add their requirement to pay GST onto that, which brings the cost of the book close to $24 before either of us are able to make a profit. In other words, when I walked into Paper Plus and said “Would you like to sell my book?” they did so out of the goodness of their own hearts. Pricing copies at $30 each (which is expensive for a YA paperback by anyone’s standards), by the time my costs were recouped and GST was paid, they received the barest minimum of profits for doing so. It’s not a good business model, and one that made me increasingly uncomfortable.
When it came to Dare to Dream, I did things a little differently. Initially I published the book on Smashwords, a company that will convert your .docx files into e-book format and make it available on various platforms. It is a tricky system to negotiate in some ways, and their formatting is not particularly good. It also does not allow you to publish on Amazon…so you are shut off from Amazon’s entire e-book market (which accounts for approximately 65% of the market in the US alone). After learning about Amazon’s Kindle Direct Publishing (KDP) program, I enrolled Dare to Dream. I uploaded the cover picture and the .docx file, gave my bank account details, and voila! Dare to Dream was available to anyone with a Kindle, or who had downloaded the Kindle app onto their smartphone. I can set the price at whatever I want, and what’s more, I get 70% of the royalties from every sale paid directly into my bank account every month. That’s almost double the royalties I was offered for Flying Changes.
That was a year ago. In that time, I have made more each month from sales of Dare to Dream than I get annually for sales of Flying Changes. Amazon’s sales tracking is very easy to use, with graphs and spreadsheets available to show sales, prices, regions, etc. And as well as sales, books can be added to Amazon’s lending library (at the author’s choice) where I earn a further small commission on books ‘borrowed’ by readers. (So far only available in some countries, NZ not included.)
I also printed some paperback copies of Dare to Dream through Printing.com in Wellington. After doing all my own set-up and design work, I was able to get the books in my hand for a fraction over $7 each, meaning I can comfortably sell them for $20 each and still make a profit for my work.
As as result of what I learned from Dare to Dream‘s success, I have recently pulled Flying Changes from the online company (Xlibris). Fortunately I retained all copyright to the content and paid for the cover image, so I’ve simply redone the cover and will make it available again on Amazon KDP very soon.
So that’s all good stuff. How does that differ from traditional publishing? Well, the way that works is that the publisher buys your manuscript from you, paying an advance based on how well they think it will sell (Nicholas Sparks was paid a $1m advance for The Notebook, his first novel!) and then a percentage of all sales. If you have written a best-seller, that sells millions of copies and is translated into lots of languages, and sells continuously well, you’re going to become fabulously wealthy. (Especially if you write six more, each more eagerly anticipated than the last – and also earn royalties from things like movies, merchandise, and theme parks…yes I’m looking at the sublimely talented JK Rowling – an exception and by no means the rule. She is still, to the best of my knowledge, the only author whose books have made her a billionaire.)
What if your book isn’t a best-seller? Well, therein lies the problem. This post from Tudor Robins explains it brilliantly. She published her first novel through a traditional publisher, then she self-published her second on Amazon. Have a read to find out which was more successful for her, and which way she plans to go in the future.
Because here’s the thing: When you are traditionally printed, you sell the copyright to your words. It’s like selling a horse – you hand over the horse and they hand you the money, and you have no control anymore over what happens to that horse. Self-publishing is more akin to leasing (assuming you are doing a paid lease with a watertight agreement). You don’t get a big fee upfront, but you get continuous payments, and you retain control over what happens to your horse. You can take them back at any time, just as you can take your book offline any time, or change the cover photo, or fix the typos that slipped through, or write a revised edition. You still own it. You can retain control.
The downside here is that you might never reach the widest possible audience. You might slip under many radars, and you will mostly likely never become a millionaire. You will quite possibly struggle to ever live off what you make from your writing, so if your ambition is to be a hugely successful author, the traditional route might be the best one for you. You also might not want to do your own publicity – although as Tudor points out in her post (linked above), being commercially published doesn’t mean you don’t have to do your own publicity, which may even cost you money. And there are also companies out there online like Pump Up Your Book, and heaps of advice available on maximising your sales.
For companies like Hachette, they continue to have the right to set their own prices. Fair’s fair, I suppose. But the problem, as I see it, is that you get books like this one, a phenomenal read that I want all of my overseas friends to buy, being priced by the publisher outside of most people’s comfort zone. Hopefully the price will continue to come down (it already has done, substantially) as the original e-book price was presumably set so high as to encourage readers to pay for a paperback copy. Which is all well and good if you live in New Zealand, within reach of a bookstore. Not so good if you live in New York, or London, or Perth, or Dubai, or Cape Town, or anywhere else that is not New Zealand, within reach of a bookstore!
Of course, there are two sides to every story. I feel for the authors involved in the Hachette case, who lost royalties due to Amazon’s decision to make some Hachette titles unavailable to purchase, delaying deliveries of others by weeks, and advertising alongside some titles with a banner of “similar items at a lower price”. Yet perhaps part of the scramble from Hachette comes from the knowledge that the easier it gets to self-publish, the more work they’re going to have to do to keep authors on the traditional publishing track. Traditional publishing is a very difficult realm to break into, and with the exception of best-sellers and top earners (many of whom were outspoken on Hachette’s behalf), is a rocky road to navigate and doesn’t offer the best returns for the small-time author. The question is – Why sell your copyright to someone else who might promote your book briefly, and if it doesn’t sell well, shelve it forever…when you can retain control of it, target it towards a wide-reaching, intended audience, and make sure that it is available forever?
Now, people fairly ask what will happen to the quality of literature when anyone can publish anything and make money from it? Who’s to say what’s good and what’s not? What’s worthy of publication, and what’s not? The simple answer to that is YOU. The consumer. Yes, there are plenty of e-books out there that are quite bad. Some are badly written, some are badly plotted, some are badly proof-read, some are all of the above. But some are fantastic. Of the 20 books listed on my What to Read page, only a handful of those authors are commercially published. Most are self-publishing their books on Amazon…and loving it. And my books are self-published. So if you’re here, you’ve probably read them, and you hopefully enjoyed them. If it wasn’t for Amazon’s KDP program, would you have read Dare to Dream?
Also, don’t forget that Amazon has their nifty little “Try a Sample” function. You can download the first chapter or so of any book before you decide whether or not to buy it. I quite often scroll through Amazon’s recommendations to me, clicking on multiple samples of books to try, and then reading them and weeding out the ones I can’t be bothered going on with (usually around half of them). This is akin to picking up a book in a shop and reading the first few pages. You might be enraptured and have to buy the book right away – or you might decide that it’s not for you after all, and walk off. You have that choice.
In conclusion, one year after starting with Amazon KDP, I still sell 3-5 copies of Dare to Dream online each day. I do next to no promotion of it, other than this website (which I don’t even know if anyone visits), this blog (which I don’t even know if anyone reads), and my Facebook page (which is being filtered off many of my ‘Likers’ newsfeeds by the Facebook powers that be because I don’t pay for advertising on their site. And they call Amazon evil…).
But wait – if I do no promotion for my books, where do I get sales from? Well, Amazon’s “Readers also liked…” function helps. So do their tailored emails that they send out – I’m constantly being told that based on my previous purchases, I should try this book called Dare to Dream. Apparently it’s quite good.) Five-star reviews are also good, because the overall star rating of a book helps it get promoted by the Amazon robots. As a result of this, I can just leave the book to tick away, making me some pocket money while I work on my next novel, while continuing to work my 9-5 day job. Because for most authors, we write for the love of the story, not for the money. We then look for the easiest, fairest way to be compensated for our work, and right now, as far as I’m concerned, Amazon are the ones bringing that to the table.
So before we get too wrapped up in bashing the big guy (Amazon) for slamming the smaller guys (published authors), let’s see what the littlest guys of all (self-published authors) think.
Works for me.
* Amazon reportedly wants to bring the price of all e-books on their site to $9.99. I assume (perhaps erroneously) that this is a maximum price, and that they will continue to allow self-published authors using KDP to set their own pricing (there are minimum (99c) prices involved when you sign up with KDP). If I had to sell my books at $9.99, I can guarantee my sales would drop – and with good reason. Although still much cheaper than buying a traditionally published physical copy of a book, if a book is priced anywhere over $5 on Kindle, I know personally that I had better REALLY want it before I will purchase it. So hopefully this will only relate to traditional publishers, and not hurt the little guy. I can’t see it being a good business model for Amazon, to be perfectly honest, and I am fairly confident that it will not happen. At least not anytime soon.
Kate Lattey 
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