A Few Quick Tips for Kindle Authors and Publishers
DRM. Authors and publishers, have you considered the impact of Digital Rights Management on your ebook sales? A large and growing number of Kindle owners cares about this issue, and some consider it in making ebook-buying decisions, since they are aware that DRM restricts their rights to do all the natural non-commercial things we’ve been doing with books since we began reading. But what many at both ends of the creative process do not know is that there are tens of thousands of DRM-free books in the Kindle Store. Nearly every book uploaded via Amazon’s Digital Text Platform (DTP) for the Kindle is DRM-free. All you have to do, if you want to make your ebook DRM-free, is follow the instructions for uploading your book via the DTP in The Complete Step-by-Step Guide To Publishing Books, Articles & Other Content for the Amazon Kindle (Creating Your Own Success Story with New Technologies) (also available in paperback and as a 4-in-1 Kindle combo edition).
Kindle Pricing. Shhhh. With all the attention paid to the $9.99 price point for Kindle bestsellers, few authors and publishers understand how pricing and payment issues really work in the Kindle Store. Focusing only on titles uploaded via the DTP here, it’s worth pointing out the following:
Amazon automatically pays a royalty or commission of 35% of the retail list price to the author or publisher for each copy sold in the Kindle Store.
Amazon automatically applies a discount of 20% to the customer price of Kindle books where the retail list price has been set by the author or publisher at anywhere from $1.24 to $12.49.
Thus, for books with a retail list price between $1.24 and $12.49, it is more appropriate to say that Amazon automatically pays a royalty or commission of 43.76% of gross sales proceeds for each copy sold. Since the aforementioned discounting occurs automatically at the software level, any rightsholder wishing to establish a customer price point of, say, $7.99, would naturally set a retail list price of $9.99.
For Kindle books where the retail list price has been set by the author or publisher at anywhere from $12.50 to $24.99, Amazon automatically applies whatever discount is necessary to bring the customer price point down to $9.99, and continues to pay a royalty or commission based on the retail list price. I’ll leave the ensuing math to you, and say only that, if you wish to establish a customer price point of $9.99, doing the math is well worth your effort. And if the numbers you enter lead you to arrive at a result of 87.52%, well, all I can say is that you are on the right track.
For Kindle books where the retail list price has been set by the author or publisher above $24.99, I have not been able to discern any rhyme or reason beyond saying that the discounted price jumps up very quickly so that it is bound to have an immediate impact on sales. The result is that any author or publisher with even a rudimentary understanding of price-sales elasticity would never set a retail list price, on the DTP, anywhere between $25 and $40.
Interestingly, one result of all this is that, for a book whose retail list price is $9.99, Amazon’s take is $4.49 (out of the $7.99 paid by the customer), whereas it is $1.25 (out of $9.99 paid by the customer) for a book whose retail list price is $24.99.
Despite the fact that Kindle owners generally recoil from Kindle-edition fiction priced (after discounting) above $9.99, there is considerable evidence that for many technical, business, and how-to titles, Kindle owners are willing to pay a higher price and certainly do not consider $9.99 too high.
By Stephen Windwalker, publisher of Kindle Nation
May 5th, 2009 at 1:42 pm
Amazon advertises that: “New York Times Best Sellers and most new releases are $9.99″. Does the $9.99 selling price for $24.99 ebooks stay in effect when the ebook is no longer “new”?
I have seen ebooks start out at $9.99 and later jump to a higher price. However, these might not have been submitted via DTP.
May 5th, 2009 at 4:55 pm
Alan, as you probably suspected, most NYT bestsellers are not uploaded via DTP.
Amazon has been a little less than systematic about delivering on that claim that you quote, and I can’t comment with any authority on the side deals that Amazon may or may not be making with non-DTP publishers.
But I can say with some certainty that, if a DTP-based title’s price rises above $9.99, it’s because the rightsholder raises the retail list price above $24.99.
May 5th, 2009 at 5:59 pm
Is there any requirement by Amazon that DTP publishers price their ebooks for them at no more than they sell them for elsewhere? In other words, most of our ebooks are $5. Would Amazon not object to our saying we wish to charge $6.25 for them?
May 5th, 2009 at 8:14 pm
Neff, I know of no such requirement by Amazon, and I am pretty sure that there is no such requirement. If you price a DTP-based Kindle edition at $5, it will be discounted to $4, you will make $1.75 and Amazon’s take will be $2.25. If you price it at $6.24, it will be discounted to $4.99 (more price neutral with your other selling venues), you will make $2.18, and Amazon will presumably be happier with their $2.81 cut.
Worst case, I think, would involve Amazon asking you to conform your prices to those charged on another venue, but I have heard of no instance where such an intervention has occurred, and I suspect I would hear of it. Good luck.
May 5th, 2009 at 9:15 pm
Amazon’s Terms & Conditions at http://forums.digitaltextplatform.com/dtpforums/entry.jspa?externalID=2 include:
The Suggested Retail Price you provide to Amazon must be consistent with the SRP you have provided to other retailers and wholesalers.
If you are selling from your own web site then this probably does not apply.
May 5th, 2009 at 9:20 pm
Ah, I stand corrected. Good catch, Alan.
August 20th, 2009 at 10:51 am
I want a book of mine to be available on Kindle but its DTP processing site is an impenetreble horror.
I’m the registered (Authors Guild) owner of copyright and agreed to have it digitized by Google Books.
Why can’t Amazon simply download my book via Google if they want it for Kindle.