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Amazon Digital Markup: 129,000%

andrewhy.de

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Re: Amazon Digital Markup: 129,000%

#21

Post by andrewhyde »

ChuckMcM wrote: post #14

This is confusing. Here is someone with a FANTASTIC first outing of a book and he's whinging about it? The author raises $8K on Kickstarter, sells his book for $10, and is complaining that the 'gorilla' is taking a bigger percentage of the take? Using his numbers: of 73%/11%/12%/1% his money was $1117/$231/$333/$20 respectively. So he made three times as much money selling through Amazon as he did on the next closest…

Having a great time with the book, sorry if I came off as whining.

A few notes. A high % of the KS money went into rewards (books printed averaged $20 shipped).

I did make 3x though Amazon, but if I had gone through gumroad, I would have done double the revenue.

Biggest tl;dr complaint is that as an avid reader of about a book a week I had no idea that authors paid both 30% of the total price plus the delivery fee. The other main competitors don't do this... just found it odd and wrote about it.

Re: Amazon Digital Markup: 129,000%

#23

Post by [deleted] »

earl wrote: post #16
ChuckMcM wrote: post #14

This is confusing. Here is someone with a FANTASTIC first outing of a book and he's whinging about it? The author raises $8K on Kickstarter, sells his book for $10, and is complaining that the 'gorilla' is taking a bigger percentage of the take? Using his numbers: of 73%/11%/12%/1% his money was $1117/$231/$333/$20 respectively. So he made three times as much money selling through Amazon as he did on the next closest…

At a guess: the author feels ripped off in the same way I feel ripped off when I buy an airline ticket and have to pay $25 to check a bag, $12 for a sandwich, etc. If amazon's fee is $4.50 they should say so instead of burying a cost almost equal to their quoted fee in fine print. Edit: also, amazon grants themselves MFN status [1] at the authors' expense. So they exploit their market size to make sure authors can't…

[deleted]

Re: Amazon Digital Markup: 129,000%

#24

Post by freerobby »

ChuckMcM wrote: post #14

This is confusing. Here is someone with a FANTASTIC first outing of a book and he's whinging about it? The author raises $8K on Kickstarter, sells his book for $10, and is complaining that the 'gorilla' is taking a bigger percentage of the take? Using his numbers: of 73%/11%/12%/1% his money was $1117/$231/$333/$20 respectively. So he made three times as much money selling through Amazon as he did on the next closest…

You assume all of the Amazon traffic was organic. He directed all of his marketing efforts to the book on amazon.com; presumably he could have captured a good number of those purchases elsewhere.

I think the real issue is less about costs and more about how Amazon hides big revenues behind "delivery fees." Most platforms (Apple, Google, PayPal, even Amazon in the AWS world) that take a percentage cut + special fees separate the special fees to mirror actual costs (e.g. credit card processing). In this case Amazon just used it as another place to add significant markup, presumably in a way that was not expected.

Should he have read the contract more closely? Yeah, no question. But it still strikes me as sleazy on Amazon's part, even though I agree with you that a lot of what he did was only possible because of what Amazon's done.

Re: Amazon Digital Markup: 129,000%

#25

Post by alanfalcon »

evanprodromou wrote: post #4

Can the market beat this? Or is the gravitational pull of the giant Kindle market too great?

Step one is to make this cost transparent to people considering selling via Kindle (and to readers who care about this sort of thing). I'm preparing my first novel for sale right now. It's a novel, not a travel book, so I'm basically just delivering a cover image and text so I would expect my "delivery fees" will be much lower, but I didn't even realize that it would be in the realm of possibility that delivery fees would add up to any kind of significant expense. How could I know? Amazon doesn't advertise this anywhere. So we need blog posts like this in order to inform authors so they know that there's strong incentive to look into the other markets.

Re: Amazon Digital Markup: 129,000%

#26

Post by mark_l_watson »

I don't get his complaint. I have written books for Springer-Verlag, McGraw-Hill, J. Reilly, Apress, etc., etc., and I am used to seeing 10% to 15% royalty.

About 50% royalty from Amazon seems pretty good, but regular publishers provide a lot of help producing a book.

Publishing books with Apple's AppStore also looks pretty good.

It is all good(!), one just has to appreciate having multiple markets available and choose which ones you like.

Re: Amazon Digital Markup: 129,000%

#27

Post by stan_rogers »

ChuckMcM wrote: post #14

This is confusing. Here is someone with a FANTASTIC first outing of a book and he's whinging about it? The author raises $8K on Kickstarter, sells his book for $10, and is complaining that the 'gorilla' is taking a bigger percentage of the take? Using his numbers: of 73%/11%/12%/1% his money was $1117/$231/$333/$20 respectively. So he made three times as much money selling through Amazon as he did on the next closest…

Exactly. Amazon isn't providing storage and delivery nearly as much as they're providing eyeballs. (The "hot list" is a self-fulfilling prophecy -- you don't need to be incandescent to make the list, but being on the list tends to increase sales -- as are recommendations.) If you think you can drum up the eyeballs yourself, then go for it. Just be prepared for vanity press results if you're not all over the marketing.

Re: Amazon Digital Markup: 129,000%

#28

Post by drewfrank »

ChuckMcM wrote: post #14

This is confusing. Here is someone with a FANTASTIC first outing of a book and he's whinging about it? The author raises $8K on Kickstarter, sells his book for $10, and is complaining that the 'gorilla' is taking a bigger percentage of the take? Using his numbers: of 73%/11%/12%/1% his money was $1117/$231/$333/$20 respectively. So he made three times as much money selling through Amazon as he did on the next closest…

I don't disagree with you, but as I understood it the author is partly dismayed by the fact that the delivery fee is so large. Even if every copy were delivered via 3G (which is unlikely), $2.58 for an 18 MB file seems steep. Sure, on one level it's not his place to complain -- he still probably made a boatload by leveraging Amazon's massive sales platform -- but I also understand that pricing schemes like that can feel like a bit of a rip-off (e.g. $20 printers with $40 ink cartridges).

Re: Amazon Digital Markup: 129,000%

#29

Post by mycroftiv »

ChuckMcM wrote: post #14

This is confusing. Here is someone with a FANTASTIC first outing of a book and he's whinging about it? The author raises $8K on Kickstarter, sells his book for $10, and is complaining that the 'gorilla' is taking a bigger percentage of the take? Using his numbers: of 73%/11%/12%/1% his money was $1117/$231/$333/$20 respectively. So he made three times as much money selling through Amazon as he did on the next closest…

He is making an entirely justified complaint that Amazon charges unreasonable fees. The idea that any and all corporate behavior is fine simply because "it says so in the contract" is ridiculous.

You aren't actually paying attention to what the author wrote - he even specifically talked about how Amazon's Kindle platform provides a good experience for readers and has accounted for the majority of his sales. His post doesn't display any ignorance of the points you are making - instead, he acknowledges them but makes the entirely valid point that charging several dollars for a "delivery fee" of a digital book is OBVIOUS BS!

There is a huge disconnect between the attitude of "any price that people will pay is a fair price" and the fact that economic systems require that parties engage in transactions in good faith. To me, it seems blatantly obvious that Amazon is engaging in the bad-faith practice of trying to conceal the true costs of their service by loading a lot of the price into a "delivery charge" that is absurd.

This kind of thing is a very old game in business, but that doesn't make it ok. Just because something is common and legal doesn't make it appropriate. A large amount of standard business practices are deliberate, but legal, rip-offs - and calling a rip-off a rip-off is a good thing.

Re: Amazon Digital Markup: 129,000%

#30

Post by bemmu »

freerobby wrote: post #18
xxpor wrote: post #11

Earlier quoted context omitted.

But there's no difference from amazon's perspective, because once you bought the book, you can download it over 3g at any time, multiple times.

There is no way that the average purchase costs $2.50+ to deliver, even amortized over the lifetime of the book. Amazon can charge whatever they want; I just think they should be transparent about what people's net pay will be. It's disingenuous to advertise that you take a 30% cut plus "delivery costs," and then mark up the "delivery costs" to over 25% of the average book price. Apple uses a similar paradigm (proces…

Maybe kindles are manufactured at a loss and these delivery fees are then part of the device cost?
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