Amazon Digital Markup: 129,000% • Hacker News Board

Re: Amazon Digital Markup: 129,000%

#61

Post by Getahobby » Tue, Jun 12, 2012, 1:31 AM UTC

MBCook wrote: post #57

recoiledsnake wrote: post #46

Earlier quoted context omitted.

Also remember that Amazon either takes a loss or is barely above breakeven for the Kindle hardware including the Fire. It is like the game console model. Go independent and make money on the PC, but if you want access to the millions of willing buyers and predictable hardware requirements, you either charge your customers more or make it up in volume.

But isn't that factored into the 30% cut they take before the delivery charges? I love my Kindle and I really like Amazon, but this is the first I've heard of the delivery charge part. Considering that it's around 25% of the price of the book... it really does seem like a rip off on their part.

Just to clarify, it is only 25% of this particular book. Sounded to me like the delivery charge was fairly independent of the cost of the book.

Re: Amazon Digital Markup: 129,000%

#62

Post by zevyoura » Tue, Jun 12, 2012, 1:32 AM UTC

andrewhyde wrote: post #21

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. T…

But if you had gone through gumroad, you wouldn't have done the same volume. If they renamed the "delivery fee" as "hosting and market placement" would you feel okay about it?

Re: Amazon Digital Markup: 129,000%

#63

Post by balloot » Tue, Jun 12, 2012, 1:33 AM UTC

This post is ridiculous. Amazon has spent billions upon billions of dollars building and maintaining a ridiculously efficient delivery system for electronic content. THAT is what the markup is paying for.

And from a common sense standpoint, if Amazon were really charging the crazy markup this guy claims, then some other company would mark up a mere 1000% or whatever and massively undercut Amazon's offering. Given that this hasn't happened, it is pretty safe to assume that the true costs are much higher than his math suggests. Either that or other companies have just ceded massive eBook profits to Amazon out of the goodness of their hearts. I'm going to guess it's the former.

Re: Amazon Digital Markup: 129,000%

#64

Post by teamonkey » Tue, Jun 12, 2012, 1:35 AM UTC

droithomme wrote: post #60

OK, so for a $10 book, Amazon collects 30% for themselves, which is $3. For a 19MB download delivered via 3G to a Kindle, Sprint, the wireless carrier, charges .15/MB, or $2.85/19MB. This is paid to Sprint, not Amazon.com. The article errors by comparing this fee to the cost for server bandwidth using S3 to come up with his markup value, but S3 bandwidth covers the internet only and does not include fees involved wit…

If I were to buy the author's book and download it to my non-3G Kindle over my own wi-fi connection, the author would still be charged $2.85 for it.

Surely the 3G Kindle owners should be paying for it - and only then if they use whispernet. Or rather, I always thought they were because the 3G Kindle touch is $50 more expensive. A cellular radio only costs a dollar or two, I always figured that most of the $50 price difference represented average download costs over the expected lifetime.

Re: Amazon Digital Markup: 129,000%

#65

Post by Karunamon » Tue, Jun 12, 2012, 1:40 AM UTC

balloot wrote: post #63

This post is ridiculous. Amazon has spent billions upon billions of dollars building and maintaining a ridiculously efficient delivery system for electronic content. THAT is what the markup is paying for. And from a common sense standpoint, if Amazon were really charging the crazy markup this guy claims, then some other company would mark up a mere 1000% or whatever and massively undercut Amazon's offering. Given tha…

$3 to transmit 15 megabytes is fucking absurd, regardless of the delivery medium. Full stop, end of story.

Re: Amazon Digital Markup: 129,000%

#66

Post by balloot » Tue, Jun 12, 2012, 1:50 AM UTC

Karunamon wrote: post #65

balloot wrote: post #63

This post is ridiculous. Amazon has spent billions upon billions of dollars building and maintaining a ridiculously efficient delivery system for electronic content. THAT is what the markup is paying for. And from a common sense standpoint, if Amazon were really charging the crazy markup this guy claims, then some other company would mark up a mere 1000% or whatever and massively undercut Amazon's offering. Given tha…

$3 to transmit 15 megabytes is fucking absurd, regardless of the delivery medium. Full stop, end of story.

It's not $3 to transmit a file. It's $3 to:

Design a great UX

Handle Credit Cards safely

Give you access to a robust infrastructure that won't crash

Market the site

Build and research a top quality e-Reader

Build data centers all around the world

etc etc etc

Bottom line is the guy made WAY more selling with Kindle/Amazon than with any other format, even given their large cut. That didn't just happen by magic. He is free to sell only with other vendors and make less money if Amazon's fees upset him so much.

Re: Amazon Digital Markup: 129,000%

#67

Post by [deleted] » Tue, Jun 12, 2012, 1:50 AM UTC

Arkeus wrote: post #41

ImprovedSilence wrote: post #37

Earlier quoted context omitted.

Fair point, but don't you think It'd be nice if they advertised the price for said fee, or at least provided a chart for fees/mb? It seems like it is a "hidden cost", not outlined in detail, leaving the client in the dark, which appears to be the problem here.

While I think his claims of high delivery charges are fair, I don't think it's right to call it hidden. When pricing your book in Amazon's self publishing (I am assuming here he went through KDP), it calculates in real time the delivery charge and estimated royalty based on the price you input. There is also a blurb on the right side of the same page explaining the delivery charge, and how it applies to the 70% royal…

[deleted]

Re: Amazon Digital Markup: 129,000%

#68

Post by kennethcwilbur » Tue, Jun 12, 2012, 2:00 AM UTC

dangrossman wrote: post #34

prbuckley wrote: post #22

It seems like the telco's are the ones making out here. They charge Amazon some ridiculous fee to deliver the content and they charge the consumer for a data plan for the device.

Most Kindle purchases are coming from a Kindle, which never has a consumer data plan. 3G Kindles' cell usage is paid by Amazon.

At https://kdp.amazon.com/self-publishing/help?topicId=A29FL26O... it shows that the delivery charge in the UK for a 18.2MB book is $2.82.

That rate is actually pretty good. According to this page, http://www.wireless.att.com/learn/international/roaming/affo... AT&T sells a 120-MB international roaming data package for $30/month. That implies an effective download charge of $4.55 for an 18.2-MB file.

Now if Amazon's data charge is $2.82 in the UK, where they do significant volume and the wireless market is competitive, imagine how much higher it must be in less developed countries where the company has less pull. I got charged approximately $800 for 40 megabytes of data usage in Lithuania last year, where AT&T did not have a partnership with any local carrier. I talked AT&T down to about $400 but they would not budge beyond that.

And think about the target audience for this book. Probably a lot of people spread out all over the world. It might not take all that many downloads in places like Lithuania to push the average delivery fee up to $2.48.

The only problem I see is that, arguably, Amazon should give authors the ability to opt out of paying for international downloads, or let them set different prices in different countries.

But it seems that the current delivery charge is pretty good - certainly it's not the enormous markup the headline claimed.

Re: Amazon Digital Markup: 129,000%

#69

Post by notatoad » Tue, Jun 12, 2012, 2:00 AM UTC

cs702 wrote: post #56

notatoad wrote: post #39

Earlier quoted context omitted.

The well known must have authors don't self-publish directly on amazon, they have publishers who handle all that sort of negotiation for them. And part of that negotiation surely includes talking amazon down on the delivery fees. However, authors who publish heir work through a publisher also don't make 55% royalty, so the author of this blog post is still better off than he would have been.

notatoad: I didn't write or even imply that well-known authors self-publish. FWIW, I have heard from a second-hand source that one well-known author is receiving net royalties from Kindle sales that are greater than the Kindle price of his books. I don't know if this is really true, but it rings true ; hence my question to the HN community.

you said that amazon is offering deals to authors. my point is that amazon doesn't interact with well-known authors, they interact with those author's publishers. if any author receives better royalties than the kindle price of their books, it may be because their publisher is receiving even more money from amazon, or it may be the publisher that is taking the loss.

Re: Amazon Digital Markup: 129,000%

#70

Post by zem » Tue, Jun 12, 2012, 2:01 AM UTC

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…

an even closer psychological analogy would be the ticketmaster fees layered atop the face price of a concert ticket. (how it actually works, apparently, is that ticketmaster provides the service of being the "bad guy" so that venues/artists can hike their prices without alienating their customers, but they invent a bunch of crappy itemisations of their fee, leaving people feeling even more ripped off because the charges are transparent bullshit)