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The problems with self-publishing on Amazon

Updated: Oct 26

Amazon has long been hailed as the saviour for self-publishing authors, providing access to not only a huge marketplace to sell books but also to a complete range of publishing, printing and logistics services. It was only we delved into the 'economics' of it all that it felt more akin to daylight robbery ... As we worked through the plans for launching our first book, Willow the Wonderer, it became obvious to us that ignoring the conventional wisdom on the internet was they way to go. Here's why we didn't self-publish and won't sell on Amazon.

There is no such thing as a silver bullet

There are thousands of articles and blogs on the internet hailing Amazon as the saviour for self-publishing authors. Amazon seems to have thought of everything we need - a platform for producing and distributing ebook, another for paperbacks, print-on-demand services (for paperbacks), warehousing if need be and shipping and all the logistics around that.

All writers have to do is produce their work. Sounds like a dream right?

The problem starts with Amazon's very crowded book shelf

Did you know that Amazon has 33 million book titles on sale — 33 million!

That’s one crowded bookshelf…

Say you are first time writer, without a large platform or following of your own i.e. not a celebrity or influencer. What do you think are the chances of your book being discovered on Amazon?

This is where the internet will once again direct you to hundreds of blogs that tell you how to ‘rank’ on Amazon. Get reviews they tell you and make sure you get the category right and don’t forget the meta data and so on.

To be fair all these are good tips and probably worked well enough - in the early days.

But Amazon like every large platform or marketplace has been focusing on developing another revenue stream ...

Generating advertising revenue creates an incentive to limit 'organic' discovery of titles

Amazon's annual advertising revenue grew by 64% to $7.95 billion in Q420. This was higher than growth in any other segment, per its quarterly earnings report. Unlike Amazon's other revenue stream's, advertising is also 'capital light'.

Is it not possible that with the shift in focus to advertising, Amazon’s algorithms are now optimising for ad-spend? We saw the same thing transpire with Facebook and Instagram once they switched on ads — organic reach has plummeted to below 5%.

Anecdotally, the experience of self-published authors on Amazon that we spoke to corroborated this.

As soon as they start spending on advertising, they see book sales come through. They stop advertising, sales tapers off. The sales volumes tends to correspond to their ad spend in a strangely stable and predictable manner.

So should self-published authors be content with this additional cost - at least it's delivering the volumes right?

Not really. This additional cost simply exacerbates the problem of 'economics' for the author...

The high economic rent for 'theoretical' reach that publishers pay

For every print book sold on Amazon, ~40-60% of the retail price is taken off as their service charge, in effect the sales commission they charge, with the remainder being the royalty - before all other service charges and taxes are applied (more on that later).

The sales commission they take depends on how broadly you'd like Amazon to 'distribute' your book, with 40% being the charge (60% gross commission) for keeping it exclusive to Amazon and 60% price tag if using Amazon to make your book available to other distributors and booksellers, in a service they call Expanded Distribution.

It's important to once again note that the 'distribution reach' being promised is largely theoretical; unless you pay for marketing there is a good chance you won't be seen...

To us at least, it seemed that Amazon was double-dipping; the only way to get your book noticed and purchased on their platform is through advertising and when you do sell, you pay them a hefty commission for the privilege.

An aside on eBooks - a compelling proposition for anyone with reach

If someone is content with just publishing an eBook via Kindle Direct Publishing (KDP) then there is the promise of it all being 'for free', except for the 30% that is taken off at the point of sale of course.

The 70% in royalties is admittedly still a compelling proposition but this too only materialises when the book sells amongst the millions of self-published eBooks on KDP. Queue more advertising spend.

Incidentally, most of the blogs singing Amazon's praises tends to be written by early adopters of KDP who self-published eBooks, in the good old days before advertising. And good on them, I say. Being an early adopter is the best way to maximise value from these 'new-age platforms'. For late comers like moi, it's best to do the sums before 'drinking the kool-aid'...

Even more fraught economics

The moment you decide to print, an avalanche of additional costs comes your way. As one self published author told us, "nothing on Amazon comes for free".

Amazon provides a range of printing services, although they only cater for paperbacks. Recent additions include print-on-demand services that create a sense of comfort that you are not taking on unnecessary risks on inventory. Then there is the full service offering around warehousing and logistics to get your book into your customers' hands.

If someone is providing a service, it's only fair they charge for it. The thing to be aware of when sourcing these services from Amazon though, is that you are paying quite the premium...

As a startup publisher with no volumes to boast of, we have been able to obtain considerably cheaper quotes for everything from printing (hardcovers too) to warehousing and even shipping directly from third parties.

It appears that in spite of their gigantic scale and therefore unit cost advantage, Amazon's isn't passing on the benefits to it's self-publishing authors or indeed other merchants. Guessing they are the ones that are really paying for all those 'free' services Amazon offers to all their prime members not to mention Jeff Bezos' extravagant yet brief jaunt to space.

Factor the above in and the average self-published author (of print books) on Amazon would be lucky to see even a dollar come back on a book that consumers happily pay twenty bucks for - and that's before the cost of advertising mind you.

This is a wider issue faced by all writers

The average writer represented by large publishing houses today ends up with no more than10% of the book's retail price. The publishing industry has started to point the finger at Amazon, calling out their enormous market power - estimated at 40% of all physical books and a staggering 90% of all eBooks sales in the US alone. They claim Amazon uses this to manipulate books sales across their platform, using predatory pricing and other anti-competitive tactics, driving down the returns for others publishers and authors.

The sad outcome of all this is that most writers can no longer make a living out of their craft.

So what have we chosen to do?

To begin with, we made the decision to ignore the 'conventional wisdom' and not use Amazon as a platform to either self-publish or indeed sell our books. The point of this blog is that I can justify this decision on purely cold, rational, economic terms - with both an author's and publisher's hat on.

We also did not have the option of traditional publishing available as most publishers had closed up shop to new submission back in 2020, whilst COVID was ripping through the world.

So after much consideration of our purpose, values, goals, focus areas and critical success factors, we decided to start our own ‘story making’ enterprise and Wise As Stories was born!

This may be my bias coming from a strategy background, but unless you have clarity on these five factors, don’t incorporate!

We are still very much at the start of our journey and no doubt have much to learn - thankfully this is the space I feel most comfortable in.

My own approach to strategy development has been very much influenced by Henry Mintzberg's seminal article on 'Crafting Strategies'. One of the things that resonated with me strongly when I first read this (fifteen years ago!) was the importance of balancing a set of deliberately formed intentions (queue the five factors) with ideas that emerge organically, as you take actions to execute on the intentions (or otherwise).

In the months ahead I will continue share our approach and progress on being a startup in the most disrupted industry of our modern times! This hopefully helps other indie writers and publishers make informed choices about the path they take to bring their work into existence. It will no doubt bring us much wisdom from others who have walked the path.

Our overall commitment remains to do things in the world of books and publishing differently.

From where we stand, the world doesn't need more celebrity authors...

We needs lots of different faces and lots of different voices telling us lots of different stories. And we need to create a different model that gives these writers, thinkers, artists and illustrators a fairer share of the value that they create.

Our human civilisation will be richer for it.


Don't leave without checking out our new picture book, Willow the Wonderer

Willow the Wonderer is a new picture book by Reeta Dhar and Darren Pryce. It follows the adventures of Willow, an adorable wise ass, who sets off on a quest to find happiness. ​ Written in perfect rhyme, the melodious stanzas take us on an enchanting journey through the natural world, exploring many wonderous places and discovering many marvellous creatures. The beautifully crafted imagery draws young readers in to seek out and count the many creatures that Willow encounters that day.

Whilst helping develop essential literacy and numeracy skills, the essence of the story remains grounded in age-old wisdom about happiness.

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