Updated: Dec 12, 2022
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 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 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 noticed 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 ...
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...
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.
The 40-60% range depends on how broadly you'd like Amazon to 'distribute' your book, with 60% being the offer for keeping it exclusive to Amazon and 40% if using Amazon to make your book available to other distributors.
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
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.