Scott Marlowe, fantasy author

Scott Marlowe

Author of the Alchemancer and Assassin Without a Name fantasy series

How much do you make selling through Amazon's Kindle store?

If you're interested in this topic you might also want to read Half of self-published authors earn less than $500.

I recently uploaded my first fantasy novel to Amazon's Kindle Store. The idea behind making it available on Amazon is (1) to hopefully gain more exposure and (2) maybe make a buck or two in the process. I'd like to take a moment to look at the latter of those reasons by asking the following question: How much, really, can one make selling an e-book in the Kindle store?

First, there's what Amazon calls the "Suggested Retail Price", or SRP. This is set by the author at the time the e-book is uploaded:

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The price you charge can range from a minimum of $0.99 to a max only Bill Gates, Warren Buffett, or Bernie Madoff (before he admitted to his Ponzi scheme and was locked up for 150 years) could hope to afford. Amazon, however, discourages price points above $9.99; you'll find many bestsellers featured prominently on the Kindle store-front selling at this price due to discounts Amazon has applied.

That brings us to our next point of discussion: Amazon's discount. We've all seen it, where Amazon takes a product that normally retails for $129.99 and discounts it to $69.99. The same principle applies here, though the discount in no way impacts an author's royalty. From my extensive research (which consisted of reading through a handful of posts on the Amazon DTP Forums until I found this one), I discovered this statement from Customer Service:

"...please know that as per our terms and conditions, our decision to discount products is based on a number of considerations which can vary over time. You will continue to receive the set percentage of the list price you set for every sale, even if Amazon changes the retail price for your content."

What this basically means is that while there may not be a method to their madness concerning what gets discounted and by how much, if and when they do discount your e-book, it will not negatively affect your royalties.

So now we come to the royalty itself, or how much we actually make per sale. The simple answer is 35% of the SRP. For a longer answer one can look to Amazon's DIGITAL PUBLICATION DISTRIBUTION AGREEMENT:

5. Royalties. Provided you are not in breach of your obligations under this Agreement, we will pay you, for each Digital Book we sell, a royalty equal to thirty-five percent (35%) of the applicable Suggested Retail Price for such Digital Book, net of refunds, bad debt, and any taxes charged to a customer (including without limitation sales taxes) (a “Royalty”).

That means for every e-copy of The Hall of the Wood sold, currently priced at $0.99, I'll make $0.35. Amazon gets the remaining $0.64. As above, should Amazon choose to discount my e-book, I'll still make the 35% royalty on the original SRP, so still $0.35. I can adjust my price point up a bit and make a little more per unit sold, but of course can't drop it below the minimum $0.99 threshold.

So, that might be more information than you cared to know, but there it is.

Sell Your E-books in the Amazon Kindle Store

I've been interested in Amazon's Kindle digital book reader since its inception (though, admittedly, I didn't start blogging about it until the second version came out). I haven't bought one yet because I'm waiting for the inevitable price reduction, but that doesn't mean I haven't been exploring its features and some of the content for the device.

The biggest source of content for the Kindle is, of course, Amazon's Kindle Store. The store features a lot of e-books. A quick run down of some of the categories:

Fantasy 5,267 e-books
Science Fiction 7,299 e-books
Mystery & Thrillers 13,570 e-books

Total, there's over 300,000 titles available for download to your Kindle. That's a lot of books.

I recently discovered one of the best things about the Kindle store: anyone can post products there. JA Konrath clued me into the possibility, and he does a nice job of breaking down some of his own sales numbers. You can see that he's had no small success at it thus far. Granted, Konrath is a published author, so his name is out there via other, more traditional channels, but he also puts forth a lot of effort online as well. Nonetheless, is the possibility of an unpublished writer posting his or her work to the Kindle store gold waiting to be mined? I plan to find out.

As of a couple of days ago, my novel, The Hall of the Wood, is available for purchase via the Kindle store:

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I wanted to make the price $0.25, but $0.99 is the minimum allowed price. The one catch is that, of course, you must have a Kindle to which to download the e-book to. So, if you've already spent $300 for the device, what's another $0.99? ;-)

The concept of an unpublished author finding success in this channel is a challenge. As noted above, there are over 5,000 fantasy titles available for purchase in the Kindle store. How to make my novel stand out amongst those? For one, I created a book cover. Nothing fancy, but it gives the potential buyer something to look at other than "No image available". Second, I gave it a product description, which is the standard blurb taken from my web site:

Jed's wife and unborn child are dead, killed by a legacy he dare share with no one. Seeking a reprieve from his guilt, he sets out for his former home, the Ranger Hall of the Wood. Along the way, he discovers all is not well. Aliah Starbough, a friend from Jed's past, sends him a chilling warning: the rangers are dead, the Simarron Forest, thrown into peril. Nearby Homewood has issued a plea for help, a summonings which Kayra Weslin, knight errant, and her chronicler, Holly, answer. Along with Murik Alon Rin'kres, an Eslar sorcerer who harbors a secret purpose all his own, the four attempt to unravel the mystery of the missing rangers. They soon find tales of their disappearance frighteningly untrue.

The third way to gain attention is through customer reviews. This one is huge, and the one that in my mind will allow us as writers to break free of the traditional agent/publisher dependency. It's a stamp of approval, a guarantee of quality, a statement saying that your book is not crap. Customer reviews, to a point, validate a book's worth. In general, low reviews indicate a lack of quality. High reviews, the opposite. This is not to say that every review should be taken as gospel. But given enough reviews and a trend should emerge.

I often read of the struggle authors undergo in finding an agent or publisher. There's really no rhyme or reason to it: the decision-making is subjective, and how often have you come across a published novel that, to be frank, sucks? I've begun to doubt the vindication that supposedly comes with having your work blessed by a "real" publisher, and let's face it: business models change. We might be witnessing the beginning of the end for traditional publishers here. If not that, certainly a sea change in the way we purchase and read books.

The Hall of the Wood has been available as a free pdf download for a long time now. As Konrath points out, Amazon's web site gets a lot more traffic than his own. That volume has a lot of potential to increase sales. Selling on the Kindle store seems like a real no-brainer to me.

How much does the Kindle 2 really cost?

iSuppli, which makes a business out of tearing down electronics products to see what's inside and then publishing their cost findings, released a report stating that Amazon's Kindle 2 costs $185.49 in components. The Kindle 2 retails for $359. That's a difference of $173.51.

Engadget shows the component breakdown:

I don't mind Amazon making a profit, but I'm still not sold enough on the Kindle to fork over $359 for it. James Martin of PC World did a cost-justification analysis comparing the purchase of a Kindle 2 and associated e-books vs. going the traditional route and it didn't work out so well:

"...my number crunching reveals that even a loyal reader of paperbacks would only have saved $58.82 by the end of the second year of Kindle 2 ownership."

That's a whopping savings of $60 after two years. In his analysis, he assumes 2 paperbacks per month; that's a lot of reading. I know I couldn't maintain that pace for 2 years.

He goes on to say:

"Amazon is sure to introduce a third-generation Kindle during that period, which you may decide you can't live without. There goes your $58.82 savings, and then some." 

Therein lies the crux of technology, my friends. There's always something bigger and better right around the corner. However, I'd love to own a Kindle 2, and maybe that "next gen" version will help drive down the price of the current model.

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Authors: Kindle 2 text-to-speech undermines audio books

image The Author's Guild has issued an E-Book Rights Alert, informing authors of the possible revenue loss to stem from Amazon's Kindle 2 'text-to-speech' feature because of that technology's potential to undermine the audio book market.

The Guild says this about the Kindle 2's text-to-speech feature:

[Text-to-speech] presents a significant challenge to the publishing industry. Audiobooks surpassed $1 billion in sales in 2007; e-book sales are just a small fraction of that. While the audio quality of the Kindle 2, judging from Amazon's promotional materials, is best described as serviceable, it's far better than the text-to-speech audio of just a few years ago. We expect this software to improve rapidly.

In short, Kindle 2's text-to-speech feature is just that: any text stored on the Kindle 2 can be read back to you. The voice has been described as a "not-quite-natural electronic voice", but as the Author's Guild states, this feature should improve over time. Just the fact that we have such technology is proof enough that it will improve. Text-to-speech years ago was horrible. Yet now you can listen to say, my blog posts, through a service like Odiogo.com in a voice that is fairly pleasant if not a bit inconsistent in its pacing. It's 'serviceable', no doubt.

Personally, I take issue with the Guild's stance on this issue. First of all, audio books are expensive. Amazon has clearly invented a way to bring that cost down effectively to zero. That's good for consumers, right? Second, we live in a free market society where innovation is generally considered a good thing. This particular innovation, again, is a win for consumers because instead of having to buy print and audio versions of a book, you can now buy the Kindle format and that's it. Read or listen (or both), it's up to you. Just think of it: now you can read as usual, but you also have the option of listening for those times when reading is not possible. It's the ultimate in maximizing your time while still partaking in one of civilized society's greatest forms of entertainment.

I understand the other side of the argument. The "lost revenue" side, that is. But much like Paul Bunyan had to bow out to make way for the chainsaw, maybe it's time for the publishing industry to get out of the way and let technology and innovation pave the way to a brighter reading and listening future for all.

I'll leave you with Neil Gaiman's thoughts on the subject:

When you buy a book, you're also buying the right to read it aloud, have it read to you by anyone, read it to your children on long car trips, record yourself reading it and send that to your girlfriend etc. This is the same kind of thing, only without the ability to do the voices properly, and no-one's going to confuse it with an audiobook. And that any authors' societies or publishers who are thinking of spending money on fighting a fundamentally pointless legal case would be much better off taking that money and advertising and promoting what audio books are and what's good about them with it.

 Now, what do you think?

Amazon's Kindle 2 to Launch February 24

image There's plenty of news, buzz, skepticism, excitement, early product reviews, and photos surrounding the imminent launch on February 24 of Amazon's all new version of the popular e-book reader, the Kindle 2.

The feature list for this new Kindle is impressive:

  • Slim: Just over 1/3 of an inch, as thin as most magazines
  • Lightweight: At 10.2 ounces, lighter than a typical paperback
  • Wireless: 3G wireless lets you download books right from your Kindle, anytime, anywhere; no monthly fees, service plans, or hunting for Wi-Fi hotspots
  • Books in Under 60 Seconds: Get books delivered in less than 60 seconds; no PC required
  • Improved Display: Reads like real paper; now boasts 16 shades of gray for clear text and even crisper images
  • Longer Battery Life: 25% longer battery life; read for days without recharging
  • More Storage: Take your library with you; holds over 1,500 books
  • Faster Page Turns: 20% faster page turns
  • Read-to-Me: With the new Text-to-Speech feature, Kindle can read every book, blog, magazine, and newspaper out loud to you
  • Large Selection: Over 230,000 books plus U.S. and international newspapers, magazines, and blogs available
  • Low Book Prices: New York Times Best Sellers and New Releases $9.99, unless marked otherwise

imageFor me, the most attractive items from that list are the size, weight, battery life, and the sheer selection of Kindle-formatted books that Amazon now offers. The wireless feature is kind of cool, but I don't know that I'd use it all that often. In other words, once you've got a book or two downloaded you're pretty much set for days if not weeks, right? I spend enough time in the office and at home that having to hook up to a standard network isn't a big deal, though it's not clear to me at this point if that is even an option. Downloading over 3G might be the only way to bring content down.

As far as size, the image on the right says it all. The Kindle 2 is described as "pencil thin". That it is. That's one slim piece of machinery, though I do wonder about the Kindle 2's durability. I'm anxious to read early adopter reviews to see if this is an issue at all.

Other intriguing features include Whispersync which will allow you to start reading a book on the Kindle 2, then pick it up automatically on your iPhone or Blackberry, then jump back to the Kindle 2, all without losing your place. Read-to-Me is of some interest as well, though I wonder how tinny or jagged the speech will sound as it reads the book to you. If done right, with a smooth, pleasant voice, you may never have to actually read a book again

Update on Read-to-me: Legal action is already being contemplated because of this feature. Publisher's Weekly reports:

Some in the publishing community are raising objections to the new device's deployment of text-to-speech software that lets users have books read aloud by Kindle. Agents are raising questions and Authors Guild executive director Paul Aiken tells the WSJ "they don't have the right to read a book out loud. That's an audio right, which is derivative under copyright law." Amazon spokesman Drew Herdener says "these are not audiobooks. Text to speech is simply software that runs on devices and reads content." To that argument, an agent responds to us: "TTS is a tool. So is a knife. If I use it to cut vegetables, I'm using it for its intended and lawful purpose. If I use it to stab someone, I'm committing a crime. The fact that they are using a technology to create an audiobook rather than recording one has nothing to do with the issue. They are using a tool that has lawful purposes to violate copyright." Asked about next steps, Aiken says "we're studying it right now."

The Kindle was intended as the iPod or iPhone of the book world. Based on the sales figures Amazon has reported it would seem they're succeeding in this regard. According to Jeff Bezos, Amazon had been selling e-books “for years” and “it wasn’t working until 14 months ago” when the Kindle was launched.image

You can see the "Kindle effect" clearly demonstrated by the spike starting in 2007.

So, what to do? Wait-and-see or rush out and pre-order right now? What are other folks' thoughts on the new Kindle 2?

Further Reading