Writer Wednesday—Amazon

Okay, fine, I’ll write about the latest from Amazon. So there.

The great dispute between Amazon and Hachette seems to be over E-book pricing, right? Here’s my opinion:

Who cares?

Oh, I’m sure Hachette authors care—it’s their livelihood, after all. And Hachette cares, because they also make money off E-book sales. And Amazon cares because . . . why?

I’m guessing because there are SO MANY lower-priced books on the Amazon site. But surely, you ask, aren’t people buying books from Hachette authors, even at those high prices? Yes, yes they are.

Let’s look at this from the perspective of indie authors and even small press:

We’ll start with a typical fiction E-book, roughly 80K words or so. A Hachette book (and I’m using them because, really, that’s who this is about) is priced at $14.99—that same book, in paperback, is roughly the same price. Should it be? Probably not. An electronic book is not a physical object, but in this day and age, well, maybe. Blood, sweat, tears have gone into its production, its writing, regardless of the medium a reader chooses.

Now look at an indie book, same size, same blood, sweat, and tears. That book is priced at, on average, $3.99. Why? Because that’s a price point at which it will sell. Look up the statistics. Again, why? Because that seems to be what readers are willing to pay for a book by Joe Blow, versus one written by a nationally known bestselling author.

Come on, don’t you go to the dollar store sometimes for certain products? Don’t you comparison shop? Don’t you sometimes get suspicious because something is priced too cheaply, and you think, therefore, that it might be crap? Be honest.

Now, you can find all over the web where someone quotes figures as to how many MORE Hachette books would sell at a lower price, and I stink at math so I’m not going to get into all that. Doesn’t matter. In fact, I’m almost tempted to raise my E-book prices, just to see what would happen. Hmm. Not a bad idea.

Times are tough for everyone, even people who read for entertainment. The fact remains that, for every Hachette E-book purchased, a reader could buy 3-4 indie books, right?

So why does Amazon care?

Beats me.

Look at your average physical bookstore. They sometimes have sales, discounts, specials, etc. They are under no obligation to do so, they can usually set their own price for the books they sell. If a book retails for 14.95, the store can sell it for as little as they want, technically. It depends on how much money they’ll make off each sale—that’s what effects their decisions.

Amazon is an online bookstore, right? (Yes, yes, among other things.) So why can’t they sell at whatever price they want? They don’t discount RHP E-books, but they DO discount our paperbacks.

I think the dispute comes down to royalties and contracts.

Many E-book publishers pay 40-50% royalties on E-books—on the retail price. Does Hachette do that? I don’t know. Maybe they pay on net. See, as indie authors know, you have to price your E-book above a certain rate in order to collect that 70% royalty, minus, of course, the cost of delivery. Amazon earns 30% of each book, without any costs. So, to make it simple, if your book is priced at $4.00, you earn $2.80 on a sale, minus a few cents. Amazon earns $1.20, for giving you the means in which to sell your book.

If you have a small press handling your book, or an E-publisher, same figures, you would earn $1.60 to $2.00 per E-book sold.

Now a Hachette book, priced at $15.00, would earn $10.50 for the publisher; Amazon’s cut is $4.50. The author would earn $6.00 or $7.50, depending on royalty percentage. That’s a big difference: on average, $2.20 versus $6.00 or $2.40 compared to $7.50. No wonder Hachette authors want a higher-priced book—don’t you?

But what is Amazon’s deal? They could make $1.20 or they could bring in $4.50 per book. Seems like a no-brainer. Why penalize a big money-maker?

And then. Gee, says Amazon, let’s take it to the readers. And authors. OF COURSE readers want cheaper books. Duh.

And you know what? Authors want more money. Another duh. So now, I’m thinking, a lot of indies are saying, “Hey, maybe our books should cost MORE!” What’s Amazon going to do then? Refuse to carry E-books at all? Aren’t they cutting their own throats over this whole thing? If Hachette lowers prices, Amazon makes a lot less.

What’s their game, anyway?





4 comments on “Writer Wednesday—Amazon

  1. Interesting.There is such a thing as ‘sweet spot’ pricing. Print books are ‘too expensive’ reducing sales, and eBook prices are perceived as ‘too low’.
    Perhaps Amazon’s game is a plan on changing the entire ballpark. Amazon sells at the price the author/indie /publisher sets at this point. Is Amazon testing the waters to see if they can dictate eBook prices at will,— in fact eventually dictate the prices for ALL books they sell?


  2. I’m not entirely sure why Amazon cares what prices the books are set at, to be honest — maybe what’s really annoying them is the lack of control? As in, we want to be able to discount your books whenever we want, and we can’t?

    Also, I don’t think authors from Hachette make $6-7 per ebook sold — I got the impression that traditionally published authors make like 10% per sale, so it would be more like $1-2? I could be wrong.


    • I really have no idea; publishers are pretty close-mouthed about that, as are authors. And they should be. The main thing is what difference does it make to Amazon? I’m still scratching my head over that one…


  3. authormjlogan says:

    Amazon wants a monopoly on book sales. If they can force Hachette to lower prices on ebooks, then other outlets will have to lower their prices as well. That means lower or non-existent profits for other outlets and they can’t compete. You are already familiar with what happens when people don’t buy books from brick & mortar stores. Amazon can easily afford a lower profit on a book–even just a few pennies above break even.

    Amazon doesn’t give a rats behind about authors. In one respect, they are becoming no different than a content mill, except readers have to pay to read.


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