Monday, 27 June 2011

Amazon are not a distributor

I'm still stewing over this Amazon problem (discussed in my previous post). Derek Haines stopped by the comments to that post and brought up something I'd failed to mention. I think I intended to mention it, but it got lost in the rush. Then, while dwelling on the fact that I failed to mention it, I started to realise

What am I talking about? Amazon have a price-matching rule. This is a clause in the contract (or at least, I assume that's where it is) which says they have the right to match any lower price you offer your book at elsewhere. It's entirely understandable from their perspective - after all, other places are offering royalty rates of 70%-plus (Smashwords offers 70% for sales through Apple, Sony etc.), which means a massive saving that writers can pass on to readers, thereby driving custom - and money - away from Amazon to other outlets.

So, Amazon's 35% royalty rate puts them at a distinct competitive disadvantage, which is more than balanced out by far broader market reach and the price-matching rule. With Amazon's market share being as large as it currently is - pray it shrinks - the price-matching rule forces authors to make pricing decisions based on Amazon's royalty rate. Your price is calculated based on what you want to get per sale on Amazon. You get more (or at least no less) on your sales elsewhere, but Amazon forms your bottom line.

The problem here is that Amazon are forcing the prices offered at other retailers artificially high, thus damaging purchasability for readers. I said last time out that I was looking to make £6000 from 'Heaven Can Wait' over 4 years; this would cost readers about £7,300 at Smashwords' 85% rate, compared to over £17,000 at Amazon's 35% - and if I want to get Amazon's 70% special offer (don't bet that it's anything else, long term), I have to price the book at £2.12 across the board, and however good it is, it's pretty short to cost that much given emerging standards.

So, Amazon's pricing and market power create a real problem for me. I want to offer my book somewhere in the £1-£1.50 bracket, but to do so commits me to a much slower return on my time and a much, much bigger cash burden on readers.

Then I started thinking about why Amazon is so important, and I had a bit of a revelation. Amazon is important because of its market share - more people access the ebook market through Amazon than through any other outlet, by far. That means an Amazon presence is important to an author because of its ability to connect the author with readers.

Sidebar: I got taken to task for my last post not being radical or revolutionary enough - I think because I held back from suggesting we all start boycotting Amazon now. As some of my rhetoric was quite fiery, I guess that's justified, but I want to make clear: I don't consider myself a revolutionary and I don't rate revolution as a marketing tool. My interest is in figuring out what the best deal for me (and hopefully authors in general) is; I'll be as ruthless (and cynical - I want to do this for a living) as I think is necessary, but I'm always going to put my interests as an author ahead of radicalistic grandstanding.

Amazon aren't a distributor. They're a marketing tool. I mean, yes, they sell our ebooks, but we don't need them for that - we can use Smashwords, Barnes and Noble, Kobo et al to sell our books and (at least from a purely financial perspective) do a far better job of it. What we need Amazon for is to connect us with readers. As such, paying differently (if not more) for the service is more understandable.

What do I mean by paying differently if not more? Amazon's price-match, as I understand it, allows them to lower your price but not raise it (confirmation, anyone?). So, if I offer the book on Amazon for 70p (which I think is as low as they'll let me go), I should still be able to offer it on Smashwords for £1.30. I'll make about £1 on a Smashwords sale - which is what I'm after - and about 23p on an Amazon sale. The important thing about the Amazon sale is that I'll also have made a Reader.

By which I mean, I'll have got someone to read my book who otherwise wouldn't. People who buy my book on Smashwords are likely to be people who have found me through Twitter or my other marketing activities (you know, the ones I haven't started yet >.>), whereas people buying on Amazon are just as likely to have found me by browsing Amazon and not knowing anything about me besides my Amazon page.

And I'm writing a trilogy. If I get people to buy 'Heaven Can Wait', and the book is any good, they'll want to buy book 2, which I'm outlining at the moment and planning to write soon. I may well not even list book 2 on Amazon, though I'll need to come up with some way of making absolutely sure that readers wanting book 2 look me up online.

Amazon are a separate marketing tool from my main marketing strategy. My main strategy is about networking - through this blog and Twitter at the moment, and via Facebook, Goodreads etc. in the future (I'm waiting on a cover image before starting that side of things). I can control - to a certain extent at least - where people go from there to buy my books, primarily by only posting links to preferred outlets. It'll knock my accessibility a bit, but gain me 75p on every sale - a 300% increase over Amazon.

Amazon works very differently; marketing through Amazon isn't about me, it's about the book. It's about people finding 'Heaven Can Wait' without ever having heard of Rik (or R.J.) Davnall. Lots of people. It's about encouraging people who've never seen my writing before to try it (and yes, I count Twitter followers as people who have seen my writing - there's a real skill to crafting a pithy tweet, but that's a blog topic for a different time).

In effect, in offering the book cheap on Amazon, I'm not making an introductory offer, I'm making an advert - a self-financing advert for the trilogy that reaches the eyes of a huge potential customer base. I don't know what the conversion rate will be like, but I'm confident it'll be acceptable.

Summary: as a distributor, Amazon are grossly overpriced. Construed as a promotional tool, however, it starts to look really appealing. I need to do a lot of checking before I'm sure this strategy will work (as a key issue, I don't know how many of Smashwords' affiliates - Sony, B&N etc. - also use price-matching), but I'll keep you posted as to how it goes. Ultimately, I'm trying to drive as much custom in the direction of Smashwords as I can, because I believe it to be in our best interests as authors to make them the standard by which the rest of the industry gets measured.

Thoughts? Experiences? Is it possible within the various terms of services?

Wednesday, 22 June 2011

Compromise, and some bandwagon-jumping about Amazon

Amazon are, without doubt, the largest force in ebooks at the moment. Their market share is huge, their technology is the industry standard, and they are fast becoming a byword for the 'new' publishing industry.

That said, I'm starting to have some concerns. A couple of links: one and two. There was also an article I saw a month or two back about the capricious, unpredictable and opaque way Amazon have been censoring (by removal from sale) certain erotic novels - and whatever you think of the novels in question, the fact that they didn't even tell the authors in question that their books had been removed amounts to gross misconduct. I apologise for the fact that I can't find the article in question.

Anywho, there are a bunch of issues tangled up here. Top of the list is that Amazon are starting to show that they cannot be trusted, at least from an indie author's point of view. Their lack of transparency and seemingly arbitrary business decisions are a serious problem for anybody looking to enter a business relationship. Do I really want to trust my baby to that?

The thing that bothers me most, though, isn't corporate indiscretion on Amazon's part - though disappointing, given Jeff Bezos' previous willingness to support e-commerce, a certain amount of ruthless capitalism has to be expected of a company of Amazon's size. What bothers me is Amazon's drive to become industry standard for the new publishing.

Why? Because Amazon's royalty rate is 35%. I am under no illusions that the 70% royalty rate is anything other than a special offer, and I do not trust the company not to pull that particular rug out from under us as and when they see fit. Given the above complaints about transparency, do we have any justification in hoping for warning?

And even if Amazon keep the 70% band indefinitely, I judge it unsatisfactory, because of the restrictions it places on pricing. I want to go through a quick bit of maths with you.

I'm a fast writer. I doubt if 'Heaven Can Wait' took me as much as 120 hours to first-draft. It remains to be seen how much editing it requires, but let's say not more than the same again. That's 240 hours' work (albeit much of it very pleasant work). I'm a new writer with no particular qualifications besides charm and good looks (leave me my delusions), but writing is skilled work, so let's say it's worth at least as much - £25/hour - as I make teaching seminars at university. So my time spent writing HCW is worth (at least) £6000. I'm paying about £130 for a cover, so I'm looking to make a total of £6130 from selling the book. (Sidebar: this assumes I'm not paying any money for any of the beta reads and critique that friends have been willing to provide - I hope to respond in kind rather than cash).

The average indie book sells (I have been told) 4 copies a day. That's 1,460 a year, which means if I make a pound on every copy sold (and sales continue to average 4 per day for the time), it'll take a little over 4 years for me to make money back on the book. I'm pretty happy with that, so let's say I want to make £1 on every sale.

With Smashwords (which seems to me like it should be our preferred choice as authors for industry standard, minor technical issues notwithstanding), I can do that by setting my price at £1.18, which is less than the cheapest student bus fare on offer in my home city. Pretty damn cheap. At that price, I'd only have to attract a total of £7233.40 in consumer spending for the novel to have paid for itself.

Compare with Amazon. There's no way under Amazon's conditions to sell at a price that makes exactly £1 per sale. At the 35% rate, you have to sell at £2.86 to make £1, but (to the best of my ability to tell) in GBP the 70% rate kicks in at £2.12, at which price you make £1.48. So, I only need to sell 4,142 copies to make the cost back, but the total cost to consumers is £8780.81. Bit of a difference, huh? And that's if the 70% rate stays; if it doesn't, the total cost to consumers of paying me back for my work on the book becomes a whopping £17,531.80 - a premium to my readers of over £10,000, which could otherwise support a whole other book by me or a friend.

Sure, Amazon have bigger overheads than Smashwords, probably even for their Kindle services. And sure, at the moment they have a better reach and market penetration (hur hur). Is it worth imparting that staggering burden to readers?

The trouble is, of course, that it's hard to imagine many people becoming successful as an indie author at the moment without Amazon. We need that reach to get us established. Smashwords' biggest problem at the moment seems to be that it's much better known among authors than readers. And it's Amazon's bestseller lists that count, too.

There's a point of principle in the midst of all this, too. When you make an agreement with any distributor - be it trad publisher, Amazon or just the post office - you're employing them. You're buying a service. Amazon is offering a service which can be had elsewhere at a far better price, and yes, perhaps the service is of lower quality, but it doesn't have to be. We have a right as authors to buy at the best prices we can get.

Amazon's royalty policy serves Amazon's interests, not the interests of authors or - and this is very important - readers. In an ideal world, there'd be some way we could reach out to readers and get them to all switch to more reliable, author-friendly distribution platform. That way doesn't exist yet; we collectively and individually lack the clout and career security to make any move in that direction.

But just as Amazon's 70% royalty rate will change, so will the average status of indie authors. There will come a time when we *don't* need Amazon as much (unless they wipe out all competition, of which more in a moment), and we can simply leave them behind. I'm not talking industrial action to change Amazon's policies, just making the decision - as and when feasible - that their service is overpriced and borderline dishonest, and thus not deserving of your business.

For now, Amazon are too powerful to do without. There's a significant risk of them coming to dominate the market the way iTunes has with music - like Apple, they control both the premier device and the premier retail outlet for their field. But Amazon isn't all-powerful as long as Smashwords, and Barnes and Noble's PubIt, and the Sony and Apple outlets, and other smaller outlets still exist. As long as we keep sending business the way of these retailers (or at least, the ones who can offer competitive deals - I don't know what B&N, Sony et al offer by way of royalties, but we're free to pick and choose among smaller markets), they'll be there when we need them.

So that's my plan. For now, while it's unavoidable, I'll compromise with Amazon's dodgy corporate responsibility - still, in fairness, better than many corporations I could name - and overpriced services. But Mr. Bezos can consider himself on notice: as soon as I can live without Amazon's reach (and possibly sooner, if that 70% rate evaporates), I will be taking my business elsewhere.

I don't know if I'll have convinced you to do the same, but whether you're an author or a Kindler, it is in your best interests to take your business elsewhere as much as you can and to give as much support to distributors offering far better deals for all concerned.

Monday, 13 June 2011

An old problem...

It's my 24th birthday today, so in this brief spell between breakfast and inebriation I thought I'd ruminate a little bit on getting older.

Well, I thought I would, but then I got an email this morning from my second beta reader, the lovely Anne-Mhairi Simpson, telling me that 'Heaven Can Wait' is great and only needs a few tweaks. Apart from being a great way to kick off a birthday, she mentioned something that gave me pause. Launch promotion.

At present, I have none planned at all, except for vague ideas about blog tours. It's getting harder and harder to deny (or at least dissemble) that I have a very strong book here. As such, I'm fairly confident I can get some good reviews coming in once I've got some people to buy it. It's that first step I'm worried about.

I've got a cover on the way courtesy of Dustin Ashe, and the first rough he sent me last week was pretty cool, and I plan on releasing the book at $2.99/£2.12. I'm dithering over whether to do the formatting myself (which I can do - I have a fair amount of experience with various kinds of mark-up) or pay someone to do it; it will depend on how much it'll cost and how fiddly the required mark-up is.

But I have nothing planned for launching. I know I should, because I know that it doesn't take many sales in a single day to push a book - however briefly - up through the thousands of ebooks on Amazon's lists, and a strong launch day might still be enough, if well-enough coordinated, to break onto some charts somewhere. I haven't even looked into the numbers well enough to know what my targets should be.

Anyway, any ideas you can offer about promotion are most welcome. I'm fighting the temptation to see if the book can stand on its own without me doing much more than telling my friends and badgering them for reviews, but that feels a) exploitative and b) lazy. It feels like I'd be letting the book down to not do a better job of promoting it. Besides, if the book is as good as I'm being told it is (and, as per my last post, I'm still having trouble taking that praise on board), I've got a lot more praise to look forward.

My first one-star review is going to be a hell of a shock, that's for a sure. I thoroughly expect to get a few, and it'll probably do me good, but that doesn't make it pleasant. I just hope I get some reviews to match my beta feedback...

This is a horribly unfocussed blog post, but it's my birthday, so bah. You get good writing other days. Today, rambling!

I should possibly lay off the Dr. Pepper...

Wednesday, 8 June 2011

Biting the Hand that Feeds Back

Having confidence in your writing ability - even once it's been proven - can be a very hard thing to do. Yep, buckle up, folks, this is another one of my jaunts into the psychology of writing. I'm dealing with a slightly unusual topic; receiving positive feedback. There are loads of blogs about how to deal with negative feedback, criticism and general negativity, but sometimes positive feedback can have its own psychological knots attached.

I'm in just such a situation right now. I'm in the process of getting feedback from various friends on 'Heaven Can Wait' - while in the meantime trying to sort out cover art, world-building and an outline for book 2. So far, I've only had one response, from AJ Alto, AKA @AJAlto, AKA 'Run!'

Without wanting to blow my own trumpet, let's just say the feedback AJ sent me was very good. With wanting to blow my own trumpet (and hey, no-one else is going to do it for me. No, not that trumpet. Perv), AJ told me the book is engaging, exciting, moving and - but for two minor grammatical points and a couple of character tweaks - ready to publish. Given that less than 6 weeks before sending her a copy, I hadn't even dreamt up the idea, that's incredible.

And therein lies the problem. I wouldn't go quite so far as to call AJ sane and rational, but she's an experienced writer and I have a great deal of respect for her wit and judgement. Therefore, I should - and do - trust her. But if the book's that good, and I can write a book that good in six weeks, why the hell would I do anything else? I should be dropping everything else and writing book 2, while rushing to get book 1 up on Amazon.

Actually, I sort of am doing that, but I'm not rushing nearly as fast as I could - centrally, I haven't started formatting the text for Kindle or EPub yet. So do I actually not trust AJ? If you trust someone, you follow their advice - that's what trust means. If you believe someone's judgement correct, it's irrational - mad - to go against it. So am I mad?

I'm cautious. Caution is a good virtue for a writer to possess. I spent too long as a teenager fantasising that the new project, the one I was then working on, was the one that would make me rich - once or twice, I even put money where my dreams were and got burned (low point; starting a zine, getting a hundred copies printed, and selling only 25).

There's a balance to be struck between caution and trust, as there is in all human affairs (okay, that was obnoxiously pretentious). In this case, I'm leaning - and possibly erring - on the side of caution because I want to take the time to get my launch right (though I'm still seriously entertaining the idea of publishing in early July).

I'm also seeking the opinion of other beta readers, because there is always the possibility that for some reason 'Heaven Can Wait' resonates specially for AJ and not for other people, and you should never assume one person's opinion is univesal, however knowledgeable that person is.

Incidentally, if you're interested in 'Heaven Can Wait', there are two (overlapping) samples here and here, and I'm still happy to accept more betas - message me on twitter (@eatthepen) or leave a comment if you're interested.