04 Amazon as a Criminal Mastermind
Serial - Episode 4: Where Amazon goes terribly wrong and winds up on the dark side. (Has to do with one of the 7 Deadly Sins...)
How Amazon Is Killing off Writerpreneurs
This ebook-loss-leader idea flies in the face of Amazon and their arbitraries. The one's they've introduced make themselves rich while killing off authors by keeping them poor. Obviously, it's in the best interest of Amazon to push ebooks, since they are low overhead and high profit.
Initially, Amazon had a flat 30% author royalty for all ebook sales. Then iTunes came out with a 70% royalty, so Amazon had to shift. Meanwhile, the Big 5 trad publishing houses were all in on selling ebooks for the same price as at least the paperback version, if not hardback.
Amazon soon came out with a 35% royalty, but carved out a 70% exception for everything priced between $2.99 and $9.99. This then excluded the very popular $.99 books (which didn't make Amazon very much income) and anything $10 or over, just so they could leverage other concessions from the traditional publishers.
Amazon wants most of the income from whale readers of ebooks and their whaler writers. But what this has actually done is to create a race to the bottom, where the most popular price for books lies mostly around $2.99 to $5.99, with the bulk in that lowest tier. This of course doesn't hold true for non-fiction and is inapplicable to print books.
The whole reason to popularize Kindle Direct Publishing (KDP) and their Kindle Unlimited (KU) is to lock both readers and writers into a platform that dictates pricing and ownership over the ebook marketplace. When you “buy” an ebook on Amazon, you don't own it in any shape or form. If you take your Kindle to Canada or other countries, certain books will disappear from your ereader. Because of various laws Amazon would be breaking. This is only true of the Kindle. No other government is restrictive of your ebook or print bestseller. It is Amazon itself that enforces book repossession. You only bought a service agreement. And why you can't simply or easily offload a Kindle ebook to any other reader.
Writerpreneurs Leaving Money on the Table
Where ebooks are being pushed as the author's main product to sell online, they have been mislead. If they aren't also publishing in print, they are leaving money on the table.
What this all points to is having real products that are intrinsically valuable, that can be warehoused or printed on demand, that can be shipped and physically owned by your audience – everything else is as whisps of gossamer in the summer breeze.
The most powerful person in the world is the buying consumer. They are the boss of all the corporations who have ever existed. And, like small business, can quickly change what they support and move their dollars elsewhere. We don't have to (and never should) wait for “government” or some monopoly to come and save us from our worst selves. We choose wisely where we spend our hard-earned income. Market forces always prevail. As you recall, buying readers are the gatekeepers now.
I long ago started buying ebooks only from Kobo. Because I can transfer from their ereader to any other computer I own. I literally own that copy I bought. There may be nuances of disagreement on that point, but I have the freedom to buy where I want and utilize that copy as I see fit – short of reselling it (which is another argument for another time.)
The free market in principle is where the buyer and seller alone agree on the price of the offer being exchanged. Digital or Print or anything else. Governments and monopolies have no real say in this, as it's a natural right and not even invented by humans. Commerce itself is embedded in wiring. Even where people don't speak the same language, trade and barter were being done by sign language before printed or coined money was introduced
Where any author has made compromises with their pricing and getting paid a livable income, it's where they have agreed to arbitraries. If they can reach and talk directly with readers who want to buy what they've produced, then they can set their own pricing scale. That's the core problem with Amazon, and how they control the ebook sales in the U. S. It's their way or the highway.
However, there is already a solution to this problem in how to reach buying readers, despite what we've been told.
The Two Types of Writer Successes
Our core problem in writing-publishing-marketing eventually came to the surface: those few writers who succeeded were running a business. These were of two types:
1) Writers who taught themselves how to market, and
2) Marketers who taught themselves how to write.
And those few were applying the hard-nosed grindstone-proved laws of business to their writing-publishing-marketing as a profession. Somehow, their business savvy was enabling them to navigate the booby traps and snares of the ingrained book-selling marketplaces.
It was not that they made their lives miserable by getting their hands dirty in business process. In fact, the few people who have succeeded still enjoyed the joy of writing as they earned a sustainable income. Entrepreneuring was another creative experience for them. However, even these successes became fewer and fewer.
Essentially because of the same problem that was keeping everyone else down – the Big Tech corporations who set themselves up as the “only way” to succeed in writing and publishing are grabbing an ever-larger slice of the payout pie for themselves. Any business manager can tell you: when overhead costs go up, profits go down.
While the ebook publishing industry has grown and makes publishing easier than ever, that widely-touted ebook success route has been disguising it's own failures - while squeezing more and more nickels and dimes from authors. All while both the book marketplaces and their supporting authors could be raking in the income hand over fist by simply helping each other open handedly.
Instead, corporate greed replaced customer service – as their public was increasingly locked in to that platform. The author could either sell there – or go away.
Amazon's Pay-to-Play Problem
Amazon has always insisted on locking in their readers, authors, and publishers. And meanwhile working out ways to take more of the income for themselves. This is their Kindle Unlimited, Amazon Prime, and all the ads they run – where you need to take out an ad on your own book page for your own book (or someone else's book ad will show up there, even several someones'.)
Authors have become satisfied at selling a month's worth of work for $2.99 a copy – and needing to sell thousands every week. All while the big leaderboard “successes” only really started earning viable income after their fifth or later book in that series. And that's providing they wrote in the highly competitive popular genres using specific common tropes.
Amazon's own algorithms push 30, 60, and 90 days drop-offs in their promoted books, replacing them with newer books which are selling better. They know that fiction books usually last only a month before the sales falter and disappear. This fact has been known to traditional publishers since at least the 1940's.
The Amazon model became:
1) Writers should be churning out 300-page ebooks in popular fiction genres every single month.
2) These should be ebooks with the similar cover, tropes, and plots to all others in that genre.
3) They should keep their prices low so they also compete on price.
4) And they should be spending advertising with that book distributor to return more of their hard-earned income.
Meanwhile (as reported by Publish Drive and others) independent aggregators discovered that authors who published to all possible distributors started earning around 50% of their income from wide distribution. At the same time, Amazon's distributions to individual authors on KU have shrunk by half and have declined steadily for years.
The conventional model for self-publishing has been to straight-jacket your writing into a narrow format while churning out a 300-page novel every single month – in a series – and every single year from there on out. In order to feed faceless, fickle readers who pay you pennies per book. All while you pay more in advertising on Amazon to sell at all. Meaning that you get less and less booksales profit to spend for yourself.
Always running, spinning, getting nowhere – except burnt out.
We have a walled garden filled with readers and writers – all on hamster wheels and getting nowhere. A problem crying out for a solution. We knew how and why our villains perpetuate their crimes – but do any other profitable models exist for writerpreneurs?
Don’t miss the earlier installments in this series: