Amazon founder Jeff Bezos is a genius in my opinion. And I’m not alone. He brought together eBook technology in a unique way that revolutionized the way people buy and read books.
However, Bezos is in the business of making money. He spent hundreds of millions of dollars building a pipeline to sell eBooks which starts on Amazon.com, delivers eBooks wirelessly through Whispernet, and ends up on your Kindle eBook reader.
Authors need to realize that it’s in Bezos’ interest to keep that pipeline filled. He does that by offering cheap eBooks to readers. The only way he can do that is by “manipulating” publishers and authors into accepting the lowest possible price for their eBook.
One of things Bezos has done to drive prices down, and pay authors as little as possible, is a program called “Kindle Select.” It comes disguised as a bundle of author benefits, but it can have a dramatic negative effect on your income.
A Good Idea Gone Wrong
Kindle Select has been with us since 2011. It was a simple plan in the beginning. If you gave Amazon sales exclusivity for 90 days, they would enroll into the Kindle Owners Lending Library (KOLL), and pay you out of a fund they established. Authors received a share of the fund based on the proportion their books were borrowed, compared to the total number of books borrowed.
Another component allowed authors to give away their book for 5 days out of each 90-day period. The idea was that thousands of people would download your book, and you could expect a huge number of reviews and the buzz would skyrocket paid sales. It worked, but not for long. It still works, but for very few. What killed the free promotions?
- Almost everyone started giving away eBooks. The market was flooded in every genre.
- A proliferation of new web sites started promoting free eBooks. That eliminated the uniqueness of the free offer, and eBooks became a commodity.
- Most free downloaders became freeloaders. They did not write reviews or create buzz. Seems like there are a huge number of eBook hoarders who get them when they are free. but never read them.
The give-away made little sense, even in the beginning. Brick and mortar bookstores don’t need to give away books to get customers, so why should that be a feature of an eBook store? And why would an author sign up for KDP Select when they could offer their eBook free without joining?
Also, as a rule, most eBook readers don’t review books whether free or paid. Exact statistics are not available, but the rule-of-thumb is that only 1 in 300 readers bother to write a review. A free copy is not the gateway to getting reviews. Amazon has used some smoke and mirrors to make authors believe there is a relationship between free copies and reviews, but happens far less often than you think. See my article on How to Get eBook Reviews here.
Amazon realized some aspects of KDP Select had little logic, so they added a kicker. eBooks given away during the KDP Select-sanctioned 5-day period counted as actual sales. Therefore, an author could get on the Amazon “Bestseller” list, and the prestige of that status, without selling a single book. I always questioned the ethics of that plan. Amazon later abandoned the relationship between free eBooks and bestsellers.
The Plot Thickens
Amazon has done several things to complicate KDP Select. They consider them improvements, but authors should challenge that claim. The changes included:
Limiting the 70 percent royalty to 30 percent in some countries unless you join KDP Select. For example, I sell mostly to English-speaking countries so I don’t care if I get only 30 percent from books sold in Mexico or Japan. If I publish a book I think will do well in one of the “30 percent” countries (notably India), I simply check the exchange rate and increase the price of the book so I get the equivalent of 70 percent at the 30 percent rate. KDP allows you to change the sales price—you are not required to use the default US equivalent price.
KDP recognizes that offering ebooks free as a promotional gimmick is pretty much dead. Thus, they started offering two other promotional features. One is a “Pre-sales” option. Authors can announce your book and sell copies before it is released.The promotional option for KDP Select users is “Kindle Countdown Deals.” An author sets a low price and it increases over time to its normal selling price. This creates an artificial incentive for customers to “buy now” and can work if a huge number of people are aware that your book is in this program. If you have an author website, you can set your own countdown deal and change the price manually. You don’t have to sign up for KDP Select to get this benefit.
Kindle Unlimited (KU) is the most disturbing KDP Select program. Any Amazon customer can pay $9.95 per month to sign up for KU and they get your book free if you are in KDP Select. You drive traffic to your Amazon sales page, and when people get there, the KU members see they can pay your asking price or get it free. You are, in effect, competing against yourself, and that makes no sense at all. A KU member must read at least 10 percent of your book before you are paid, and the KDP Select tax is horrific.
The Price to Use Kindle Select
You cannot know in advance how much you’ll be paid from the pool. KU/KOLL book sales show on your KDP sales graph in blue, but the dollar amount is not included in the totals below the graph. The amount of money in the pool changes from month-to-month as does the number of eligible books, so you don’t know what your allocation will be until they release payment.
What can you expect? In my case, I sell my ebooks for $3.99. That means I get $2.79 per book minus the tiny Whispernet delivery charge. How much was I paid for books in the KU/KOLL program the first month? A mere $1.54 per book. That means I am losing $1.25 PER BOOK for the privilege of belonging to KDP Select.
Is there an up-side to the KDP Select tax? I don’t see any at this point, so I removed all my books from the program.
Gimmicks like free books or “countdowns” won’t help you, because your goal should be to maximize your financial return. KDP is a delivery system, and a good one, but Amazon will take hard-earned money out of your pocket if you use KDP Select.