aprilhamiltonApril Hamilton is an indie author with a number of successful titles to her name. Here she writes about the love/hate relationship indie authors and publishers have with Amazon.

Amazon And The Indie Author: Frenemies?

I had a discussion about Amazon with a writer friend recently. She was annoyed that the profit split for Kindle books created using Amazon’s DTP is 35/65, with 65% going to Amazon and 35% going to the author/publisher; she called it robbery. I know many indie authors agree with her, but I don’t really understand why.

I reminded her that when a mainstream author gets a book published in whatever format (print, e or audio), the publisher keeps about 55% of the retail price as recompense and the bookseller, whether online or brick-and-mortar, gets a standard 40% cut of the retail price for any book they sell. This amounts to a 5/95 split, with 95% going to the publisher and bookseller and just 5% (or less) going to the author. True, some authors are able to negotiate more attractive terms that grant them up to a 15% royalty (sometimes even more on subsequent print runs), but this is not the norm, particularly for first-time authors with debut books.

With DTP books, Amazon is acting as both publisher and seller, yet the split is 35/65—not the 5/95 or even 15/85 split you might expect. And anyone who’s still not happy with Amazon’s split is free to go through another ebook publisher/seller outlet, like Smashwords (85/15 split, 85% to author/publisher and 15% to Smashwords), so it’s not as if your choices are limited to Amazon vs. not publishing ebooks at all.
As an indie author and advocate for the indie movement, my positive opinion of Amazon is risky for me to express publicly because so many indie authors were left out in the cold when Amazon pulled its big power play (publish through Lightning Source, BookSurge or Createspace, or say bye-bye to your “Buy” buttons). I was not affected because I’ve always published my trade paperbacks though Createspace, but I know plenty of authors who were suddenly forced to choose between losing their Amazon listings or paying for new print runs. Had I been in their place, it would’ve been a tough row to hoe for me, too. Which may lead anyone reading this to wonder how I can count myself among indie authors and be at all accepting of Amazon’s move.

I look at it this way… My husband runs a pond maintenance business and he used to buy water plants from growers for resale to his customers. When he discovered he could do a better job of plant quality control, deliver the plants faster and at a lower cost by growing them himself, that’s exactly what he started doing. I’m sure those growers from whom he used to buy plants are none too pleased with his decision, but that’s not his problem. His problem is to ensure his own business’s survival by offering his customers the best product at the lowest cost. That’s true for any business, Amazon included.

Frankly, like I’ve said on my blog, businesses must earn their customers. I chose to publish my trade paperbacks with Createspace long before Amazon’s power play, and I chose CreateSpace because no other POD outfit comes anywhere close to CS’s per-copy production costs on POD books. Low production costs allow me to price my CS books right in line with comparable mainstream books while still keeping a royalty of about 3x what a mainstream author gets. Admittedly, CS is a totally DIY solution; you must deliver a print-ready book and cover, and there will be no handholding or quality control from CS whatsoever. But that was precisely the kind of service I wanted, and if CS can offer straight POD printing services at such a bargain, why can’t Lulu, iUniverse, Wordclay, and all those other self-pub printers?
This is the point at which the discussion with an Amazon-averse indie author usually takes a turn. They’ll generally acknowledge the logic behind what I’m saying, but then raise the specters of the ‘what ifs’: what if Amazon gets to be a monopoly, what if they decide to enlarge their share, what if they raise their prices for publishing services, what if, what if, what if. And I always say the same things in response.

1) Amazon will never get to hold a complete monopoly on book sales because they can’t match indie booksellers for service or depth of knowledge, and can’t match other outlets (i.e., Target, B&N, Borders, etc.) for instant gratification and convenience. I blogged on the matter of Amazon vs. indie brick-and-mortar stores recently, and again, I don’t see Amazon as a Big Bad Wolf in that scenario.

2) Amazon will never get to hold a complete monopoly on ebook readers because the Kindle just isn’t that great—yet. There are much cooler dedicated devices already in development, and plenty of people are happy to keep reading ebooks on non-dedicated devices.

3) In the early years of Amazon people used to predict that as soon as Amazon came to dominate the online retail market they’d jack up their prices, but it hasn’t happened yet. Lulu, WordClay and other self-pub outfits have definitely got CreateSpace beat when it comes to customer service and author support services, so if Amazon allows CreateSpace’s production costs to get very close to those of its competitors and starts charging for Amazon listings the way most other self-pub outfits do, I and plenty of other indie authors will jump the CreateSpace ship with nary a look back. I’m pretty sure Mr. Bezos knows that, and I don’t think he’s stupid enough to let it happen.

4) Even if Amazon does manage to get a monopoly on ebooks and ebook readers (which, again, is not at all likely to happen), they’ve still got 20-30% more of your author royalty to eat up before they’re eating up as much as mainstream publishers already do. And even if that comes to pass, how will that situation be any worse than the deal mainstream authors are getting today? I don’t hear of mainstream-published authors being ticked off at their publishers for their royalty percentages, so I can only assume the vast majority of them find their 5-15% arrangement equitable.

I really don’t get all this I’m-sure-Amazon-is-evil-because-they’re-big-and-totally-dominate-the-marketplace stuff. Amazon is probably the best thing that ever happened to indie authors, because they’ve leveled the playing field for us. They’ve given us access to their huge, global audience of book-buyers, as well as some fantastic promotional tools (i.e. Amazon reviews, Listmania!, tagging for Amazon search) to help us reach those buyers. There’s no segregation between indie books and mainstream books on Amazon, our books appear in searches right alongside mainstream books. With the possible exception of Amazon’s recently-introduced Author Stores, Amazon offers no advantages to mainstream books over indies. Yet even that may be a temporary advantage, since it appears that Amazon intends to roll this feature out to all authors with at least two books for sale on Amazon following the feature’s current, beta phase.

Amazon is the 400-pound gorilla on the bookselling scene, no doubt, but it’s a 400-pound gorilla that has offered to carry us indie authors around on its shoulders and share its bananas with us.

April L. Hamilton is an author, blogger, Technorati BlogCritic, leading advocate for the indie author movement and the founder of Publetariat, the premier online news hub and community for indie authors and small imprints.

If you have any questions for April, regarding this post or anything else, leave a comment and I’ll make sure that she answers here – Alan.