Disrupting Amazon Book Sales

Yesterday, I read this article about how Amazon has small publishers like us by the neck:

Amazon Advantage, which I’ve written about before, is the alpha method of selling our books. It puts us squarely in the limelight so that when someone types in the title, we are the first and most visible seller. Click on the cover image and the book on offer is the one sold by us. But the cost for this clarity and publicity is high, and can be met only by the big publishers, who print thousands of copies of a title and keep the cost-per-copy to less than a pound. But if you are a small press, the sums don’t add up. Linen Press welcomes writers with no track record and writers from minority groups. We read the 20, mostly unsolicited submissions that arrive each week. Having signed up an emergent writer (emergent is a polite way of saying unknown), we usually do a first run of 400 copies, which works out at a basic production price of £3 per copy.

Then there will be other expenses in the process, such as £200 for a cover image, £200 for artwork, £500 for typesetting and the creation of digital files, £200 for flyers and publicity materials, perhaps 10 copies of the book to enter an award such as the Baileys women’s prize for fiction. The final cost per copy for us is nearer £4. Amazon Advantage takes 55% of the recommended retail price, so on a £7.99 novel, it takes £4.40 and we get £3.60. We have to post books individually, as they are ordered, at £3 postage plus the cost of an envelope. We’re down to a profit of 60p. Out of that comes the author’s royalty of 80p, so we’re in minus figures.

Source

While I understand what she’s talking about, we don’t experience quite the same costs that she does… our business model is different… so I see what she is saying but disagree with her conclusion.

Where she is 100% correct is that there aren’t a lot of options out there for publishers. Every publisher, big and small, are willing to hear new ideas for selling their books outside of Amazon.

Here was my thought when I read this: Book sales are ripe for disruption.

  • More people are buying more books than ever in the history of the world.
  • The cost of entry into publishing is lower than at any time in history.
  • Digital sales are on the decline.
  • Amazon has billions in marketshare, but they have also have billions in costs/overhead.
  • The cost of entry to starting your own physical or online bookstore is shockingly low.
  • Outside of Amazon, no one is really innovating in this space, everyone seems focused on competing with Amazon instead of delighting book buyers.
  • Publishers (like us) are eager to take on new retailers.
  • While it’s nearly impossible to compete with Amazon on price or speed of shipping, there’s TONS of room for other ways to beat them.
  • Just because big box bookstores failed doesn’t mean that it’s impossible to do well at book retail. There are segments of booksellers doing very, very well.

Did this peak your interest? Leave me a comment or drop me a note via my contact form. I’d love to hear what you’re thinking. 

Published by Adam McLane

Adam McLane is a partner at The Youth Cartel, co-author of A Parent's Guide to Understanding Social Media, blogger of 10+ years, and a fan of all things San Diego State University Aztecs.

Join the Conversation

3 Comments

  1. Adam, interesting piece. However, do you have the statistics for indie press/self-pub sales on Amazon? The PW article is showing that clearly digital sales are down for the Big 5, but my hunch would be they price themselves out of the market. Many of the Big 5 ebook prices are ridiculous. Indies are hitting the consumers’ ideal price points.

    Thoughts?

    1. Our experience is similar to other independent publishers. Kindle sales are down… which doesn’t mean that trend will continue, it could easily turn around… but there’s a bit of chatter among indies that mirror what the big players are seeing.

      We’ve played with price point quite a bit with Kindle sales. While I agree that the big boys are charging way too much for Kindle books, even when we’ve tested much lower price points they just aren’t moving. I think the pendulum will tip back towards digital… but ultimately I think the shift to making the Kindle brand with the iPad ultimately undercut it’s adoption among book readers.

Leave a comment

Leave a Reply

%d bloggers like this: