KINDLE Goes to 70% Royalties

You might have noticed my books have not been available on Kindle the last few days, or that I no longer have them listed with deep discount prices or free on Smashwords. That's actually good news. Two of them are back up on Kindle, and the other two will be soon. Here's what's going on:

As of June 30, the new 70% royalty rates are available on Kindle. This change, announced in May, doubles the previous 35% royalty rate, which was Pikersville compared to what competition was paying- 65 to 85%, depending on the site. But with Kindle selling possibly 90% or better of ebooks in general, self-publishing ebook authors couldn't afford not to use Kindle as a distributor. Amazon's one driving force all these years has been to capture the entirety of the market, though, and competition from smaller sites, which often offered free ebooks, or discounted rates, was beginning to cut into their game. After all, if an author gets 85% of the cut, as on Smashwords, he/she can sell her books at a heavily discounted price and still make more per book than through Kindle because if there's anything ebook buyers love, it's cheap or free ebooks.

But naturally, considering its true nature, Amazon found a way to leverage the increased royalty rate into a competition-bashing weapon. And authors can't really turn it down if their aim is making sales that have some meaning.

Kindle will also keep the 35% royalty rate, and authors may choose. But they can only have the 70% rate IF they do not offer their book on a competitive site for less money. In addition, the book must be priced between $2.99 and 9.99, and it must be priced at least 20% lower than the retail price of the same book in print. And, the book may not be in the public domain. The author or publisher who puts the book up on Kindle must have legal rights to its publication. In addition, there is a delivery fee based on size of file, which amounts to about a nickel on my books.

There are a few things that seem sort of contradictory, and I'm researching them, but it seems clear to me that I cannot offer my books on Smashwords or another such site, or my own site, for any price under $2.99, and clearly I cannot give them away or offer them at "Name your own price" , which I had been doing.

That was, unfortunately, one of Smashwords' best draws. But if, for example, I sold one book in a hundred for a price of about $1- and that's about how much one gets with the "Name your own price" pricing, I'd have to give away huge number of books to equal 70% of $2.99, minus $.05, or $2.04 for every book. I can count on each of my books selling at least 10 books a month, and many times, a lot more. It's kind of unpredictable. And yes, I admit I haven't been promoting in the most effective ways on Amazon, so they could be doing much better than this. To make better use of Smashwords, I'd have to give up 35% in royalties from Kindle. I can't afford that.

The question is, of course, what will Smashwords do to counter Kindle's move? I am no lawyer, but I see this strong-arm method of grabbing the competition's customers as pretty close to an anti-trust move. That's never scared Amazon off from trying similar tactics in the past, but in almost all cases they've had to back down. So I wonder what will happen next?

For those of you who are considering re-issuing your older books for which you have your rights, or if you're thinking about e-publishing some stories you don't plan to put through the traditional publishing process, maybe this increase, coming from the biggest seller of ebooks in the industry, could be good news. It's good for me, overall. With this increase, I'll be making more money per month from my older books than I ever made through a publisher in an entire quarter. And from the last owner of the company, more every month than I made in the entire year.