Why Amazon Needs to be Heavily Regulated by the FTC
$7.99 paperback for American Zen nets me exactly ten cents in royalties:
Hello Robert, Thank you for writing to us. I checked your account and I found why you received a $0.10 for a sale. Allow me to explain this to you so you may better understand. Your title was setup for distribution through Amazon initially, you then removed your book from the Amazon.com sales channels on 01/17/2016 which was yesterday. Before you removed your title from Amazon.com distribution this sale was made and if you check your pricing step within your Member a Account you will be able to see with the current list price of 7.99 you earn an Amazon.com Royalty of $0.10 per sale. I hope this information helps and answers all your questions. Thank you for choosing CreateSpace for your self-publishing needs. I hope you have a wonderful day further.Now, I'm the first one to admit that I'm not the most pragmatic writer out there when it comes to price points and Amazon's increasingly Byzantine pricing tiers but I know when we authors are getting a raw deal. And this new revelation, one of which I admit I should have been aware years ago when I first published American Zen, highlights in a microcosm just another of countless and myriad ways in which Amazon.com steals from its authors.
In this particular case, I'd originally chosen all six distribution channels for this title, a natural inclination for an indie author wanting to get as much exposure for their book as possible. But what Amazon doesn't go out of their way to tell until you realize your drastically diminished royalty statements is when someone buys your paperback on Amazon, the distribution fee shoots up from 30% (standard for a Kindle title) to 40%. It also literally cuts your royalty in half. I found that out when I sold a copy of Tatterdemalion last November and saw my royalty cut from what was then $6.20 to $3.10. The CS guy who called me informed me when someone buys a paperback from Amazon.com, this is what happens.
When I saw American Zen netted me exactly a thin dime (the Create Space edition's price point is $7.99), I understandably saw red and wrote to complain about this. I pretty much expected the usual non-answer that I often get from these third world drones with the suspiciously-sounding Christian names (this one was named "Lyle") so I did some poking around on the Create Space product page.
Trying to raise my royalty rate without bloating the price point, I experimented and discovered that even when I got rid of five of the six distribution channels (keeping only Create Space's), my royalty rate stayed pat at .10¢ a book. More maddeningly, even though I divested myself of Amazon as a distribution channel, American Zen's paperback edition, as with all my novels, is still being offered on my Amazon Kindle product page.
This essentially means I'd have to sell 10 copies of American Zen a day at the current price point before I could earn even a thin dollar in total royalties. Ten sales a day to make one dollar. There is something seriously wrong with such a royalty system and I am amazed Amazon so brazenly thinks it can get away with stealing so much money from their own authors.
Here's the kicker: If you opt for expanded distribution for your Create Space project, they force you to bloat the price point for your paperback regardless of the set overhead expenses of paper, ink, printing costs, etc. For instance, when I had chosen all six distribution channels for Tatterdemalion last spring, they told me I had to charge over $15 per book (I settled on $15.50). I figured since this was a 193,000 word book, that's a lot of ink despite choosing a 10 dpi font size to keep down the page count.
Then when I saw what was going on with American Zen, I decided to get rid of all but my Create Space distribution channels and discovered I could get away with charging less than $10 a book and still earn a royalty. No more $15.50 price point and it's now going for a much more competitive $9.99.
So don't believe Amazon and Jeff Bezos when they tout offering authors royalty rates of 35-70% because they will always find some sleazy way to do an end run around their authors and throw corporate double speak at you when you ask where the fuck all your royalties went. Granted, math isn't my best subject but even I know that .10¢ for a $7.99 title doesn't come close to even 35%. That's a joke.
And that's just one out of countless ways Jeff Bezos and his Merry Pranksters in Seattle steal money from their authors. Here are some other ways:
Those of you with Kindles no doubt know of something they launched a few years ago called Kindle Unlimited. This is Amazon's version of a con job that we saw on the Simpsons. Homer buys $1,100 in Itchy and Scratchy money that he's told at the gate he can use once he enters. Then when he does, every single concession stand in the park says they refuse to accept Itchy and Scratchy dollars (a real life amusement park scam in full evidence at places like Disneyworld and other corporate entities that get to print their own scrip).
Kindle Unlimited is much like that. For the supposedly low price of $9.99 a month, Amazon boasts over a million titles offered even though they limit you to 10 titles per month then take them off your Kindle when the month is up (By comparison, Scribd, another subscription service, offers 20 books a month, including several bestsellers).
Something else they don't go out their way to tell you is that trying to find an actual bestseller to read for your monthly subscription price is like literally trying to find a needle in a field of haystacks. Every single one of the Big Five publishers decided to opt out of this when Amazon announced their subscription service. Logically, they didn't like the idea of getting cut out of any real sales and having their authors screwed over while Amazon continued raking in $10 a month from probably millions of people who were duped into thinking they were getting a great deal.
So where does that leave the author? At first glance, it would appear as if readers were reading their books for free while they earned no royalties. And the truth isn't too far from that.
Bezos pretended to address the issue by setting up a pool to give to authors each month like JD Rockefeller handing out dimes to the poor and the actual size (Usually around $2-12 million) of this pool is squishy and changes from month to month. In virtually 100% of the cases, authors discovered that with Amazon KDP Select's payment scale they wound up making far less than as if they'd sold the title outright (usually a buck and change, if that).
As if that's not bad enough, for authors who choose to opt out of entering their books to Kindle Unlimited, there's another catch. Doing so will essentially remove your title from the virtual shelves and have it relegated to Amazon's dark basement where no will see it, which places an even greater burden on the author to publicize a title that Amazon was never very interested in publicizing to begin with. So essentially, Kindle Unlimited offers only dog shit no one wants to read while on the open market making you pay what they decide you should pay for a Kindle bestseller (up to $17 or more). On the face of it, it looks as if Amazon is touting the work of their indie authors (a corporate line they love to run with) but there are stiff penalties for authors who opt out of KDP Select even though opting in inevitably results in greatly reduced earnings.
Then there's the outrageous scam they hatched last year and implemented July 1st: Paying Kindle authors by the page. Here's how it would work in the real world:
You buy a paperback at a brick and mortar book store. You take it home and begin reading it. Yet if you don't know enough to look, an employee from the store camps out in your bushes and takes careful note of every single page you read by looking over your shoulder. After hiding in your bushes for 60 days, they then hack into the author's bank account and steal back the percentage of money s/he didn't "earn". Meanwhile, the bookstore and distributor get their full cuts and the only one penalized is the author.
In other words, you could have the biggest-selling Kindle title on the planet earth but if no one reads a single page, you don't get a single penny while Amazon still gets to rake in their 30% while keeping your money in escrow or some place.
See how far that would fly in the meat world. So why should it be any less creepy or any more legal in cyberspace and why are so many authors enthralled with this idea?
It's bottomlessly despicable enough that Amazon keeps track of your spending and reading habits down to the last page (a tradeoff for being part of a network). But this KENPC program, as they called it, even had safeguards built into it. Since this implementation, several authors had tried to get more pages read by increasing font sizes but Amazon had an ingenious solution for that, too- They don't go by actual page count but percentage of content read and the only way around it is to include pictures, pie charts and graphs that still (for now, although I'm sure Amazon will eventually find a way around that, too) count as actual content.
So, in other words, the author doesn't get paid for the pages that aren't read and "meeting thresholds" as they like to term it in their corporate double speak. And the onus and stigma is being despicably placed on the author for not sustaining the reader's attention enough to get them to finish the book. But that's just one of literally countless reasons why a reader wouldn't finish reading a Kindle title.
The buyer could have died or had been hit by a bus and put into a long coma. Their Kindle could have been lost or stolen or damaged. There could have been any family emergency or a new job or relocation made them too busy to finish your book. None of which has any bearing on the quality or content of your book. Yet Amazon pretends to blame the author entirely for their content not being fully read to justify stealing money from our pockets.
Indeed, despite what my royalty reports told me, when I finally got my money at the end of last year I realized to my horror that I got less than half of my royalties (Amazon, natch, got to keep their usual 30% distribution fee) and when I pressed them to inform me where my money was being held and if Amazon was making interest on my withheld money, they couldn't or wouldn't answer me aside from blandly telling me they'd release the rest of my money once I'd "met the threshold." Then they dropped the matter entirely and, predictably, began ignoring me.
Back in the old days, authors automatically met that threshold in the devilishly difficult act of getting a customer to part with $5-10 for a book of yours but now Amazon had ingeniously made that very conditional. They bully authors in their passive/aggressive way to sign up for a program that's guaranteed to lose them money and sales then place the burden and penalty on authors for not sustaining interest when there are literally thousands of reasons for a book not being read. If you earn Amazon a 30% distribution fee, you've already done part of your job "meeting thresholds" and they should do their part and pay their authors fair and square.
But they continue warbling their siren song about how they're all about the customer and how they offer 35-70% royalties for their authors. But you need to read the fine print especially with an Amazon agreement. They are one of the most evil corporations on earth and the authors who viciously defend Jeff Bezos and his band of thieves are no better than the Jewish trustees who worked at Auschwitz, hoping their service will earn them a dispensation from the showers and gas ovens and maybe, if they're really lucky, a pat on the head from the commandant. In reality, Amazon serves as an ongoing object lesson of what happens when you deregulate industry and allow them, instead, to self-deal so they use their size to bully vendors, customers and authors alike.