The Savvy Book Marketer

How Amazon's Pricing Affects Author and Publisher Profits

Authors and independent publishers are sometimes upset to find that online bookstores like Amazon.com are selling their book at a discount from the list price (the price printed on the book).

For books sold and shipped by Amazon, the fact that Amazon has chosen to sell at a discount to list price typically has no effect on the amount of money that authors earn – they still receive their standard payment from Amazon or their publisher, distributor, or wholesaler.

Amazon is reducing their own profit margin (to undercut their competitors) when they choose to sell a product below the list price. Of course if you are selling books on your own website, then you are competing with Amazon.

If you have a publisher, it's possible that Amazon's discounting could affect your royalties. Check your contract to see if there are any provisions that lower your royalty rate when books are sold to consumers at below list price. But keep in mind that there is nothing you or your publisher can do to affect Amazon's pricing.

Although Amazon's discount policies may not affect how much you get paid for each book sale, there are ways to increase your profits through Amazon. My ebook, How to Sell More Books on Amazon, discusses five ways to potentially increase profits from Amazon and provides a wealth of information about promoting books on Amazon. Be sure you are taking full advantage of strategies to mazimize your sales and profits on the world's largest bookstore.

Selling Books on the Amazon Marketplace

The Amazon Marketplace is an area on Amazon.com where anyone can sell new or used books (and many other items).

Shown below is a typical book listing on Amazon.com. At the top is the book's list price and the price (in red) that Amazon sells the book for. Below that are two links to "6 new" and "9 used" books – those links take you to the Amazon  Marketplace where this book is offered for sale by book dealers or individuals.

Why would you want to sell books in the Amazon Marketplace?  Here are some reasons to consider:

•  If you have slightly damaged books that you'd like to sell, you can list them as used—just be sure to describe the condition of the book accurately.

•  You can offer autographed copies of your book.

•  Depending on what your profit is when you sell books on Amazon.com through your current channel, you might be able to earn a higher profit per book by selling on the Marketplace. If you are self-published, you will need to do the math to determine which method is more profitable for you. If you have a traditional publisher, selling on the Amazon Marketplace may not be appropriate.

•  You can sell used books from your personal library (although some authors and publishers are not comfortable with the practice of selling used books). Nonfiction, recently released fiction, and audio books sell best. You can also sell other items, like cameras and electronics.

Some downsides of selling on the Marketplace are:

•  It takes time to print the packing slip, pack the order and mail it.

•  Many customers don't know about the Marketplace, or simply prefer to order directly from Amazon because they trust them.

•  When customers buy your book directly from you on the Marketplace, it doesn't add to the "number of books sold" factor to help boost your ranking on Amazon.

Here's how the Amazon Marketplace works:

1. You list your item for sale in the Amazon Marketplace.
2. A customer orders your item.
3. Amazon notifies you by email that you have an order.
4. You log onto your seller account and print out the packing slip.
5. You pack and ship the order. Standard shipping of books is done by Media Mail.
6. You log onto your account and click the Confirm Shipment button to notify Amazon that the order has shipped.
7. Amazon sends a shipment confirmation to the customer and charges the customer's credit card.
8. Amazon pays you by direct deposit into your bank account.

To set up a seller account on the Amazon Marketplace, visit this page. 

For more details on how to sell through the Amazon Marketplace and how to calculate your potential profits, see my ebook, How to Sell More Books on Amazon. You'll also get a wealth of information about promoting books on Amazon and maximizing profits through the world's most popular bookstore.

The Advantages of Print-on-Demand Book Printing

 Print-on-demand (POD) is a method of printing using digital technology to print books in quantities as few as one. Rather than printing a large quantity of books using traditional offset printing methods, books are printed "on demand" as needed.

The term POD typically refers to printing very small quantities of books to fulfill orders as they are received. Digital technology is also used in "short run" book printing, where books are printed in quantities of approximately 25 to 1,000. In larger quantities, offset printing (applying ink to paper on a printing press) is usually more practical.

Many new authors misunderstand the definition of print-on-demand. Because subsidy publishers like iUniverse use POD printing, they are often called "POD Publishers." But POD is a printing strategy that is used by publishers of all types and sizes, from independent publishers and small presses, to subsidy publishers, to large publishing houses that use POD to keep their backlist titles in print.

In the past few years, the quality of digital book printing has improved to the point where the typical consumer can't tell the difference between a black and white digitally printed book and one printed on a printing press. If your book's interior has photographs or illustrations, or is printed in color, you will need to consider whether POD printing will be of sufficient quality. I recommend ordering a sample to test the quality.

Advantages of Print-on-Demand for Independent Publishers

Amazon Plays Hardball on Sales Tax Issues

In a recent article in my book marketing newsletter, I explained why all authors should join the Amazon Associates affiliate program. But it may be getting harder for authors to participate in Associates. In early 2010 Amazon announced to their affiliates based in Colorado that they were removing them from the Associates program due to changes in sales tax laws there.

Sales tax laws vary by state, but generally any company that has a physical presence in the state (such as offices or warehouses) is considered to have "nexus" in that state and is required to collect sales tax from all customers located in the state. Local businesses complain that online retailers have an unfair competitive advantage because they don't have to charge sales tax in most states, making it cheaper for customers to shop online.

Some cash starved states are declaring that if an online company has any affiliates (people or companies who promote their products in exchange for a sales commission) located in their state, it gives that company nexus and requires them to collect sales tax. In some states (North Carolina and Colorado) Amazon has responded to these new laws by dropping their Associates in those states. Publisher's Weekly reported that Amazon was appealing a similar law in New York, and another law is pending in California.

Being dropped from the Associates program hurts small businesses who were earning income from Amazon commissions. It will be interesting to see if Amazon continues dropping Associates as more states pass laws of this type—surely losing Associates will impact Amazon's revenue. In the meantime, I still recommend joining the Amazon Associates program if you can. It's a good way to boost your profit margin on your books and perhaps earn additional revenue on related products.

To stay up to date on another Amazon issue (disappearing Buy buttons) see this post from Sarah Bolme.

Learn How to Boost Your Profits with Amazon Associates

Every author who has a book for sale on Amazon.com should be enrolled in the Amazon Associates affiliate program. In the November issue of The Savvy Book Marketer Newsletter, you'll learn how to earn revenue from the Amazon Associates program, even if you don’t have a book on Amazon. Other topics in this issue include:

• Thanksgiving Special - Save 25% on Savvy Book Marketer Products

• Free Book Marketing Resources

• Creating a Successful Author Blog

• Social Networking for Authors - Audio Program Now Available

Publishing Content for Amazon's Kindle

Here's a guest post from April Hamilton, author of The IndieAuthor Guide:

Amazon's Digital Text Platform™, or DTP, is a conversion tool used to create content for the Kindle™ ebook reader device, and put that content up for sale in the Amazon Kindle™ Store. You cannot use the DTP to create Kindle™ editions of your work for your own personal use, the content creation process automatically generates an accompanying Amazon product page.

Assuming you've already made the decision to self-publish, there are three very good reasons to go with Amazon DTP: it's easy, it's free, and it gets your work onto the virtual shelves at Amazon in a matter of days. While it's true that only Kindle™ owners will be able to buy your DTP book, and they are a relatively small group as compared to the book-buying general public, these are the very circumstances that offer some distinct advantages over other forms of self-publishing.

How to Improve Your Position in Amazon's Search Results

The more books you sell on Amazon.com, the more books you will sell in the future. That's because your book will appear higher on the results page when customers search by keyword. For tips on improving your position in Amazon's search results, see the feature article in the January issue of The Savvy Book Marketer ezine.

Getting Great Reviews For Your Book

Below is a terrific article from Phyllis Zimbler Miller about getting great book reviews. This post also illustrates the power of online marketing. I first met Phyllis on Facebook, then signed up to follow her on Twitter. Today I saw a tweet on Twitter that Phyllis had posted this article at ezinearticles.com, and I wanted to share it with my readers. See how that all works together?
Cheers,
Dana

How to Get Free Targeted and Sincere Reviews For Your Book

By Phyllis Zimbler Miller

Getting free targeted and sincere reviews for your book requires research, commitment and follow through. I'm going to share with you the mistakes I made and the things I did right about getting book reviews. First the mistakes:

I waited until the book was published instead of sending out the manuscript or the first page galleys from my print-on-demand publisher.

I used pay-for-review services whose reviewers were not committed to the subject of my novel -- for them this was a job for hire.

I sent copies of the book to book bloggers who responded to my email that they indeed wanted to review the book but who never reviewed the book. I later realized that I wasn't anyone to them so my book obviously got buried in the avalanche of books they receive.

Now what I did right: