This was largely due to the fact that Amazon, as part of the 70% royalty rate, also charges to deliver the ebooks over 3G. Mr Hyde's ebook, which was 18MB in size, cost him over $2.50 in fees each time he sold a copy in the Kindle Store.
Again, his ebook was 18MB in size, while most are well under 1MB.
He's understandably shocked by the situation and he posted a rant on his blog. (Sidenote: Go read it. The other details are fascinating.)
I, for one, am not surprised.
Amazon has charged delivery fees for as long as they've offered the 70% royalty rate. It's not at all a secret, and in fact you'd have to work really hard to not know about the fees. To be honest I do not see how you couldn't know about the delivery charge after having chosen the higher royalty rate; all the info is on the same page. Nor is it hard to find.
As I see it, the real story here was that this author was surprised by the fees. That's not quite so newsworthy, is it? (If not for the fact that Amazon is involved, I doubt that any blog would bother to post about this story.)
I rather admire the fellow for having the guts to post about his mistake, but it is his mistake. As bad as the fees might be in this particular case, Amazon does post the price schedule where anyone can read it. It's not the fault of Amazon if he didn't find the info.
Lots of other authors did know about it, and you can tell that from the many responses to a post on this story over on The Passive Voice:
--Wow… I’ve never heard of costs this high. My books are always less than a few cents. It sounds like his image compression is not as standard as he thinks. He’s also making a big thing of whispernet fees. Fees that don’t apply in all areas. I would say the actual make up is .58 cents. The $2 is an additional fee charged occassionally depending on location.
--Agreed. Why should my lean, trim, de-bloated ebooks subsidize someone else’s fatsos? If this guy doesn’t want to do what it takes to get his delivery costs down, then he shouldn’t complain about paying the price for that.
--I had to comment here because I’ve seen so few authors mention this issue, and it’s something I deal with. I write illustrated books. In addition to other projects, I have a 5-book illustrated fantasy series for adults. My adult books have gorgeous watercolors and inks. There are usually about 18 full-page illustrations + character portraits and maps. These books are 50 – 60K words.
I sell most of my illustrated books for $4.99. Deliver costs average about 30 cents – not inconsequential, but manageable. As a point of reference, my text-only 300K omnibus also ends up costing about 30 cents per download in deliver fees. 50K words with illustrations vs 300K words without = same deliver costs for my books.
That being said, I want to highlight Hyde's other response to the fees; other authors might want to0 copy it.
He's now selling the Kindle edition of his ebook alongside the PDF. Both are sold DRM-free via an ecommerce site called Gumroad, and that's a good thing. He's found a way to avoid the fees while still supporting his readers, but his new alternative also stands as an example of why you might want to stay with ebookstores.
This site only charges credit card fees, not the 30% plus commission of any of the major ebookstores. But the site also doesn't offer anything in terms of marketing, suggested selling, or even listing pages (not that I can see). All it does is process the payment and forward the file.
It's effectively a DIY option for someone who wants to do their own marketing on Twitter, Facebook and an author website, and that might be a reason that some would choose not use it. But given that self-pub authors often do their own marketing, perhaps not.