When publishers collectively noticed a couple weeks back that Amazon was now giving its coveted buy button to whichever third-party seller offered the best deal on a title (as opposed to using it to sell the copy Amazon bought from publishers), they lost their s***.
Publishers, their trade group, and their puppet variously accused Amazon of depriving authors of royalties, decimate publisher and author earnings, and “attempting to drive down the value of books” (never mind that the publishers themselves had sold the books cheaply in the first place, making this a problem they had created for themselves).
Now one publisher is trying to come up with a reason indie authors should be concerned, only she has inadvertently demonstrated that indie authors might actually benefit from Amazon’s new policy.
Writing over at PW, Brooke Warner spends several thousand words rehashing the events so far without actually clearly stating how indie authors could be helped or harmed by the change in policy. (Or at least that is my impression; Warner doesn’t clearly state her conclusion.)
Many in the industry speculate that Amazon’s ultimate motive with the Buy Box policy relates to the company’s plans to expand its POD offerings. Amazon’s guidelines for how to win the Buy Box states that vendors must excel in pricing, availability, fulfillment, and customer service. For authors using CreateSpace for POD titles, the only one of these areas Amazon will not directly control is pricing. It should also be noted that Amazon is very effective at controlling pricing across its own platforms, incentivizing low pricing on Kindle Direct Publishing titles, for instance, by offering 70% royalty to authors who price their e-books between $2.99 and $9.99 and only 35% to authors at any other price point.
For those authors who continue to be smitten with Amazon, this kind of relationship may work out well, and they may have a long and successful career as a POD author who wins the Buy Box every time.
The rest of us need to be vigilant. …
While Warner’s piece is mostly true, it overlooks several nuances in how POD book are distributed.
The thing that Warner missed is that authors who distribute their POD books through Createspace can choose an option called expanded distribution. The authors agree to take a smaller royalty (40% vs 60%) in order for the book to be listed with third-party retailers like Barnes & Noble’s website and Walmart’s website.
(Other POD providers have different names for similar services, but for the moment we will skip them and focus on Createspace.)
The thing about expanded distribution is that those third-party retailers can price the book however they like. They can discount the book if they so choose, and they can sell the book at twice the list price.
What’s more, those third-party sellers can also list the book on Amazon’s marketplace.
Do you see where I am going here?
Authors who choose expanded distribution could now see the buy button going to third-party sellers that offer the authors’ books at a discount.
Given that most indie authors have anemic print sales because POD books are so expensive, any discount is bound to result in an increase in print sales and a net benefit for authors.
But they will also be getting a smaller royalty on the list price, meaning they’re earning less per title.
Publishers may view this development with alarm, but honestly authors could be coming out ahead here.