Self Publishing Amazon

In my last post about self publishing on Amazon I provided two screen shots from Bookfinder.com – one for an ISBN published by Amazon’s publishing company and one for an ISBN published by Outskirts Press. According to Bookfinder, the Amazon publisher provides a total of 8 unique sales channels while Outskirts Press provides a total of over 50 unique sales channels.  I identified this as one major difference — benefit — to self publishing with Outskirts Press instead of self publishing Amazon ‘s way.

I also alluded to other benefits, specifically royalties, and I will discuss that now.

There’s no doubt that Amazon pays fairly good royalties on its own books that it sells from its own site at Amazon.com.  It is subsidizing itself.  And, as I covered last time, books published by Amazon are rarely available anywhere else BUT Amazon.  So you may arrive upon the conclusion that there’s no downside.  Well, the downside is receiving only 8 unique sales channels instead of 50.  And if your self publishing Amazon book DOES happen to sell through a sales channel other than Amazon, your royalty is significantly lower — 10% of the retail price instead of the 35% of the retail price you may be expecting.   Why are you expecting 35% and only receiving 10% on “expanded distribution” sales?   Because Amazon does what all self publishing firms do, and in fact what all businesses do the world over: they market the “good news.”

So, let’s create a little chart comparing the “good news” (i.e., royalties) earned by the same two titles I used last time: The self publishing Amazon book:  Pocket Guide to the HCG Protocol (ISBN: 978-1442152663)  with a retail price of  $12.77 compared with the Outskirts Press book, Sell Your Book on Amazon (ISBN: 978-1432701963) with a retail price of $14.95.

HCG Protocol has a random retail price of $12.77, which is already kind of weird, but so as not to give unfair advantage to my book, which has a higher retail price of $14.95 (and therefore I would earn higher royalties), let’s say the retail price of the Amazon book is also $14.95.  In other words, we’re already granting the competition an extra two bucks to the retail price, just so you can see an apples to apples comparison of Amazon royalty payouts compared with Outskirts Press royalties.  Keep that in mind as you look as this side by side comparison of author royalty earnings in dollars and cents.

The first thing you may  notice is that the Amazon-published book, HCG Protocol, is not available at very many places.  You will also notice that the Amazon book makes two different amounts, depending upon whether the book sells from Amazon (the author earns 35% of the retail price) or elsewhere (the author earns 10% of the retail price).   So if a single copy of HCG Protocol, published by Amazon’s self publishing company, sells from all the unique locations in this chart that are available for its Amazon distribution, the author earns: $11.03.

By comparison, the book published by Outskirts Press earns the same royalty regardless of what channel the book sells through. Since this is my book, I know precisely how much I make on it: $6.58. That’s 100% of the profit of the book, and translates into a retail royalty of 44%. So if a copy sells from all the unique locations in this chart that are available for Amazon distribution, I would earn: $144.76.

I’ve often said that “book math” is tricky.  It’s a complicated subject that I’ve composed several articles about, and it is always the topic of “Q & A sessions” after my personal appearances at workshops, seminars, and conferences.   This is often the most important part of an author’s decision making process (or should be) and it is also the part they understand the least.  Self publishing firms know this – and they use semantics in their marketing to leverage that lack of knowledge.

So in my next posting, I will discuss exactly how my book at Outskirts Press can make MORE money on Amazon than one of Amazon’s own books. I will also explain how a “100% profit” translates into a “44% retail royalty.”  By understanding “book math” authors who are exploring all their publishing options will be able to make better financial decisions when it comes to choosing the self publishing partner that is best for them.