Why Selling Direct is Vital for Authors

News hit this morning that Google has decided to no longer sell ebooks through independent bookstores. Instead Google will focus on selling ebooks directly through Google Play. Their collaborative effort with bookstores had been an attempt by both parties to crack Amazon’s dominance of the ebook market.

Writers having their own websites and/or taking other steps to make their digital books available directly to consumers is becoming even more important. A recent survey by Pew Research Center’s Internet & American Life Project reported two very important numbers. First, 19% of Americans now own a ereader device of one sort or another, with the Kindle leading the pack. Second, 21% of Americans had read an ebook in the last year. If you click through to the article, you’ll find a chart at the end which notes that a lot of people find ebook reading preferential to print book reading in a number of categories.

So, the big takeaway is this: If your work is not available in electronic form, you are invisible to those readers.

Combine that with the Google story, and a second takeaway is this: ebook markets can be very volatile. Only by having work available from your own website can you guarantee that your work is available. (More on this in a bit.)

A third news story follows up on the investigations into whether or not the Agency Model of ebook distribution violated Federal anti-trust laws. Apple and a couple of publishers are resisting settlement offers which would scrap their agreement. The investigators allege that the Agency Model, which lets publishers set prices and limit discounting, allowed publishers to collude and set higher prices for ebooks than was the norm, hurting consumers.

What’s gone underreported in all this is the effect the Agency Model has had on Independent authors. Prior to Apple’s establishment of the Agency Model, Amazon paid indie authors 35% of the cover price of their books. Once the iBookstore opened, Amazon matched Apple’s payment rate of 70%. Barnes & Noble offers 65% of cover and Google—at least when they were selling through indie stores—offered 45-55% of cover price.

By way of contrast, books purchased through my online store return me 95% of cover price. I also turned around last year and, as an experiment, offered the Delux version of In Hero Years… I’m Dead on a data disk for $6—the same price as the download. That effort returned 65% of the cover price (less manufacturing costs, obviously). Manufacturing costs were low enough, in fact, that I could offer the disks to independent bookstores at a normal discount and still make a little money.

It would be really easy to read the above and draw the conclusion that I’m predicting a coming catastrophe, where the Feds force Apple to scrap the Agency Model, and Amazon turns around and uses its clout to go back to offering authors 35%. Apple and the other outlets would follow suit, maximizing their profits, and authors would find their internet income slashed effectively in half. Fact is, that could happen. I don’t expect it to, but I’d not be surprised if it did.

By setting up your own website store, by judiciously printing up CDs for direct sales at conventions or to independent bookstores, authors benefit either way. Let me provide another example. I have a trilogy of novels, the Fiddleback trilogy, which I sell for $5 each, or in an omnibus collection for $12. Because of Amazon’s pricing structure, which returns 35% of cover price for anything over $9.99, I don’t list the omnibus edition via Amazon. If someone comes to my website, I provide the book in the Kindle format (as well as epub). Amazon’s readers would actually be saving money if they could buy the omnibus edition, but Amazon’s lack of flexibility on this point means their readers pay more.

Corporations act in their own enlightened self-interest. (How enlightened it is can be a matter of debate.) Authors need to do the same thing. Right now, smart money has us driving sales to larger sites, like Amazon, because sales there help trigger that important “Other users also purchased…” sales offers. But as we build our audiences, as we bring them to our websites, we might as well benefit from their willingness to support us.

3,000 customers willing to spent $2 a month with an author will generate over $60K in revenue for that author when the author sells direct. I’ve been a writer for a long time, and $60K is a good chunk of change. And it doesn’t matter if you don’t have that many readers, or you don’t generate $24 worth of copy in a year. Every penny you make over what it costs you to maintain that store is profit. No one is stupid enough to refuse to pick up a $5 bill lying on the ground simply because it isn’t a $50 bill. Pick up enough $5 bills and you have $50.

Profit is the name of the game.

And if writers don’t start realizing that, corporations will be happy to profit off their ignorance for as long as it takes for writers to get wise.