Indie author gets sticker shock from Amazon "delivery fees"

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68 Responses to “Indie author gets sticker shock from Amazon "delivery fees"”

  1. David Niall Wilson says:

    Not sure how there could be any confusion, whether the charge is high, or not.  When you publish through Amazon they tell you very clearly what the delivery fee will be on the rights and pricing page.

    • lafave says:

       That doesn’t make the fees not unreasonable.

    • wysinwyg says:

      How does that obviate the utility of the comparison across several vendors presented in the OP?

      • David Niall Wilson says:

        It doesn’t, but it’s still a choice. If it’s not fair, don’t use it.  I guess all I’m saying is that this article makes it seem like he was surprised to find what he was charged, and I’m saying if that’s true he just didn’t pay attention, because it says right on the page what they charge.  It isn’t some hidden secret charge…

        • wysinwyg says:

          Right, you’re looking for something to complain about. I suppose that’s something you have in common with the OP.

          • David Niall Wilson says:

            The complaint was with Amazon for their download price.  All I pointed out was that it was not a “secret charge.”  I say…whatever makes you smile.  This is the sort of comment that ensures a larger group will never get involved in these discussions…

          • wysinwyg says:

            “This is the sort of comment that…”
            No, actually, your original comment seems more likely to stifle discussion of the issue.  That’s why I responded in the first place.

          • He’s not looking for it, it’s right there.

  2. Chris Drouin says:

    I suspect that the ‘delivery fee’ is for their 3G Whispernet service and that at least a portion goes to their cellular partners.  Granted, I also suspect an awful lot of books are delivered via wi-fi now (particularly on the Kindle Fire and the wi-fi only Kindles), so this may be the modern equivalent of the RIAA’s “record breakage” surcharge on album sales.

  3. Emo Pinata says:

    WHAT!? The company with the largest market share charges more for its services!? That’s a terribly unethical practice!

    Good lord, so long as Amazon sells the most they can charge the most to sell. That’s what makes people earn less per book – the hope to sell higher volumes. Unless he can justify that Amazon is charging too much compared to the services that sold similar volumes… oh wait he showed that the most interest and the most volume came from kindle users wanting the kindle formatting.Now if this was a comparison between two or more stores with similair volumes, then he’d have a point. I don’t mind him pointing people to places he makes more money though, that makes perfect sense; “Wah, I easily made the most money using Amazon’s services but I want more from them!” just rings hollow.

  4. Fex says:

    This post appears not to include the value of setting up a secure online store and processing payment. Let alone an online store with the history, stature, usability, and traffic of Amazon. You’re not paying for the download – you’re paying for the sales channel (which I think it’s fair to include as part of ‘delivery’). If you just compare costs on raw bits, then bear in mind that books are terrible value – I can get lots more bits for my entertainment dollar if I buy a blu-ray disc – it’s got 25GB of information on there. What do you mean that isn’t the point?

    Are Amazon charging too much? Quite possibly, but let’s at least be realistic about what you’re paying for.

    • Cory Doctorow says:

      Presumably many of those costs are also present in S3, which charges 1/12,000 of Kindle rates for delivering bits on like-for-like networks (I’d bet good money that S3 is the back-end for Kindle delivery).

      Presumably, the 30% commission charged by Amazon accounts for amortization of the remainder in this supplier’s eyes.

      I think you’re missing the fact that he’s comparing two different services offered by S3.

      • foobar says:

        S3 doesn’t offer free 3g to its downloaders.

      • Does S3 include a “processing fee” to cover the percentage take of payment processing services? This should be included as well when calculating the ratio of fees to sell books. Amazon does not charge “S&H” separately.

    • petsounds says:

       Setting up a secure, online store and processing center? Those costs were amortized long ago.

      It sounds like what’s happening is, Amazon is offering free 3g to Kindle owners on the backs of authors. In effect, Amazon got a free boost in Kindle marketshare (free 3g is a fairly big differentiator) by taxing the authors of the content it is selling. That is a dirty tactic.

  5. Michael Grosberg says:

    Is the book DRM’d? if it is, Amazon needs to encript the file separately for each buyer.

    • Cory Doctorow says:

       It is not.

    • retepslluerb says:

      Even then it would be a negliable cost, otherwise Apple would have to charge this fee, too. 

    • And how much do you think it costs to encrypt an 18Mb file?

      Let’s say an 18MB file takes 2 seconds to encrypt (that’s a conservative estimate).  You can buy an hour of computing time on Amazon’s EC2 for 8 cents.  Ignoring that Amazon can probably get a discount on EC2  time, the cost of encrypting an 18MB file is approximately $0.00004.  (or 4 cents for each thousand books sold).

      Not worth considering.

  6. robertdee says:

    So, as someone finishing the final draft of a book who is thinking of selling it online through Amazon and iBooks, my initial idea of keeping the price low i.e. $2.99 to encourage people to impulse buy is not going to work? This seems unfair as that’s how the app market works (and works well).

    • foobar says:

      If you’re writing a book, yes. Your delivery fee will be on the order of a penny or two.

      Your average ebook is going to be less than a megabyte. Andrew’s book is an order of magnitude bigger, so he gets penalized.

    • What foobar said.

      Also, as a fellow indie author, I’d suggest looking into Smashwords as your distro platform. It makes it easy to get your ebook into every venue, and they’re up front with the costs, which are very reasonable (usually around 15% distro fee).

      The Kindle fees are a little high, but I’m sure that, with pressure form alternate distribution sources, Amazon would lower them a bit. They’ve made it clear they want to stay competitive business-wise, and if everyone else is dropping prices, they will be forced o as well.

      • foobar says:

        Smashwords is a bit shady. They won’t allow you to submit just plain epub/mobi files; they force you to use their converter, keeping you dependent on them.

        Also, their 15% is above any vendor charges, 

        • RevelryByNight says:

           Smashwords is the least shady ebook retailer I’ve used. They don’t force you to use a converter: they have a free ebook that teaches you how to properly format your book and they do a check to make sure you did it correctly (something which Kindle could certainly benefit from).

          Amazon, on the other hand, forces you to use their proprietary format, ensuring your purchases can only be read on Kindle, and they encourage (if not require) DRM. And you can’t set free titles.

          Smashwords distributes to many other (smaller) retailers and keeps less in commission than B&N, Kindle, and iBookstore. You can make your books DRM free, and you get the same cut no matter where you set your price. And you can post it for free.

          Plus, when PayPal got all shitty with the erotica/pr0n rules, Smashwords fought back in support of their authors and won.

          Smashwords is terrific, and Amazon is the shadiest bastard on the block

          • foobar says:

            I just double checked and yes, Smashwords does still force you to use their converter. You can’t just upload epub/mobi files to them.

            Amazon’s format isn’t proprietary; the spec is published. It predates ePub quite significantly, and they are technically almost identical. You can set free titles on Amazon and they neither encourage nor discourage you to use DRM. It’s a choice they leave up to you, with no default.

            Smashwords like to present themselves as an angel, but they’re really not.

        • RevelryByNight says:

          I double checked the DRM thing, and yes they allow you to choose without swaying.  I stand corrected on that.  The price thing though is still a big “nope”.  They say quite clearly the price  “Must be between $.99 and $200″ and any attempt input a price below .99 is met with red text and prohibition.  Can you tell me where they allow free uploads?

  7. nixiebunny says:

    It’s reasonable to assume that the 30% they charge is not for the delivery of bits, but rather for the Amazon website access. They have a lot of overhead to run the site. And they have a significant market presence, so people looking for ebooks are drawn to the Amazon site.

    Raw bits cost about $.000000000001 each to deliver. Amazon knows that. We know that.

    If you don’t like to pay for the name, then use a less popular site.

    • L says:

      “If you don’t like to pay for the name, then use a less popular site.”

      Maybe you missed the part that said, “B&N didn’t sell enough to move the needle for him.”

      When your choice is between selling in a global superstore or from a van parked on the side of the road, it’s not much of a choice, now is it?

      • David Niall Wilson says:

        L – most authors and even publishers concentrate their efforts on Amazon.  We have sold nearly 10k worth of books at B&N just this month – because we stuck with it and figured out how to sell there.  It’s not B&N’s job to move his needle, it’s his…if you publish yourself, you have to market as well, and if you mostly market in ways that will increase sales on Amazon, that’s where the needle will move.

        Oddly, Apple and Sony sales seem to do slightly better without any prompting than B&N, but none of them turn the meters the way Amazon can with good marketing.

      • EH says:

        The word “monopsony” comes to mind…

  8. I’m not sure what the argument is here. Amazon don’t take a cut and charge delivery as a means to pay for hosting, they take that cut because they’re a marketplace that puts your product in front of millions of people – they advertise that marketplace and spend millions on research to secure sales and aid in conversion.

    Would he use the same argument when selling a physical book in a store? That the cost in fees is more than putting the books in storage?

    The delivery thing sounds odd though.

    • EH says:

      Amazon…take[s] that cut because they’re a marketplace that puts your product in front of millions of people – they advertise that marketplace and spend millions on research to secure sales and aid in conversion.

      Why doesn’t the name of the charge reflect that? In light of your interpretation, would you agree that “delivery charge” is a misnomer? Frankly, with that expansive a definition of “delivery,” one that would seem to cover all data relayed over a communications network, it’s really a “Amazon is awesome” charge.

  9. HahTse says:

    The only real shocker in this is that amazon feels the need to hide the costs. If they would just say “Well, we’ll take 40% and that includes all fees and stuff – the remaining 60% are all yours.  We know that’s more than what the competition takes, but you can expect way higher sales through us than you could ever get from them.” I think that nobody would feel the need to bitch about it.

    • David Niall Wilson says:

      But that would penalize folks like the author above who only has a small, mostly text product… If they just added another ten percent, then those who published a smaller book would be catching part of the charge that is being levied now on larger books (usually those with a lot of photos).  

      I don’t think anyone believes they are charging what they actually pay – with the amount of bandwidth they command, their cost is negligible.  On the other hand, they offer free 3G to their Whispernet enabled customers, and there is a cost in that … since no one from Amazon is here to join the discussion, we can only speculate what they are actually attributing those data fees to. 

      B&N takes five percent more, but does not charge a delivery fee.

      This entire discussion is based on the difference in what the author made on a large book.  If this same book was 1MB – it would make more on Amazon than it does on Nook…

      It would be nice if Amazon would come out and explain why they charge the delivery fee, break it down and try to justify it, but there is no law that says they have to do that, so I’m not holding my breath.

  10. Seems a lot of people are missing what I see as the big point here: they’re double-dipping. Based on the table above, they are charging almost as much for the “shipping” as they are for the “product”.

    If you made that claim about some dude on Etsy selling hemp bracelets that would be one thing. He probably is spending as much with UPS as he did at the bead shop. But Amazon, I’m pretty sure they can get packets to Peoria for a lot less than Stoner Bob spends to get a padded envelope there. (Although having significantly less patchouli stench when they arrive does add some value to the equation, and that shouldn’t be disregarded completely.)

    • EH says:

      If you had a point, it was muddied by your hippy-punching analogy. Try again.

    • David Niall Wilson says:

      It’s only true if you are talking about a big, image-heavy product.  The discussion here is really, I think, about them charging this higher data price point on larger files, and how high that price-point actually is.  To ship a smaller book they are taking only a couple of cents….to ship the bigger book, they are taking a chunk…

  11. That “129000% markup” number is mega-bogus. They are comparing simply hosting files with Amazon to using Amazon to list their book, process payments, and deliver. Payment processing for small online businesses costs ~2% + $0.25 (source:  http://elavon.com/costco-offer/ ), so a better initial estimate might be (30%) / (2% + 0.25/10) = 666% markup (:O). This is a classic terrible apples to oranges comparison.

    • Joris_M says:

      No. All hosting, payment processing, store overhead, and all other stuff is in the 30%.

      • What are you saying “no” to? I’m saying that Amazon’s markup from hosting to selling is an apples to oranges comparison, and doesn’t include things like payment processing or listing on Amazon.com.

  12. The ratio of the two markups gives us an “author bullshit factor” of 129000/666 = 193 or 19,300% !

  13. RayCornwall says:

    Some of the higher delivery fees made sense when Amazon was beaming books across 3G. Someone had to pay those fees, and Amazon said, “Let the author/publisher pay.”

    What would be nice to know is how the ratio between books delivered on 3G vs. wifi (which is cheaper for Amazon to deliver, as they don’t have to pay for the “last mile” connectivity between your router and the Kindle device) has changed over the years since the Kindle was introduced, and whether or not Amazon has changed its fees since then to adjust. 

    I don’t think I’m going to hold my breath waiting for those stats (Amazon still hasn’t released stats on Kindles sold, have they?), but it’d be interesting.

  14. Diogenes says:

    Until Amazon gets some real competition, give the book away on your website.  You can make your money off your speaking tour.

  15. Len Feldman says:

    Given what Amazon charged for Hyde’s 18.1MB eBook, they’re charging $142.54 per gigabyte. On AT&T, which provides Amazon’s 3G service in the U.S., any consumer can get 5GB/month for $50 on contract. I guarantee you that Amazon is paying less than $10/GB for its 3G service.  $142.54 for less than $10 of bandwidth is a pretty steep markup.

  16. Bloo says:

    I wonder – if you host the file, can you include buttons to send it to the user’s Kindle address (somebody@kindle.com or somebody@free.kindle.com)?  seems like you’d be handling the delivery.

    • David Niall Wilson says:

      Amazon will still get you…because it costs money to e-mail a book to your kindle (lol).  If people want to help the author and save the money they should buy at a different site and take the extra step to download it and transfer it to the Kindle with the USB cable.

  17. I don’t doubt that Amazon is gouging authors by charging way more to deliver the book than the telcos charge them for bandwidth.  I’m still waiting for a ruling on whether they’re actually charging the “delivery fee” when people download via wifi.

    I’ve got a self-published book up on Amazon (Singularity sci-fi, CC-licensed), and they’ve been taking $0.08 from each sale.  Not enough to worry about, and yet I still feel a bit ripped off if they’re charging this for wifi delivery.

    On an unrelated note, I know Amazon starts giving away ebooks for free if they find out it’s being given away free elsewhere, but I’ve asked around and nobody seems to be sure what will trigger that.  Has anyone gotten bitten by this for giving away the book on their personal site?

    • David Niall Wilson says:

      Bryce, they aren’t likely to see it on their own, but there is a button on the product page where they ask people to “report a lower price”.  I believe if one or two people click that and point to the free site, Amazon will key on it.  I’m not a big proponent of giving things away, but that’s how I’ve seen it work.

      • RevelryByNight says:

         They have spiders that roam for your book on other sites.  If it’s listed at a lower price their autobots will lower the price to match.  This is how authors I know are able to list their ebooks for free on Amazon.  They post it at a “normal” price on Amazon, then post it for free on Smashwords or similar, and within a week or two, “poof!” free ebook on Amazon.

  18. niktemadur says:

    Their “Contact Us” is a FAQ with no way to send a message.

    Yuck, this isn’t the first time I’ve bumped into this insouciant crap from major players.

  19. TwilightNewsSite says:

    I wrote to Amazon and asked about this issue.  This was their response:

    “The Delivery Costs for a Digital Book will be equal to $0.15 multiplied by our determination of the number of megabytes your Digital Book file contains, once uploaded by you and converted by us into our then-current Digital Book format. One megabyte equals 1024 kilobytes. One kilobyte equals 1024 bytes. We will round file sizes up to the nearest kilobyte. The minimum Delivery Cost for a Digital Book will be $0.01 regardless of file size.

    For instance, in the US Kindle Store, if your book has a file size of 0.400 megabytes and a List Price of $8.99, the Delivery Cost will be $0.06 (0.400 MB x $0.15 = $0.06), and your Royalty will be $6.25 (($8.99 – $0.06) x 70 percent = $6.25).

    The royalty calculation is as follows:  Equal to 70 percent of the amount equal to the applicable List Price for the Digital Book less the Delivery Costs (as defined above) for the Digital Book. But if we sell the Digital Book at a price below the List Price to match the price at which a third party sells any digital or physical edition of the Digital Book or to match the price at which we sell any physical edition of the Digital Book, the Royalty will be equal to 70 percent of the amount equal to the price at which we sell the Digital Book less the Delivery Costs for the Digital Book.

    This can be further illustrated in the link below:

    http://kdp.amazon.com/self-publishing/help?topicId=200634500

    Note: Because List Price, File Size, Offer Price, and Delivery Charge can all change at any time, copies of the same book sold throughout the course of one week may have had different values for each of these attributes in your royalty reports. Therefore, average values are displayed in your reports. 

    Delivery costs apply only to the 70% royalty option and are not subject to our 35% royalty option.  Additional information regarding royalty report criteria can be found in our Help pages:

    https://kdp.amazon.com/self-publishing/help?topicId=200641170

    I hope this information is helpful.  Thank you for using Amazon KDP.

    ———-

    That was the end of their response. So, a key element of your book’s royalties is its’ total file size, which is mainly a function of how large your images are. Note the following limits:

    “Digital books with a file size greater than 3 megabytes up to 10 megabytes must also have a list price of at least $.99, and digital books with a file size of 10 megabytes or greater must have a list price of at least $2.99.”

    Source: https://kdp.amazon.com/self-publishing/help?topicId=A36BYK5S7AJ2NQ

    So, if I’m figuring correctly, my book, “Twilight for Life”, which is 5 MB (5 x $0.15 = $0.75), and since the percentage is calculated AFTER the delivery fee is subtracted from the purchase price, the royalty would be calculated as follows:

    2.99 price – 0.75 delivery fee = 2.24 subtotal x .70 percentage = $1.568 royalty.

    Or, rather, that would be the royalties, if Twilight readers were more interested in the metaphorical parallels of heroes’ journeys and the challenges we face IRL, than they apparently are. ;-)

  20. How much does Amazon earn on a “real” book?  I’ve been working with computers since1985, and I’d rather buy real because I can have it 50 years no matter the technology changes.  The only e-books I buy are classics…aka: free. 

  21. AvantiSmith says:

    Andrew Hyde is the worst kind of whiner. By his own admission he spent a whole week writing his book. Amazon treated him well and made his book a hit and now he’s complaining about the delivery charges for his bloated file.  If he had published it himself in print and found a national distributor he’d be lucky to recoup 35% of list and would have none of Amazon’s reach and recommendation features to help him gain visibility.  Not everyone has Boing Boing, Radar or the Domino project to hype his book.  If Hyde is so great, he should spend another week and write something else and try to get traction without Amazon. Jeez.

  22. David Niall Wilson says:

    You can find someone else to bait, whoever you are behind the nonsensical, no link, anonymous tag.  I’ve been writing a long time, publishing a fairly long time, and offer a non-fee download alternative to the nearly 500 books I’ve published through our own store. I don’t like monopolies any more than you do…  I also don’t like insulting people as much as you, apparently.  It’s not a discussion at all if your method is to leap in and act superior every time someone posts… and it’s just silly to do so without even saying who you are.

  23. wizardru says:

    You really seem to be coming to this discussion with a great deal of baggage that I’m not seeing contained with David’s comments.  

    What I see is a published author of (according to wikipedia) about 10-12 books who discusses his nook and amazon sales on his blog rationally discussing that, regardless of your feelings about the matter of monopolies and oligarchies, Amazon does not hide or disguise their delivery charge.  Cory’s write-up seems to imply that he was shocked when he saw these charges because they were somehow hidden or a surprise.

    I don’t see him saying ‘deal with it’ anywhere; I see him saying that this shouldn’t have been a surprise.  Did you read where he sells books through his own store?  Clearly there are other avenues to sell through, but none have the market that those big houses offer.  That hasn’t stopped companies like Baen from making a profit.  You don’t HAVE to use Amazon, which appears to be what you’re inferring from David’s post.  Just like you don’t have to be listed with a major label to make a profit at selling your music…but if you do, you’ll get a much larger potential audience and exposure.

  24. Avram Grumer says:

    YanquiFrank, you’re going off-topic and being insulting for no reason. Stop it. 

  25. Doing nothing?

    He could only sell the book on his own site, and he’d quickly see just how much amazon is doing.

  26. Emo Pinata says:

    My argument is not countered by simply saying it’s an economic rent. You admit amazon has the traffic, and he who controls the traffic can charge 20% more for selling Mr. Hyde’s book.

    And yes, you should bend over and take it unless there’s a better alternative. If you want to make money you will find you have to bend over and take it a lot in life.

    Now, putting his energy into directing people to other sources that puts more cash into an author’s pocket is fine. Calling amazon unethical because you’re not earning as much as you think you deserve is silly.

    Now amazon being a monopoly is different, and the regular failings of antitrust laws in the US to do anything is a big deal and part of the reason why amazon does so well.

  27. I understand all of your points, and was previously aware of them, but it doesn’t change my argument.
    Is Amazon an eBook monopoly? Maybe it is, but I don’t see it as one; they can’t dictate whatever price they want, they’re not the only eBook retailer, not by a long shot. What they do have is a big audience and a high-performance ecommerce platform (it’s not just about traffic, not by a long shot). Even if they are technically a monopoly (in which case shouldn’t action be taken against them?) I don’t think their commissions are high enough to warrant this kind of backlash. They just have the biggest wedge of cheese, and are very good at selling things – which to me at least has value, value that results in more income – which is a good thing for everyone.
    The commission rates you see above are perfectly normal in the digital asset marketplace world; there were web design marketplaces back in the day that charged as much as 70% commission, and in the industries I’ve worked in the norm is 30-50%. In the physical retail world 50% is a pretty standard markup – which isn’t really that different in nature to a commission on the sale (assuming you make sales of course).
    It’s not cheap running a marketplace, I know: http://www.startups.co.uk/63-falling-pixel-startups-100.html (although I haven’t been involved for quite a few years now). We had 30% commission rates, which at the time were the best in the industry by a clear 10%.
    Admittedly Amazon are in a position to be more competitive, but I don’t think the incentive is there for them yet – give it a year or two and I think you’ll see more commonality in the commission rates.

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