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Publetariat Dispatch: If You Think Amazon Is Gouging You On Delivery Costs, It’s Only Because You Didn’t Do The Math Up Front

Publetariat: For People Who Publish!
In today’s Publetariat Dispatch, Publetariat founder and Editor in Chief April L. Hamilton explains Amazon delivery costs, and why self-publishers should do the math on them up front.

I’m seeing some online noise lately from authors who are outraged at the  “delivery costs” being deducted from their KDP book royalties. These  authors are posting angry diatribes against Amazon on their sites, blogs  and social media accounts, railing against Big Bad Amazon and their  sneaky, author-cheating, money-grabbing tactics.

Here’s the  problem: it’s those authors’ own fault if Amazon is retaining so much in  delivery costs that their books aren’t earning a respectable royalty,  because those authors OPTED IN for a royalty percentage that includes a  deduction for delivery costs in the first place.

When you  publish a Kindle book through KDP Select, you must decide whether to  choose the 70% royalty or the 35% royalty option. Many  non-detail-oriented authors just click that 70% option without  considering, or even knowing, the repercussions of that choice.

Two  such repercussions are delivery costs and royalty as a percentage of  sales price. These are important, because they impact the amount of  money you ultimately earn per copy sold.

If you go with the 35%  option, your royalty per copy sold is 35% of the retail price you set,  period. Even if Amazon elects to discount your book for some reason, you  get 35% of the original price you set on every copy sold.

If  you go with the 70% option, your royalty per copy sold is 70% of the  retail price you set, minus delivery costs, with some caveats. Delivery  costs are as follows, per Amazon’s current pricing page on the KDP site: $0.15/MB £0.10/MB €0.12/MB €0.12/MB €0.12/MB €0.12/MB

Obviously,  the larger your file size, the higher your delivery cost, and the lower  your net royalty per copy sold. In every one of the angry posts I’ve  seen, the book in question was heavily illustrated or formatted,  resulting in a huge file size. It would’ve been a simple thing for these  authors to do the math ahead of time based on their books’ file size,  and if they had done so, they likely would’ve concluded the 35% option  was the smarter way to go for these particular books.

There’s a KDP FAQ that explains these details right here, and per another section of the FAQ, the average delivery cost per KDP book is six cents.  For a book containing only text and maybe a handful of decorative  embellishments, that’s a totally reasonable and believable figure.  Straight text novels I’ve published or formatted generally come out  somewhere between 240 – 350 KB, so on such a book, the delivery costs  are negligible.

Note that you can choose different royalty  options for different KDP books, it’s not like you must choose one or  the other and then it applies to your entire KDP catalog.

Now,  back to those caveats. There are other factors to consider before  choosing the 70% option, and these are fully disclosed and explained in the KDP royalty FAQ section about the 70% royalty option.

First,  if you’re selling your book on other sites (even if in other formats)  and any of those sites decide to discount your book for any reason,  Amazon will immediately discount your book to match the lowest price its  ‘bots find on the web and base your royalty calculation on that  price—NOT the list price you originally set. This is why I generally  advise authors who are selling through multiple outlets to go with the  35% option, because they have no control over vendor pricing, and with  the 70% option their royalties will be entirely unpredictable because  the book’s ultimate sales price on Amazon will be unpredictable.

Second,  you must set a retail list price between $2.99 – $9.99 for your book.  Some authors will balk at the low end, since it excludes 99 cent and  $1.99 pricing, others will balk at the upper level because for some  books, especially textbooks or technical books, it may be legitimate to  charge more than $9.99.

I won’t detail everything else one needs  to consider before making the choice between the 35% and 70% royalty  options, because frankly, if you’re the author-publisher, that’s your  job. And if you don’t take the time to research the consequences of  your publishing choices, that’s nobody’s fault but your own.


This is a cross-posting from Publetariat founder and Editor In Chief April L. Hamilton‘s Indie Author Blog.


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