Category Archive: Barnes and Noble

Aug 12 2014

Amazon & Hachette, What’s the Deal?

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I got the email. The one from the Amazon’s Book Team, urging me to write a letter to the CEO of Hachette Book Group (HBG) to remind them that e-books are not paperbacks or hardcovers and shouldn’t be priced as such.

Here are just a couple of the points I will make in this post:

  • This issue is not about authors or publishers but about the consumers, the readers. Even though some Hachette authors are affected, Amazon and Hachette seem to forget that this is about readers who buy e-books. Happy readers make happy business and a profit for author, publisher and retailer. Readers want low prices. Eventually, readers will not buy high priced e-books and Hachette will be forced to adapt to publishing’s changes or fail.
  • Although Amazon is strict about carrying e-books with low prices, maybe the way they are going about it is all wrong. Yes, I agree e-books should be priced lower than physical books as there are no warehouse costs, shipping cost, printing cost, etc., to offset. However, is preventing preorders and sales of these overpriced books the best tactic? Maybe, if that compromises your brand as the largest online retailer with the lowest prices. Read on.

So what’s up with Amazon?

Amazon wants to be the next Walmart and cater to their online buyers by guaranteeing low prices. Amazon’s mission is “to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices.” As a bookstore this goal helps them beat out the competition, driving more readers to Amazon.com for low priced reads. How can they brand themselves as a “customer-centric company that offers its customers the lowest possible prices” if they are distributing digital books priced as high as the paperback?

So their statement to Hachette, in my words, are “You want me to help sell your books? You gotta play by my rules. Because I don’t want you exploiting my customers and taking advantage of them by charging them ridiculous fees.” Because even though Amazon gets a piece of the earnings of each e-book sold (30%), they’re reminded of their brand and their mission, the thing that makes them the go-to place for e-books and, well, everything else. Low prices. That’s essentially their thing. And they seemingly care a lot about their customers to prevent the sale of some titles to ensure their customers aren’t being overcharged.

Is this right? That’s the main question. And the answer varies from “yes” to “no” to “I don’t know and don’t care,” depending on who’s most affected by their tactics.

Why shouldn’t publishers play by Amazon’s rules?

Seems like a simple business maneuver (or bullying, depending on who’s talking). Want to work with me? Abide by my rules. Amazon is a business. The way they build their brand is by offering books at a low cost. I said it before, but it bears repeating. This is the difference between Amazon and Barnes and Noble, for instance. Barnes and Noble lists books at the price the publisher chooses. Amazon lists books at the price the publisher decides IF it’s a favorable price for their customers.

So what’s up with Hachette?

Maybe Hachette is a little behind the times. Maybe they don’t understand how publishing has evolved. Maybe they do, but don’t care. Maybe they’re just greedy and it’s all about money, money, money. Who really knows? In response to the letter by Amazon, chief executive of HBG, Michael Pietsch, had this to say:

“Unlike retailers, publishers invest heavily in individual books, often for years, before we see any revenue,” he wrote.  “We invest in advances against royalties, editing, design, production, marketing, warehousing, shipping, piracy protection, and more. We recoup these costs from sales of all the versions of the book that we publish—hardcover, paperback, large print, audio, and e-book.

“While e-books do not have the $2-$3 costs of manufacturing, warehousing, and shipping that print books have, their selling price carries a share of all our investments in the book.”

The bottom line is that Hachette wants to charge high fees for their e-books and that doesn’t fit with Amazon’s business model.

So what if Hachette said, “Screw you, Amazon,” and only sold their books through other online retailers, leaving Amazon in the dust?

They would probably lose money from Amazon’s customers, or face complaints from readers who prefer Amazon’s one-click buy now convenience, and enjoy adding to their collection of books on their Kindle readers.

So what if Hachette lowered they’re e-books on Amazon.com?

Hachette would be forced to lower prices of their e-books at other retailer’s sites too. Otherwise readers would flock to Amazon to get the lower priced books, which is good for Amazon and good for Hachette because it’ll probably increase  sales from Amazon, but the sales will come from lower priced books. Meaning less profit for Hachette (not so good from their point of view).

But money is the name of the game.

Greed aside. Money keeps a business afloat. Sure. Plenty Kindle Direct Publishing (KDP) authors, including myself, complained about the royalty difference when pricing our books. KDP authors can select from two royalty options.

E-book priced at $0.99 – $2.99 = 35% royalty to the author

E-book priced at $2.99 – $9.99 = 70% royalty to the author

*$0.00 (FREE) e-books are only an option for Kindle Select participants = books are exclusively sold from Amazon

*All e-books to be priced under $9.99 

Here’s a more detailed explanation at this link.

OK, let’s think business here. Amazon crunched numbers to make sure when every book sells, they make a profit. Makes sense from a business standpoint, right?

I used to wonder, if Amazon really cared about the customer why not add to their database of free e-books by making it easy for KDP authors to upload free reads. I still have a book on Amazon (not enrolled in Select) that is free everywhere else, even Amazon UK and CA, but is still listed at .99 cents on Amazon.com US and other countries. This is so because Amazon uses price matching. If another retailer (competition) provides the book for free Amazon will (usually) do the same to stay on top of the competition.

However, by (definitely) offering the free option to books that are exclusive to Amazon through Kindle Select, they now eliminate the competition of Select titles altogether. As frustrating as this can be to authors not enrolled and want to distribute free e-books on Amazon, including myself, I get it. Business, remember?

Hachette—who I am not familiar with as a business, and never worked with—have an agenda and a profit to make too, to recoup the overall cost of producing the books, as stated above by the chief executive of HBG. If they make bad decisions by overcharging for e-books, over time, those mistakes will correct themselves one way or another. Readers will stop buying overpriced e-books, Hachette will be forced to adapt to the times, or buckle.

Bottom Line

Amazon must learn that although they are currently big and bad in the book industry, they are not the face behind a publishing revolution and they shouldn’t strive to be. They should do what they do best and provide e-books at a value by focusing on the consumer’s wants, but not tossing them in the middle of legal negotiations. Is going public really going to change the fact that these two companies want to do business together but can’t agree? How is a letter from little ol’ me to the CEO of Hachette going to change his or anyone’s opinion, especially if what I say is:

1) Bullet points at the bottom of their lengthy email Amazon prompted me to say

2) Things Mr. CEO already knows

Bestselling Hachette authors placing a $100k ad against Amazon in the New York Times, and Amazon mass emailing all of their readers, is simply putting us in the middle of a war that none of us deserve. The folks choosing sides are most likely the ones directly affected by the Amazon-Hatchette battle. Those on the fence are most likely the ones thrown in the middle and have nothing to do with either parties.

Frankly, both sides are publicly presenting themselves as unprofessional. To go so far with their tactics to start a war over the rights and wrongs of e-book pricing. What should have been a private matter has now spiraled into authors and readers and others in publishing from all over, taking sides and pointing fingers. When if only Amazon and Hachette focus on the reader’s wants (which is a huge factor to consider in the publishing industry) this war would have been nonexistent.

This has been my two cents. Mind sharing yours?

[Image credit: Claudio Toledo]

Mar 07 2013

Basic Facts about Self-Publishing Every Author Needs to Know

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Recently, I’ve come to realize some authors are simply confused about the self-publishing business. Many are holding onto some of the popular misconceptions, while others have the whole business of self-publishing completely wrong, thinking of self-publishing as a last resort, or for books that can’t sale. I think there are plenty of authors out there who are missing out on this option of book publishing because of the longstanding misconceptions about it.

Misconceptions:

  1. You have to pay to self-publish
  2. You self-publish when you can’t sell the manuscript to “real” publishers
  3. Self-published books are poor quality
  4. Self-publishing costs too much money
  5. Self-published books don’t sell
  6. Self-publishing means no physical books
  7. Self-publishing is a hobby and is not a business

The Facts:

  1. Self-publishing is FREE. If you pay to get your book published that is called Vanity Publishing or Subsidy Publishing. From my experience, this form of publishing is just another way for people to take advantage of novice writers. Yes, I fell into that trap at the beginning of my career. However, I learned from that. You should not have to pay to be published.
  2. Self-publishing is not a last resort for many. You self-publish when you decide you want to make more money on your sales, make your own creative decisions, and become your own boss (because as soon as you sell your first book you are legally considered self-employed).
  3. Self-published books are comparable to traditionally published books when it comes to quality. Not ALL self-published books are poor quality and full of errors, though a lot are. Only because it’s become so easy to self-publish that more people are exploring this option and they’re doing it more often (faster). So pretty much anyone could do it, which means some writers who don’t develop their skill or don’t see a need to purchase great cover art or editing services click “publish” much sooner than they should have. However, we shouldn’t assume all self-published books are crap, just like we shouldn’t assume all traditionally published books are perfect.
  4. You could self-publish at no cost. However, self-publishing does require financial investment if you want to sell your book, but the return could be much greater if you know what you’re doing. You are responsible for cover art, formatting, editing, marketing, and marketing materials (i.e., website hosting, bookmarks, business cards, etc.), however, in most cases you earn a higher percentage of royalties (i.e., up to 80% on Kobo, 70% on Amazon DTP, 60% on Smashwords, 60% on ARe and Omnilit, and 40% on Barnes and Noble’s PubIts!). Which means more money back in your pocket. Also, keep in mind, being traditionally published requires an investment too as you are now required to market your book.

    publishingChart

    *up to or varies

  5. Self-published books sale very well. Sometimes you have no idea if the book you just purchased was traditionally published or self-published. Sometimes just browsing Amazon a book jumps out at you and holds your interest. In fact, a lot of the books sold on Amazon and on other online bookstores are self-published books. This is the case because of the increasing amount of authors who are turning to this option.
  6. You can acquire physical copies of your self-published book. With print on demand (POD) services available to indie authors, it is now easier and faster than ever to get your book into print and to print out as many or as few physical copies of your book as you want whenever you want. Amazon’s Createspace is a popular and free POD platform as is Lulu. They just deduct a percentage from each sale.
  7. Self-publishing is most definitely a business … if you choose. Sure, some people self-publish their family’s cooking recipes into a cookbook just for family members and close friends, some self-publish their book of poetry just to have a personal memento to pass down generation after generation. Yes, for some, self-publishing is a hobby and nothing more. But for many others, it is definitely a business. And for a handful of authors, it’s their livelihood, their means to make a living, for such indie authors as; J.A. Konrath (thriller writer), Amanda Hocking (YA, paranormal author), and Hugh Howey (science fiction author).

What Self-Publishing is NOT:

Just like traditional or e-publishing, self-publishing is not:

  • A get-rich-quick scheme. You cannot publish a book and become a bestseller within a short amount of time without working hard on promotion, platform, and investing money on marketing and materials.
  • A fast path to superstardom. You will not become famous and be interviewed by Oprah within a short amount of time without working on your craft, learning the business, and putting in hard work.
  • A means to quit your day job. Because of the reasons above. Don’t quit your day job until you are making a steady amount of money to cover your living expenses and you are consistent for more than a few months. In fact, I personally, would not rely solely on writing as a single source of income because it is so inconsistent. One month you can make 5000 sales the next only 1000. The success of a book varies and sales are unpredictable.

What Self-Publishing Requires:

You will not become rich and famous overnight. Self-publishing, like any business, requires:

  • Hard work (blood, sweat and tears)
  • Skill (knowledge, education, know-how)
  • Investment (time and money)
  • Concentration (focus, planning, strategy)
  • Willpower (determination, mental strength and perseverance)

Some Benefits:

  1. You make ALL the creative decisions. From cover art design, to the font of the interior text, to the release date. It’s all you.
  2. You control the sales price. You can set a price and change it at will. You can even set the price to free (with some distributers).
  3. You earn more money. You make a higher percentage back on royalties.
  4. You keep ALL rights. The rights to your book including digital, film, audio, etc., are yours forever.
  5. You take all the credit. If you do become a bestseller and sell your film rights to a major movie company, you can bask in the joy of doing it all yourself.

Some Drawbacks:

  1. You are responsible for everything. You have to correctly format your book, upload your book, proof it, set prices, manage prices, market it, promote it, and the list goes on. Remember, it’s all you.
  2. You must invest. You pay for cover art and editing (and sometimes formatting if you choose). With traditional publishing and e-publishing, the publisher pays for cover art and provides editing free of charge. “Free” unless you take into account that they’re getting 50-90% off of your sales. *You are “technically” paying for these services including; marketing, distribution, formatting, etc.
  3. You market solely. Sure, you must market your book if you are traditionally published or self-published, but self-publishing means you are doing it all on your own. That means, you must balance out marketing your book, working the day job, raising the family, writing your next book, managing an online social profile, branding, etc., with little or no help unless you pay for marketing services out of pocket.
  4. You take all the blame. If something goes wrong, you have no one to blame but yourself.

I can go on and on about self-publishing, and I will touch on it again in forthcoming posts. What about self-publishing interests you or horrifies you? What questions do you have about self-publishing? I’ll do my best to answer in a future post.

What about self-publishing are you most interested in?
What would you like to know more of regarding self-publishing?