Sunday, April 6, 2008

Frakkin Amazon Chit Again!!!

First, I would like to say I am a free thinker. I have no vested interest in any of these companies. Though I do own stock, I own stock in many companies and therefore leave the brain$childs to do my bidding. I don't run a publishing house, or a press, or have a chit load of friends and/colleagues pushing me into spouting off their opinions as my own, without thought to all who may hear my words. I am only a lowly writer and I often refer to myself as an author in progress.
I have read everything available to me in the search engines about this matter. I know who is posting what. As a free person I can make my own assumptions as to why, all the while confident that I have educated myself intelligently about the matter.
Therefore, until there is an update, I'm going to stop commenting on this because its pointless trying to get through to people, once everything has been presented to them in clear form. Everyone is entitled to their opinion and it is certainly not my mission to change their minds, but I feel responsible to explain why I have arrived at my own. Though it may be an unpopular opinion, it is not less worthy of attention.
Please read the whole thing only if you are remotely interested in another perspective. I certainly do not want to waste anyone's time who is just looking for a debate.
Think people; where are you getting your information from. Everything has a source and some sources have their own interests, as they should, at heart.
Many questions are addressed on this forum I have provided the link below. Please read the whole five pages of the thread before posting more questions here, as I suspect this subject might be getting tiresome to some being that there is no new material having transpired.
That being said... I found this, which is the most intelligent perspective on the whole thing here.
Not that you aren't all bright and shiny intelligent people, this is just the most "big picture" kind of perspective I have seen and share her sentiments. I do not know her personally, and have not spoken with her, though I do hope to remedy this posthaste. I do know she publishes RPG related items, on a very small scale, and is a horror writer herself, as well as a free thinker. I am using her post because quite simply, I couldn't have said it better myself, literally. LOL
The Gray Witch of Bellmaw

Join Date: Sep 2005
Posts: 218
Re: Amazon PoD Take-Over?

I'm going to try to address a few points that I have been drilling into people at some other forums.

1. Amazon is not obligated to list POD titles as "in stock." Because they aren't in stock. POD titles are printed as they are ordered. In the past, they have listed them as in stock, with the understanding that the POD service would immediately print and ship. However, smaller services (and even LSI on occasion) have not followed through on this. When a package arrives late, Amazon is the one that gets the heat from the customer, not the POD printer.

2. Amazon is NOT deleting POD title listings. They aren't even saying they aren't available. Non-Booksurge books are still being listed on Amazon. However, the ADD TO SHOPPING CART button is being replaced with SEE ALL BUYING OPTIONS. Amazon has a huge pool of third party booksellers that sell through there system. The books can still be bought on the Amazon site. The only difference to a customer is that the books no longer qualify for free shipping.

3. LSI and most POD services only offer Amazon and other retailers a short discount of 20% or less. When you are offering free shipping to customers, that means you can end up losing money on those sales.

4. If you are working directly with LSI, you have an option to set higher discounts, and make your books returnable. If you do this, your books appear in the LSI system as "traditional" availability. Not as POD titles. If you are a small press that has your books listed like this, Amazon doesn't even KNOW your books are POD, and therefore this whole argument is a mute point.

5. This issue is primarily aimed at the 3rd party POD services like Lulu, Booklocker, etc. Not the individual small press publishers. When you as an author set up a retail title through these services, you have to double the price of your product to set the retail price. However LSI only lists the titles with a "short discount" of 20% or less. You as the author don't get the difference, it is eaten somewhere between your 3rd party service, LSI, and Ingrams.

Sample Book.
6 x 9, black and white, 96 pages

I want to set my retail price for this book at $10.59

Fixed price:
Manufacturing/printing cost: $3.46
Lulu commission: .37
Calculated royalty: $1.46 (what my profit is on a book sold for $10.59)


This number is then doubled to set the retail price.

Retail mark-up: $5.30

So Amazon gets a 20% discount or less, off the retail. So Amazon pays $8.48. That leaves $3.19 unaccounted for? Where does that go? LSI/Ingram's pocket.

6. You can use the FREE Createspace service to set up your books with Amazon. You do not have to pay a $50 fee unless you want the pro account, which just gives you better pricing. Booksurge prints these titles, but you do NOT need to buy a Booksurge package. You can continue to use whatever service you want elsewhere.

7. The CS package lets Amazon take a 40% cut (not 48% as is being bantered around...go to the website and read the details). And you actually pay LESS per book.

Same book as noted above

Createspace/Amazon (standard)
Fixed price for printing: $3.66 (book less than 108 pages)
Amazon discount: $4.24
Profit: $2.69

Now if you actually decide to use the pro plan, your profit looks like this:

Createspace/Amazon (pro plan)
Fixed price: $2.25 (book less than 108 pages)
Amazon 40% of retail=$4.24
Profit: $4.10 to the author

The bottom line is, this is a GOOD THING for niche publishers and self-publishers, because you can deal directly with Amazon without having to pay to use 3rd party services! I've actually been using CS for some time already to handle my Amazon sales, because I make more per sale than if it is handled through LSI.

8. 3rd party POD services ALREADY use multiple different printers. Lulu has two different printers that handle European orders, and a half dozen printers to handle various book orders in the U.S. And Canada. Sending the electronic files to Amazon to handle is no more work for them than sending to LSI or anyone else. The only difference for Lulu or a 3rd party service is that they are paying a bigger discount to Amazon, but at the same time they aren't paying anything to LSI/Ingrams. So if you are a 3rd party service that isn't hiding a lot of fees in that mark-up, its 6 of one, half a dozen of the other as far as you are concerned. If, on the other hand, you are hiding fees or using some "new math" to calculate retail pricing, this eats into the 3rd party service's money.

9. Most of the news sources that are reporting on the story are getting their information from two sources: PublishAmerica and Angela Hoy. If you read the articles, they are almost all circular articles that reference each other. We all know PA doesn't have a good reputation for honesty, so we can throw them out the window. Angela I have a great deal of respect for, but at the same time she owns a 3rd party POD service that charges up front fees to use, and the notion that authors can set up directly with Amazon means some of her customers may not need her any more. So she has a vested interest in the status quo.
Bards and Sages
Publisher of Speculative Fiction and RPGs

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