Waterstones and ebook prices

[tompe]

Originally Posted by DuckieTigger

I just got a very stupid question here: Why does Amazon have the urge, need, reason for charging 65% markup in some parts of the world and even more in others ( I seen 70% mentioned)?

Because they can? The want to maximize the profit.

[DuckieTigger]

Originally Posted by tompe

Because they can? The want to maximize the profit.

Now logic would imply this: If I was a publisher, I would not allow Amazon to sell the book in Australia, because I don't want only 35%. But the publisher already had the cost of creating the ebook. So every ebook sold, even if the publisher only gets 1% it is money into their pocket which they can share with the author. Or am I missing the point here? Do sales in the rest of the world all of a sudden stop if the first 500 books that are sold happen to be in Australia??????

[Blue Tyson]

It isn't Amazon, it is the publishers. e.g. you check the prices and they are ridiculously high at Google ebooks, at Kobo, at Fishpond, at Borders as mentioned...

As far as I can see they are doing it for their own protection, here - long have we had triple priced books that prop up foreign publishers with fat margins. If the paper bookshops here charging such high prices go away, there is very little need for most of the 'local' subsidiaries of the foreigners - as they are middlemen that can disappear.

As at the moment we get for a foreign book :-

UK author - UK publisher - UK printer - UK distributor - UK retailer for a book

When sold in a shop here it is

UK author - UK publisher - UK printer - UK distributor - aeroplane - Australian publisher - possibly Australian printer (or just a books ticker) - Australian distributor - Australian retailer (who has to wait for the several middlemen in the chain to get their act together, putting them at further competitive disadvantage)

For a digital book you don't need the plane and :

UK author - UK publisher - UK retailer (Amazon)

Is all that is needed. So a several supply chain step distintermediation.

Getting a single copy Australian book print on demand from LULU or someone in the USA will still be cheaper than getting a standard book in a shop here - and considerably cheaper at that.

So it would appear they have decided - and it smells of desperation - that Australians need to be made to pay for massively overpriced product digitally as well to try and prevent this.

Take one of Harry's 8 pound books in the UK. If the publisher gets about half, then they get 4 pounds a book to spread around. Or 12 dollars say, round number.

That same book is $35 here, then they get 17.50.

If the sales for a title look like : -

Two thirds of the sales in the UK, one third in AUS/NZ etc.

Sales :

UK 10000 - Revenue 60000
AU 5000 - Revenue 87500

With a few other international trade related costs, presumably.

Or that would be 59% of revenue from a far smaller population. 60 odd million in UK, 20 million AU, 4 million NZ. So the UK proportion of UK/AU/NZ is on the order of 2/3, 70% or whatever, around there.

Some publisher titles from the UK of course will have zero interest in Australia. Genre fiction is not one of those things, though.

So overcharging us so much props up the UK operations significantly.

[DuckieTigger]

Thank you Blue Tyson.
That explains things a little bit better. Still does not explain why the profit margin for an ebook has to be so low for publisher and so high for Amazon. I can see how it would hurt to have the ebook at only a 1/3 price of a pbook - and possibly stop all pbook sales on amazon and local stores with really bad out come for the local bookstore (as in out of business bad). Even though I still believe the ebook should be available for the same price world wide. And to support local economy, it should have regular sales tax applied everywhere making the prices after tax still slightly different throughout the world (for the end customer). But Amazon not having all the overhang of extra expenses for airplane and such makes a killing at 65% at virtually no cost. If it is easy money for Amazon, it should be easy money for the publisher. This should make the checkbook of the author happy - and the author that people in AU want to read is the reason for Amazon to make easy money in the first place (even if they don't jack up their share for ebooks to 65%) just simply from the overpriced ebook prices.

Unless: people in Australia actually want cheap ebooks and therefore actively kill local pbook stores even more than simply having Amazon with aggressive prices?

[sabredog]

Originally Posted by DuckieTigger

Unless: people in Australia actually want cheap ebooks and therefore actively kill local pbook stores even more than simply having Amazon with aggressive prices?

There are only two brick and mortar book chains here.

Dymocks has no real idea of ebook prices and less of an idea about setting up an appropriate epresence. Collins is only just becoming active on the net in regards to ebooks.

The horse is well and truly out of the stables discountingwise now, with shops such as Kmart and Target offering cheaper DTB prices than the two book store chains.

Australians simply do not want to be ripped off by price gouging international publishers or be only offered a narrow selection simply because we live in Australia.

[pdurrant]

Originally Posted by DuckieTigger

I just got a very stupid question here: Why does Amazon have the urge, need, reason for charging 65% markup in some parts of the world and even more in others ( I seen 70% mentioned)?

Data charges.

For small publishers (using Kindle Direct Publishing), there is a choice of markup for books prices between $2.99 and $9.99:

(i) Publisher gets 35% of price set by publisher. Amazon gets the remainder, less data charges, and any discount Amazon chooses to offer on the book.

(ii) Publisher gets 70% of (price the book sold for - data charges). Amazon can reduce the price of the book to match any new retail price of the ebook or paper equivalent.

In parts of the world where Amazon are delivering ebooks over 3G using roaming data agreements instead of an agreement with a local carrier, only the first option is allowed.

If the book price is less than $2.99 or more than $9.99, only the first option is allowed.

[Adele Ward]

Although we choose the 70% option Amazon only give us 35% in some countries. I can't see any logic or justification for this. I didn't even notice that they could do it until we started getting the 35% payments because it isn't immediately obvious. Once we got 35% payments I checked we had ticked the 70% option then searched for their small print.

They can also pay less if they find a more competitive price elsewhere, which could explain why the ebook price is the same on other platforms. We are still working on this as we had to get the books on to Kindle first because they still dominate the market and it's only fair on our authors.

But in the long term we can't enroll on some of Amazon's ebook schemes because we do need to sell on other websites, and this will be one of the only ways we can offer more competitive prices.

[Kumabjorn]

First; A hearty welcome to Adele Ward. I think you are the first participant here I've encountered that is openly a publisher. We haven't seen much input from that side of the industry here, and hopefully you will be able to contribute to a fuller picture. From your posts I gather that you aren't all too happy about Amazon. If that is the case, why not just by-pass them? Nothing says that you have to sell your books through Amazon, why not set up your own book selling site and then offer your selection at lower prices to other sites? That way you would gurantee a highest possible price and you could add value like on-line chats with your authors or editors. Make books available as .mobi and .epub and almost any device can dispay it. I believe you can even deliver them to peoples' Kindles directly though the name@free.kindle.com address (although that probably requires untying an ethical knot or two).

Anyway, it is very nice to have you here on the board and I look forward to more input and opinions from your side.

[HarryT]

Originally Posted by Kumabjorn

If that is the case, why not just by-pass them?

Because it would be economic suicide to do so. Most authors who sell on multiple sites report 95%+ of sales via Amazon.

[Adele Ward]

I should add that the 35% they pay us isn't because we're on any particular Amazon scheme. This is their standard agreement when we put any ebooks with them. They can pay 35% for sales to a large number of countries, and they can pay a lower commission if they find the book offered at a competitive rate elsewhere. They call the payment to us 'royalties' although we're the publisher, and they seem to take the rights of a publisher with an unfair kind of contract. We don't have a contract with our authors that would let us do this so it's very annoying that an online bookseller would do it.

And in answer to the question - yes, they do it because they can. But they're doing it WHILE they can too, because once publishers can sell on more websites in other formats it won't work for them any more.

[Adele Ward]

Yes, it would be wrong to pass Amazon by at this stage. For the sake of our authors it's only fair to make their books available on Kindle. We also need to be building up sales of ebooks on other platforms at the same time, but not by cutting out Amazon. We have to work with them at the same time.

As for building up the competitive website. My job is to keep publishing outlets open for authors. To select, edit and help them establish their names in a difficult market where there's a real bookselling crisis. That takes all my time and I've had to take time off from my own writing to do it. Many publishers set up because they believe in this.

So it's somebody else's job to compete with Amazon. It needs to be a major bookshop or another major online retailer. It could even be one of our huge supermarkets as they have online sales including books. It just needs to be a strong contender with Amazon where we can put our books in another standard format.

Amazon isn't only a problem with ebooks. Another major problem is that they have so successfully created a brand perception that makes customers go to them as a one-stop source of information on a book. They don't actually supply many of the print books they display so they have an automatic message on them saying they are Unavailable or Out of Stock.

This makes customers think these books are no longer in print. Nobody knows why Amazon does this with some books because it's all automated and the book is supplied by the distributor where the publisher warehouses books each time an online order is received. It's easy for any online bookselling website to do this. The fact that they don't supply so many books, and that they even take orders then send emails for weeks before telling a customer the book is unavailable, is very damaging. This is the worst damage Amazon does to publishers.

But our books appear with them and on all other online bookseller websites automatically as they're on the Nielsen database. For those of you who don't know about it, the Nielsen database is also what easily passes the order to the warehouse and gets the book sent out.

Unless things have changed you can see what I mean by looking at any books from Ward Wood Publishing (my company) on Amazon.co.uk and on bookdepository.co.uk Amazon owns Book Depository, but the books are quickly and reliably sent out from Book Depository, while Amazon has the misleading message that the books are unavailable or out of stock. If you try they will accept your order, keep you waiting, and not supply the book.

So, yes, Amazon is a real nuisance and damaging to many publishers. But we have to work with them until there's a real contender. We will be putting our books in other formats on other websites including our own. And I do have a social network for writers to interact on writtenword.ning.com (I think you mentioned that too). An online bookselling site for all books to compete with Amazon isn't something I can spend time on.

[Kumabjorn]

Originally Posted by HarryT

Because it would be economic suicide to do so. Most authors who sell on multiple sites report 95%+ of sales via Amazon.

Yes, but when you think about it, this e-book market is still in its infancy. It is by no means destined to be dominated by Amazon. But as long as publishers goes along with Amazon's business model it will surely grow from a 300 pound gorilla to an 800 pound mountain gorilla. I wasn't suggesting an all-encompassing competetive site, only that Ward Wood Publishing have a site available for their own books. If .mobi is available it isn't any problem getting it on a Kindle.

[Adele Ward]

Oh we do have a site for our own books. As soon as we create the ebooks in other formats, which will be very soon, they will be for sale on our own website, our author's websites, the websites of major bookshops, hopefully places like Tesco (if they have ebooks). We've been going for a year and a half and brought out the books in print, so we're still in the process of converting them, first to Kindle as Amazon is one of the main places authors are getting sales, but we'll certainly have ebooks on our own website too.

Ebooks are in their infancy and I don't believe Amazon can keep this position of dominance. We need to be able to sell across more websites, and bookshops actually need to be able to offer online selling of ebooks if they are to survive. So we're all discussing this.

There are interesting discussions about it on thebookseller.com which is the main website and magazine for Booksellers in the UK. Things will change.

[Adele Ward]

I've just heard back from one of our readers that they can't get Kindles or Kindle books in Malaysia. I know we can't manage to get books delivered by Amazon or Book Depository to some countries in that part of the world. The problem is actually that they don't arrive with the customer, so the online sellers have stopped delivering. We have to try to get them delivered ourselves.

The problem has mainly been in Cambodia for us, where one of our novels is set, but we still haven't ever managed to deliver a book! We have to carry them over personally or they vanish en route. I can understand they're tempting, and I suppose a Kindle is more tempting - we're going to be running a competition with a Kindle as a prize but it seems they can't be delivered to a lot of places. I will follow up with other ereaders as prizes too. I do want to help boost interest in ebooks.

This does mean there's a big gap that a competitor to Amazon could fill. A lot of the countries that want ebooks can't get the Kindle ones. They read on iPads and other gadgets. I do think their dominance is short term. I just hope their competitors don't go a proprietary route or demand exclusivity like them.

It's in the interest of publishers to set as competitive a price as they can manage, so even when I can't see the reason other publishers have had to set a high price, I know there must be one.

[pdurrant]

Originally Posted by Adele Ward

Although we choose the 70% option Amazon only give us 35% in some countries. I can't see any logic or justification for this.

See my post a few posts above yours. Data charges.