My recent promotion – the results

Two Covers

If you’re a regular follower of this blog you’ll know I ran a promotion over the weekend for both Second Chance and Absent Souls and I wanted to share my results with you.

Background

Outside of blogging and the rare promotional tweet, up until June this year I’ve rarely run a book promotion. Second Chance was published in January 2014 and has stayed in the minor charts on amazon.co.uk ever since. Its sequel, Absent Souls, was published November 2014. There is a third book due out later this year (if I pull my finger out).

I’ve been lucky that I’ve had success with both books on Amazon.co.uk but my efforts of getting noticed in the US have been virtually zero. This is bad news for my sales (the US is by far the largest single ebook market) but good news for testing promotional effectiveness.

I’m not intending to heavily promote my books until book 3 of the trilogy is finished but I wanted to test the effectiveness of different forms of advertising beforehand to see where to focus. I ran my first paid ad in June this year through Booksends, offering Second Chance for free. At the same time I put Absent Souls on a 99c/99p countdown deal. Over the three days Second Chance was downloaded 1000 times and I should enough copies of Absent Souls to cover my costs. While my sales on amazon.com since then have been flat, my pages read (both my books are in Kindle Unlimited) resulted in a higher income than before but were starting to tail off after two months.

The Goal

As in any business, your book promotion should have a goal. My goal was to increase awareness of my two books on Amazon.com, gain new mailing list subscribers and to cover the cost of advertising. I would also hope to see an increase (read: any) in sales and/or pages read over the following weeks.

Promotion Plan

Use the same offer, Second Chance for free and Absent Souls for 99c/99p over three days.

Day 1 – Promote only on my blog, a promotional post by the wonderful author Tammy Salyer, and one or two promotional tweets.

Day 2 – Two adverts placed, one with Ereader News Today (ENT) and the other with Robin Reads. I’d originally planned to promote only with ENT but I’d heard Robin Reads had a good UK following, and as they had a space free I thought I’d try them as well. The cost of both came to the same amount as the cost of the one promotion with Booksends.

Day 3 – No promotion other than the odd tweet.

The Results

IMG_3394Day 1228 downloads of Second Chance.

This was a surprise as I’d expected maybe 50 with so little promotion, so thank you to everybody who took the time to support the promotion with tweets, reblogs or by telling their friends.

Day 21830 downloads of Second Chance.

Because both mailing lists are US based, the first (Robin Reads) didn’t go out until 3pm UK time. I immediately noticed an upsurge of downloads at this point, from around 30 to over 300 by the time the ENT mailing went out at 5:30pm UK time. This is when things went crazy. By the end of the day I’d reached no.2 in the free science fiction/cyberpunk charts, no.8 in the science fiction charts and had broken into the overall top 100 at no. 65. This was well beyond my wildest expectations and a little surreal.

The down side was that I made hardly a ripple on amazon.co.uk, so either the information about Robin Reads was incorrect, or the majority had already bought my book. 🙂

Day 3385 downloads of Second Chance

Over the same period Absent Souls hit no. 13,000 in the overall paid charts, with total sales more than covering the costs of the promotion.

Conclusion

It’s always a little dangerous drawing conclusions from such little data, however it’s clear promoting on two mailing lists was more effective than one. I know this may sound like common sense but remember I paid the same amount of money for the June promotion and the one last weekend.

I also believe you need momentum for a successful promotion. The promotion in June met my goals but it only got Second Chance into the top 50 of the Science Fiction charts. Breaking into the top 10 of science fiction, and the top 100 overall, meant Second Chance was visible to a much larger audience, giving it a second chance (no pun intended) to be seen and downloaded by readers other than those on the mailing list.

For the longer term goals it’s too early to say. I know from Kevin Brennan’s blog earlier this year, that high free downloads doesn’t automatically mean higher sales, but even if I don’t reach this goal as yet, I’ve learnt another lesson on the effectiveness of different promotional options and strategies.

What about you? If you’re a writer, which promotional routes do you find most effective? Or if you’re an avid reader, have you signed up to any bargain book mailing lists and if so, which ones? I’d love to hear from you.

 

Do you like intelligent thrillers? If so, join my mailing list and get one of my 5-star rated near-future dystopian thrillers absolutely free. The mailing list is guaranteed spam free and I will only contact you if I have a new book launch or an exclusive short story to share. To sign up, please click here. 

Advertisements

KU pages read stats – a new obsession

reading-over-shoulder

image source: bookriot.com

When Amazon announced they were changing their Kindle Unlimited payment scheme from ‘flat rate per loan’ to a payment for each page read there was a lot of debate about its impact on publishing. One thing missed, however, was its impact on authors themselves, specifically being able to ‘see’ people read your work.

When Amazon KDP launched their new scheme they also launched a report allowing authors to see how many page reads were captured per day, and like KDP’s other reports, this one is updated on a regular (hourly?) basis. For many authors, especially those selling at reasonable volumes, the report will show the thousands or tens of thousands of pages read per day in a steady stream. For those of us with more modest sales, the experience is very different.

It took a couple of days before I received my first KU download under the new system. I’d seen the sales rank bump – because I monitor my sales more often than is healthy – and waited with excitement to see the pages read appear on the new report.

And waited.

And waited.

Nothing happened. Perhaps the report has a few teething problems, I thought, or the reader is finishing another book before starting on mine. I tried not to let the lack of activity bother me, but the lack of activity needled me more than I wished to admit. Then, on the second day, the graph had changed. It registered 51 pages read from the day before. Somebody was reading my book!

The most logical thing to do at this point would have been to close the report and get on with my life, but no, I had to know more. So I tried to work out the exact point they had read up to. The Kindle Edition Normalized Page Count (KENPC) for Second Chance is 524 pages. The print book has 305 pages so at roughly 1.72 KENPC per print page I deduced that the reader had stopped at page 30 or the start of chapter 5. I was thrilled, it’s the point where the multiple threads of the opening chapters start to pull together. They were clearly enjoying the story.

At the same time, another emotion surfaced, one I hadn’t expected. Most authors will recognise the emotional rollercoaster when somebody you know reads your book. On the one hand you’re desperate to find out if they like it but you know it’s bad form to ask – there’s nothing worse than a needy author badgering you for your thoughts on the mine of their book to put you off a story. So whenever you meet your friend you deliberately don’t mention the book but at the same time you hope they bring it up in conversation to satisfy your need for validation.

Or maybe that’s just me.

Anyway, watching somebody read my book remotely elicited similar emotions, but this time I had both more and less information to go on. I believed I knew exactly where they’d read up to but had no visual signals, no reassuring smile to comfort me. All I had was the data, so being a story-teller I built my own narrative. In my head they’d loved the book so far and couldn’t wait to read on.

The next day I registered a KENPC of four, the day after that eleven and then a big fat zero. I was mortified. What had gone wrong? My imagination went into overdrive. When I’d first published Second Chance, a number of friends mentioned that it took four or five chapters to get into the story and then boom, everything started to fit together and they were hooked. Yet this reader had got that far and stopped. Did that mean they hated what I’d written? Had they given up and moved onto another book? Had they found it – god forbid – boring? It was torture. What had started as a wonderful new experience to remotely bond with my audience had turned into ego death by a thousand cuts.

Before the new payment process was introduced, all I had to worry about was whether I sold (or rented out) a book or not. Clearly I wanted the reader to enjoy what they’d bought as I had another book for sale and a third on the way, but once a sale was registered, it was a sale. It was a small piece of success, a balm for my ego.

Not any more.

Now I had the agony of watching somebody dump my novel for something more interesting. It took me back to my youth, bringing back feelings of dating the most beautiful girl in high school only to lose them to the football team captain the very next day.*

I woke the next morning and immediately checked my report. I had a KENPC of 485. Woo hoo! The football team captain was clearly a jerk and she loved me all along. I knew it. I’d always had faith in the wonderful, anonymous reader. Doubts? Pah!

Since then my KENPC graph has taken along the look of the Himalayas, with high peaks of many hundreds of pages read to low troughs of none. And it makes sense. For a start, many people don’t read every day, and even if they do they may not necessarily connect their Kindle to the internet until they’re ready to download their next book, only then passing on the data of where they’ve read up to. At the same time I’ve picked up more KU downloads, so it’s become almost  impossible to build a narrative as I’ve no idea whether I’m seeing one person reading 300 pages or one hundred people reading 3 pages (actually, I know it’s not one hundred people at a time – I wish – but you get the point). The point is, my short-term obsession has waned, settling down to monitoring my KENPC score as often as I do my sales (which is still far too frequent than is healthy).

Although it’s early days, I’m finding the new KU payment scheme is much better for me than the old one. I’m only halfway through the month, have had similar downloads than previous months but have made over three times as much money (if the $o.oo6 per KENPC figure widely publicised is correct). I’ve no doubt things will change as the scheme settles down but for the moment I’m happy.

The best part, though, was seeing my first reader, having enjoyed Second Chance so much they’d read it in three days, move on to Absent Souls and do the same thing. At least, that’s the narrative I’ve built in my head and it’s one delusion I’m happy to maintain.

So what about you? Are any of your books in Kindle Unlimited and have you had similar experiences? What are your thoughts about authors being able to remotely look over your shoulder and see what you and other readers have read? I’d love to hear from you.

*This never actually happened in real life, but I’ve seen enough movies to empathise.

 

Do you like intelligent thrillers? If so, join my mailing list and get one of my 5-star rated near-future dystopian thrillers absolutely free. The mailing list is guaranteed spam free and I will only contact you if I have a new book launch or an exclusive short story to share. To sign up, please click here. 

Why Amazon deleting reviews is a price worth paying

amazon_logo

Amazon is currently cracking down on what it sees as inaccurate or reciprocal reviews and it appears, at least from recent posts I’ve read, a number of authors have been affected. Amazon are using an algorithm to identify what they term as suspect reviewing patterns, as well as identify reviewers who they believe know each other, and blocking those reviews. Once blocked, because Amazon believe the reviews broke their reviewing terms and conditions, the reviewer can no longer leave any  future reviews. When challenged, Amazon have generally given automated responses along the lines of ‘we trust our algorithms and you have no right of appeal.’

Before I go any further, I want to make it clear I have every sympathy with the individuals concerned. Writing just one thoughtful book review takes time and effort, to do it over and over again is a considerable commitment. To be told, out of the blue, that everything you’ve written will be stripped from the site, would be one hell of a shock. Then there is the underlying accusation of cheating a system, one to which the reviewer has no right of reply, and the fact that once banned they can’t write any further reviews. It is being found guilty without trial and goes against everything we know as fair. Not only is it a personal affront, it means the authors of the books reviewed lose both the review and the rating as well. If (or possibly when) it happens to me, I would be furious too.

At the same time, Amazon has a problem. Customers no longer trust their review system and in some cases with justification. If you are selling a product on Amazon (any product, not just books) there are plenty of companies willing to give favourable reviews in return for a fee. The term for this type of behaviour is astroturfing and it happens on all the major sites where customer reviews play a part in the purchase decision making process. And it’s not just companies offering this service. I’ve been approached – both explicitly and implicitly – by authors asking to swap reviews. It hasn’t happened often, and I’ve always declined, but it does happen, and if a relatively obscure author such as myself has been approached then this is clearly something that some authors are happy to take part in. Astroturfing’s not a new process, it’s been happening since the first review sites were established and is employed by many companies large and small, but it has become so common in recent years it’s got to the point where customers have lost faith in product reviews.

The one thing you need to remember about Amazon is that their number one priority is to their customers. Everything they do is focussed on providing the best service to their customers. They are very good at this, and it’s the primary reason they have become so successful. Amazon regularly top the polls for best companies by as rated by consumers because they always put customers first, so it should come as no surprise that when their customers no longer trust the review system, Amazon decide to do something about it.

The problem for Amazon is how do they identify, out of the millions of products they sell and the tens or hundreds of millions of reviews on their system, which ones are the bad reviews. There are too many to analyse by person – I worked out that if you had one hundred million reviews and 1% were seen as problematic, it would take over one hundred man years to check them all – and it’s pure cost as far as Amazon are concerned. And it’s not easy. If you look at the books I’ve highlighted as Recommended Reads, each with a corresponding review on Amazon and Goodreads, almost all are by authors I don’t know personally, one or two are by authors I’d met previously through social media, and a number are by authors I’ve since got to know on social media, often because I’ve promoted their books. A handful have gone on to review my books. I’ve always been genuine with my praise and have never requested or expected a review in return – favourable or otherwise – but there are enough connections there for some people to question the validity of my reviews, adding to their mistrust of the system.

And customers regaining trust of the review system is at the heart of what Amazon are doing. So, rightly or wrongly, Amazon have decided to cut off the leg to save the body. They are doing this across all product areas, using an algorithm to identify suspect patterns and connections, and automatically removing reviews they believe could be false, banning those accounts highlighted from generating reviews. And this means some innocents will be caught up in the process. And while that’s bad news for those affected, Amazon see it as a small price to pay compared to their customer regaining trust in reviews.

But as an author, I want people to believe in the reviews of my books. I’m lucky enough to have received some great reviews, a number of them from other authors. I’d hate to lose these reviews but if it meant readers placed more trust in those that remain then so be it. We still have the opportunity of placing those reviews in the ‘Editorial Reviews’ section of the product page, it’s just they would no longer count as part of the overall star ratings and average.

Of course, I would prefer Amazon found a better way to clean up the review system, and as mentioned earlier, I have every sympathy for those wrongly caught up in this process, but if it provides a system readers trust, that can only be of benefit to all of us.

What do you think? Do you agree with me or do you think I’m completely wrong? What are your views on what Amazon is doing, or the review system in general? I’d love to hear from you.

 

Do you like intelligent thrillers? If so, join my mailing list and get one of my 5-star rated near-future dystopian thrillers absolutely free. The mailing list is guaranteed spam free and I will only contact you if I have a new book launch or an exclusive short story to share. To sign up, please click here. 

Is the world really ending with pay per page read?

End of the world

Image licensed through creative commons. Source: https://www.flickr.com/photos/brothermagneto/

Anyone even slightly interested in publishing will have seen a number of apocalyptic headlines recently regarding Amazon and their plan to pay authors by the number of pages read. Most of these articles have been either deliberately or accidentally misleading so let’s just cover the facts.

  • The new system only involves ebooks downloaded as part of the Kindle Owners Lending Library program (which is a benefit of having Amazon Prime Membership) or those downloaded by Kindle Unlimited (the pay monthly, download as many books as you want) subscribers.
  • Only authors who sign their books up to the KDP Select program (a program which offers authors benefits such as promotional days etc. in return for Amazon exclusivity) are involved in KOLL or Kindle Unlimited. It’s a voluntary program. You do not have to be part of KDP Select to sell your books through Amazon.
  • If an author sells a book, they get a percentage of the total sale price as before, regardless whether they are part of KDP select or not.

What this means is that Amazon aren’t revolutionising the publishing industry, just changing the terms of their own voluntary author program.

That said, this will have an impact on a number of authors. In the past, for any KOLL or Kindle Unlimited download, the author received a payment after 10% of the book had been read. This was to stop people gaming the system by downloading thousands of books they had no plans to read, just so an author received payment. The actual payment itself was calculated by a fund (or pot of money) decided by Amazon. These payments have varied month on month but have recently been as low as the $1.30’s per download.

Now indie authors being the entrepreneurs that they are, saw this 10% payment trigger and decided to react by publishing shorter books, often by cutting up longer novels into separate parts (I toyed with the idea myself but decided against it). This meant instead of publishing one, three hundred page novel, they might publish three, one hundred page serialised novel. The advantage being you only had to read ten pages (instead of thirty pages with the original novel) to trigger payment, and you get three payments instead of one (if the reader reads all three).

The new system has been designed to counter this. Paying per page read is, in theory, a fairer system. It encourages writers to publish novels in their most natural form and pays all authors equally. It is also more difficult to game. However, a lot of authors who’ve made a lot of money from the old system are quite understandably concerned about the new changes, especially as they were announced at short notice. Also, a number of people are unhappy with the premise that a book of 500 pages has more worth than one of 200 pages. Then there is the concern that this new system will change how authors write, forcing them to put a cliff-hanger at the end of each chapter to keep people reading.

My thoughts

I have some issues with the KOLL and Kindle Unlimited payments system but as a relatively new author the benefits of joining the program outweigh the potential downsides. I don’t have an issue with being paid per page ready, I think it’s a better system than the one they had in place before, but it’s not perfect. My main issue is that by all payments coming from a finite pool, as opposed to stating a fixed page fee, Amazon have made publishing into a zero sum game where authors are fighting each other for a limited amount of money. That said, this was the same in the old system and my sales aren’t large enough for me to believe my income is being significantly affected.

I have some sympathy with the view that a 500 page novel will now have a higher potential value than a 200 page novel. There is some fear that writers will start to pad out their books to gain a higher income, but I don’t believe this will happen, because readers get bored with bloated text and stop reading, and the one thing all authors want is for readers to actually read their books the whole way through.

While I’m sure some authors will change their style to add cliff-hangers at the end of each chapter, in reality all writers are want to write a compelling story that grip readers through to the end. We have a number of ways of doing that, through the development of compelling characters, a gripping narrative, the use of mystery and so on. I don’t see the new system changing how the majority write because wanting readers to read to the end is already an author’s primary goal.

I don’t plan to remove my books from the KDP Select program because of these changes but will be interested to see how much, if any, impact it has on my income. What I would love to have, as an author, is the ability to see where readers have read up to and if there is a pattern to where they drop out. This information could make a big difference to what and how I write, and if Amazon made this available for a fee, they could be sitting on a goldmine.

So what about you? What are your thoughts about the changes to the KDP Select program? Are you worried, intrigued or not bother? I’d love to hear from you.

 

Do you like intelligent thrillers? If so, join my mailing list and get one of my 5-star rated near-future dystopian thrillers absolutely free. The mailing list is guaranteed spam free and I will only contact you if I have a new book launch or an exclusive short story to share. To sign up, please click here. 

New Kindle announced – Kindle Aroma

Kindle Aroma

I don’t normally talk about e-reader technology but the latest announcement from Amazon has got me really excited. Called the Kindle Aroma, it’s been designed to address one of the reasons many people still prefer to read a book as opposed to the more convenient e-reader – its smell.

The Kindle Aroma comes with a small changeable scent ‘capsule’ that gently emits the evocative smell of paperback books whenever the Kindle is being read, giving the user the sensory illusion they are holding a real book in their hands.

“The Kindle Aroma has undergone extensive focus group testing,” said Angela Fripolola, Kindle Aroma Product Manager, “and the results have been beyond expectations. Over 95% of those taking part preferred the Kindle Aroma over our flagship product, the Kindle Voyage, with some refusing to hand them back at the end of the session.”

While the product will be shipped with the standard paperback scent, there are plans to release different types of book smells to match the type of book being read. “Our research team have identified a number of key scents, from ‘pristine newly printed’ to ‘mouldering in the back of the charity shop box’ and ‘fusty vintage first edition,’ along with ‘well-loved sticky fingered copy’ for our children’s books.” Ms Fripolola continued.

The new Kindle Aroma also replicates the sound of a turning page each time the screen is tapped to move on, with different sounds depending on how hard the screen is tapped. “We were going to add a torn page sound for the most extreme strength of tap,” Ms Fripolola said, “but it led to tears during testing so we took that option out.”

Also, in a response to the recent Clean Reader controversy, Amazon are considering offering their own user defined word filter called the Cursematron, which selectively adds curse words and increases the level of sex and violence for adults who enjoy reading MG and YA books but like a little more grit in their literature. The first book scheduled to be released under this programme is To Kill a f***ing Mockingbird.

 
Fool Me Once

You need commitment to succeed

commitment-quotes

I recently wrote about how difficult self-publishing can be in my post 5 self-publishing truths few authors talk about, and that it wasn’t automatically a road to fame and riches. It hit a nerve, with over 3000 views in less than a week – the equivalent to 2 months worth of views at my normal rate – and many of you who commented spoke about how the post represented your own experience.

One point raised was that it felt as if I was trying to put people off self-publishing and telling then not to try. This couldn’t be further from the truth. I would encourage anyone to write and publish a book. While I too haven’t had the fame and riches I’d hoped for (but not expected), I have no regrets about starting out on this journey, so much so I’ve published two books and am currently working on my third. The main purpose of the post was to make people aware of what they are facing. However, that doesn’t mean you just have to sit back and accept that fate.

Last week I spoke to Heather Hill, author of The New Mrs D, and she kindly sent me through a list of everything she did on her path to becoming an Amazon bestseller. As you can see, not everything she tried worked, but it is a great example of what you can achieve if you have the commitment to succeed, put the long hours of work in and refuse to take no for an answer. It also nicely mirrors the message from Kameron Hurley and the effort she put in to turn her writing career around.

  1. I started a blog, after gaining a decent following and wonderful feedback from my comedy twitter ramblings. It gathered momentum, people were reading me! And it was good.
  2. I bought ‘The Writers & Artists Yearbook and read everything in it that applied to my writer style and goals.
  3. I began writing my book. I did not stop to edit, I just kept going. Even on days when I felt like everything on the page was nonsense.
  4. I followed experienced authors through various social media channels; I observed them. I looked at them as a potential reader NOT as an author in training. I was picking up on the elements of their online persona that attracted me as a reader.
  5. I attended a few signings and talks from literary agents, getting real advice.
  6. I reached a halfway crisis of confidence. Got advice from a good friend to read ‘On Writing’ by Stephen King. Best move ever!
  7. I shared my writing with three friends that I knew would give me honest feedback and then did several rewrites.
  8. I employed the wonderful editing services of Flora Napier at Blueprint Editing.
  9. I rewrote again.
  10. I read three books on submissions to agents. They were Sex, Lies & Book Publishing by Rupert Heath Literary Agency, ‘Dear Agent’ by Nicola Morgan and ‘From Pitch to Publication‘ by Carole Blake
  11. I submitted to a total of thirteen agents after thoroughly researching the type of books and authors they were representing already. After six weeks, I was signed by an agent.
  12. I rewrote again, with suggested changes from my agent.
  13. We received thirteen publisher rejections. I gathered all of the editor comments and picked out the common themes – then rewrote again.
  14. I paid for a full manuscript report from Cornerstones.co.uk, got the report back, gave myself a few days to digest all of the advice and rewrote again.
  15. I decided to publish with agency assistance via the Amazon White Glove Programme.
  16. I made a list of everyone I knew personally and everyone I networked with in order to announce the release of the book via a one-off email. I explained that they weren’t on some circular mailing list; just that I wanted to share my good news with them all and thanking them for their support thus far.
  17. I blogged regularly via my WordPress site and shared my entire experience with followers on Twitter, Facebook, Google+, Pinterest, Instagram, LinkedIn and Stumbleupon.
  18. I sent contacted 29 book bloggers asking for a review (only 5 said yes) and 23 to Amazon reviewers (only 2 responded). I also contacted a number of women’s websites. Only 1 responded – Britmums, who agreed to an interview & feature but then stopped responding to my emails without a word.
  19. My book was launched on 4th July 2014, but hit the Amazon Best Sellers List two days beforehand… on pre-orders.
  20. A Kindle Daily Deal promotion on Amazon Australia rocketed my novel to no1 overall bestseller on the site in August 2014.
  21. I produced a hard copy of the book via Createspace and wrote to every major bookstore in Australia and some in the UK hoping they would consider stocking it. Everyone (eventually) declined – distribution problems to Australia and the UK were a major barrier. I had failed to realise Createspace only distribute to the US.
  22. In November, for personal reasons, I left my literary agency, who promptly and without warning unpublished my original ebook sending it crashing out of the Amazon chart and in to obscurity.
  23. In December 2014, I placed my book in a Kindle Free promotion for three days. In preparation, I entered news of the promotion to as many free Kindle book websites as I could find and applied for a BookBub promotion. Luckily, Bookbub accepted me, although I went with one of their smallest, cheapest genre lists. My book went to no4 in the Free Kindle chart overall in the UK and no 7 overall in the US during the promotion. It was downloaded 29,000 times in that three days. 17,000 of these downloads were on day one – the day of the Bookbub email.
  24. It is still in Amazon UK and US best sellers lists at the time of writing.

It would be very easy to read this list and say “well, it all came down to a BookBub promotion,” but that would be missing the point. Everything Heather did, the continual revisions to write the best book possible, the mailing list to get that initial exposure, sending out to bloggers to get good quality, neutral reviews – all provided a foundation that made her book attractive enough for BookBub to accept her submission.

So what do you think? Is there anything you’ve tried that worked for you and is not on the list? I’d love to hear from you.

Do you like intelligent thrillers? If so, join my mailing list and get one of my 5-star rated near-future dystopian thrillers absolutely free. The mailing list is guaranteed spam free and I will only contact you if I have a new book launch or an exclusive short story to share. To sign up, please click here. 

New KDP EU Pricing and what it means for authors

amazon

By now anybody who has published a book through Kindle Direct Publishing (KDP) will have received a long and very detailed email explaining the new pricing process for books sold within the EU to take into account the new sales tax (or VAT) laws that come into effect from January 1st 2015. I’ve seen a number of confusing comments on this on Twitter and via blogs so I thought I should try to capture the key points.

1. When you set up a price in KDP from January 1st it will be the price including VAT

In the past authors set up a list price and Amazon would then add the appropriate tax rate (at the time, 3%). This often led to confusion as authors would be unaware of this, put in a list price of £2.99 and see a sales price once live of £3.08.

Now when you set a price of £2.99 the customer will be charged £2.99, taking the guess work out of hitting a price point.

2. The sales tax laws have changed so goods are taxed in the country of the customer

This means that if a book is purchased from amazon.co.uk and sent to a customer in the UK, it will be taxed at 20% (not the 3% as in the past). If it is bought by a customer in Ireland it will be taxed at 23%. This, potentially, could have a big impact on author margins. Let me show you an example:

In the past an author would set a list price – tax of £2.90
The customer price would be £2.99 (£2.90 + 3% sales tax)
The author would earn commission (70%) on the list price – tax of £2.00

Under the new system the author sets a list price including tax of £2.99
Amazon would then remove the sales tax (e.g. 20% in the UK) leaving a list price – tax of  £2.29
The author would earn commission (70%) on the list price – tax of £1.60

So by keeping the same list price as before, we authors would have to absorb a 20% drop in earnings!

3. All list prices for existing books will go up in a one-off price increase on January 1st 2015

Every book listed for sale in the EU will have a one-off price rise on January 1st 2015. The amount of the price rise will depend on the Amazon store as local sales tax rates are different (20% UK, 19% DE, 5.5% FR, 21% ES, 22% IT etc.). This will be your new list price including sales tax. You can then change it to any price you want but the new price will always include sales tax, like the examples above.

So, if you have a book for sale in the UK at £2.99, Amazon will increase that price by 20% (UK sales tax) to £3.59.

4. The minimum 70% commission level will go up

Because the new list prices are inclusive of sales tax, the minimum price to receive a 70% commission will also rise. The new price points are:

For ebooks less than or equal to 3 megabytes, the new minimum list price requirements are £ 0.99 and € 0.99
For ebooks between 3 and 10 megabytes, the new minimum list price requirements are £ 1.49 and € 1.99
For ebooks equal to or greater than 10 megabytes, the new minimum list price requirements are £ 1.99 and € 2.99

5. Testing times

Clearly, this will be a testing time for self-published authors. Will customers accept a significant price increase in the markets with high sales tax, or will we have to accept a reduced margin in order to maintain our expected sales volumes. Only time will tell.

 

**Update: I’ve had a little more time to think these through and I have a couple more points to add below **

 

6. Amazon want you to pass on the price increase

This tax doesn’t just affect you as a writer, it also has an impact on Amazon (which was the intention). Because Amazon take their 30% from the list price – tax, they too will receive 20% (or more) less income). This is why they have increased the minimum level to hit 70% commission.

7. There may be more cross-border purchases

If authors decide to pass on the price increase there will be different price points in different European countries for the same book. This may lead to readers buying ebooks from the country with the cheapest price (because they have the cheapest sales tax).

8. This may not be the last we hear of tax increase

With the introduction of this new tax law, e-books are being taxed more heavily than paper book (which are taxed at 0% in many EU countries). There are already petitions on change.org asking the EU to tax e-books at the same rate as those in paper. The hope is that the e-book tax will be reduced. My guess is that the paper book tax rate will increase. We shall see.

If you have anything to add to this post, or if you believe I’ve made a mistake or misrepresented the information, please don’t hesitate in letting me know in the comments below.