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Is Amazon Feeding The Kindle By Starving Createspace?

It's tinfoil hat time again.  I snuck into Mr. Quack's secret room and borrowed one of his.  To get it I had to break the code to unlock the secret box where he stores the alien abduction/blocking government surveillance gear (most of it is multi-purpose).  Chasing the snark I sent him after won't take long, so I better make this post quick.

 For some time I've been checking my book and ebook sales with a fervor and dedication unmatched by most religions.  But as time passes it has perturbed me more and more that so few of those sales are for the paperback versions of my books available through Amazon's Createspace.  I sell a couple of paperbacks a month and that number should be much, much higher. 

CS now distributes paperbacks to other retailers, so my paper books are not just available at Amazon, they're sold at bookstores across the net - from Barnes and Noble to Books a Million and to scores of other retailers.  So the books are out there for purchase in lots of places.  Plus, not everybody owns an ereader (yet) but everybody can read paperpacks.  Everybody has bought paperbacks for years. 

So why is it that my ebooks far, far, FAR outsell the paperbacks?

It's the price.  CS is a POD (print on demand) company.  Under the old system, indie authors had to pay big up front fees and pay to have their books mass produced.  Then they had to market and sell the books themselves.  I understand that Dan Brown used to sell paperbacks out of his automobile trunk.  But under the new POD systems, there are no upfront fees and the company will market and distribute your books if you enroll in the "pro" plan for $39 per year.  So most folks - nearly all indie authors these days - have long ago dumped the old paperback companies and are going with one of the POD companies. 

It's a great idea in theory and it would be a great idea in practice - except for the price structure.  A writer could opt out of the pro plan and put the books up on just Amazon and charge a "fairly" reasonable rate for them.  But everyone wants their books out in more venues.  So we opt into the distribution system.  That comes with big old royalties to Amazon.  Under the structure, a paperback that a writer could buy directly for just over $4 has to be sold for like $16.99 to net a writer $2.75 in royalties.  Ouch. 

And you know what?  $16.99 is a hell of a lot of money to pay for a paperback.  So very few buyers purchase indie paperbacks.  They skim over them and wonder what kind of nut thinks their book is worth that kind of money.  Most probably have a vision of authors expecting the Brinks truck to drive to their house and drop off money.  The big price tag keeps sales of indie paperbacks low.

I got to thinking about all of this the other day while I was doing my blog post for the Marianne's blog.  I do appreciate the fine folk at Amazon and CS.  As I wrote, I'd just appreciate them a lot more if they charged a lot less in royalties.  I even emailed CS and suggested the company fix the royalty structure.  I pointed out that selling more for less can work out well.  I suggested they just ask Walmart.

Then it occurred to me to wonder what it all means.  Amazon is the King of Marketing.  Why does Amazon have in place such a ridiculous royalty structure for paperbacks, when they charge nothing to a writer to sell on Kindle.  Not only that, but AZ just put in place a new royalty structure at Kindle where writers can make 70% of their set purchase price as royalties, instead of the former 35%.  Amazon clearly must know that they'd sell a lot more paperbacks if they lowered the royalty structure.  So why aren't they doing that? 

That's when it hit me.  Amazon is pushing the Kindle at the expense of every other platform and at the expense of writers who write for those platforms.  Amazon is feeding the Kindle by starving Createspace. 

It probably shouldn't come as such a surprise.  Amazon bought a little company called Mobipocket quite a few years ago so that it could siphon off the technology and use it to create the Kindle.  Once Amazon had drained the goodie out of the deal, it left Mobi sitting around to molder and hopefully die of its own accord.  I bet Amazon was surprised to learn that so many Mobi authors won't take their books off the Mobi platform until they get paid.  See, right now Amazon, which pays its Kindle and CS royalties religiously, is holding in its big corporate pockets a huge debt owed to Mobi authors who were signed up under contracts that no pay out would be made until sales reached $150.00.  Amazon hasn't changed that policy, even in today's reality when it could pay through Paypal accounts or direct deposits. 

Amazon bought Mobi to kill it.  Has it decided to do the same with CS? 

A little while ago Amazon was crowing because ebook sales for the Kindle were more than doubling hardcover and then paperback sales on the site.  Amazon's founder had predicted a few months earlier that the Kindle would kill print.  And then the sales predictions seemed to prove it out.  It was a self fulfilling prophecy.

If Amazon wanted to grow its CS affiliate, it'd be working on changing the royalty structure. It would put a structure in place that made it possible for a writer to sell a paperback for less than $10.00 and still make money.  Amazon would sell a lot more paperbacks and it would make more by charging less.  All of that is true but - it wouldn't help the Kindle.

Now, I've got to go.  I hear Mr. Quack's car pulling up.  He's bagged the snipe.  I've got to get his tinfoil hat back to its hiding place before I'm caught.