Whoa--Amazon screws over a self-published author?

kaitie · Nov 4, 2011

Okay, I just saw this linked on Nathan's site. Author's blog link here.

The general gist is this: Author's book was mistakenly listed as free (down from $4.99) after B&N listed a free sample of the first three chapters. Amazon's system is apparently automated and it saw the sample and decided to price match to the sample.

He then sold something like 5000 copies in the four days it took to even get an answer on the problem--and then Amazon refuses to pay any royalties on those books.

Apparently, the only option for getting opted out of the price-matching thing is to take a lower 35% royalty (as opposed to the standard 70% offered at this price range).

Yeah. Sick. I feel awful for this author and can only hope it results in further sales.

What do you think? On the one hand, I can understand Amazon saying they aren't going to pay him for something they received no money on, but at the same time the author didn't want to have his book listed for free and Amazon is the one that screwed up. I feel like he should at least get something for the trouble, even if it wasn't full royalties. I guess I'm just someone who feels like if you screwed up you should be the one to try to make it right.

The royalties being the only way you can change that pisses me off, though. That is such a huge change, and it looks to me like the only reason for such a big discrepancy is because it makes the latter option so undesirable by comparison that few authors would opt in. What makes me angry, though, is that essentially what they're saying is that the only way to guarantee you aren't abused by their automated process is to pay them an extra 40% in royalties. That's lovely.

I also have a question--if Amazon drops the price to price-match, does the author get the lower royalties for that price point? In other words, if Amazon drops the price to $.99 automatically, does the author's royalty rate go down to 35% as well?

Just wanted to share this and see what people thought.

pangalactic · Nov 4, 2011

kaitie said:
What do you think? On the one hand, I can understand Amazon saying they aren't going to pay him for something they received no money on, but at the same time the author didn't want to have his book listed for free and Amazon is the one that screwed up. I feel like he should at least get something for the trouble, even if it wasn't full royalties. I guess I'm just someone who feels like if you screwed up you should be the one to try to make it right.

He did get something for it; 5000 new readers.

Flippant comments aside, I'm withholding judgement until I see sales figures for the book preceding this change. If he was only shifting a couple of units a week I don't see that he's owed anything - I'm pretty sure the publicity from this (it was all over Twitter when it happened) will have generated him more royalty-paying sales than he missed out on, if I'm right about his pre-price drop sales.

If I'm wrong, and it turns out he was selling pretty decent amounts anyway, then my view on the matter will no doubt change.

Amadan · Nov 4, 2011

I hope he doesn't think he's actually entitled to royalties for 5000 books.

Amazon should probably make a conciliatory gesture since it was their error, but those 5000 downloads would not have happened if his book hadn't been free.

Wayne K · Nov 4, 2011

I want this to happen to me

Terie · Nov 4, 2011

Amadan said:
...but those 5000 downloads would not have happened if his book hadn't been free.

This. Unless, as pangalatic said, the book was selling reasonably well before, then the only reason there were so many downloads was because it was free.

Take a look at AW member Merrihiatt's thread to see how fast free downloads rack up compared to paid sales.

Tettsuo · Nov 4, 2011

Amadan said:
I hope he doesn't think he's actually entitled to royalties for 5000 books.

Amazon should probably make a conciliatory gesture since it was their error, but those 5000 downloads would not have happened if his book hadn't been free.

I agree 100%. 35% is a huge gesture of generosity Amazon didn't have to do.

Alitriona · Nov 4, 2011

According to the author he checked to see if sales happened over night and the same six sales showed on his account the morning this began.

If he honestly believes he would have sold 5,000 books at the original price in that time-frame, he's fooling himself. Anyone encouraging him to believe it is doing him no favors.

It's horrible to lose control over book to the point it is offered free to download when that's not what the author wants. This guy agreed to Amazon's terms when he published and price match is part of what Amazon do.

I think he should have made more of an effort to make sure the two different files appeared to be different. I clicked on the screen shots and I would have taken them as the same product. I can't blame Amazon on this. I think this was his mistake and he should now make the most of it.

JimmyB27 · Nov 4, 2011

IMHO, Amazon screwed up, they pay.
If they'd mistakenly listed a physical book as free, would the publisher expect to be paid for them?

raburrell · Nov 4, 2011

I'll agree that it's highly unlikely the guy would've sold anything near those 5000 copies, but to me, this seems somewhat akin to piracy on Amazon's part. (albeit accidental)

JimmyB27 · Nov 4, 2011

Alitriona said:
If he honestly believes he would have sold 5,000 books at the original price in that time-frame, he's fooling himself. Anyone encouraging him to believe it is doing him no favors.

What does that have to do with anything?

It's horrible to lose control over book to the point it is offered free to download when that's not what the author wants. This guy agreed to Amazon's terms when he published and price match is part of what Amazon do.

They mistakenly price matched it to a sample. That's not what he signed up for.

pangalactic · Nov 4, 2011

Alitriona said:
I think he should have made more of an effort to make sure the two different files appeared to be different. I clicked on the screen shots and I would have taken them as the same product. I can't blame Amazon on this. I think this was his mistake and he should now make the most of it.

I was about to say the same thing. Just putting "Issue 1" across the bottom of the cover doesn't tell me that it's a different product, and I'm human. How could Amazon's algorithm be expected to tell the difference?

JimmyB27 said:
If they'd mistakenly listed a physical book as free, would the publisher expect to be paid for them?

That's a different situation, though, because the publisher would be out physical stock that costs something to produce and ship. Not so, here. The author can't demonstrate that he's actually lost any sales, and he hasn't lost any money by fulfilling those orders. There are people commenting on his blog that they feel bad for having got the book for free and that they'll buy his next release - they wouldn't have read him if the book wasn't free. I think he's come out of this a winner, and griping for lost money that he hasn't actually lost isn't the way to deal with this, IMO.

JimmyB27 · Nov 4, 2011

pangalactic said:
That's a different situation, though, because the publisher would be out physical stock that costs something to produce and ship. Not so, here. The author can't demonstrate that he's actually lost any sales, and he hasn't lost any money by fulfilling those orders. There are people commenting on his blog that they feel bad for having got the book for free and that they'll buy his next release - they wouldn't have read him if the book wasn't free. I think he's come out of this a winner, and griping for lost money that he hasn't actually lost isn't the way to deal with this, IMO.

Sooooo....pircacy is ok too, because there's no loss of stock...?

pangalactic · Nov 4, 2011

JimmyB27 said:
Sooooo....pircacy is ok too, because there's no loss of stock...?

I know you're joking, but that's not at all what I said. I don't see that this equates to piracy at all; he knew that if Amazon found the product listed at a different price they would match it. The differences in the way those products were presented are miniscule, and I don't think anybody can expect Amazon to download every other version of a product out there to check its contents.

Sheryl Nantus · Nov 4, 2011

I think this illustrates a point made in another thread - Amazon doean't have a CONTRACT with any of these self-published authors, they just have an agreement to Terms of Service.

Amazon can and will do what they decide to be the "right thing" for them and not necessarily the author. They can pay him or not pay him, they can jack the royalties up or down. There's no legal contract for them to keep to or to violate.

It might be something to keep in mind when rushing to Amazon with your self-pub projects.

Amadan · Nov 4, 2011

JimmyB27 said:
IMHO, Amazon screwed up, they pay.
If they'd mistakenly listed a physical book as free, would the publisher expect to be paid for them?

The publisher is paid for them. Amazon has to buy physical books before they can ship them.

raburrell said:
I'll agree that it's highly unlikely the guy would've sold anything near those 5000 copies, but to me, this seems somewhat akin to piracy on Amazon's part. (albeit accidental)

Not really, but I'll bet he's going to sell far more copies as a result of this than he would have otherwise.

kaitie · Nov 4, 2011

Tettsuo said:
I agree 100%. 35% is a huge gesture of generosity Amazon didn't have to do.

They didn't offer 35%. They offered nothing. They said "Sorry we can't pay royalties on those copies." The 35% comes into play as the way to get out of the price-matching plan. In other words, if he wants to get out of it so that the same mistake doesn't happen again, he has to agree to take lower royalties than he is currently guaranteed.

I think Amazon should at least offer something. I agree that the copies wouldn't have "sold" if they weren't free, but the fact that Amazon took several days to fix the problem (even after they said it was fixed) when the author clearly didn't want the book listed for free because he didn't want lost royalties says to me that Amazon should have at least offered him something for the trouble. I find the "we'll only not do this if you give us more royalties" element just outright offensive, personally.

I think part of what bothers me about this is that if the publisher wasn't Amazon, then the author is less likely to be screwed. The publisher would receive a particular amount from Amazon for the book, and then if Amazon dropped the price they're taking the hit, not the author because the author has already been paid by the publisher.

That's where this really irks me. If the author chooses to make a book free that's one thing. But if Amazon, as a seller, decides to do it without the author's knowledge (especially when erroneous), that's Amazon as a seller taking a loss. It bothers me that the author should be hit by the seller deciding to do any promotion.

Alitriona · Nov 4, 2011

Jimmhttp://absolutewrite.com/forums/newreply.php?do=newreply&p=6707168yB27 said:
What does that have to do with anything?

We are told over and over that pirating is not lost sales, that people who download a book for free are unlikely to have bought it. Anyone who has had a book priced as free on Amazon knows how the numbers clock up and how ridiculously fast they do. Again, mostly by people who would never have paid for the same book. These are not 5,000 lost sales(I think it was over 6,000 in the end).

Jimmhttp://absolutewrite.com/forums/newreply.php?do=newreply&p=6707168yB27 said:
They mistakenly price matched it to a sample. That's not what he signed up for.

It doesn't say anywhere on his screen shot that is a sample. It was his responsibility to make that clear. The author has as much responsibility in this as Amazon does, if not all the responsibility.

I'm sure it's hard to look at that number of downloads and know he won't see any money from it. Believe me, I get it. Been there with file-sharers and it's tempting to look at it as lost sales. I do understand the sick feeling at losing control over a creation even outside of the money issue.

Regardless, it doesn't change that based on his previous downloads he hasn't lost those royalties. You can't loose what you wouldn't have had in the first place.

kaitie · Nov 4, 2011

Sheryl Nantus said:
I think this illustrates a point made in another thread - Amazon doean't have a CONTRACT with any of these self-published authors, they just have an agreement to Terms of Service.

Amazon can and will do what they decide to be the "right thing" for them and not necessarily the author. They can pay him or not pay him, they can jack the royalties up or down. There's no legal contract for them to keep to or to violate.

It might be something to keep in mind when rushing to Amazon with your self-pub projects.

Yes! This!

AP7 · Nov 4, 2011

It's not even close to piracy. The downloads were authorized. At best there was a breach of contract or perhaps negligence (both a stretch), but even then, where are the damages?

kaitie · Nov 4, 2011

JimmyB27 said:
IMHO, Amazon screwed up, they pay.
If they'd mistakenly listed a physical book as free, would the publisher expect to be paid for them?

This is what I was trying to explain earlier, but think I'm doing a bad job explaining. Amazon would pay the publisher an up-front amount to sell the book. For print it would be usually 50% if I remember right. In other words, if Amazon then lists the book for a low amount, they are taking a loss on the book, but the publisher has still been paid.

They do this often. There have been plenty of cases where Amazon took losses on books by pricing them exceptionally low in order to squeeze the competition or to make a statement (for instance, pricing hardcovers at less than the price of ebooks to penalize publishers for what they considered high ebook prices). When this happens, though, Amazon is the one taking a loss and the publisher still gets paid. Another example would be Harry Potter, which many retailers priced discounted to the point that they didn't make a profit on it with the assumption that it would get customers into bookstores and those customers would then purchase other books as well.

Normally the author isn't hurt by these tactics directly (unless they're being screwed out of ebook sales or getting 1 star reviews because of pricing, but that's another story) because the publisher is still paid and therefore the author is as well.

This isn't happening here. I can't help but think it should be. It isn't right that Amazon's promotional plans would cost the author.

AP7 · Nov 4, 2011

kaitie said:
I can't help but think it should be. It isn't right that Amazon's promotional plans would cost the author.

Yes but what did it cost the author? If you want to claim Amazon was negligent or breached their agreement, you also have to show damages. Like, perhaps, he's owed a royalty based on the sales he would have made when it wasn't on sale, which sounds like it wouldnt have amounted to more than a few bucks.

JimmyB27 · Nov 4, 2011

Alitriona said:
We are told over and over that pirating is not lost sales, that people who download a book for free are unlikely to have bought it. Anyone who has had a book priced as free on Amazon knows how the numbers clock up and how ridiculously fast they do. Again, mostly by people who would never have paid for the same book. These are not 5,000 lost sales(I think it was over 6,000 in the end).

I'll remember this thread next time someone shouts me down for making this point wrt piracy....

kaitie · Nov 4, 2011

AP7 said:
It's not even close to piracy. The downloads were authorized. At best there was a breach of contract or perhaps negligence (both a stretch), but even then, where are the damages?

The damages are that the author didn't want his book listed for free, that it was done erroneously, and that Amazon took days to fix the problem and even then was less than helpful.

I used to sell books on Amazon. That letter this guy got? It's the same sort of thing that I used to get there. It's a giant company with the equivalent of form letters to handle service questions. I used to send emails asking legitimate questions concerning a sale or a customer or a question or what not and sometimes it took three tries just to get a reply that actually answered the question and showed that anyone had read it. I swear they have something that picks out key words and then sends back the right form response.

This isn't how authors should be treated. I guess for me it's more about what strikes me as moral and good. There was a problem and it was eventually solved, but the resolution sucked.

Yes the guy sold more copies than he would have otherwise, but he didn't want his book to be listed as free. I can understand that. I think the point is less one of should the author have been happy with it and more one of the fact that the author was unhappy and was treated poorly.

J. Tanner · Nov 4, 2011

It's kind of lame that Amazon is doing nothing for this author considering they were giving out gift cards to scammers (mostly, and a few legit customers too) for pointing out a few typos in a book.

But history shows that a author tends to come out ahead after a free period so here's hoping there's a silver lining for this particular author.

Alitriona · Nov 4, 2011

AP7 said:
It's not even close to piracy. The downloads were authorized. At best there was a breach of contract or perhaps negligence (both a stretch), but even then, where are the damages?

I agree it's not piracy. Just to clarify when I used piracy in my comments it's only to illiterate free downloads anywhere don't equal lost sales.

Whoa--Amazon screws over a self-published author?

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