(Outrage) Amazon adjusts price and royalty...

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...unilaterally.

http://www.jimchines.com/2012/02/amazon-ebook-price/

The above is from the blog of a successful author, who self-publishes some e-books and who also has a number of books published through ordinary means.

The summary is that Amazon decided to reduce the list price of one of his titles from $2.99 to $0.99; without letting him know in advance, let alone asking him or giving him a reason. His royalty has gone down accordingly, from $2.09 to $0.35. Amazon's Kindle And Direct Publishing Terms And Conditions grant Amazon the right to do this. To wit:

5.3.2 Customer Prices.To the extent permissible under applicable local laws, we have sole and complete discretion to set the retail price at which your Digital Books are sold through the Program. We are solely responsible for processing payments, payment collection, requests for refunds and related customer service, and will have sole ownership and control of all data obtained from customers and prospective customers in connection with the Program.

This is something that ordinary publishers, be they major or small press, often have the privilege to do. It is impossible (or unwise) for self-publishing writers to ignore Amazon because doing so would cut them out from most of the e-book buying market. This means that people have to accept that this can happen to them. All they can do is make their work available through other online sources at prices (and royalties) that they favor and hope that enough of their readers know about those sources through the writers' blogs and will choose to buy from there instead; but the consumer is an inherently selfish animal, and will gravitate towards buying at a price that is favorable to them, without regard to the consequences for the writer.

One of the advantages of self-publishing is that the writer can set the price and by extension, the royalty. I have to ask, then, that if Amazon — which is arguably the number one enabler of self-publishing — retains the right to set the price, then is this really self-publishing?
 

merrihiatt

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Those are the terms of the agreement, all right. I know I've read the Terms of Service countless times. Sometimes I think writers people click the "I accept" button without even glancing at all the requirements.
 
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amergina

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Jim Hines (jchines) is a member of AW, just so you're aware.

I think the lesson I learned from his post is twofold:

It reinforces what I've heard from multiple sources about diversifying your writing income streams--that is, don't put it all in one basket. Even the giant Amazon basket.

It reinforces my own belief that Amazon is not out to help authors, but to make money. If they can make money by being nice to KDP folks for the time being, they will. But to think that they're being altruistic to self-published writers out of the kindness of their heart is--how can I say--dense.

But I don't think Mr. Hines is outraged in a HULK SMASH way. I think he's a bit annoyed and wants folks to know his experiences and to warn of the fine print.
 

thothguard51

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My understanding of the way Amazon pricing works; if Amazon lowers the price from 2.99 to .99, at their discretion, Amazon will still pay the higher royalty percentage. Unless the author has the book listed elsewhere for a lower price, at which point Amazon will lower or match the price and pay the author the royalty based on the new percentage.

Why I would not want to give my book away for free on another distributors site because Amazon will then lower my Amazon price to free as well, and Amazon being the larger would cause me to lose more...

I wonder if this author has his work listed at other sites for lower prices...

The good news is that the author has the right to pull the book if they don't like Amazon's pricing or policies. I have read where Amazon has raised prices back once the author contacts them, so long as they do not have the work listed elsewhere for less...
 

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My understanding of the way Amazon pricing works; if Amazon lowers the price from 2.99 to .99, at their discretion, Amazon will still pay the higher royalty percentage. Unless the author has the book listed elsewhere for a lower price, at which point Amazon will lower or match the price and pay the author the royalty based on the new percentage.

Why I would not want to give my book away for free on another distributors site because Amazon will then lower my Amazon price to free as well, and Amazon being the larger would cause me to lose more...

I wonder if this author has his work listed at other sites for lower prices...

The good news is that the author has the right to pull the book if they don't like Amazon's pricing or policies. I have read where Amazon has raised prices back once the author contacts them, so long as they do not have the work listed elsewhere for less...
hmmm. even interestinger
 

amergina

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My understanding of the way Amazon pricing works; if Amazon lowers the price from 2.99 to .99, at their discretion, Amazon will still pay the higher royalty percentage. Unless the author has the book listed elsewhere for a lower price, at which point Amazon will lower or match the price and pay the author the royalty based on the new percentage.

Why I would not want to give my book away for free on another distributors site because Amazon will then lower my Amazon price to free as well, and Amazon being the larger would cause me to lose more...

I wonder if this author has his work listed at other sites for lower prices...

The good news is that the author has the right to pull the book if they don't like Amazon's pricing or policies. I have read where Amazon has raised prices back once the author contacts them, so long as they do not have the work listed elsewhere for less...

If you read the blog post, the problem was that Amazon lowered the price without it being cheaper anywhere else, and did not pay the 70% on the original list price.

There was a time when Amazon did lower it because JCH had a Holiday sale and Kobo was slow about bringing the price back up. He's not complaining about that. After the Kobo price when back up, he worked with Amazon to return the price the the list price. That happened. Then later, Amazon lowered it again. It's that second time he's taking issue with, since the book is not lower anywhere else, but Amazon isn't paying royalties on the list price.
 

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I wonder if this author has his work listed at other sites for lower prices...

Nope. From the blog post:

"So when I saw that Amazon had dropped the price again, my first step was to check other listings. Everywhere else, the book was on sale for its list price of $2.99. I saw no external reason for Amazon to drop the price."

ETA: Which I see amergina has already pointed out. My bad for posting before reading the last comments. Anyway, I've e-mailed the KDP team four times asking why the price was lowered. So far, I haven't gotten a satisfactory answer beyond, "Our Terms of Service say we can change your price."
 
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merrihiatt

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Nick's comments have played out in my experience as being true. I have offered an e-book free on other sites and Amazon price-matched. I then changed the price from free back to the original price and it was changed through all sales channels and eventually at Amazon. I have also contacted Amazon directly and asked them to increase the price as no other sales channels were offering it at a lower price.

Part of the problem comes from Amazon's own policy of price-matching, even as they state in their Terms of Service that you cannot offer your e-book at a lower price; it needs to be the same price through all sales channels. But, when an author does offer an e-book at a lower price (breaching the Terms of Service), Amazon does (at their discretion) price-match, it can be difficult to get the price changed back to a paid price because if it is available at a lower price elsewhere (even through some obscure sales channel you've never even heard of), Amazon is in their rights to keep the price lower. Even if it isn't available anywhere else, it clearly states in the Terms of Service that Amazon can change the price at their discretion. Heck, they can remove your book altogether and ban you from their program without even giving a reason. It's wise to read all that fine print and I still maintain that diversity is a good thing.
 
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Sometimes I think writers click the "I accept" button without even glancing at all the requirements.

Lots of people do this, every day; not just writers.

It reinforces my own belief that Amazon is not out to help authors, but to make money. If they can make money by being nice to KDP folks for the time being, they will. But to think that they're being altruistic to self-published writers out of the kindness of their heart is--how can I say--dense.

That's a good word for it. :) I hope nobody who deigns to self-publish would be this dense. Maybe I'm naïve.

The good news is that the author has the right to pull the book if they don't like Amazon's pricing or policies.

This would pull the author away from most of the e-book buying market. (The linked article's title says it all: "Amazon: We have 70-80 percent of e-book market.") Amazon are vertically integrated in the extreme: they control the supply, the listing, and the delivery. If you have a Kindle, there's almost no point in buying e-books from any other seller anyway because theirs is a proprietary format. It would be like if, in the 80s, Sony had the world's biggest video store chain; a chain that predominantly sold the Betamax format; and if they owned the wholesale distributors and the videotape duplicators as well; and again, all of whom would have exclusively dealt in Beta.
 
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thothguard51

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I did read but missed the point about not having his work elsewhere for lower price. I know he is also with B&N.


We may not like Amazon, but we are not tied to them and have options. I might also note, Amazon is not the only company that has clauses in contracts that hold them harmless for any unintentional errors. The key word is unintentional...
 

shaldna

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While this sucks, I really don't have anything to say other than if the terms and conditions stated it, which they did, and someone signs it, then that's basically tough luck.

This, I think, is more about making sure you read and reread all contracts and query anything that you're not comfortable with or that you don't understand.
 

These Mean Streets

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It was just a cautionary anecdote to let people know the possibilities of what could happen. That's all. Not a call to arms or a rant or a petulant foot stomp.

I see it as basically an eye opener for those few folks out there who solely publish with Amazon, in the misguided belief it will be their true path to success and riches.
 

Terie

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It was just a cautionary anecdote to let people know the possibilities of what could happen. That's all. Not a call to arms or a rant or a petulant foot stomp.

Really? Then why do you suppose the OP put the word 'Outrage' as the first word in the thread title? Not to mention that using that word seriously mischaracterises the blog post the OP linked to. I think that riling people up is exactly what the OP was trying to do, not only because of the choice of thread title, but also because of a history here at AW of doing exactly that.

I personally am not outraged that Amazon followed through, so much as I am outraged that they put such language in their ToS in the first place. Of course, I'm one of those who is outraged at much of what Amazon does.
 

These Mean Streets

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Really? Then why do you suppose the OP put the word 'Outrage' as the first word in the thread title? Not to mention that using that word seriously mischaracterises the blog post the OP linked to. I think that riling people up is exactly what the OP was trying to do, not only because of the choice of thread title, but also because of a history here at AW of doing exactly that.

I personally am not outraged that Amazon followed through, so much as I am outraged that they put such language in their ToS in the first place. Of course, I'm one of those who is outraged at much of what Amazon does.
Actually, I was talking about Jim Hines' article, not Op's post.
 

brainstorm77

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I've read Jim's blog post. He didn't offer the title cheaper anywhere else. I would like to know why Amazon lowered the price if it wasn't to match a price elsewhere.

I've been trying to get one of my titles set to free with no avail. I've been reporting the lower price for days and nothing.
 

brainstorm77

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While this sucks, I really don't have anything to say other than if the terms and conditions stated it, which they did, and someone signs it, then that's basically tough luck.

This, I think, is more about making sure you read and reread all contracts and query anything that you're not comfortable with or that you don't understand.

I second this. I did read the terms of service before clicking accept with Kindle Direct.
 

veinglory

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I think his post offers the interpretation that it was probably a glitch/mistake--but one Amazon were complete unapologetic about because they can do whatever they want.
 
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This, I think, is more about making sure you read and reread all contracts and query anything that you're not comfortable with or that you don't understand.

The question keeps being raised, however: if you object to Amazon's terms and conditions, then what? Are you going to boycott Amazon and by doing so, cut yourself off from 80% of the e-book market? Monopolies suck. It's kind of funny that the world's biggest enabler of self-publishing has way tighter control over the e-book market than the major publishers have over the "dead tree" market.
 

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The take away from Jim's article is, I think, not that he signed the Terms and Conditions and so he's stuck with Amazon doing whatever they want with his list price. It is that the Terms and Conditions, and Pricing Page are written in a convoluted and contradictory way in that all the examples given are what happens to the royalty rate when a title is price matched. There is no language (other than if you feel a price was changed in error) to address a title's price being dropped for reasons other than being price matched.

So in Jim's case he was aware that Amazon could change the price whenever they wanted but the only language/examples ever given by Amazon on how this would work out is in the context of price matching. If an author or publisher using the KDP program reads through the Terms and Conditions and Pricing Page they are going to come away with the idea that as long as they never offer their title for less anywhere else the list price they set will stay in effect. (And yes, Section 5.3.2 pretty much negates everything put forth in the Pricing Page, it's true. But notice how all of the examples on the pricing page are different, and the emphasis on price matching. I really do think this was written to deflect attention from Section 5.3.2.)

I've been watching what is going on with Jim because our plan is to distribute Eggplant titles through Amazon. We'd be stupid not to since they do have such a large market share of e-book vending. (We're also distributing through B&N and Smashwords because it is stupid to put all of our eggs in one basket.) I've been especially concerned with how Amazon handled the situation. Yes, they reinstated the price when Jim contacted them. But they only paid him royalties on the .99 list price for the books sold during that time. They haven't told him why the price was dropped, and they most likely won't. They don't have to explain what happened, why or what they're going to do in the future to make sure mistakes like this don't happen again. Which is about how I expected it to play out.

So what this means--at least for us--is that when we start releasing titles this summer we've added another item to our daily to do list: Check Amazon prices on each title. That way if something similar happens we can catch it quickly and have it fixed just as quickly.
 
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Are you going to boycott Amazon and by doing so, cut yourself off from 80% of the e-book market?

The numbers I've seen posted suggest that Amazon's e-book market share has dropped substantially over the last year or so; which makes sense, because there'd be little point trying to get people to agree to exclusive sales on Amazon if Amazon already had most of the market.

The primary reason I have for selling through Amazon is that their search tools are light years ahead of the competition. B&N and the rest are OK if you know the book you're looking for, but aren't very good if you know the kind of book you're looking for and just want to see which books are available. I've probably found half the books I've bought on Amazon in the last decade through my recommendations list.
 
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The numbers I've seen posted suggest that Amazon's e-book market share has dropped substantially over the last year or so; which makes sense, because there'd be little point trying to get people to agree to exclusive sales on Amazon if Amazon already had most of the market.

It might also be because Amazon entered the electronic book market with a huge share of the "dead tree" book market already in hand, and a large number of the people who would be inclined to buy books online already hooked into them. So, they started out with a huge advantage and they were quickly able to leverage it into electronic books.

The only way for Amazon to go from there, in terms of market share, was down. Such was inevitable as soon as competition came to the scene.

The primary reason I have for selling through Amazon is that their search tools are light years ahead of the competition.

Naturally, their superior market share exists for a reason. They actually have something to offer consumers; like this.

This seems to be the best conclusion here:

we've added another item to our daily to do list: Check Amazon prices on each title. That way if something similar happens we can catch it quickly and have it fixed just as quickly.

Amazon's customer service (really, supplier service in this case) permitting, yes; the impression I have got so far is that they are somewhat slow and getting a real person to reply to you is not easy.
 
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