Hamit: Amazon Pricing

Introduction: Jim C. Hines’ “Who Controls Your Amazon E-book Price?” relates the author’s problems with Amazon’s policies and responsiveness to pricing issues that have disadvantaged his self-published e-book. (Hines’ other titles are published by DAW Books.) His influential post gained an even wider readership when reposted on SFWA’s blog. I invited Francis Hamit to analyze some of his experiences with the giant online bookseller.

By Francis Hamit: Never ascribe to malice what can be explained by simple incompetence. I, too, have had these problems with making price changes on Amazon KDF. But it goes away fairly quickly and the money lost is minimal. I’m actually considering making all of my prices $2.99 or higher. I know from experience that lower prices do not generate enough extra sales to make up for the margin lost. At $2.99 I make three to six times as much per copy than I do at 99 cents. Sometimes you get the lower rate because Amazon distributes to over 100 nations but only pays that 70% on sales in the six where they have a presence online. Before I get all huffy about that, I have to consider those extra sales as incremental income I would not have gotten otherwise because I am not normally in those nations with e-books. It’s found money! I have observed, from years of doing business with them on these issues that Amazon.com runs extremely “lean.” That’s a polite way of saying that they are too cheap to hire enough people to do the work to provide decent service and that , while the customers come first, vendors like me are near the bottom on their list of priorities. They are currently trying to hire someone to fix that, but fixing it is going to require, among other things a big change in the corporate culture. I put in my application for that job, even though I am way past the sell-by date, because I know exactly what needs to be done. I don’t view that as a job, but as an opportunity to make a huge difference in how authors are treated. I don’t need a “job.”

The pricing they do on my print editions is simply what everyone else does. They are allowed to cut their price as long as they pay me mine. Because of the Robinson-Pattman Act, I can’t undersell them or offer a competitor of theirs better terms than they get. So I don’t By the way, our new audiobook releases are through ACX.com, which is part of Amazon, and again they are taking their own sweet time about getting them all up. On those they set the prices through Audible, which they also own. And they have an exclusive for the first seven years, so there are no competitors. Audible also has most of the market for audiobooks. Their system got me three great narrators for four short audiobooks and saved not just a lot of time, but also a lot of up-front money. People who sign up for their club can get these audiobooks free and they still pay us. What’s not to like about that?

So just don’t stand there, buy a book! Seriously, authors make more money from Amazon than any other online retailer. I’ve been doing this since 2004.