Amazon’s Bribe to Publishers: KDP Select and the $6 Million Fund

And why I’m giving it a try.

I published my first real ebook back in the end of October: Making Movies: A Guide for Serious Amateurs. I built the book in InDesign, spun off a color print-on-demand version through MagCloud, and then painstakingly prepared ebook formats for the iBookstore, Amazon Kindle, and Barnes & Nobel Nook. Within a week, it was widely available and actually began to sell.

The Kindle Owners’ Lending Library

Not long afterwards, Amazon.com sent a chill through the publishing industry by announcing that Kindle owners who were also Amazon Prime subscribers would be able to borrow books — for free — from Amazon.com. The program is called Kindle Owners’ Lending Library and its an obvious ploy by Amazon.com to make its Kindle hardware more attractive to readers. After all, you must have a Kindle — the actual device and not a Kindle app on an iPad or computer — to borrow the books for free. So for those readers who don’t need all the features of a real tablet computer, this program makes a Kindle a bit more attractive.

I immediately questioned one of my publishers in its private Facebook group:

As an author, I’m wondering how Peachpit’s participation in this program (if they do participate) will impact royalties.

After all, I don’t earn royalties from borrowed book; I only earn royalties on purchased books. Apparently, I wasn’t the only one thinking about this. The Mac Observer published a piece titled “Amazon’s Lending Library Raises Publisher & Author Hackles” that explored the program and responses to it in some depth.

In the Facebook group, the publisher’s response was quick and to the point:

[Publisher Name] is not participating.

I found this reassuring. The reason: If readers knew they could get my books for free, they might stop buying them. If they stopped buying them, I would not be able to earn a living. Pretty simple, no?

So I saw the program as a threat to my livelihood and was glad to hear that my biggest publisher was not going to participate.

Fast Forward to Last Week

On Thursday, I got an email message from the Kindle Direct Publishing service. That’s the service publishers use to get their ebooks for sale on Amazon.com. It started like this:

We’re excited to introduce KDP Select — a new option dedicated to KDP authors and publishers worldwide, featuring a fund of $500,000 in December 2011 and at least $6 million in total for 2012! KDP Select gives you a new way to earn royalties, reach a broader audience, and use a new set of promotional tools.

It went on to say that if I opted to include my book in the Kindle Owners’ Lending Library, I could get a cut of a monthly $500,000 fund based upon the total number of times my book was borrowed. Of course, Kindle owners would be attracted to these books because they were free to borrow. And now I could get a royalty payment on a borrowed book.

It seems like win-win-win:

  • Amazon wins because it gets more books in the Kindle Owners’ Lending Library, thus enhancing the value of the Kindle and Amazon Prime programs.
  • Kindle Owners with Amazon Prime memberships win because there are more books available to borrow for free.
  • Authors/Publishers win because they actually get paid when people read their work.

I thought long and hard about why I might not want to give this a try with Making Movies.

The only drawback for me as a publisher is that I had to give Amazon.com the exclusive right to sell/loan my ebook for at least three months. I could not distribute an ebook version of the title anywhere else — not on Apple’s iBookstore, not on Barnes & Nobel, not on MagCloud, and not even on my own website or blog.

I looked at the sales figures from all the places my book appeared. I’d already sold more copies with Amazon.com than with all of the other retailers combined.

It was a pretty easy decision.

So today I enrolled Making Movies in KDP Select.

The way I see it, three months is not a very long time. If I fail to bring in enough royalty money during that period to continue allowing Amazon to have an exclusive on my ebook, I’ll drop out of the program.

And I know of at least one other author who has enrolled his title: Andrew Dambe with his novel Soleá. (I started reading it; it’s a neat book.)

It’s worth a try, right?

Shoppers, Do Your Homework!

Slick product packaging and marketing ≠ best products

mophie juicepackThis morning, while on Google+, I read an update by one of the people in my circles. He was recommending a product called mophie juice pack powerstation. This is a portable battery device that you can use to charge cell phones and tablet computers when you’re on the go and a regular charging source is not available.

Lenmar PowerPortI’m interested in devices like these. In fact, the other day, I’d added the Lenmar PowerPort Wave 6600 to my Amazon.com Wish list. At first glance, this product seems to do the same thing.

There is, however, a $30 difference in price, with the Lenmar being the cheaper of the two alternatives.

Making an Objective Comparison

I looked briefly at the two devices. The mophie was 4000 mAh; the Lenmar was 6600 mAh. I thought higher was better. So I queried the person who’d recommended the mophie. His response was that if based solely on power, the Lenmar looked better. He then talked about portability and battery quality, suggesting that the cheaper unit might not be as good quality as the other.

Of course, I had to dive in and find out. So I looked up the specs on both of them — the above links will take you there. What I found was that Lenmar’s rather plain vanilla site provided specifications that included battery type, voltage, capacity, unit size, and unit weight:

Lenmar Specs

The specifications info on mophie’s site, which was slick looking and modern with lots of trendy lowercase product names and headings, didn’t provide any details about the battery at all, although it did provide unit dimensions (it was a bit smaller) and shipping weight (which I suppose could be helpful if I wanted to carry it around in its original packaging):

mophie specs

To be fair, mophie’s features page did mention that its battery was 4000 mAh and it could output up to 2 amps.

I downloaded the user guides for both, looking for more information. Lenmar’s was a 3-page black and white guide with two of the pages in languages other than English. It provided lots of details on what the device could do and how to use it. mophie’s was a slick-looking 2-page color flyer with a first page that read like a marketing press release. (How else could you describe a heading that read “Here’s a rundown of why this is the perfect device”?) Nowhere did it say what kind of battery the device had or how much the device weighed.

Then I started looking at actual features. The Lenmar device had two power out ports: one at 1.0A max and the other at 2.1A max. They could be used together for a total of 3.1A max output. That means I could (theoretically) power an iPhone and an iPad at the same time. Or an iPhone and a GoPro. Or two GoPros. The mophie, by comparison, had just one power out port rated at 2.1A max. (This, by the way, contradicts what the website said — 2A — but it’s close enough.) That meant I could only power one device, like a single iPhone, iPad, or GoPro, at a time.

So here’s what I saw:

  • Lenmar had a basic Web site and ugly manual pushing a product that had a 6600 mAh battery and two ports capable of charging two devices at once. Price: $44 on Amazon.com.
  • mophie had a slick looking Web site and manual pushing a product that had a 4000 mAh battery and one port capable of charging one device at a time. Price: $80 on Amazon.com.

Which one do you think I picked?

Questioning Motivations

I started bring up these points on Google+ in comments to the original post about the mophie unit. I was very surprised that the person who posted the recommendation about the mophie didn’t seem the least bit interested in seeing whether the Lenmar unit was a better value for the money. Instead, he claimed he was familiar with mophie and that he knew their products were worth what they charged.

Period.

Then I noticed that the same person had made several other product recommendations recently and I began to wonder whether he had some motivation to push certain products — beyond his own experiences with them. And that’s when I realized that I was wasting my time trying to have an informed discussion about the two alternatives.

The Point

Yes, this blog post does have a point. A few of them, in fact:

  • Don’t take social networking product recommendations at face value. You can never be sure about the motivations of the people who push products.
  • Don’t make a purchase decision without examining alternatives.
  • Don’t let slick or trendy looking product design, websites, or marketing documents blind you to a product’s true feature set.
  • Don’t think that the highest priced product is always the best quality alternative. These days, price is not always an indicator of quality.
  • Do choose products that meet your needs at a price you’re willing to pay.

Is the Lenmar product better? I don’t know. It certainly seems to have a better feature set for nearly half the price. That’s enough to get me to try it.

Dear Amazon: Exactly How is THIS Prime?

I know how to use a calendar; do the folks at Amazon.com understand what “two days” means?

A few years ago, I bought into an Amazon.com Prime membership. For $79/year, I get “free two-day shipping” on items that qualify for Amazon Prime. Almost everything I buy qualifies.

Today, I needed to order an extra long iPad 2 charging cable and an SD card. I got on Amazon, added the items to my cart, making sure they were marked “Prime,” and checked out. Note the last screen before I completed the checkout process:

This isn't Prime

Today is November 2. Two days from now is November 4. Seven days — or five business days — from now is November 9.

It says Prime. I paid for Prime. I paid for 2-day shipping.

Why is this item delayed?

So now I’m faced with a dilemma: do I blow it off and just settle for something less than I paid for or do I waste an hour of my life with the frustration that would result from contacting Amazon.com?

What would you do?

Is That Deal Really as Good as They Say?

Amazon misstates retail prices to inflate savings.

It’s a twist on my Safeway whine from last week. Stores — including online stores — purposely misstate the retail or regular price of items to make their own prices look better.

Amazon's PriceHere’s proof. I was distracted by a tweet that took me to Amazon.com and was further distracted by a “Lightning Deal” offer for the Garmin nüvi 500 GPS. Here’s the deal as it appeared on Amazon.

Wow! I thought to myself. A $499.99 GPS for only $169.99! That’s a savings of $329 or 66% off retail price!

I’m shopping for a new GPS — something with a bigger screen that still supports topographic maps — and thought this might be an excellent deal for me. So I went to the Garmin Web site to get the full details about this particular model.

Real Retail PriceWhat did I discover on Garmin.com? That the suggested retail price of this GPS is not $499.99, as Amazon advertises. It’s $299.99. That’s $200 less.

Doing some math, I calculated a savings of only $129 or 43% off the real retail price. Admittedly, that’s still pretty good, but it’s a far cry from 66%.

Not Such a DealAnd the deal isn’t so sweet when you look at Amazon’s regular (not “Lightning”) price: $232.38. Now you’re saving only $67 or 22% off retail price, despite the fact that Amazon claims you’re saving $267 or 54%.

My point? Don’t believe retail prices as advertised on reseller Web sites or in stores. Do your homework. Don’t let fantasy savings con you into making a purchase decision before you have all the facts.