Amazon KDP Select Double Fail

A contractual failure followed by a customer service failure.

As detailed in this blog post, I enrolled one of my ebooks into the Amazon.com KDP Select program. Almost immediately, I began seeing weird numbers on my royalty statements for the book: Sales at unit prices of 9¢, negative royalties, free books in a period when they were not authorized.

I immediately began a long and frustrating email correspondence with Amazon.com’s “customer service” staff. In this blog post, I’ll share the chain of correspondence that began in January and ended just the other day.

My original message, sent on or around January 10, 2012:

Subject: WTF? Positive unit sales with negative royalties?

This had better be a mistake.

1/7/2012 shows net unit sales of 13 yet net royalties of MINUS (-) $1.40. How is that even possible? Also, why is the royalty rate only 35%? I am set for 70%.

1/7/2012 also shows net unit sales of 169 at 70% royalty. The book sells for $3.99, yet you’ve calculated an “average offer price” of 9¢. How is THAT possible? I never authorized a selling price less than $3.99 except for 12/25 (free).

What’s going on here? Please explain WITHOUT using some canned response that does not apply to my situation.

The response from someone named Prasanna came on January 12 and, as expected, it contained a bunch of canned information:

Hello,

I can certainly understand your concern about the reports reflecting the royalties in negative. I checked our records and was able to confirm that the all the sales made in the week ending 01/07/2012 were completely free sales due to the free promotion you offered for your book.

However, among those free sales, I noticed that there was a refund that was made for your book which was for a sale made in the previous month. It is due to the refund for the sale made in the last month, the royalty amount is appearing as -$1.40.

Further, with reference to the 35% royalty option, I’ve found that one or more copies of your book were sold outside of countries where the 70% Royalty Option is currently applicable. The 70% Royalty Option is only applicable for sales to customers in these sales territories:

Andorra
Austria
Belgium
Canada
France
Germany
Italy
Liechtenstein
Luxembourg
Monaco
San Marino
Switzerland
Spain
United Kingdom (including Guernsey, Jersey and Isle of Man)
United States
Vatican City

Sales to customers in other locations will receive a 35% royalty. These sales are recorded separately in your royalty reports at the 35% rate.

At this time, the reports don’t show the specific location where your titles were sold. I’ve shared your request for this feature with our business team for consideration as we make future improvements.

Thanks for using Amazon KDP.

This did not make sense. I had authorized only one day as a giveaway for my book: December 25, 2011. That’s the day I advertised it as being free on Twitter, Facebook, and elsewhere. There should be no free book sales in January at all.

I replied on the same day:

I’m sorry, but this is NOT true. The book was offered for sale for free on just one date: 12/25/11. That is NOT in the week ending 1/7/11.

Kindly explain why there were unauthorized giveaways of my book.

This time, Anuradha replied on January 14:

Hello,

Please know, the Prior Six Weeks’ Royalties report shows the sales you’ve made over the past 6 weeks. The total “units sold” and the “units refunded” will fluctuate each week depending on which day you view the reports and the number of sales made over the combined previous six weeks (to date). Keep in mind the “Week ending” column shows the date that the week ends instead of the week beginning.

Thus, as communicated earlier, the refund which is reflects in week ending 01/07/2012, was for a sale made in the previous month. Hence, the royalty amount is appearing as -$1.40, in week ending 01/07/2012.

Further, the price at which we sell your book may not be the same as your list price. This may occur, for example, if we sell your book at a lower price to match a third party’s price for a digital or physical edition of the book, or Amazon’s price for a physical edition of the book and it appears that your title was price matched with a third party’s web site (to match the competitor’s price).

I hope this information is helpful. Thanks for your understanding and for using Amazon KDP.

This information was not helpful. There could not be any “price matching” because the book was available only on Amazon.com due to their KDP Select requirements.

I replied on the same day:

I did not authorize price matching. At least I did not intend to. If I did, kindly tell me where I can de-authorize it.

There is no other version of the book to match to. Amazon has an exclusive for the ebook title. THAT WAS REQUIRED BY AMAZON. The only currently available print copy of the book sells for $14.99. How is 9¢ matching that?

You are obviously picking prices out of thin air and it MUST stop.

On January 18, Violet replied:

Hello Maria,

Our price for your title, Making Movies: A Guide for Serious Amateurs is $3.99 and it was never offered for $0.99. You can confirm the price here:

http://www.amazon.com/dp/B005ZSZMCS

I hope this helps. Thank you for using Amazon KDP.

Of course, this didn’t help either. I replied on the same day:

No, this does NOT help. Your reports indicate that you sold over 100 copies of the book for 9¢. WHY? You told me it was price matching. There is no price matching since Amazon has an exclusive on the book.

WHAT IS GOING ON? It certainly seems to me that you are either lying on my royalty statements or selling the book for a lower than authorized price. Which is it?

Violet replied again on January 21:

Hello Maria,

I’ve raised a request to the concerned department to check why your title was offered for a lower price in the week ending January 7, 2012.

I will contact you with more information by the end of the day on Wednesday, January 25.

Thanks for your patience.

And then again on January 30:

Hello Maria,

I wanted to send you a quick e-mail to let you know that I’m still researching on this issue. It usually takes 1-2 business days for this sort of research, but in this case it’s taking a little longer. I’m very sorry about this delay.

I’ll be in touch shortly with an answer for you. Thanks for your patience.

I guess “shortly” has a completely different meaning to the folks at Amazon.com than it does to most folks. I didn’t hear from Violet again until March 20 — more than two months after my initial support request. She finally admitted that Amazon had screwed up:

Hello Maria,

I apologize for the delay in getting back to you.

Your books’ promotion did not occur as scheduled on December 25th, and began instead on January 6th. A technical error then caused the promotion period to last longer than expected, but this issue has now been resolved.

We’re sorry for the inconvenience this may have caused. Thanks for your understanding.

So let’s get this straight:

  • Amazon did not do my free book promotion on the day I authorized it.
  • All the advertising I did that day to generate interest in a free copy of my book was not only wasted but must have looked like a cheap lie to the people who followed the link and couldn’t get a free book — thus damaging my credibility.
  • Amazon then ran the free book deal for “longer than expected” — a length of time that is still a mystery to me — thus giving away free copies of my book for longer than I wanted the offer to run.

I replied to her message the same day:

Screw-ups like this, and the amount of time it took you to answer my question — more than TWO MONTHS — are why I’ll never be in KDP Select again.

I promoted that book as free on Christmas Day. So I look like a liar to everyone who attempted to get the book that day on YOUR program for free.

By extending the sale beyond the allowable time, you gave away more copies of my book than you should have. How will you compensate me for those lost sales?

You’re already ripping me off — in comparison to other ebook sellers — by charging a bogus distribution fee and cutting my royalty rate to certain countries. You are clearly using your position in the marketplace to take advantage of authors and publishers.

You should be ashamed of yourself.

But I know you don’t care. It’s business as usual at Amazon.com.

Even though I replied to her message by using the same technique I’d been using all along, the automated response I got said:

Our Customer Service department didn’t receive the e-mail message below. If you still need help, please visit one of the pages below so we can quickly provide you with additional information or give assistance via e-mail or phone.

In other words: fuck off, we’re tired of you.

Think KDP Select is a good deal? Think Amazon actually cares about its publishers? Think again.

One Publisher’s Experience with KDP Select

A mistake, pure and simple.

Back in December, I wrote “Amazon’s Bribe to Publishers: KDP Select and the $6 Million Fund,” a blog post where I discussed the Kindle Owners’ Lending Library and Amazon.com’s attempt to fill that library with books: the KDP Select Program.

The Deal

KDP Select offers Kindle format ebook author/publishers a chance to earn a piece of a monthly $500K or $600K fund. Enrolled books must:

  • Be available for sale on Amazon.com only. In other words, if you enroll a title in KDP Select, you cannot sell the same title as an ebook anywhere else. Amazon.com gets the exclusive right to sell your ebook on Amazon.com.
  • Allow Kindle owners who are also members of Amazon Prime to borrow the enrolled book for as long as they like for free.
  • Keep the enrolled title in the program for complete three-month terms. Once you sign up, there’s no getting out. And if you don’t turn off the automatic renewal option — which is enabled by default, of course — the book is automatically re-enrolled for another three months.

There are other “benefits” as well. For example, you get the option of making your book available for free to anyone on Amazon.com. (Imagine that! They let you give it away!)

The Bait

Compensation comes in the form of a share of the fund. Here’s how Amazon explains it; note the big numbers they use to make author/publisher mouths drool:

Your share of the Kindle Owners’ Lending Library Fund is calculated based on a share of the total number of qualified borrows of all participating KDP titles. For example, if the monthly fund amount is $500,000, the total qualified borrows of all participating KDP titles is 100,000, and your book was borrowed 1,500 times, you will earn 1.5% (1,500/100,000 = 1.5%), or $7,500 for that month.

So according to Amazon, although you’re letting a whole bunch of people read your book for as long as they like for free, you could still make $7,500 (or even more!) in a month on that book.

I Bit

My only ebook title at the time, Making Movies: A Guide for Serious Amateurs, was selling a few copies here and there on Amazon.com’s Kindle store, Apple’s iBookstore, and BN.com’s NOOK store. Not anywhere near enough to make me feel good about my first attempt at ebook publishing.

I thought for a while about KDP Select. I blogged about it. And I figured, what do I have to lose? So I signed up in December and even did a free book promotion for Christmas Day.

The Results

Over the next three months, I saw the following results:

Transaction Type Units Earnings Per Unit Avg.
Sales at 35% Royalty 2 $2.80 $1.40
Sales at 70% Royalty 37 $92.46 $2.50
Free Book (Christmas Promotion) 333 $0.00 $0.00
KDP Select Borrows 10 $18.40 $1.80
All Transactions 382 $113.30 $0.30

Let’s take a moment to analyze this. Here are the points that jump out at me:

  • Over a three-month period, the KDP Select program earned me a total of $18.40 for this title.
  • During the same period, regular Kindle earnings totaled $95.26. These are actually people who bought my book. I would have earned at least this amount if I had not been on the KDP Select program. I might have earned more if the 10 people who borrowed my book had bought it instead.
  • The average earnings per book borrowed was $1.80; the average earnings per book sold was $2.44 per book (that’s $95.26 ÷ 39).
  • Factoring in the free books, my KDP Program average earnings was less than 6¢ per book (that’s $18.40 ÷ 343).

Of course, this does not take into consideration sales that were lost because the book did not appear in buyer-preferred markets such as the Apple iBookstore and BN.com NOOK store. Based on sales figures before and after the book’s enrollment in the KDP Select program, that could be anywhere from 5 to 15 units per month.

So the KDP Select program earned me $18.40 and possibly lost me quite a bit more.

I don’t see any good from this at all. None. Do you? If so, explain it to me.

The Exposure Argument

A friend of mine who published his first novel on the Kindle platform enrolled his book in KDP Select about a week or two before I did. He and I had discussed it briefly via email before I dove in. He had the same “it’s worth a try” attitude that I did.

The other day, I contacted him with the following question:

How did your KDP Select deal go? Did you make any money worth talking about? I’m about to blog about my experience and was wondering what you thought about it.

His response:

Definitely no money worth talking about, unless that would be about $25! And no borrows at all. However, I’m letting it run for another 3 months. What has been encouraging is working with World Literary Cafe’s free promotion day, which runs through KDP Select’s free promotion days. That doesn’t bring in money directly but does at least bring exposure which has resulted in some sales and hopefully reviews at some point.

And that brings up an interesting point: exposure.

A writer who is just beginning to publish his work (such as my friend) has different goals than a writer who has been publishing her work for years (such as me).

Show Me the Money

I’m in it for the money, pure and simple. As print publishing dies and my existing titles no longer warrant revision, I need something to fill in the income gap if I expect to maintain the freelance lifestyle I’ve enjoyed for the past 20+ years. I need to create a book for a definable market and sell to that market at a price it’s willing to pay. In the ebook world, that price appears to be under $10 — more likely under $5. I did the math and realized that in order to succeed on this path, I need to build a library of long-lived titles and sell an average of 60-80 books a day. That’s why I was initially so disappointed in the sales results for my first book. It wasn’t even a drop in the bucket I needed to fill if I wanted to continue earning a living as a writer — which is what I’ve been doing for 20 years.

But I’m not in it for exposure. I have exposure. I’ve written and published more than 80 books, the vast majority of which are with major publishers such as McGraw-Hill, Peachpit Press, O’Reilly, and Macmillan. I support my books via a Website that gets about 1,000 hits per day. I’m occasionally interviewed on podcasts and video podcasts and have appeared numerous times at Macworld Expo. I may not be a “name brand” like some others who write the kinds of things I do, but I’m certainly quite a step up from those just entering this field.

Expose Yourself

My friend, however, is not in the same position. He’s new to writing novels and, as anyone who has done so can tell you, it’s extremely tough to break in. There’s lots of competition, much of it from best-selling authors that people turn to every time a new title comes out. It’s hard to get recognition for your work, let alone try to sell it when there’s just so much competition.

He’s doing the smart thing — the same thing I did years and years ago when I started out: he’s trying to build a name for himself. To do that, he needs to get his work in front of as many people as he possibly can. He needs his book read and reviewed, preferably with lots of stars and good comments. He needs to begin building a base of readers who not only like this first book, but will be anxiously awaiting his second. And third. Readers who will be willing to show support by paying to read his work.

And that’s why he sees KDP Select as something that might help him in the long run.

Is KDP Select Worth It?

In my mind, no. Definitely not. The exclusivity is enough to convince me that it’s not something I ever want to do again. After all, my third Maria’s Guides book, iBooks Author: Publishing Your First Ebook, is selling like crazy on the iBookstore. If I did an exclusive on Amazon.com, I’d lose out on all of those sales.

But for authors/publishers just starting out and trying to do the best thing for the long haul, it might be worth a shot. My friend seems to think so.

An Objective Comparison of Ebook Distributors

What I’ve noted so far.

I published, through Flying M Productions, my first ebook in October 2011 and have since published two others. (Learn about all of these titles here.) I went mainstream on all of the ebook distributions, choosing Amazon Kindle (custom mobi), Apple iBookstore (epub), and Barnes & Noble NOOK (epub). With about five months of sales and reseller experience, I thought it was about time to share my observations of these three platforms.

For each criteria, I provided a grade and notes to back it up. Remember, this is based on my experience with just these three books. For the iBookstore, I do not include my experience with iBooks Author-generated books in the table; that’s discussed briefly at the end of this post.

Criteria Kindle Store iBookstore NOOK Store
Ease of Publishing A
It’s very easy to get into the Kindle Direct Publishing program and publish books.
C
Apple’s iTunes Connect program requires a lot of paperwork and acceptance of agreements that are often updated. Its interface for publishing is surprisingly unintuitive (for Apple). It requires a unique ISBN for every book sold.
B
Getting into the B&N Pubit program is relatively easy, although there is an approval process that takes some time. Its online book submission process is easy.
Publisher Support D
Publisher support is nearly non-existent. It’s difficult to send questions. Most questions are answered with a “canned” response. Often, I’m told my question needs more research, but an answer never comes.
D
Publisher support is handled primarily through a menu-driven help system that’s poorly designed. It can take more than a week to get an question answered and it’s usually with a “canned” response.
n/a
I have no experience with B&N’s support system.
Ease of Creating Acceptable Documents B
I convert from epub to Kindle using the Kindle Previewer app. This usually goes smoothly the first time around, but it does require that conversion.
C
Apple is extremely particular about formatting and unusual characters in ebook files. For example, it doesn’t like uppercase filename extensions or spaces in file names. This often requires a lot of digging around in epub format files to fix problems. To be fair, I could probably improve my templates to prevent some of the problems I encounter.
B
BN.com accepts just about any epub I send, as long as it isn’t any larger than 20 MB (which I think is too restrictive.)
Appearance of Ebook C
The Kindle format inconsistently formats bulleted lists and font sizes and completely ignores some formatting. As a result, my books are not usually formatted as I’d like to see them.
A
My iBookstore books usually look very good. Apple is true to all epub formatting.
B
My NOOK books usually look very good, although I sometimes notice instances where formatting is ignored.
Speed of Review Process A
Amazon consistently makes my books available for sale within 24 hours of posting.
D
There is no consistency in the speed of Apple’s review process. I had one book appear within an hour of posting while I waited a week or more for others.
B
B&N consistently makes my books available for sale within 48 hours of posting.
Sales A
In most instances, Amazon sells the most books.
B
Apple sells reasonably well — unless a book has an unusual amount of appeal to Mac users, in which case, it sells best.
D
B&N’s sales are sluggish and rather disappointing.
Royalties D
Amazon offers the worst publishing deal. To get 70% royalties, you must price the book between $2.99 and $9.99. The 70% commission rate is only available for books sold to certain countries. All sales to other countries earn just 35%.You must also pay “delivery fee” based on the size of your book file for all books sold at the 70% commission rate. Amazon enforces price matching, so if your book is available for a lower price elsewhere, Amazon will arbitrarily lower the price of your book in the Kindle Store. And don’t even think of getting into the KDP Select Program; that’s something else I need to blog about soon.
A
Apple offers the best publishing deal: 70% flat rate on all books. No hidden costs, no exceptions to the 70% rate.
A
B&N also offers a good publishing deal: 70% flat rate on all books.
Sales & Royalty Reporting C
Amazon’s reporting system is inconsistent and confusing, although it does have up-to-the-minute sales figures. Amazon’s staff does not reply promptly (or at all) to sales/royalty report questions. Reports seem to indicate book sales at unauthorized prices, making me wonder whether Amazon is ripping me off.
A
Apple’s reporting system is updated daily. Reports can be viewed its iTunes Connect website as well as in an extremely well designed iOS app.
B
B&N’s reporting system is minimal but accurate.
Final Grade B
The only reason Amazon gets such a good grade is because it sells a lot of books. Its royalty structure sucks, but I can still earn more there for most titles than anywhere else.
B
Apple’s fair royalty rate and reporting help it score well, but its disappointing sales figures and inconsistent review process keep it from getting a better grade.
C
B&N is a nice platform, but low sales keep it from getting a better grade. In all honesty, if it weren’t for the fact that publishing there was so easy, I probably would’t bother.

Of course, it remains to be seen how well my iBooks 2 interactive (enhanced) books do on the iBookstore, since Apple is taking so damn long to approve them.

Do you have any experience with any of these publishing platforms? If so, what have you observed? Share your thoughts in the Comments for this post.