The Amazon POD Ultimatum: What Does It Mean To You?
What was the ultimatum? Roughly paraphrased: All POD printed books must either be printed at Amazon’s own printers, be part of the Amazon Advantage program or Amazon will stop selling them. They’ll still be listed, but only in the “used and new” section.
Amazon’s printers, BookSurge and CreateSpace, limit the discounts at which they will sell books to Amazon and to other retailers. They also don’t offer access to Ingram, as LSI and some fulfillment operations do, which limits your book’s availability outside of Amazon.
Is Amazon going to apply this to you? If it does, what are your options?
Does this change things for you? Probably not yet. Amazon seems to be focusing on the presses that do the most publishing using POD printing. No one knows when, or if, they’ll get around to reining in the smallest publishers.
Of course, if you’re using a large subsidy publisher (a.k.a. “POD publisher” or “self-publishing company”), instead of a POD printer, Amazon is already forcing change upon you.
Most subsidy presses will be forced to give Amazon standard trade discounts of 40% or more. This means that most of their books will be priced out of the market. Most subsidy presses make their money by charging the author, so they won’t be seriously hurt at first, but their authors will have an even harder time breaking even than they do now.
What happens when Amazon comes for you? What are your options? That depends on your books, on the discounts you’ve been giving and on your marketing plan. Your choices include:
• Print with BookSurge or CreateSpace (BS and CS) alone,
• Print with other POD printers and BS/CS,
• Do an offset print run, kick your marketing into high gear, and secure trade distribution,
• Enroll in the Amazon Advantage program, or
• Limit your Amazon sales to the Marketplace, and do without the “Buy Now” button.
Some types of books simply can’t be done under those conditions. Take children’s books as an example. These have very low price points, and the cost of POD printing precludes meeting that price and offering Amazon discount of 40% or more. If Amazon is the primary sales channel, as it is for many POD printed books, this means you either have to take the risk of committing to an offset print run, or cancel the books.
If you print through BS/CS only, you may have limited distribution choices for sales outside of Amazon. For some books, this won’t be a problem. In addition, you’re going to be required to give Amazon a typical trade discount (at least 40% off the list price), and to pay the fees charged by those printers. At the moment, those printing fees are relatively competitive, but they may not continue to be so. The discounts are higher than many publishers have been offering on POD books, even when the publishers aren’t vanity presses and the books are on topics typically considered suitable for the bookstore trade.
If you print with more than one POD printer, you’re going to pay multiple set up fees (which are small, but so are the profits on POD printed books). You might want to do this in order to secure access to Ingram. Ingram is the largest wholesaler in the book world, but they’re not interested in dealing with small presses. If you can get your books into their system, they’ll be available to and through most major bookstores.
You will be forced to offer trade discounts to Amazon, and may be forced to offer them universally, cutting into your profit margins. This will make even fewer of the books that go to POD profitable.
Offset print runs drop the unit cost of a book significantly, but many books simply can’t be sell that many copies. If yours can, and if you can afford to risk the investment in a larger print run, you may be able to make the economics work by going for the lower margin/higher volume path. This means that you will have to find a way to drive readers into the bookstores to buy your book, and a way to convince a distributor and bookstores that the readers will come. But, if you’re successful, this could be the beginning of a growth path for your company.
Join Amazon Advantage, and you can print anywhere and any way you like. You pay a small annual fee, and offer Amazon a 55% discount. Your profit margins will be razor thin on almost all kinds of books, especially if you print POD, but you may be able to make it work.
Marketplace sellers offer almost every book. You could rely upon them alone, refusing to play on Amazon’s field at all. There are many options here, and they’re not mutually exclusive. You can have your own Amazon store, and enroll with Alibris, AbeBooks, and many of the other major sellers. The problem: many book buyers will not buy a book through the “Used and New” Marketplace sellers. If you choose this option, you’re going to lose volume. The Marketplace generally offers higher margins and a reasonable allowance for shipping, but that may not be enough to compensate for the drop in sales. This is especially true if you’ve been selling to Amazon on a short discount.
How do you decide? Crunch the numbers. Estimate your sales and costs under each option, and look for the best bottom line. Publishing is a business, even if you’re in it for reasons beyond the monetary. You have to at least break even if you’re to survive for long.
If number of readers matters more to you than profit, you might consider offering free e-books of your material. That might increase your sales of printed books, and will certainly increase your readership at a very low cost.
Above all, don’t panic. If it hasn’t happened to you yet, then something may change before it does. Consider your options and prepare, but keep your eyes open for new choices. And no matter what options are presented, always consider the numbers. Some things that seem like wonderful shortcuts have unanticipated consequences.
