Smashwords and Amazon pricing

[fbrII]

I have noticed lately that a lot of books by independent authors will sell for less at Amazon. I'm curious who is setting the price the authors or the book sellers?

It would seem that if the author gets a better royalty selling through Smashwords ( this is an assumption on my part, feel free to point it out, if incorrect ) they would not want to undercut their prices through Amazon.

I'm not trying to create a good guy, bad guy scenario, or implying that all prices should be the same, just wondering whats behind the price differences?

[khalleron]

Originally Posted by fbrII

I have noticed lately that a lot of books by independent authors will sell for less at Amazon. I'm curious who is setting the price the authors or the book sellers?

It would seem that if the author gets a better royalty selling through Smashwords ( this is an assumption on my part, feel free to point it out, if incorrect ) they would not want to undercut their prices through Amazon.

I'm not trying to create a good guy, bad guy scenario, or implying that all prices should be the same, just wondering whats behind the price differences?

Amazon requires that any book can't be undersold - all prices elsewhere must be equal to or greater than Amazon's price.

[fbrII]

Amazon requires that any book can't be undersold - all prices elsewhere must be equal to or greater than Amazon's price.

When there is a price difference, it is always lower at Amazon, at least to my experience. But is it Amazon who choses to lower the price or the author?

[carld]

I believe that Amazon searches the web for instances of books selling for less than what they offered for at Amazon. If found the Amazon price is reduced. I think the process is automated.

Some self-publishers have used this to offer free books at Amazon, which isn't normally allowed, by setting the Smashwords price to zero.

[fbrII]

Some self-publishers have used this to offer free books at Amazon, which isn't normally allowed, by setting the Smashwords price to zero.

I noticed when looking, that the price difference, (when there was a price difference) was always a dollar less at Amazon.

I looked at 'A Land of Ash' which was listed as one of the top 2010 Indie books at 'Red Adept Reviews'. The book (a collection of short stories) was 99 cents at Smashwords and free at Amazon. If the behavior is computer driven and it would not surprise me it appears .99 cents at Smashwords may get cut to free at Amazon. And, if that is the case, does that mean the author loses their royalties?

[carld]

I'm not sure about royalties. Back when the Amazon DTP program was starting up Amazon said that when they reduced an ebook price for a sale, promotion, or whatever, the author would get their full royalty regardless of the price Amazon set.

I don't know if that applies in this sort of price matching case or not. Maybe someone who has used the system will post to let us know.

[VydorScope]

The authors set what price they WANT to sell at on Amazon, and that becomes the "list price," Amazon from there sets the price up and down depending on many factors that only they know. For example my book is free on the US store, but not on the UK or DE stores even though I have it set to 99 cents everywhere. (99 is the min price you can set it to.)

Here form their official FAQ:

1-5. Who determines the price of my content?
As the publisher, you set the "list price" for your content. Amazon.com reserves the right to set the retail price at our sole discretion. See the Pricing Page and Terms and Conditions for information on how royalties are calculated.

Please note, We reserve the right to set the retail price we charge for the books you provide to us. We may offer your book at a price below your list price if, for example, the price at which a competitor sells your book, or the price at which we sell a physical edition of your book is lower than your list price. In that case, if you chose the 70% royalty option, your royalties will be calculated off of this offer price for sales that qualify for the 70% royalty option. If you chose the 35% royalty option, you will be paid off of the original list price you chose.

[fbrII]

1-5. Who determines the price of my content?
As the publisher, you set the "list price" for your content. Amazon.com reserves the right to set the retail price at our sole discretion. See the Pricing Page and Terms and Conditions for information on how royalties are calculated.

Please note, We reserve the right to set the retail price we charge for the books you provide to us. We may offer your book at a price below your list price if, for example, the price at which a competitor sells your book, or the price at which we sell a physical edition of your book is lower than your list price. In that case, if you chose the 70% royalty option, your royalties will be calculated off of this offer price for sales that qualify for the 70% royalty option. If you chose the 35% royalty option, you will be paid off of the original list price you chose.

Thanks Vincent that definitely clears things up with the exception of what happens when the offer is free and the author elected the 70% option? Does this only happen ( product is free) when the author elects or can Amazon give it away without compensation to the author?

[VydorScope]

Originally Posted by fbrII

Thanks Vincent that definitely clears things up with the exception of what happens when the offer is free and the author elected the 70% option? Does this only happen ( product is free) when the author elects or can Amazon give it away without compensation to the author?

Correct, if the Amazon changes the price to free, the author gets nothing per sale. That is the status of my first book currently, which is fine by me since I wanted to list it for free anyways. Kind of annoying that an author can not just list a book for free, but they can make it free with out author's involvement.

[BenCheetham]

Amazon's pricing system seems eccentric and somewhat unfair. Why shouldn't indie authors be able to put their books up for free, when mainstream publishers can do so? The idea of pricing a book for free at Smashwords and forcing Amazon to price-match is intriguing. I'd already thought about it, but it seems unfair to anyone who buys the book from Amazon prior to them reducing the price.

[Lazybones]

When I published my novella on Amazon, I priced it at $0.99. It was free at Smashwords, and within a week Amazon had lowered the price to match.

I had a novel at Smashwords that was at $2, when I published it on Amazon I set the price to $2.99 so I could qualify for the 70% royalty option, that one dropped as well. I get 70% of every $2 sale now.

Ben, I thought about the same issue of fairness, but I only sold 1 copy at the $0.99 price in the week it was up; when it went to free I had 2,000 downloads within 48 hours.

[carld]

Originally Posted by Lazybones

Ben, I thought about the same issue of fairness, but I only sold 1 copy at the $0.99 price in the week it was up; when it went to free I had 2,000 downloads within 48 hours.

Going a bit (we really need an off topic sign with a smiley face).

The disparity you found between sales and downloads is really interesting. I wouldn't have thought the difference would have been that drastic for a $0.99 book. Did you notice any bump in sales for your other books after the 2,000 downloads?

[VydorScope]

Originally Posted by carld

Going a bit (we really need an off topic sign with a smiley face).

The disparity you found between sales and downloads is really interesting. I wouldn't have thought the difference would have been that drastic for a $0.99 book. Did you notice any bump in sales for your other books after the 2,000 downloads?

It has to do with the way its listed. At 99 cents your are competing with Stephen King, at free you are not. There is a separate list of free books, plus there are sites that do nothing but monitor newly free ebooks, so you get listed on them (these forums for example) them as soon as you go free. For example my book reached #7 on the "best selling" free ebooks, but book 2, which is not free, is at like #28,987 or so on the "best sellers" non-free book list.

[BenCheetham]

That's given me some serious food for thought. Seems like a great way to generate interest in a book. Roughly how long does it take for Amazon to lower a book's price once it's up for free at Smashwords?

[VydorScope]

Originally Posted by BenCheetham

That's given me some serious food for thought. Seems like a great way to generate interest in a book. Roughly how long does it take for Amazon to lower a book's price once it's up for free at Smashwords?

Mine took many months, some people say weeks... so dunno.