Why should authors not have some control over the price their books are sold for?

[abookreader]

I guess I feel a better system would be for the author to set their wholesale price .. ie I want the retailer to pay me $1.40 for every book you sell or whatever price ... and then the Retailer could set their list prices and discounts as they see fit.

Their could be a clause that the book can't be listed on the "self-pubbed" (Smashwords etc) platforms for anything less than 200% or whatever of the wholesale price.

[Andrew H.]

Originally Posted by abookreader

Their could be a clause that the book can't be listed on the "self-pubbed" (Smashwords etc) platforms for anything less than 200% or whatever of the wholesale price.

Why do you think this is a good idea?

But in general, I'm with those other posters who don't see any purpose to some sort of law like this. After all, authors *are already* free to sell their books for any price they choose, at least if they sell it themselves. I don't see why they should have the right to dictate the selling price to Smashwords or any other third party, though.

And AFAIK, Amazon does let indie authors set their own price; it simply charges the authors more if they select prices outside of Amazon's preferred prices. And with a clear business justification at the low end: 30 cents per sale for a 99c book may not be cost effective for Amazon in most cases.

In any event, I see no need to give the author control over retail pricing; I certainly see no advantage.

[wannabee]

Originally Posted by Andrew H.

In any event, I see no need to give the author control over retail pricing; I certainly see no advantage.

Unless the author is the retailer and has their own shop as well. I think you can still sell on Amazon as long as you agree not to sell your book for less elsewhere. That's good. Exposure in Amazon at 30% of the sale for overseas sales and 100% off your own site.

That's the decision we've just made. Someone prove me wrong here because I've got my you-know-whats on the chopping block. We just sacked the distributor because they will not give us the rights to sell our own eBooks on our own sites.

They had the paper and were making money but chose to drop the lot if they couldn't have the eBooks. Well one phone call to another distributor and they didn't mind new business so they have the paper and we have the eBooks.

[MV64]

Honestly, I don't think they should have control. Or, if they do price however they want, they have to pay the consequences when no one buys an overpriced book. Industry standards help boost an industry because people know what to expect. This is one of the things (other than prices and shady business tactics) holding the industry back.

[DMSmillie]

Originally Posted by MV64

Honestly, I don't think they should have control. Or, if they do price however they want, they have to pay the consequences when no one buys an overpriced book.

Isn't that what you'd expect, regardless of who sets the price? Indie authors are surely very aware that they can't afford to set their prices too high?

Originally Posted by MV64

Industry standards help boost an industry because people know what to expect. This is one of the things (other than prices and shady business tactics) holding the industry back.

What standards are you referring to, MV64?

[DMSmillie]

Originally Posted by wannabee

Unless the author is the retailer and has their own shop as well. I think you can still sell on Amazon as long as you agree not to sell your book for less elsewhere. That's good. Exposure in Amazon at 30% of the sale for overseas sales and 100% off your own site.

That's the decision we've just made. Someone prove me wrong here because I've got my you-know-whats on the chopping block.

Yes you can do that, wannabee. The contract with Amazon is a non-exclusive one, and leaves you free to sell the ebooks with other online retailers, on ebay, your own website, etc. You simply contract not to sell the book elsewhere for less than you sell it on Amazon (and, if you go for the 70% royalty option, you also contract that the ebook is priced at least 20% below the print book price).

[C.I.Bond]

Originally Posted by Worldwalker

If the authors are selling books -- or pens -- from their website, they're acting as retailers and they can charge whatever they feel like. But when they're selling through a third party, who then resells the items to the public, they're wholesalers, and they should, like any wholesaler, be determining the wholesale price (what they sell the book to Amazon for), but not the retail price (what Amazon sells the book to you for).

It scares me that so many people who laud the free market have no understanding of how it works.

This retailer/wholesaler argument holds with goods that are purchased in bulk (in advanced of the retail sale), shipped, warehoused, unpacked on shelves and then resold to the public. All of this requires an investment in people and transportation so that needs to be wrapped into the mark-up price. In the case of Amazon they aren’t doing this they are buying the book at the point of sale and sending it to the consumer. If the consumer sends it back they don’t take the loss the author does and the refund is deducted from his total check. It’s almost like they are taking 30% for their distribution net work or social networking site.

Indie publishing is more like… marketing or an add-on service that you can get if you buy a Kindle, which is where their real concern lies. Amazon isn’t interested in managing Indie work or guessing at what the best price is for the product. The author has an incentive to figure out a price that will maximize his profit and Amazon has an incentive to keep the price low because they want people to buy Kindles (hence their $2.99-$9.99 range). I don’t think Amazon has any interest in the Indies because frankly there is a lot of work to manage them and not much money there. They do have an interest in getting Indie to publish with them though, it looks cool at it draws attention to the Kindle – which is something that they actually can make money on.

The bigger problem with applying traditional retailer/wholesaler economics to this is that the downloaded model had pretty much destroyed the retail-consumer relationship. Retails don’t have the power they once did and it is very easy to set up a similar e-shop and sell your book so Amazon doesn’t have the same power that a traditional retailer might. If they push, the authors leave and then the Kindle looks less cool.

As far as pricing, indie books will typically be lower than standard publishing because there is a tendency in small markets toward some collusion and the major publishers are pushing for higher prices, a little like OPEC and price fixing. No one wants a price war, with a large amount of sellers collusion isn’t possible… now you could ague that books are unique works and one can’t be substituted for another the way that oil or diamonds can but I’m not sure I buy that… I’ve read too many romances that seemed interchangeable.

[wannabee]

Originally Posted by DMSmillie

(and, if you go for the 70% royalty option, you also contract that the ebook is priced at least 20% below the print book price).

I was under the impression that Amazon will pay only 30% if sold outside the UK or USA. We could easily arrange for the eBook to be 20% lower than the printed books.

[Andrew H.]

Originally Posted by C.I.Bond

I don’t think Amazon has any interest in the Indies because frankly there is a lot of work to manage them and not much money there. They do have an interest in getting Indie to publish with them though, it looks cool at it draws attention to the Kindle – which is something that they actually can make money on.

I don't think that Amazon makes much money from the indies: they probably make more money from one Nora Roberts book than they do from all of the indies put together. I don't think that they're doing it for the "cool" factor, either - there are too many indies that are fan fiction, amateurish romance novels, or "Twilight" clones for them to be considered "cool." And I don't think that Amazon makes any money from selling the Kindle; they make money from selling books.

But Amazon is very interested in selling books. And as the books it sells can only be read on Kindles, they are interested in having Kindles in as many people's hands as possible. So good support for indies means more people having Kindles, means those people buy other books from Amazon, too.

And the more this happens, the less willing people will be to switch to another reader/store, since they have already so many books in Amazon's format.

[JLeighs]

I don't think the wholesale pricing for physical goods is a valid comparison in this case because book sellers like Smashwords, Amazon, etc. (if I am understanding correctly) don't have it set up that way. The author gets a certain percentage of the selling price and that's that. Am I correct so far? So, since that is the case, the only way an indie author can keep from having his/her percentages reduced to wooden nickels due to price slashing is to set a certain price for the book across the board. Or that's my understanding, at least.

[DMSmillie]

Originally Posted by wannabee

I was under the impression that Amazon will pay only 30% if sold outside the UK or USA. We could easily arrange for the eBook to be 20% lower than the printed books.

Yes, it's true that if you sign up to the 70% royalty scheme, you only get 70% on sales in the US or the UK, and 35% on sales to other countries, but you still have to sign up to the 70% royalty contract to get that, and it specifies that the ebook price has to be at least 20% lower than the online print book price - I don't think it differentiates in terms of where the ebooks or print books are being sold.

[C.I.Bond]

Originally Posted by Andrew H.

I don't think that they're doing it for the "cool" factor, either - there are too many indies that are fan fiction, amateurish romance novels, or "Twilight" clones for them to be considered "cool." And I don't think that Amazon makes any money from selling the Kindle; they make money from selling books.

Ah you misunderstand. The books themselves aren’t cool but the concept of being able to publish your own novel or read your friend’s book is cool. The coolness is in the abstract not in the reality.

[Just4kix]

Many indie authors first offer their books for free in order to gather some reviews. They then price at $0.99 as it seems that readers are willingly to gamble 99c on an unknown author. Once they have a readership they will price their next book higher.
Sometimes Amazon will discount the books, but the author will still receive 'royalties' on the original price. There was even a case of Amazon offering a book for free and it was downloaded 1000's of times, but the author still got his royalties. (We all want to know how we can get them to do it for our books!)

[DMSmillie]

Originally Posted by Just4kix

Sometimes Amazon will discount the books, but the author will still receive 'royalties' on the original price.

The usual reason for Amazon to discount is to match a lower price found on another online retail bookstore. You only get royalties on the original list price if you selected 35% rather than 70% royalty rate (if you selected 70%, you'll only get royalties on the discounted price), and even then not always - if it happens a lot, the author risks Amazon pulling their book, on the basis that the author is not adhering to their side of the contract, where they agreed not to sell the book elsewhere at a cheaper price than on Amazon.

Originally Posted by Just4kix

There was even a case of Amazon offering a book for free and it was downloaded 1000's of times, but the author still got his royalties. (We all want to know how we can get them to do it for our books!)

Are you sure about that? I understood that the authors this happened to didn't get any royalties for any of those sales, but I might be wrong on that. I do know that several of the books were pulled from Amazon's listings when Amazon spotted what was happening, then reinstated a few days later. It only happened because these authors were offering their books free on Smashwords, and Amazon's automatic price checker found that and set a matching price in Amazon for a few days until someone at Amazon spotted it.

[Kali Yuga]

I see absolutely no reason why an author or publisher should not be allowed to set the price of their goods.

When Smashwords, Scribd (remember them?) and Amazon's self-publishing services got started, they clearly said "authors set the price, we get a set percentage." No one complained.

Thousands of people sell their hand-made tchotchkes on Etsy. The maker sets the price, and Etsy takes a tiny slice. No one complains about "price fixing" or how "immoral" it is for the creator to set the price.

If you want to buy a Dell laptop, Dell is manufacturing and setting the price, period. No one complains about how "unfair" this system is.

If Penguin decided they would no longer sell ebooks via retailers, and will only sell via their website, would this be "fair" -- even though the upshot would be identical?

For years, Apple set a blanket price of $1 per song download. This is clearly a form of "price fixing," just by the retailer rather than the music label. Is it OK to force every vendor to the same price, because it's the retailer doing it instead of the publisher/music label? Would it still be OK if Apple had set the price at $2?

Many authors and publishers intentionally price their books at $0.00 for promotional purposes. The retailers aren't selecting which books to promo. Is this also an example of "unfair" behavior or "price fixing?" Is it only OK for the author/publisher to set the price, if and only if that price is zero?

And let's not forget, several powerful retailers asked for this system and/or several key features. Well over a year ago, Google offered publishers power over pricing. Apple also required that no other competing retailers would be allowed to undercut them on price, and voluntarily offered them agency pricing.


Retail is changing. I, for one, find it rather amusing that people insist that retailers and publishers "get with the times" and stop treating ebooks the same way as paper -- and then blast them because they aren't treating ebooks like paper. Almost as amusing as seeing people promote Smashbooks one day as the type of business that will destroy the big publishers, only to see them get railed the next day for making life simpler for their authors/contributors.