| "Amazon charges 55% for it's
Amazon Advantage Program because that is what self-publishing
authors are used to paying distributors."
This came directly from the lips of an Amazon.com employee at
a recent publishing conference. Since Amazon is acting in the
capacity of a distributor when an author participates in their
Amazon Advantage program, they feel 55% is fair. Unfortunately
for their customers, they are not taking into account their computerized
processes and lower overhead (nor their $29.95 yearly fee).
First of all, what is Amazon Advantage? In a nutshell, it is
a sales program offered by the largest on-line retailer that allows
independent writers and publishers the ability to list individual
books on the Amazon.com website, thereby reaping the rewards offered
by worldwide distribution and a gigantic brand name.
Amazon's Advantage program is clearly advantageous but is it
really all its cracked up to be? Let us investigate the potential
earnings a little closer...
For our example, we will take a 250 page book with a retail price
of $14.95, an average figure on Amazon. If your book's retail
price is higher or lower, you will have to adjust the numbers
in this example accordingly.
Amazon takes 55% of your retail price right off the top, leaving
an amount of $6.73. In order for them to sell your book, they
need to have access to it, which means you will need to mail it
to them. On average, Amazon requests 2-3 books at a time ("3
weeks worth of inventory" according to this Amazon source.)
Never mind that mailing 2 books to Amazon costs approximately
the same as mailing 6; you will be investing the time and postage
to conduct three different mailings, each of them eating into
your profit margin.
Let's be fair and say the shipping and handling cost per book
is $2. In actuality, it is probably higher if you factor in your
hourly rate for taping up the box and traveling to the post office.
That leaves you with $4.73 for each book. Now let's factor in
the printing cost. How much did that book cost to print with an
off-set printer? It depends on your print-run, naturally, but
let's be generous and say it only cost $1.50, not including the
shipping costs to you. Yes, this method has you paying for shipping
twice, which is not unlike paying taxes twice. And who wants to
do that?
In this generous scenario you are left with $3.23 of profit,
plus the headache of shipping books, managing inventory, and accounting
costs. You would like to list your book with Barnes & Noble.com,
Powells.com, BAMM.com, and elsewhere, but who has the time? Amazon
is already taking too much away from time better spent writing
and promoting.
Introducing 20% Amazon Listings With On-Demand Technology
What if an on-demand edition of your book could generate more
profit with less work? Thanks to new printing technology and inventory
management software, custom on-demand publisher Outskirts Press
can publish an on-demand edition of your book and make it available
on Amazon for just 20%. Inventory, shipping, billing, and production
are all handled by Outskirts Press and its wholesale partners.
Let's take the same 250 page paperback book with a retail price
of $14.95. A 20% discount leaves you with $11.96 (instead of $6.73
with Amazon's Advantage program).
Granted, the on-demand production cost is higher (costing $6.65
per book with Outskirts Press' Diamond Package). $11.96 minus
$6.65 leaves you with $5.31 of profit. There's no additional out
of pocket printing or shipping costs since all of that is handled
behind the scenes by Outskirts Press and its partners.
You are making $5.31 for each book you sell on Amazon, rather
than $3.23. Plus you are saved the hassles of inventory, shipping,
billing, estimating print-runs, and paying interest and overhead.
More profit. Less risk. How does Outskirts Press do it? Through
an inventory management system known as EDI.
What is EDI?
EDI stands for Electronic Data Interchange. The transfer of data
between different companies using networks and the Internet. As
more and more companies get connected to the Internet, EDI is
becoming increasingly important as an easy mechanism for companies
to buy, sell, and trade information. Amazon's computerized system
can manage sales and inventory with very little human involvement,
particularly if one computer speaks to another.
How does it work? When an Amazon order is placed, EDI communicates
the order through Outskirts Press wholesale partners and the book
is produced. Turnaround time according to Amazon's own website
is 24 hours.
Why does EDI drop the discount so substantially? Amazon would
rather deal with 1 wholesaler via EDI handling thousands of books
than with thousands of authors via email handling 1-2 books. They
make their profit in volume, and hence the considerably lower
discount.
Any other advantages? Yes. All that time and effort involved
in listing your self-published book independently with Amazon's
Advantage program has probably prevented you from listing it with
Barnes & Noble, Powells, Books-A-Million and countless other
online retailers. Each online retailer you pursue independently
multiplies your time expenditure, and therefore further decreases
your profit margin.
On the other hand, with Outskirts Press and EDI, the same 20%
discount can be applied across the board, resulting in automatic
distribution and listing with all participating online retailers
simultaneously.
Even if you have already printed a book off-set or have published
a book elsewhere, you owe it to yourself and your profit margin
to explore adding an on-demand version of your book to take advantage
of this win-win opportunity.
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