Is Amazon Exclusivity Right for You?

amazon kdp select
Photo credit: 401(K) 2013 via / CC BY-SA

Today’s guest post is by author Robert Kroese (@robkroese). Note that the Kindle Unlimited environment is constantly shifting. If you’re investigating whether KU is right for you, always check Facebook groups, message boards, and blog posts for author experiences shared within the last three months.

As most self-publishing authors know, Amazon offers marketing incentives to authors who sell their ebooks exclusively through Kindle, through a program called KDP SelectKDP Select requires that authors sell their ebook (but not print book) exclusively through Amazon for at least 90 days. The agreement automatically renews unless you decline to enroll again; however, you can always go back and re-enroll at any time.

It might seem like common sense to distribute the digital edition of your book as widely as possible, to as many retailers as possible, rather than being exclusive to Amazon. However, there are some advantages to enrolling in KDP Select.

Going Wide Can Hurt Discoverability

Yes, you’ll lose out on some potential sales by not having your ebook available at all retailers, but probably not as many as you think. While the sales of a well-known author like Sue Grafton or George R. R. Martin will likely be spread widely across several retailers, if you’re a relatively unknown author, you are very dependent on how “discoverable” you are on each site.

Although it’s not easy to rise to the top of the Amazon bestseller lists, at this point Amazon’s algorithms still provide the best hope for a new author to be discovered. Unless you spend a lot of time researching the idiosyncrasies of each online marketplace and expending time and money marketing in those venues, your book will probably languish unseen among hundreds of thousands of others.

Additionally, there is the possibility of sales on other sites cannibalizing your sales on Amazon. A sale is a sale, of course, but the more you concentrate your sales on a particular venue, the higher your book will rank there and the more visible it will be to potential readers. It’s better to be highly visible on one site than buried on five of them.

Generally speaking, then, Amazon exclusivity makes more sense for authors who are just starting out or who are relatively unknown. More established authors can leverage their popularity by selling more widely.

Enrollment in KOLL and Kindle Unlimited

Enrolling your ebook in KDP Select is the only way to make it available in both the Kindle Online Lending Library (KOLL) and Kindle Unlimited (KU).

KOLL, as the name indicates, is Amazon’s online ebook-lending service; anyone with a Kindle device can borrow up to one ebook per calendar month at no charge. KU is Amazon’s ebook subscription service, which allows readers to pay a flat monthly rate to read as many ebooks as they like.

Indie authors do get paid for these borrows—based on pages read—but the system is somewhat arcane. Basically it works like this:

  • Every month Amazon establishes a fund used to pay authors for KOLL/KU page reads.
  • Amazon determines how many pages of each book were read during the month, using its Kindle Edition Normalized Pages (KENP) algorithm, which is a fancy way of saying that you can’t get away with that trick you used in college of making the margins smaller and using 14-point font to make your paper seem longer.
  • Amazon divides the fund amount by the total number of pages read and pays you your share.

For example, the fund total in a recent month was $16.3 million. The total number of pages read that month was around 3 billion.

$16.3 million / 3 billion pages = $0.0054 per page read

A couple of technical notes on this:

  1. Amazon doesn’t publicly release the “total pages read” number, but you can estimate it yourself using the information provided on your KDP royalty statement. Just look for any line where the Transaction Type is “Kindle Edition Normalized Pages (KENP) Read.” Divide the Royalty value by the Net Units Sold or KENP Read value. This tells you how much you are being paid per page read. To estimate the total number of pages read across the program, divide the KDP Select Global Fund amount by this amount.
  2. A “page,” according to the KENP algorithm, seems to be somewhat shorter than a normal paperback page: my novel City of Sand is 255 pages long in paperback, using a 6 x 9 trim with standard margins and font size. But according to Amazon, it’s a whopping 402 pages using the KENP algorithm. So if someone downloads City of Sand and reads the book in its entirety, I would make about $2.17 per copy read (402 pages x $.0054). That’s nearly what I make on a sale (70% of $3.99 = $2.79).

In the early days of KOLL and Kindle Unlimited, some authors made a killing by manipulating loopholes in the program. When Amazon changed the rules to prevent this sort of manipulation, there was a lot of weeping and gnashing of teeth, most of it unjustified. That said, Amazon continues to tweak its algorithms and KOLL/KU have steadily become less lucrative for most authors. Two years ago, I was making almost as much on page reads as I was on sales. These days, KOLL/KU income makes up about a quarter of my income. This is due to a confluence of factors, including:

  • A decrease in the number of pages of my books being read (probably due to the increased competition as more books are added to KOLL/KU)
  • A slight decrease in the amount Amazon pays per page read (due to the KDP Global Fund not keeping pace with the total number of pages read)
  • A change in the KENP algorithm that reduced the number of pages in my books. For example, KENP 1.0 considered my novel City of Sand to be 455 pages; KENP 2.0 says the same book is now only 402 pages.

Gaining Access to Special Promotional Tools

KDP Select also allows you to access to advertising and promotion options you wouldn’t otherwise have. These include Kindle Countdown Deals and free book promotions. The advantage of both of these types of promotions is visibility.

  • Countdown Deals have a dedicated page on Amazon, and offering your book for free makes it possible to get into the top 100 free books in your category.
  • Out of the 90 days you commit to being exclusive with Amazon, you get up to five days where you can make your ebook available for free.

These are valuable promotional tools, but there is so much competition for low-priced and free ebooks right now that neither of these promotion types is likely to be the deciding factor in determining whether you go exclusive to Amazon. If you’re able to coordinate these promotions with other tactics (e.g. a BookBub listing or an effective Facebook ad campaign), you might be able to get enough visibility to move a significant number of books. But don’t expect a huge spike in sale just from a temporary price promotion.

The Value of Simplicity

One frequently overlooked advantage of selling ebooks exclusively through Amazon is simplicity: if you only sell in one venue, you only have one file format to deal with, and only one version of your book to maintain. If a reader points out that you’ve left the “l” out of the word “public” in chapter seventeen, you can fix the mistake in one place, upload the new version, and be done. If you want to lower the price of your book, you can do it in thirty seconds, without having to refer to a spreadsheet of passwords for five other ebook management interfaces. This may not sound like a big deal, but that time adds up—especially once you’ve got seven or eight books to manage.

There Isn’t One Right Answer for Everyone

Whether you enroll your books in KDP Select is going to depend on the above factors and also on whether you want to give Amazon that much control over your livelihood. Obviously Amazon controls the amount of money in the global fund for KOLL/KU page reads, as well as other advantages of KDP Select, and they can change the terms of the deal anytime they like. A self-published author has to keep a continual eye on whether the pros outweigh the cons. However, my suggestion for new authors would be to experiment with KDP Select for 90 days and see what kind of results you get.

This post, from an author who recently decided KDP Select is not for them, is worth reading. Randall’s experience is summarized in this paragraph:

My initial upward spike quickly turned into a long slide down. I’ll spare you the details and just say that by the time the ninety-day commitment was over I was pulling down the same numbers as I had been when I was wide. And that was with my first book Closure being offered FREE. (I’d been forced to put a price of $2.99 on it to justify going onto KU.)

Author Lindsay Buroker details her own experiences with KDP Select here, and gives a good breakdown of the advantages and disadvantages of exclusivity.

I know authors who do well selling exclusively through Amazon and authors who do well selling more widely. Bestselling indie author Hugh Howey enrolls all his books in KDP Select. Other authors, such as my friend Denise Grover Swank, prefer to diversify, making their ebooks available through Apple iBooks and other marketplaces. For me, it makes sense to enroll my books in KDP Select because a lot of my books are published by 47North, an Amazon imprint, so they are exclusive to Kindle anyway. Putting some of my books on other marketplaces wouldn’t make me enough money to make up for the lost KOLL/KU income, and it would probably frustrate people who can’t find the rest of my books. So for me, enrolling my books in KDP Select makes sense. Whether it does for you is going to depend on where you are in your career, where your audience is, what your goals are, and how you feel about being highly dependent on Amazon for your income. Again, it bears repeating: Even if your experimentation indicates that KDP Select is a good deal now, don’t assume it will always be.

Note from Jane: If you found this post useful, I highly recommend taking a look at the upcoming book from Rob on how to self-publish.

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