Dana Alexander
Dana Alexander
Dana Alexander

Weaving fantasy, reality, and desire...

Insightful Thoughts Re: Kindle Unlimited

Writers, This post is well worth the read. Enjoy!

Kindle Unlimited: Will it Affect You?

The New York Times claims self-published authors are unhappy about Amazons Kindle Unlimited program, which uses an all you can eat model similar to the one used by Netflix and Spotify. For $9.99 a month, Kindle Unlimited offers access to 700,000 self-published and traditionally published books. Publishers who participate in the program earn less money in exchange for access to Amazons subscriber community.

But the problem is not Amazon. More often than not, the problem is unrealistic expectations. Kindle Unlimited is a non-issue for most self-publishers.

Kindle Unlimited: Publishers are Opting In.

Nobody forces anyone to buy from Amazon (or sell through them). The world could boycott Amazon and shut it down, but they wont because Amazon makes it cheap and convenient for consumers to find and access everything from eBooks to LED trailer lights. If you feel like your publishing business is a second-class citizen on Amazon, you’re right. The customer is the one riding up front in a big leather seat. Amazon has built an empire by offering value to customers and they know if you opt out, a small army of people with stuff to sell will be happy to fill the tiny void left by your departure. This doesn’t make Amazon mean or unfair; it makes them smart businessmen. As capitalists, they’re following the money and they’re exploiting the power vested in them by the marketplace to change the publishing ecosystem to favor their business. Love it? Hate it? Those aren’t relevant questions.

Selling Books? Really?

For most small publishers, books are a horrendous retail product. How much money do you make from a book sale? Probably somewhere between $2 and $10. Self-publishers who fail to sell books in volume rarely earn enough revenue to recoup their publishing costs. And forget about getting paid for those writing and research hours. Sure, there’s always a bell going off somewhere in the casino that keeps the rest of the room popping quarters and pulling handles some publishers get lucky or clever but the majority of self-publishers sell fewer than 100 books.

Given that big publishers keep the prices of eBooks artificially high (they’d sell millions of $2 eBooks, but I suspect their $20 printed complements wouldn’t look very appealing to consumers), small publishers have exploited the low production and distribution costs to flood the market with $1-$3 eBooks. But with the seller skimming 30%-70% off of low prices, the retail profit margin remains thin, even with production costs near zero. Most self-publishers cross their fingers, hope readers will discover them, and send their messages in bottles out into the seas of publishing.

If you opt in to Kindle Unlimited and toss your books in that pool, how much will this really affect your bottom line? If you’re one of the minority who sells books in volume, you will see a difference. But if your average book sale returns less than a cup of coffee (as is usually the case) and you sell 100 books per year, profit opportunities lie outside the bookselling environment.

Of the authors I work with, the ones who profit from book sales are the ones who sell books at workshops and keynote speeches. One sold 1000 books at a single event, signing books and accepting cash at the back of the room, but most of us don’t have access to stadium-sized audiences. We publish because we want to share our stories and ideas, even if that costs more money than it makes. The rest of my clients don’t worry about book profits. They trade on the credibility that comes with literally being the one who wrote the book on the subject. For them, a book is a relationship builder.

Relationship Marketing

In general terms, a sales transaction is the result of a relationship between a buyer and a seller. That relationship may be as simple and indirect as a consumer reading a label on a package, deciding to trust the people behind the product, and buying it. Or it might involve months of negotiation between a sales/support team and an acquisitions department. In either case, the exchange of money is predicated upon a consumer making the decision to trust the seller to enter into a relationship.

Smart sellers consider the costs in time and money required to initiate a relationship with a buyer. How much time, effort, and money will you invest to earn $5-$10? If (hypothetically) it takes 15 minutes to talk to a prospective reader one-on-one, and that results in a sale half the time, your hourly return is $7.50. Spend an hour reading to an audience of 25 people and assume 10 of them will buy a book when you’re done. Your return is $75.

But how many of these audiences can you assemble? Its clearly more efficient to build relationships with many prospective readers at once, but until your audience exceeds 100 people, the returns aren’t very gratifying. And how many hours and dollars will it take you to prep for your hour behind the lectern? What if you spend $350 on books to sell at your reading event and then it rains that day and nobody shows up? If you expect 100 participants, you’ll want to bring at least 50 books. Larger businesses require more up-front capital so you can invest in inventory. Risk increases with audience size.

As an author, if I initiate a relationship with a reader that results in a book sale, I earn $5. As a book designer, if I initiate a relationship with a reader that results in $3000 worth of design, typesetting, and coaching work, my efficiency increases 6oo times. Personally, I would find it gratifying if you read my books, but professionally, I want you to see my books and want yours to look and function like mine. I want you to see my eBooks and purchase the software I developed that empowers you to make your own. As an author, I’m an artist who wants to share my work, but as a publisher, I want to derive income from books. Selling them at least for me seems the least effective way to accomplish that goal.

Writing, Publishing, and Kindle Unlimited

As a writer, I think of myself as a literary artist. I love sharing my stories, and I love helping others share theirs. The art of writing well, of transmuting thoughts and ideas into ink squiggles on paper fascinates me. As a book designer, I understand how font choice and page layout and other aesthetic factors empower readers to decode those ink squiggles into something greater than the data on the page. As with most artists, I want to share my work. Paying the bills with it wouldn’t be such a terrible thing, but art is not driven by practical considerations. Art is about personal expression. Art seeks an audience.

As a publisher, I think about shallow things like relationship costs, marketing efficiency, profit per unit, and how I can make money. Bookselling fell off my radar a long time ago. My books (and this blog) attempt to demonstrate relationship-worthiness, knowledge, experience, capability, taste, and perspective offerings that provide value to clients and profit to my publishing business.

Whether Kindle Unlimited is a godsend or a rip-off can only be assessed in the context of where your publishing interests lie on the spectrum between art and business. We all want to share our work with millions of readers, and hope to earn a few coins in the process. But without a solid strategy and a realistic budget with which to implement it, many indie writers will find it valuable to use Kindle Unlimited to put their work in front of a larger audience even it if it costs them a big slice of a tiny pie.

If you’re wearing your publishing business hat, you’re most likely selling books in volume by appealing to niche audiences, speaking to groups, or using your writing credentials to attract bigger opportunities. If you’re selling books well on your own at prices you’ve set yourself, you’re probably best off holding your course. If your model involves casting as wide a net as possible using your book as opportunity bait, Kindle Unlimited might be an excellent value.

Kindle Unlimited is an opportunity for some writers and a deal killer for others. Publishing is a tough business either way. You’ll find excellent discussions of the programs practical pros and cons, but the real danger lies in allowing such discussions to obscure the bigger picture.

The greatest pitfall for indie publishers is not Amazon or their latest eBook distribution strategy. The stumbling block is wishful thinking that promotes conflating the interests of art (writing) with those of business (publishing). Is your book an art book (fiction, for example) designed to entertain and inspire, or a practical product (like a book on programming or investing)? Is your audience easy to identify and reach (people who collect acoustic guitars all hang out on a few websites) or more nebulous and general (people who enjoy novels; where do they hang out?)?

Do you have a strategy and a budget, or do you have a good book and lots of passion? With a clear business plan, the impact of Kindle Unlimited on your book business will be easy to assess. Without one, think about bigger things first.

Categories: My Favs
Dave Bricker
Dave Bricker, MFA is a speaker, author, editor, graphic designer, interactive developer, and design educator. I help writers turn well-crafted manuscripts into beautiful, high-quality books.

Where to Buy My Books

Dana’s books are available at other booksellers in the U.S., U.K., Australia, Canada, and Germany. Check out individual book pages for buy links.


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