The Business Rusch: Free

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The Business Rusch: Free

Kristine Kathryn Rusch

I just came across a terrible article on Galley Cat from the Media Bistro site. Galley Cat bills itself “The First Word on the Book Publishing Industry,” and Media Bistro, when it started years ago, was supposedly going to shed journalistic light on the publishing industry. Let us all pause while I chuckle darkly.

I really should stop railing against the decline in journalistic standards. I really should, because all it does is give me heartburn. But I got my journalism training from a bunch of blue collar World War II reporters who believed in verifying sources, researching the material, and never ever trusting what someone said in an interview without doing a bit of investigation first.

This Galley Cat article would’ve been tossed in any newsroom I worked in after a few phone calls. Instead, Galley Cat, which should know better, printed the dang thing, and now I’m watching this badly written article go viral.

What is it?

Here’s the misleading headline: “Author Loses Royalties From 5,104 Books.”

Here’s the story: a new self-published author named James Crawford told Galley Cat that Amazon lowered the price of his book, Blood Soaked & Contagious, to free without his permission.  Crawford now claims that Amazon owes him money for the 5,104 free downloads—and actually, he may have a case for something or other. I’m not quite sure what.

The problem isn’t with Crawford, although I’ll deal with some of the issues raised by his circumstance in a moment. The problem in this article is with Galley Cat for taking what he says at face value, reprinting an e-mail from Amazon (probably without their permission, ignoring copyright), not interviewing Amazon for their point of view, and—most importantly—not understanding the new face of publishing.

Let me explain.

What happened to Crawford is this: He published Blood Soaked & Contagious at $5.99.  Then he put up a few chapters of the same book as a loss leader for free on Barnes & Noble.  What I’m assuming is this: He put up the chapters under the same title as the book on I can’t tell you this for sure, because a search of the B&N website only turned up one version of Blood Soaked & Contagious.  (God, I want to add punctuation somewhere in that title.) That version is priced the same as the Kindle version at $5.99.

Anyway, the free chapters triggered the suspicions of Amazon’s bots. They troll the internet, searching for the same items that are for sale on Amazon, only at cheaper prices. If the bots find a cheaper price, then they lower the Amazon price to the same amount.

The Kindle Direct Publishing (KDP) Terms and Conditions that all folks who use KDP agree to states that Amazon has the right to set the retail price on any book published through KDP. Amazon maintains some form of this agreement with most of its suppliers.

Traditional book publishers fought a battle with Amazon almost two years ago now so that they wouldn’t be subject to Amazon’s ability to set a retail price.  This is called—for some strange reason—agency pricing.  (Do not confuse it with prices set by agents.)  Not all traditional publishers signed on to the agency pricing agreement. You can tell which ones have by a little snarky comment near the price on the Kindle listing: This price was set by the publisher.

The problem is that even with agency pricing, Amazon may discount a price if they find the exact same version of the book for sale at one of its major competitors at a lower price. Note the term “major competitor” and “exact same version.” Important distinctions. So if B&N are selling the new Stephen King at $8.99 and Amazon has the book at $9.99, Amazon will give the customer the $8.99 price.

Wal-Mart does the same thing for everything from diapers to blankets. Retailers have long advertised that if you can find the same item at a lower price elsewhere, the retailer will meet or match that price, or maybe even give a better discount.

I’m not defending the practice. Hell, I’d love to have the price of my book remain the price of my book.

I’m just saying that the practice exists and whoever publishes a book through KDP agrees to abide by this concept.

The concept failed James Crawford. His B&N book with the same or a similar title triggered the Amazon bots and they mistakenly lowered the price of a different product to zero.  When Crawford pointed out the mistake to Amazon, Amazon immediately corrected the price, returning it to $5.99.

Here’s where the misunderstanding comes in on Crawford’s part. In the space of time—not mentioned in the Galley Cat article—that Crawford’s book was available for free, it sold 5,104 copies. Crawford believes that he is owed royalties for that.

He is not, although he might be able to get some kind of compensation if he can prove harm and if he can get an attorney to take his case. But I’m not sure he can prove harm.

Because here’s the problem: Crawford believes those 5,104 sales would have happened anyway. If he was correct, then Amazon would owe him in the neighborhood of $21,000 ($5.99 x 5104 x 70%).  I’d be fighting for that too.

But Crawford’s book wasn’t selling at that same rate before the book went to free. How do I know this? Crawford noted “a huge spike in downloads over night” (and that misspelling comes from the Galley Cat article) and that spike caused him to investigate what had changed.

What had changed was the price.

I went through something similar during the first week of October. Sourcebooks lowered the price of my novel Wickedly Charming to free for one week (October 2-9) as part of a promotion. I blogged about it here and promised to come back to the topic when the promotion was over. It’s been a month now, and I can say a few things for certain.

First, let me say that I don’t see the numbers for Wickedly Charming or my other novel, Utterly Charming, which is also published by Sourcebooks—at least, I won’t see the numbers until I get my royalty statement in April.  So I don’t know how the numbers spiked on those two books, although I do know that they did, from that goofy Amazon ranking.

What caught my attention was this: the sales of my 99 cent short story, The Charming Way, spiked the  morning that Wickedly Charming went free. The Charming Way spiked and spiked significantly—going from selling a few copies now and then to dozens that day. The blurb of The Charming Way mentions that the story provided the inspiration for Wickedly Charming.  Readers had not yet had time to read Wickedly Charming, and yet they were picking up the short story to read later.

By the night of October 2, my other Kristine Grayson titles—on which I can see the numbers—started to climb. The climb was slow, but steady, which suggested to me that the fast readers who had finished Wickedly Charming were now looking at the other Grayson books.

The books that sold the best were the paranormal romances, just like Wickedly Charming. The novels Completely Smitten and Simply Irresistible sold better by the end of the week. The other titles were short stories.  The paranormal short stories sold the best. The Western romances, also published under Grayson, and the few contemporary titles didn’t sell half as well, even though they were priced at 99 cents.

I’ll come back to that in a minute.

Debora Geary mentioned in the comments on my blog post about Wickedly Charming that the sales of my other titles would really spike the following week, when Wickedly Charming would return to its original price. I thought that very odd, but I decided to track it as best I could. I had the help of a friend, since I was in Canada when the price bounced back up.

I can’t give you the actual sales figures for Wickedly Charming yet, but I can tell you how the Amazon rankings went. Amazon has a bestseller list for free books on Kindle and for paid books on Kindle. Wickedly Charming went all the way to number seven on the free list, and stayed between seven and twelve from late Tuesday, October 4 until the book’s price went up on October 9.

The morning of October 10, Wickedly Charming’s sales rank on the paid list was 5,000-something. That means that according to Amazon’s algorithm, 5,000+ books were selling better than Wickedly Charming on Kindle. By noon, that number had become 2,000-something. By the time I arrived in the States—about five in the afternoon, that number had climbed to about 1,200.  By the time I got home at 9 that night, the number had climbed to 735 (where I finally got a chance to write it down).

The number continued to climb for the next day, peaking at 324, and remaining there for the rest of the week.  Then it started to go down. A month later, the book—which was released in May—is at 15,000.

A different promotion is going on this week, by the way. Sourcebooks has priced Utterly Charming at $2.99.  I am not seeing the spike in sales that I saw with the free book.

Aside from the whole free thing, pricing seems to make no difference, provided the e-book is less than $10.  The sales of my 99-cent short stories increased only on the paranormals, and were consistent with the sales of the $4.99 novels. The 99-cent westerns and contemporaries didn’t sell nearly as well.

Here are a few other interesting facts about that free book. Sourcebooks lowered the price on the NookBook as well, but there was no accompanying rise in sales during the free week on the other titles, although I am noticing a slow and steady increase throughout the month.

Barnes & Noble does not have a free bestseller list nor, so far as I can tell, does it have an easy way to find free books. So B&N customers had to stumble on the book to know it was free. Kindle customers troll the top 100 free books list—I know I do—and download books that sound even remotely interesting.

I have downloaded free Kindle books for the past 18 months, and I’ve only read about a third of them. Some are by authors I planned to read anyway, and some just plain sound interesting. I’ve bought other books by those authors, but later, after I had read the free book.

So of the free downloads that Wickedly Charming got, many of those books are as yet unread.

I had a similar experience when offered The Disappeared, the first in my Retrieval Artist series, for free. Audible had published the entire series that summer—to date anyway. (Audible has just published, as an exclusive, the next RA novel, Anniversary Day. The paper/e-book version will come out in December.)

When my editor at Audible asked me if I wanted to put the first book up for free, I said yes immediately, startling him. So many other authors had said no (and were offended) that he was gun-shy. I figure a writer has to trust her work.  I’ll give you the first one for free, and trust that you’ll buy the rest.

Over the  next nine months, I could see the spike in readers moving through the series like a mouse working its way through a snake. The readers went from book to book, not dropping off, until they got to the last book.  But more than that: there was a significant rise in readership even after the bulk of the readers who had gotten the book for free were done. Those later readers had taken their time getting to the free book. Then they started through the others.

I’m still seeing a benefit from Wickedly Charming’s free week. I’m not sure where the sales of the other books and stories will level, but I know they will, unless they get goosed again.

The increase in sales on the other titles—the ones I can monitor—was significant. By this Monday, October 31, four weeks after the promotion started, sales on the other titles were ten times higher than they had been in September. I’m hoping that the free book made a lot of new fans.

The surprise for me was that once the book stopped being free, it continued to climb the rank of Amazon’s paid bestseller list. I’m assuming—and I honestly don’t know this—that the algorithm combines free sales and regular sales in that crossover. Once readers see the book on some of the subgenre lists, then they start buying, and the sales increase.

The subgenre lists, by the way, look like this: Fiction—> Romance—> Paranormal.  So you can drill down to some interesting subgenres. The Charming Way actually made it onto a World mythology bestseller list for a short period of time.

I’d been planning to offer something for free for a long time, but I had known that I needed a game plan before I did so. The fact that Wickedly Charming went free was a bonus for me—Sourcebooks conducted the experiment, and I saw a direct result in related titles.

Friends who had done free books had seen very little impact on sales when the free book or story had no similar titles to boost.  A free mainstream short story didn’t boost sales of science fiction novels. A free mystery novel didn’t boost the sales of the author’s romance titles. And so on.

I saw that in my Grayson titles. The sales of all of the Grayson paranormals increased. The sales of the light Westerns increased, but not nearly as much. And the sales of the contemporary romance stories remained exactly the same. On Kindle.

There was no benefit that I saw on B&N, although friends tell me that there is a long-term benefit on titles that remain free for a month on B&N. That makes sense to me, because that gives readers time to find the free book—something Amazon does automatically.

This brings us back to James Crawford.  A glance at his name on the Kindle bookstore turned up 30 different books, but with a quick scan it became clear that most of the titles by the various James Crawfords weren’t him. So I went to his Amazon page, and found only two titles, Blood Soaked & Contagious and Super Love! Kaiju.  The first book, Blood et. al, appeared on September 15, 2011, and the new title (which is 99 cents) appeared on October 19.

I have no idea if the second publication was available when the first title went free. I doubt it. But what this all means is that Crawford had no way to benefit from the accidental free offering of his book. Although I do wonder if the sales of Blood et al increased after it was briefly free. I’ll wager it did.

So does Amazon owe Crawford royalties for the mistake? No. The sales wouldn’t have happened if the book hadn’t been free. Does Amazon owe him damages? Only if he can prove harm, and again, given my experience and the experiences of others, I don’t think there was any.  He can always hire a lawyer and see what he can get—but I suspect all he’ll get will be some legal fees.

Galley Cat on the other hand deserves a slap on the wrist and a long lesson in the art of reporting. If they are, indeed, “the first word on the Book Publishing Industry,” then they should know that free promotions often boost sales. They should also have contacted someone at Amazon to answer Crawford’s claims, and they should have asked uninterested third parties for analysis.  This kind of article is just plain shoddy reporting, and has, unfortunately, diminished any credibility that Galley Cat ever had with me.

Back to the whole concept of free, however. Let me share what I’ve learned over the past few weeks. Use it as your guide if you want to offer a free e-book some time in the future.

1. Make sure you have more than one title before you offer a book for free.

2. Make sure that you have titles in the same genre, and if possible, make sure they’re in the same series.

3. Limit the amount of time the title is free. I have a date with both Kindle and iTunes to check the free listings once per week—and I know I’m not alone. This will introduce a lot of readers to your work, although maybe not right away.

4. Expect blowback. Readers who get books for free are a vocal bunch. Someone will hate your book. Others will love it. A few will be offended because the book isn’t what they expect. A friend of mine calls this the Netflix effect. His theory works like this: Most of the popular movies on Netflix have ratings of 5-7.5 (out of 10) because when you have hundreds (if not thousands) of people ranking the movie, the spread will work out so that the movie will rate right in the middle.  Some will like it, some will hate it, some will love it. It all averages out.

5. Remember that this is a promotion. It’s called a loss leader—meaning that you expect to lose money on this title to lead readers to your other work. Do this only when you can afford a promotion, and not before. Think of it as advertising, and like all advertising, it’s a bit of a gamble.

If I were giving advice to Crawford, I’d tell him to stop worrying about the “lost” royalties and get another book up on Amazon ASAP. Take advantage of all those new readers who got the book for free. I’d also advise him to read the terms and conditions of something before he agrees to it.

Will I offer a free book in the future? In a heartbeat. But as I said above, I will have a game plan, and I will make sure that I know what I’m aiming for with the promotion. That’s what other businesses do. They don’t just randomly offer a special. They put some thought into it.

Writers and publishers should do the same.

Speaking of pricing, for the last few weeks, I haven’t explained the donate button. As I discovered last summer, when I fail to comment on the donate button, donations drop off. I have a donate button on the Business Rusch part of my website because I use up valuable fiction writing time to write this nonfiction blog. The money I make from donations keeps me writing the blog every week. So if you got something from this week’s blog (or previous blogs), leave a tip on the way out. Thanks!

“The Business Rusch: Free” copyright 2011 by Kristine Kathryn Rusch.







64 thoughts on “The Business Rusch: Free

  1. Camille: “Like it or not, Amazon is offering something of high value to both the customers and to writers. Higher value than a publisher ever offered — and a higher value than any other bookseller has offered.”

    That’s not an apt comparison because Amazon is not acting as a publisher. It’s acting as a distributor. Essentially, Amazon is acting as the Ingram’s of e-books and the indie authors are the publishers who have to produce the books in all e-book formats, just as a publisher covers the costs of production, distribution and shipping of print books. And just as Ingram’s gives a percentage back to the publisher of each sale, so too does Amazon give a sales cut back to the author of comparable amount. It’s not a royalty. And Amazon’s cut to the indie author (publishers) is not the most generous in bookselling. Amazon is a wholesaler and so the cut is not as large as publishers may get from bookstores.

    And, like Ingram’s does in wholesale distribution, while Amazon does not have a monopoly (which I never said it did,) it does own the majority of the indie e-book selling market. People want to get on the Kindle because that’s still the biggest market and they may not have the time and resources, rather than being lazy, to do multiple formats and so they go with the largest. This gives Amazon a lot of leverage to set terms that are first and foremost best for Amazon, not the indie authors (publishers.) In time, when Amazon’s majority decreases, authors in aggregate may be able to bring pressure to bear to make changes in the marketplace that benefit them.

    Indie authors, to be effective, need to view themselves as publishers, not as authors getting bigger royalties, which is not what is occurring. Like publishers giving ARCs away for promotion, reviews and word of mouth and Baen Books giving free books online, an indie author can do a free promotion and this may be very effective. But indie authors have to do that free promotion through sales channels and it has to be a complete free promotion — no sales on any vendors, and there are many circumstances that indie authors unlike publishers don’t have the leverage to control in the marketplace. Each indie author, acting as a publisher, has to make choices about what strategies they will use, including free promotions, and whether the author has a print fanbase already or is just coming in is one of those factors that have to be considered. It’s not a one size fits all situation.

    I agree with Ms. Rusch that Galley Cat did a really sloppy job and misrepresented what happened. But that also happens with sites reporting that Amazon is giving indie authors a royalty, which they are not, or claiming that Borders went bankrupt because of Amazon, which was not the case. Accuracy is not a big hallmark of the Web, especially related to the crazy world of books. I also think that Crawford is not entirely wrong to pursue financial settlement for Amazon’s contract violation because his doing so helps ensure that Amazon doesn’t do this mistake with other authors. It might even get the contract terms changed to better ensure better service, and who doesn’t want that?

  2. I’m curious about this compared to the Baen free library. There we have a publisher putting up free ebooks, and explicitly using early volumes in a series as ‘loss leaders’ to crank up sales across the series as a whole, not worrying about whether individual volumes don’t get paid for. It is more formalised than the Amazon things, but they seem to have come to the same conclusion — free stuff works for increasing sales, but people like what they like and want more of ‘the similar’ if not the same, so it only works for closely akin books.

    I’m not a huge fan of the the politics in a lot of the Baen books, especially the more overtly militarist stuff, but they are an interesting example of a publisher going where the retailers (and authors) you are discussing are going.

    It is interesting for the future of author/publisher/retailer (not to mention wholesaler), as each more and more takes on the others’ roles.

    It been said that time exists to stop everything happening at once, so that we are not overwhelmed. Well-defined roles are a bit the same, and it is always going to be challenging when the fences come down.

    1. Darren, good point about the roles. It is challenging, but it’ll settle, in the end. As for the Baen Free Library, like Sourcebooks, Baen has been on the cutting edge of this stuff for years. They have had a chance to figure out what works. People love the free library, and when I spoke with Toni (the publisher) last January at Chattacon, she talked about how successful the free library was at getting readers into series. It’s what other retailers have known for years. Fascinating.

  3. KatG:

    I can only tell you from experience of myself and a number of other authors who do a lot of experimenting with free…. but I can say that every single solitary time any of us have offered even a very unpopular book for free for a few weeks improves sales of that book for a while afterward.

    Amazon’s policies, imho, are not at all unreasonable, given the level of cheating that goes on among indie authors. (Like setting a book’s price at 9.99 but opting in for 35% option, and then pricing it at .99 cents elsewhere in hopes that Amazon will match it, and then pay 3.50 to the author for books which sell at .99 cents.)

    As for the fact that Crawford’s case was not a contract violation — that’s right. Please do not attribute to me the statement that it was. I did not say what happened to him was fair. I said it did him no financial harm — which is different. (It undoubtedly did cause him stress, but, you know, Amazon has admitted its mistake and is working with him.)

    Like it or not, Amazon is offering something of high value to both the customers and to writers. Higher value than a publisher ever offered — and a higher value than any other bookseller has offered.

    They do not have a monopoly, they are not holding us hostage and they do not have a monopoly. As both Kris and Dean have pointed out, there most certainly ARE other ways to get your books out there, the totality of which dwarfs Amazon. But most indie writers (self included) are too lazy to take advantage of them, because, you know, it’s work. Amazon pays for itself by making things a lot easier.

    Sure their service sucks, but that’s a part of the package.

  4. Kris,

    Curious. When the story originally broke, I wrote and posted a reply on their site pointing out that he wouldn’t have 5000 downloads if it wasn’t free. I don’t remember the rest of what I wrote now. Some of the comments look like they might be replying to my comment, but my comment is no where to be seen.

    Makes you wonder.

    Thanks for the detailed article.


  5. “When Amazon matches a free or discounted price an author is offering elsewhere, that’s perfectly legit — that’s in the contract. It’s actually a violation of the contract for an author to offer a book for a lower price elsewhere.”

    Yes, I’m aware that it’s in the contract. It’s in the contract because individual authors have no leverage with Amazon to negotiate anything different. If they want their e-book on the Kindle, then they have to abide by whatever conditions Amazon sets down. Further, Amazon is able to keep them from giving away the book for free on the Kindle — because Amazon makes a great deal of money from all of these indy titles in aggregate even when they don’t sell many copies individually — and also is able to counter and even shut down free giveaways the author might attempt to do at other sites like Smashwords through their bots, without notice to or redress by the author/supplier. It’s legal and contractual, but that doesn’t make it necessarily a good thing for indie authors. It is a business strategy of Amazon’s made for Amazon’s benefit which they can enforce because they still control half the e-book market and about 90% of the indie e-book market.

    Given that those are the circumstances under which authors have to do business right now, it may make much more sense for many indie authors — the ones who do not have an established fanbase, backlist and name recognition — not to do free giveaways at any e-book sales site and instead lower the price somewhat at all the e-book sales sites including the Kindle. While it might result in fewer downloads, it will result in actual revenues — and more chance that those books being paid for will be read and create word of mouth — and it will give the author a chance to build the audience and get into rankings of sales (rankings of free downloads not existing,)which then might get some extra promotion from Amazon and make more people more inclined to buy.

    Right now, with Amazon controlling so much of the indie market, going along with Amazon on this point isn’t such a big deal. But as the Nook, Kobe, iPad, Smashwords, etc. get bigger as a market, the lack of ability in contracts of indie authors to control where and with whom they do free giveaways is probably going to become more of an issue. If indie authors are going to be businesspeople, then these are the issues they have to look at, not just swear fealty to Amazon.

    In the particular case of Crawford, there was no free giveaway being matched, just a promotional sampler. So Amazon violated their contract with Crawford and he has a contractual right to seek redress from them. While he may not get “lost sales” as those really can’t be predicted, he might get damages. As for whether he got more actual sales after the free download spree, those are numbers he should be able to provide you with in another six months or so. But that doesn’t really prove a direct correlation as free downloads are often not read and a sales increase can just as easily come from sales Crawford previously made that created word of mouth.

    There’s no right answer here because it’s all new frontier. But indie authors need to be aware that e-book sites are in very fierce competition with each other and have little incentive to work with indy authors to those authors’ benefit in that competition. So authors will have to develop strategies to be able to do effective business with these sites. That may involve giving the book away for free on all sites for a short period, but that may not be the ideal strategy for all indy authors.

  6. “Furthermore, if you don’t stick up for your fellow authors someday you’ll find yourself on the short end of Amazon’s bully stick.”

    I always have to sigh deeply when I hear this. “Just wait until this happens to you!” is almost always addressed to someone with more experience getting the short end of the stick than the speaker has.

    Look, things go wrong. All the time. You have a great corner location for your restaurant, and there’s a terrible accident one day, which cuts off traffic for the whole of your most lucrative lunch time traffic. Or you have a bad location, but make a lot of money of a seasonal festival… which was rained out this year.

    Sometimes, your ice cream cone gets knocked out of your hand, and nobody gets you another.

    When someone with experience doesn’t get upset about something you think is a disaster, maybe it’s because they actually have experienced similar situations, maybe often.

    Nobody blames an author for getting upset the first time something like this happens to him, but Galley Cat has NO excuse for not actually looking further and supplying the context that author didn’t have.

  7. In bashing the Galley Cat article your reasoning is ridiculous on several levels.

    First,you slam Galley Cat’s journalism but don’t argue that any of the article’s information is incorrect. In fact, you seem to agree that it is correct, but find fault in the author for wanting to protect his right to control his work.

    Second, your argument doesn’t address the author’s central issue — that Amazon gave away thousands of copies of his book without his permission. You point out that he signed an agreement saying Amazon can price his book equal to the price offered by any other retailer. But his book apparently wasn’t offered for “free” by B&N so of course Amazon wronged him and should make it right. It was their mistake. Your take: the author is too stupid to understand how “free” is what he should want.

    Third, you condescendingly imply that he can sue Amazon if he thinks he was damaged. Yeah, independent authors have the finances to battle a $30 billion rapacious, take-no-prisoners behemoth like Amazon.

    If you think Amazon is so much smarter than you about pricing, why not just submit your work to them and let them price it however they want. The issue here is fairness. Amazon doesn’t give a crap about individual authors or their work. All you are is revenue to them. Your “free” content helps them sell Kindles.

    Furthermore, if you don’t stick up for your fellow authors someday you’ll find yourself on the short end of Amazon’s bully stick. But sure, you can always hire a lawyer with all that money you’ve earned from the sale of free books.

    1. He signed an agreement that let Amazon set the price of his work, Doug. They did set the price. That’s the bottom line. In a court case, which is what I was discussing, he has to show harm to get damages. I’m not sure there was a provable–in court–harm. The books wouldn’t have sold as much if they hadn’t been free, and he probably has more sales now than he had before. Still, he has a valid complaint against Amazon. And it sounds like, if you look at his blog, Amazon is realizing it and is trying to figure out some kind of action.

      I’m not defending Amazon. If you read closely, I say I would prefer to set the price of my own work.

      As for Galley Cat, yep, I’m complaining. They never contacted Amazon, they said Amazon owes him money for all those downloads, which they do not. There is no way those downloads would have happened without the free price. If anything, they owe him for the lost sales–a handful, maybe. I pointed out these errors and others in my piece. Take a look at the Society of Professional Journalists’ Code of Ethics. You’ll see that the Galley Cat article followed almost none of these practices. The very first one in the code is important, but so are the rest.

  8. This was such an educational article! Thank you so much! This site is really helping me keep tabs on the very latest changes in this industry.

    I have one question. You recommended that we have more than one title before offering a free book. What’s your opinion on how you should price your first book? Thanks!

    1. Pricing is still iffy, Monica. I think if you’re under $5, readers will see your work as something they’ll try. Under $2, they’re going to wonder if it’s too cheap–except as a special. But right now, that’s my opinion. I don’t have a lot of facts to back it up. I’ll be looking at pricing more closely later in the year.

      And thanks for letting me know that the site helps. 🙂

  9. Galley Cat is a trade mag. Like PW, sometimes it seems to think that part of it’s remit is to write snarky, inaccurate articles on what are perceived to be threats to the trade. Agents/publishers/physical bookstores/physical books = good. Amazon/e-books/self-publishers = bad.

    I don’t think that’s a very sustainable position.

    Re. your free book, congratulations on a fantastic performace. It’s nice to see a publisher willing to experiment on price in this way.

    I’ve been tracking the performance of a lot of free books and I think your tips are on the money.

    However, I have been noticing some writers having great success with “free” even with standalone books. I’m not talking about the thousands of free downloads, I’m referring to the book’s performance AFTER it returns to the paid listings.

    It seems that while your free ranking won’t be perserved as such, some elements that go into the ranking algorithm is (my hunch is that it’s the bit that factors in “sales” velocity).

    I had a guest post from an author a few weeks back. She had only two titles out – one science fiction and one non-fiction, totally unrelated titles.

    The science fiction book was only selling a handful a month. She made it free and had thousands of downloads over a week. When she put it back to paid, it shot up to #253 in the overall Kindle Store and sold over 1,500 books over the next two weeks. It was selling six a month before that.

    She was convinced that is at least partly down to all the bots and sites that pick up the new free books and promote them heavily, even after you return to the paid listings. She reckons you benefit from that promo for two or three weeks.

    I’ve heard of a few cases like this (free working great for standalone titles), but this is the only one where I have all the details. You can read more about it here:

    1. David, thanks for the link. I’m pleased with the way Sourcebooks is marketing the books. Sourcebooks has been one of the innovators among traditional publishers in the e-publishing realm, using free for more than a year or so, and it’s been fascinating to see how their promotions work. I’m intrigued by “free” with standalones. The folks I know who’ve done that have seen a halo effect, just not as big a one as they would see with a series or a related title.

      Agree with you on in-publishing trade magazines. 100 years ago (okay, maybe 25), I used to freelance for business trade magazines to augment my income, and back then, those folks fact-checked me more than any mainstream magazine. Times, they do change. (Although they did let 20-something no-nothing me write for them, so maybe things aren’t so different…)

  10. One problem that the Crawford case illustrates is Amazon’s tendency to employ the “nuclear option” when something happens that the company doesn’t like. Even though the company has the contractual right to meet the lowest price at which a title is being sold by competitors, Amazon could, and should, investigate the situation further and warn self-publishers before dropping the price to zero.

    You’re right that he probably would have sold only a small fraction of the 5,104 free downloads had they not been free, but he did lose some income due to Amazon’s “Fire, ready, aim” approach.

    1. Actually, Len, I disagree. I’m pretty sure he didn’t lose any sales because of the halo effect after the book went to paid. I’m convinced he got more sales because of this mess. I hope he’s writing the next book and not contemplating legal action, because he would have a heck of a time proving lost sales. It’s a mess, yes, but it’s a weird new world of publishing mess.

  11. Kat: When Amazon matches a free or discounted price an author is offering elsewhere, that’s perfectly legit — that’s in the contract. It’s actually a violation of the contract for an author to offer a book for a lower price elsewhere.

    The problem here is not that Amazon lowered the price without “permission” (he gave permission when he clicked the agreement box and published the story) — but rather that Amazon doesn’t let people set prices to free in the first place. So they have to break the rules to offer a free book.

    I suspect that capability will come, perhaps with some limitations. I just wish it would come sooner.

  12. I know of another self-published author who was running a free download special on Smashwords for his novel and Amazon promptly changed his price on Kindle to free. He tried to view it as a positive for the promotional aspect because it did garner more downloads and he didn’t contest it. But the reality is that Amazon did it without his permission, eliminating his chance to make income even if from lesser sales, and is forcing authors not to give free promotions on any other sites besides Amazon or Amazon can simply say no sales all around. Consequently, Amazon keeps a tighter grip on the e-book market and indie authors can’t act like publishers. So you may, unless you are an established author with a large fan base, be far better off going with a low price like 99 cents and no free promotions and get fewer downloads but a better chance of getting your titles in rankings — which brings name recognition and more downloads — than letting Amazon simply throw it in with their thousands of free titles and keep you from any kind of promotion with other vendors. Until there’s more authorized procedure in the market, Amazon will continue to act as a cattle baron and fence authors in. That’s okay for now while the market is young, but it may become a real problem later on.

  13. Debora comes wandering over to find out why traffic to my website spiked yesterday while I was on a plane :D…

    A comment on what happened when your book came off free. It used to be that books jumped back into the paid ranks very high up (as if all their free sales in the past day had been paid). Now it takes from 12-72 hours to fully adjust to that paid rank, and it starts way at the bottom (one I watched peeled off at #11 free, then came out at #352,000 paid, and adjusted up to #246 paid over the next 12 hours or so).

    If you’d been able to see the daily sales numbers, I suspect you got the most paid sales in the 24 hours after being free, even though that’s not when your paid rank peaked. Unfortunately for you, you were on the long end of the rank adjustment (if it had taken less time, you’d likely have peaked about 150 ranks better). So the book isn’t really climbing the paid ranks based on sales, but based on a lag in Amazon crunching. Either way though, your sales numbers were probably really pretty!

    And now, for the two people still reading :), a caveat – a publisher like Sourcebooks can set a price to free right on Amazon, so they have a lot of control over where it starts and ends. Indie authors can’t do that – we have to try to finagle a price-match with a free price on iTunes or B&N (sent via Smashwords – you can’t go direct to free on B&N either). So control is a LOT less, and many authors are having trouble peeling off free and getting properly reintegrated into the paid rankings on Amazon (sometimes for days or weeks). It’s a marketing tactic that bears some risk and doesn’t always work properly (and as James discovered, KDP response time is not always ideal on “outside the norm” issues like this.) Proceed at your own risk ;).

    1. Debora, fascinating. We’re still all doing guesswork, though. If I were really still in the nonfiction game, I’d interview someone at Amazon and get the scoop. I’m too lazy. (Actually, I’m under too many fiction deadlines.) Someone should do an article on the various ways the bots work for all of the publishers (hint, hint) using real journalistic standards, not Galley Cat’s. 🙂 (Oh, that was snarky.)

  14. Just for future reference, for those who use Smashwords distribution:

    If you do something like James, where you put a freebie sampler up ahead of real publication, or do some other thing which you want definitely taken down when the time comes:

    1.) leave some time for things to trickle through the system.
    2.) check every vendor on the distribution list thoroughly
    3.) if some vendor is lollygagging, write to Mark Coker. He’ll help.

    You can use the contact link at the top of the page, but be very specific and clear on what you’re asking. (He gets a LOT of mail.) State how long you’ve been waiting for the vendor to change, include links to the vendor’s page for the book and to Smashwords’ page for the book.

  15. I remember early last year when Amazon flipped the entire “free” bestseller list into the “paid” bestseller list. I don’t know if it was a hiccup or what, but there were about 30 unknowns suddenly in the Top 100, and some used it as a springboard into huge sales and success. Never underestimate luck in this business.

  16. For the sake of correct reporting, it took Amazon from 9/30/11 to 10/20/11 to reset the price of my book. The customer service surrounding this situation was abominable, and that is one place where Amazon KDP (who have since contacted me by phone) and I agree.

    -James Crawford

    1. Thanks, James. Just found your blog about all of this. I had trouble locating it over the past several days, and finally saw your notice. For those of you following this, here’s where you can read the entire story:

      Amazon did treat you terribly and I have no idea what kind of recourse you have for that; that’s what lawyers are for, if indeed you’re willing to go that way. I hope you and Amazon can find some kind of settlement. As I said in my piece, my complaint is with the misleading Galley Cat article, which went viral.

      I do hope you get more work up–and I hope this got you some good attention from readers on your book. I also hope you get some more writing up there soon, so that you can capitalize on all of this publicity.

  17. You say, “The concept failed James Crawford. His B&N book with the same or a similar title triggered the Amazon bots and they mistakenly lowered the price of a different product to zero. When Crawford pointed out the mistake to Amazon, Amazon immediately corrected the price, returning it to $5.99.”

    The problem is, Amazon did not immediately correct the price. The runaround went on for some time, as call after call were made, to try and correct the problem. Amazon/KDP insisted on a re-publishing, and it again went to “free”.

    That’s what makes Mr. Crawford’s case more difficult.

  18. I’m just starting out with self-pubbing, but since I started my blog in 2009 I always do a free story every Halloween. When I uploaded my ebooks last month, I started on 10/17 with the novel and a free novella that takes place in the same setting, and has the first chapter of the novel at the end. The next day I put up the 2010 free short story, and then each weekday a paid short story until Halloween, when the 2011 free story went up. (The free stories are also available at my website.)

    Of course, right now I’m mostly looking at Smashwords data, since I had to wait for Smashwords to push the free stories out to B&N, and Amazon has not marked them down yet. (I haven’t put the 2011 story on Amazon for that reason. If they mark down the other two, I’ll try making it available.) But here’s what I’ve found so far, as of today:

    The novella A Wild Hunt (released 10/17) has been downloaded a little over 200 times.
    The short story Not Quite Casper (released 10/18) has been dowloaded 650 times.
    The short story I Burn For You (released on 10/31) has already been downloaded just short of 500 times.

    So the second short story is outpacing the first. Both the shorts are outpacing the novella. I don’t know if this is due to length, or if it’s because both the shorts are erotica and the novella isn’t. (I have noticed the paid short stories that have the subtitle “an erotic short story” sell better than the ones that don’t have the subtitle.)

    A Wild Hunt only just showed up on B&N, and Casper and Burn aren’t there yet. It will be interesting to see what that does to sales.

    I know it’s way too early to really be able to tell anything, but I’m finding it all very interesting.

    1. Thanks for the numbers, Mercy. I too find that erotica sells better. My erotica (under a pen name that no one but Dean knows) sells better than everything else combined. I think genre is important in all of this as well. But again, we’re working with friendly numbers here and don’t have a broad ability to look at large numbers. We’ll see over time.

  19. Great stuff on the freebies, Kris.

    As for journalism, I used to work with an anchor who, when we were unable to get sources or verify facts, would say, “Never let the facts get in the way of a good story.” Of course back then he was kidding.

    Sadly, that joke has become truth in the world of journalism.

    1. And yet there are folks working to keep up the standards. I know how hard you work, Randy. It was starting to change thirty years ago, and the change accelerated with the 24-hour news cycle combined with the cut in support staff. It became harder to maintain good quality with fewer resources and more time to fill. What irks me the most are the folks who claim they know what they’re doing and they don’t. They just copy the tabloid shows on their websites and think that’s journalism. Or what I’m seeing other friends deal with, which is management that came from another industry. One friend told me that her boss (the owner of the company she works for) said my friend’s biggest problem was that she considered herself a journalist. “I don’t have that problem,” her boss said. Ouch. That’s what we’re coming up against in our quest to find good information.

  20. “I really should stop railing against the decline in journalistic standards.”

    I wasn’t aware there was such a thing as journalistic standards. But then, I’m a bit of a cynic when it comes to that subject.

    As an aside, and a bit of snark, one of my favorite movie lines ever is from Deep Impact, when James Cromwell’s character is talking to the news lady on the dock at the beginning: “I know you’re just a reporter, but you used to be human.” I crack up every time I hear that line.

    Anyway, it’s pretty awesome how well going free worked out for you, Kris. I don’t have nearly the portfolio out there to make playing that card worthwhile yet. But by mid to late 2012, it might be something worth trying.

    Thanks for sharing. 🙂

  21. Finding free books for the Nook is very easy. In the search box, simply enter 0.00 – you don’t even have to do an advanced search and specify that’s the price you’re looking for, just put 0.00 in the first search box you see and all the free books will come up.

    1. Thanks, Madigan. I knew someone who owned a Nook would know. It’s still not as obvious as the Kindle, where you click on the bestseller tab and you choose between the paid list and the free list. But at least there’s a way to do it. Good to know.

  22. I’m sure that temporary “sale” helped him. I’ve had a number of books go free. Every one of them had at least a minor increase in sales afterward (on the same title).

    And at B&N, they tend to make a lot of money after they’ve been free for a while.

    However, I was going over my sales numbers, and I discovered that for one of my shorts collections (one with a tie-in to a particular novel) all of my sales of all of my novels are slightly better when that book is free. It doesn’t matter if that book itself is no longer “selling” a lot of free copies.

    Having that book free (all the time, not just temporarily) is the best promotion I’ve done.

    I think the reason has to do with the slightly off-genre nature of my books. My books are the kind of books which need to be “hand sold” — that is, since they’re hard to identify by genre and tone, people need more info to overcome their resistance.

    What that one freebie does is show the reader, in a less “odd” way, what kind of voice I have, what kind of stories I tell. While this is good for those who write clearly in a particular genre or who already have a reputation, it’s _critical_ for those of us who are off-kilter.

    But it has to be the right book. I think writers like me should be writing lots of short subjects and experimenting to find that perfect “salesman” book — and then offering that for free everywhere they can get it.

  23. Thanks for the info. Kris!

    As to the state of journalism (initial cap deliberately omitted), Conan O’Brien ran an interesting segment last night. He had announced, apparently in a press release, that he was going to perform a same sex marriage for 2 of his staffers on the program later in the week. Last night he aired a segment of at least 20 TV news outlets reading, “Conan O’Brien is pushing the envelope on late night television…,” all using exactly those words. Obviously that’s what the press release said, and so it was writ on the teleprompters. All you need is a good looking letterhead, a fax machine, and a good headline. It’s sadly rare to see an act of actual Journalism committed these days.

  24. Hi Kris,

    Cool post. I think going free is a pretty interesting and exciting adventure. Recently, I wrote a few 1,500 word promo stories set up like what Konraith did with Serial. I don’t really have huge sales via them yet, but my feeling is that once Amazon price matches B&N, I will see quite a bit of action from it (I did it once with an erotica title and noticed a good cross over to my other titles and still am.)

    Anyway, with 200 titles and growing rapidly, I’m pretty excited to see how things turn out once Amazon gets around to fixing me up. Will I see my fantasy and thrillers sell heavily and will other genres see an increase to? Yes or no. Either way, I’m excited!

    Keep up the good work!

    Kenneth Guthrie.

  25. Thanks for sharing your information. I’ve had similar experiences with the free short stories I’ve put up as loss leaders (though obviously with sales less than yours.) I feel I’ve learned what I needed to learn from the experiment and now I’m going to wait until I have more books up before doing it again. At the very least, getting my first two trilogies completed. Getting those finished would get me to the ten book threshold that seems to be a common number for seeing a more consistent growth pattern in sales (or at least that ‘ten’ number is a being passed around as a threshold, not sure if it’s true or not.)

    Thanks again!


  26. Great analysis, Kris! My own experience with Galley cat has been that they’re more interested in clickthrough’s and shares then accurate reporting. This is not the first time they’ve taken a sensational angle on a story, and probably won’t be the last, as long as this tactic brings them more page views.

    As for the author, I agree that this mistake from Amazon probably didn’t hurt him, and might well have helped him, although I can see why he’d be frustrated. The psychological experience of offering your book free by choice, compared to having it done without your knowledge or permission, is very different. I went over to his blog about the experience, and it seems like Amazon customer service has been pretty unresponsive. It’s not the first time I’ve heard stories of KDP brushing off individual authors. There was that whole kerfuffle with Amazon removing erotica from some of their lists a while ago, and stonewalling them when they objected.

    1. Livia, thanks for the reality check on Galley Cat. I hadn’t looked closely at them in more than a year, because I usually have seen the story elsewhere. As for KDP, they’ve been quite responsive to me and to others. I find that doing things by e-mail often leads to “unresponsive” complaints because the e-mails never arrive. The key is to be persistent–and to make sure that someone got the e-mail you sent.

      That said, the author is probably quite frustrated, more so because he expects money now. It’s not a good situation. I think we can all learn from this, in that we should be careful of our titles on books, so as not to confuse the bots. (I’m serious, even though that sounds rather skiffy.)

  27. Actually I’d assume the paid rank increase came because the book started showing up more frequently in the “Customers who bought this also bought” list, as Amazon includes free downloads as bought books.

  28. Excellent analysis & excellent advice about what a loss leader is & how best to utilize it. I will be starting my self-publishing adventure with a novelette … & my plan is to put it up at a reasonable price, probably 1.99, & then ignore it beyond simple notices on a website & facebook. Then I plan to work on the next couple of stories in that world & put them out as well. Maybe once I have enough of them to make a collection, and/or a stand alone “full length” piece (50,000 words or so), I’ll start thinking about loss leaders.

    But it makes total sense to wait on marketing strategies until the inventory to capitalize on those strategies is in place.

    Your explanation is clear, to the point, & immediately makes the light bulb over my head light up.


    1. Thanks, Shawn. I think we’re all still in the experiment phase of this stuff. 🙂 So it’ll be interesting to hear what works.

      Skip, you might be right about the algorithm. I’m still not entirely sure how it works. Maybe it’s elves working their magic ways….

  29. Good one, Kris! You are absolutely right. Free can be very effective when promoting your work and gaining readership but you have to have other titles to offer as well. This is something new I am seeing in the indie publishing world and will take time to catch on in the other if it ever does.

    1. Traditional publishers are figuring it out, Melissa. Sourcebooks is a traditional publisher. I’m finding a lot of short stories by big names when I troll the Kindle free lists, usually just before a big book gets released. This free stuff isn’t something that indie writers dreamed up, but something that has been a part of retailing for decades. Folks just haven’t applied it to books before–that I know of.

  30. Yeah, that article niggled at me, too. I guess it says something about modern journalism that I expect it to be inaccurate if not outright propaganda. When somebody does bother to research properly, I’m impressed. (Bear in mind that I’m young enough that I don’t remember the standards ever being high.)

    I love seeing that the free promo from Sourcebooks affected your sales. What you experienced supports how I suspected those things would work. 😀

  31. Thanks for the sanity check on this, Kris. I had seen people talking about that (and a lot of other pretty dumb discussion about free books) and was just shaking my head.

    I haven’t tried free with a series yet (that’s the next experiment), but it definitely boosts the sales of books post-free. I had a thriller novel free for 9 days and got 17403 downloads (and 8 reviews! yay) and in the five days since going back to the shockingly high price of 5.99 (tongue in cheek here), I’ve had 122 sales. It is slowing down a little today, but that bump alone was worth it (paid for its cover, editing, plus extra). I can’t wait to experiment with a series. I don’t see those 17k copies downloaded as “lost” anything. Most of those people probably would never have seen or bought the book without it.

    I have heard from others that your experience is not unique. Series seem to do very well at free for the first book with about 2-5% follow-through of people buying later books.
    Also, wasn’t it Neil Gaiman who had “The Graveyard Book” available for free off his website for like a year while that book was also on the NYT bestseller list? I wonder who he’s gonna sue for free hurting his sales? *grin*

    1. Thanks for the numbers, Annie. I wish there was a way to track the follow-through over time. The immediate one is obvious; the later ones aren’t. And yes, Neil offered (still does, I think) the Graveyard Book for free on his site. As he says in an interview, we encounter most of our favorite authors through freebies–either a loan from a friend, a loan from the library, a gift, and so on. We should realize that’s a marketing tool. They’ll buy the next book, if you did your job as a writer.

  32. The only experience I have with selling a free title on Amazon is when I put my short story “Timpani the Ostrich Rancher” free, really just to see how to actually accomplish that. The day it switched over to free a little under 2000 people snatched it up, and a steady trickle after that, to about 4500 total.

    I also saw sales of a lot of my other 50 short stories, collections, and books go up, but not by a whole lot. It wasn’t really a targeted promotion, and it’s a stand-alone short story. I wasn’t even prepared enough to put the name of the collection in the product description.

    So, really the only benefit was the ego stroke of having a kerbillion ‘sales’ all at once, and seeing my short story somewhere in the rankings for a couple days. Oh, and the Joy of Learning. …lame.

    When I do it again, I think the strategy of making the first book (or an introductory short book or short story) of a series free will be the best one for me. A weekly rotation of free short stories might also be useful, once my bookshelf is bigger.

  33. What interests me in all this is whether Amazon can set a mechanism in place to prevent their bots from picking up same name “samples” set to free. And whether they’ll see a spate of these non-labelled samples.

    I rode the free train last month (write up here: if you want to see the figures) and found it was very positive for sales of the next book in that series. I saw a couple of negative reviews based entirely on the first chapter (free seems to mean people are happy to review on a sample of the book) but the vast majority of the reviews were positive, so that evened out.

    1. Thanks for the numbers, Andrea. Free does work when properly targeted. 🙂

      David B., thanks too for your experience. That matches what numbers of writer friends have reported on free stand-alone short stories. I’ll have one up over Christmas, just because, but I don’t expect any spike in my numbers because of it. It’s kind of a present to my fans.

      Also, the free short story on my site here on Mondays does help build readership. Besides, that’s fun as well.

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