Business Musings: Your Basket is Leaking

Business Musings: Your Basket is Leaking

In October 2018, Sears filed for bankruptcy. The form of bankruptcy the corporate heads chose was something called Chapter 11 here in the U.S. It means that the company—once the largest retailer in the entire world—will be able to reorganize and, if they’re lucky and the folks running the company are smart, they might be able to emerge from bankruptcy with some of the business still intact.

The key here isn’t the details of Sears’ bankruptcy. It really isn’t even Sears itself which, when I was a child, fifty years ago, was a fixture in America. It’s the trajectory of the company.

In the late 19th century, Sears started as a mail order company that sold watches.  Over the next three decades, the founder acquired partners and reorganized his business more than once. The company made an initial public offering after the turn of the century, getting more and more cash into the business.

And Sears grew from a mail order company that sent out catalogues featuring watches to one that featured bicycles, stoves, washing machines, dolls, clothing, and groceries, among many, many other things.

By early 1940s, Sears’ catalogue became  known as the Consumer’s Bible. In the 1950s or so, Sears started opening brick-and-mortar stores, and by the mid-1970s, the brick-and-mortar business overshadowed the mail order catalogue.

Mismanagement, a failure to keep up with the times, and a large corporate structure led to a decline starting in the 1980s, exacerbated by the rise of Wal-Mart in the 1990s. Sears still had a lot of value after the turn of the 21st century, but not in retail. The value was in its properties and its stock, and eventually that declined as well.

And now, Sears—mismanaged to pieces, its mail-order business (and famous catalogue) a distant memory—has almost thrown in the towel. They’re fighting for their existence. Very few adults alive remember the store in its heyday.

But look at that trajectory. Mail order on one item only. Then more items. Then unrelated items. Then becoming one of the biggest companies in the world. Then adding brick-and-mortar.

Does that sound familiar? Think of it this way: instead of mail order, think online. Instead of watches, think books. And then realize that Amazon shares much of Sears trajectory, only on a slightly accelerated pace—and without the name changes and the obvious added partners.

Sears to Wal-Mart to Amazon. There is a direct line. Wal-Mart is still fighting for dominance, but they’re no longer fighting Sears. They’re fighting Amazon. And Amazon is probably fighting some other company with a good idea, some company that I’m not entirely aware of.

Why is that important?

Because currently, Amazon is the biggest online retail company in the world. (Wal-Mart is still the largest retailer, but Amazon has moved up to second there as well.)  Amazon is exceedingly important to the indie writer movement. In fact, indie publishing would not be where it’s at without Amazon’s innovation with the Kindle ereader ten years ago.

In that time period, a lot of self-published authors have used Amazon’s ecosystem to make themselves, if not wealthy, then at least comfortably well off.  Many of those writers don’t even market their work outside of Amazon at all, preferring to use the tools provided by Kindle Select to promote their series and their work.

Early on, writing advice for indies (as I’m going to call writers who work outside of traditional publishing) centered on an Amazon-only strategy. If you look at my earliest blogs on the publishing industry, back in 2009/2010, you’ll see me constantly defending myself against that very argument. I learned as a young freelancer to go wide—and that was back in the early 1980s. Relying on only one source for income—no matter how large that source is—is never a good idea.

Eight years ago, my argument looked weak. Back then, Amazon had few competitors in the ebook space. But now, there are more than I can count. Barnes & Noble tried to go head to head with Amazon here in the States and largely failed. Kobo has managed a large international presence, and is continually growing their business. iBooks has played off Apple’s established network worldwide to remain a player, and even GooglePlay has made inroads in Amazon’s dominance.

But none of those markets or any of the others indie writers can access when they go to D2D or other aggregators come close to Amazon in sheer reach.

I know that. It’s hard to avoid that. That’s why my books are on Amazon. But, as I told folks at the 20Booksto50K conference earlier this month, I never had the option of joining Kindle Select. Kindle Select demands exclusivity from its authors, and I couldn’t do that, under any of my then-existing pen names. Through traditional publishing, my names had gone worldwide. Going exclusive to Amazon meant that many of my regular readers wouldn’t be able to get my books.

Having been in traditional publishing, with its weird rules and limitations, meant I had learned early on how angry readers get when they can’t get a book that they want. I didn’t want to replicate that experience for them, particularly as I took back control of my publishing, so I never even considered Select.

Although, I had to admit, I was envious at times of writers who could manipulate that system to raise their profiles—at least on Amazon. It would have been nice to have access to the same tools. Eventually, I developed a few new pen names (for a variety of reasons, and no, I’m not telling you who they are), and they experimented in Select.

The Select promotion tools are good until they’re not, as everyone who plays in that ecosystem knows. Amazon changes the system, and then the indies figure out how to best use that system, and then Amazon changes it again.

There have been complaints about Amazon and its practices from the start. But savvy writers have known that Amazon started this revolution, and no matter what they’ve done, we all owe them big for that.

But…then there’s the argument I’ve been making on this blog since at least 2010. Do not put all your eggs in one basket. Even if that basket is the biggest online retailer in the world.

I still get pushback on that advice. But not as much as I used to. Because some of the big pro-Amazon indies are beginning to see cracks around the edges of Amazon. There’ve been too many changes to Select, too many broken promises, too many costly mistakes.

Some of the formerly pro Select-only gurus are now quietly going wide. A few others, trapped in the ecosystem, are using other tools to make their novels available before they put the books into Select. They’re still gaming Amazon’s system, but they’re gaming it to keep the income coming—until they can move out of the exclusivity trap that they had allowed Amazon to build around them.

For the writers, though, who continued to argue that Select was the only viable place to play, October and early November were a difficult time. Writer after writer here in the U.S. noted that their international sales had declined dramatically.

I felt for a number of them, many of whom self-reported on David Gaughran’s blog that sales figures from the countries that had provided most of their income had dropped precipitously in recent months.

Amazon had made some kind of internal change designed to funnel readers into the country-appropriate stores. A lot of international readers who had been buying from Amazon.com (the original site, based in the U.S.) could no longer do so this fall. However, in theory, if those same readers went to the Amazon store in their country (Amazon.it in Italy, for example) they would find the books readily available.

In theory.

In practice, it was haphazard, and no one—not the readers, not the writers—had been informed of the change.

It caused a huge mess. And finally David Gaughran, who lives in Ireland, researched what was going on. He did fantastic work to discover what the problem was, and how it affected customers worldwide. I highly suggest you read this blog post of his, as well as the comments.

At the time of this writing (in mid-November), there’s uncertainty as to whether or not the problems stemmed from a bug in the system or a deliberate change that backfired on the P.R. level. After a lot of pressure, which ramped up after David’s piece, Amazon finally released a statement about the situation.

They wrote:

We’re experiencing an issue that has made some eBooks unavailable in the Kindle store in different marketplaces. Our engineers are working to solve this issue as quickly as possible. We’ll update this post to keep the Community informed once this issue has been resolved.

That’s as clear as mud, since the “issue” might well have been intentional. Or it might have been, as some readers suggested, a side effect of a change in the way that Australia collected the GST (Goods and Services Tax) on overseas businesses. (Essentially, if Amazon’s Australian customers bought from Amazon Australia, then Amazon wouldn’t have to pay the GST. If those customers bought from Amazon.com (A U.S. store), Amazon would have to pay the tax.) Amazon had started geo-blocking Australian customers from using the U.S. store.  and there is speculation in the indie community that this geo-blocking marked the beginning of the problem across Amazon.

Whatever the reason, the changes in Amazon resulted in a drastic loss of income for some writers. That loss was even more severe for writers who were not wide. Because that meant that a lot of those writers lost impulse sales. They also lost revenue from promotions that went nowhere (to Amazon pages without buy buttons).

If that reader then decided to download the book from another retailer, like Kobo or iBooks, the reader wouldn’t be able to find the book at all—because the indie author chose to be exclusive to Amazon.

The sale was, for all intents and purposes, gone.

Now, before you write me, I know that a lot of readers want their .mobi files and nothing else. They don’t want to move to Kobo’s readers or to read on their iPhones. They want to use their Kindles or their Kindle apps. And if the book isn’t available on Kindle for those readers, it doesn’t matter if the book exists on another platform. Those readers won’t go to that platform at all.

That’s a side point. But let me continue the digression for a moment. Because if a writer’s work is wide, then the reader gets to choose how she buys her books. The writer doesn’t dictate what platform the reader has to use to get the book. There are a lot of benefits in being wide. That’s just one of them.

This last month, though, it reminded me of the dangers of putting your eggs in one basket. Select writers saw their sales damaged due to a change in Amazon policy, a change Amazon had not been transparent about (to readers or writers). Since the change happened behind the scenes, it took more than a month for writers to learn what was happening.

By then, the sales were lost, and there was nothing the writers could do to recoup that lost revenue.

These problems had happened in Select before, and will probably happen again in the future…as long as Amazon maintains Select. But I’m hearing concerns from the hardcore Amazon defenders that Select might be shut down. I don’t have any data that suggests such a maneuver, but Amazon has been known to shut down its programs without much warning at all. Earlier this year, it shut down Kindle Scout and Kindle Worlds. It’s not a big stretch to think it might shut down Select, especially given some of the complaints it’s getting from readers about the program.

Amazon’s deliberate lack of transparency makes it hard to know what’s in the works at corporate headquarters. Even if Select is highly successful from the outside, it might be requiring too much time on the part of its staff to justify its existence. Or it might have outlived its usefulness.

Or all of this speculation might be wrong.

But what happens to the writers who are making a fantastic living inside the Select ecosystem? If Select goes away, so does their income. They’d have to rebuild wide, and they might not ever achieve the same level of success.

These writers had a taste of what can go wrong this fall. That precipitous drop in income due to Amazon’s “issue” should be seen as a warning shot across the bow. One “issue,” one technical glitch, one corporate decision, and all of the indies who are exclusive to Select might go from making five to six figures per month to making nothing at all.

If you’re one of those writers, think about what that would mean for you and your career. Have you banked enough money to handle that sudden loss of income? Do you know how you will react if Select vanishes?

If you don’t know the answers to those questions now, it’s time to figure out what you’ll do. Because you’ve had fair warning.

No retailer is forever. And no retailer is on top forever. Retailers are like any other business. They grow, they change, they mature, they cut back. Look at the history of Sears. It went from being the biggest company in the world to filing bankruptcy. If you don’t believe me, believe Jeff Bezos. On November 8, he told his employees:

Amazon is not too big to fail. In fact, I predict one day Amazon will fail. Amazon will go bankrupt. If you look at large companies, their lifespans tend to be 30-plus years, not a hundred-plus years.

He’s right about the 30-plus years. That’s where Barnes & Noble is at right now. And B&N was the big scary store-eating bookseller two decades ago.

If you don’t think that the loss of a retailer can have an impact on a writer’s career, let me remind you of how many indie writers had their careers destroyed by the loss of All Romance Ebooks just two years ago. Writers lost hundreds of thousands of dollars, money they were never able to recover.

If Amazon shuts down Select, it will pay its outstanding debt (unlike All Romance Ebooks). But that doesn’t help writers on the loss of future earnings. You can go from earning thousands in December to earning nothing in January. It will be scary. Or it might not happen at all.

But the wise indie is the one that sees the warnings that Amazon is sending. Protect yourself now. Figure out, over the next few months, how to take your writing wide.

It’s the best protection you have. It might not replace the vast income you could lose if (when) Select disappears, but it will enable you to easily rebuild.

Amazon is just one retailer, like Sears was one retailer. Sears was the giant of its generation, just like Amazon is now. But giants shrink with age, just like the rest of us.

Remember that, and you’ll still be here years from now.

Even if Select is not.

***

The more things change…

It amazes me how similar the Sears growth trajectory is to Amazon’s. Amazon hasn’t been around as long as Sears, so we’ll see if the similarities continue across generations. But right now, Sears does provide a great object lesson—and one that comes at the same time as Amazon’s Select “issue.” The timing couldn’t be more auspicious—for the blog writers of the world.

I have a few ideas on how to make the transition from Select to wide, but I haven’t finished researching them in depth. I learned about a few at the Business Master Class, and a few others at 20BooksTo50K. I’ll be writing about them in the months to come.

In the meantime, thanks to everyone I met at both conferences. It was nice to put faces to names, nice to meet supporters in person.

And as for the rest of you, thank you for supporting the blog. I appreciate the emails, shares, likes, links, and follows. I also appreciate the donations which keep this reader-sponsored blog alive.

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Which I am going to say right now. Thank you!

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“Business Musings: Your Basket is Leaking,” copyright © 2018 by Kristine Kathryn Rusch.




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27 responses to “Business Musings: Your Basket is Leaking”

  1. Maree says:

    I’m a writer with a very small readership and only a few books published. A lot of other writers have scolded me for not putting my books in KU, but I’ve had too many other experiences in my life to feel safe with only one client. It’s simply a bad business practice as far as I’m concerned.

    And already, even with my tiny readership I’ve had readers tell me they hate amazon and won’t shop there, and are thrilled to find my books on other platforms, and I even had one reader email me and tell me that there was a problem with Amazon and since she couldn’t buy there she’d gone through quite a few hoops to buy the book on another platform and then side load it to her kindle.

    From these sorts of comments I feel like I’m actually building a readership that are fans of my writing, who will put in some effort to seek out my work. And Amazon antics can’t change that. I wouldn’t feel so confident of a readership gained through KU.

  2. K.A. Jordan says:

    David Gaughran is a wonderful researcher. I didn’t realize that I had a problem with my KU e-books until he brought it up. I had an entire month with no sales outside the US Amazon site. They just started up again December 1st.

    I started transitioning out of KU in September. The last time I had my e-books ‘wide’ I didn’t have enough to get noticed. Now I’ve got more and the transition is going well.

    Always glad to get news from people like you and David! I rely on people like you to get my news.

  3. For over a decade now, I’ve been telling people what’s going to happen with Amazon. That they’re going to treat suppliers like shit (the way they treat us indies), that their terms would get more and more onerous for the supplier (ding, ding, ding), and that they’d be unable to keep the ridiculous promises they make to both customers and suppliers (Prime two day shipping is a joke in my house, if my dad wants something in two days has has to pay through the nose for overnight).

    Nobody believed me. Then in the daily PW email yesterday, there was an article about brands who are leaving Amazon completely because they refuse to play in Amazon’s closed system and risk going out of business. Birkenstock is one of them, and the article was centered on Pop-Sockets. Then there’s all the stuff that’s been in the NYT this year, plus the workers comp lawsuit in California that Amazon will most likely lose.

    I think Amazon is in the beginning stages of their destruction. When they treat brands that way and they leave, customers go elsewhere. I haven’t purchased anything on Amazon in a decade and the only way I’ll ever be in Select is if it’s literally the only option left. And I write two of the powerhouse genres for KU. I’m leaving thousands of dollars on the table. But I refuse to sacrifice my principles and ethics for fast cash. They already treat me like shit. I’m not giving them permission to control everything about my career.

  4. I think you’re definitely right about a lot of things, including the thesis that gives the post its title. Amazon may be in the retail business, but what’s surprised me is that it’s also the web business, and it’s had startling longevity for being in that sector; Google is just about the only one who can claim similar longevity. I almost think 30+ years would be extraordinary, especially when we have tech companies that fold or are bought so much more quickly. I’m thinking specifically of MySpace here (who else remembers them?).

    One other thing I think it’s worth considering is Amazon Web Services, which tends to fly under the radar. Everyone thinks of Amazon as this big retail behemoth, but two big points about AWS: it accounts for 10% of Amazon’s revenue (more than $17bn) and A LOT of websites run on it. When AWS has gone down, it’s brought down sites and services like Quora, IMDb, Instagram, and IFTTT.

    You say, though:
    “Eight years ago, my argument looked weak. Back then, Amazon had few competitors in the ebook space. But now, there are more than I can count. Barnes & Noble tried to go head to head with Amazon here in the States and largely failed. Kobo has managed a large international presence, and is continually growing their business. iBooks has played off Apple’s established network worldwide to remain a player, and even GooglePlay has made inroads in Amazon’s dominance.

    But none of those markets or any of the others indie writers can access when they go to D2D or other aggregators come close to Amazon in sheer reach.”

    But it seems like that contradicts the point you’re trying to make. The way you’re phrasing it, it seems like Amazon still has few competitors in the ebooks space. Some have made inroads, as you mention Google has, but even still nobody is really coming close to Amazon. I have hopes for Apple Books, but we’ll see.

    The basket argument just becomes more complicated when the other baskets are either much smaller or much more flimsy, and so can’t hold as many eggs, or any at all.

  5. vinector says:

    A point that many writers miss is that Amazon is making out like a bandit on Kindle. Publishing a book on Kindle costs Amazon so close to nothing their accountants are frustrated. What does it cost the writer? Months, sometimes years, of hard work. Yet AMZN gets their 30%. Indies hate traditional publishing, but the trads do SOMETHING for their percentage, albeit very little these days. AMZN does almost nothing. I firmly believe that a digital publisher who cuts a reasonable deal with authors could be powerful in the market. But I haven’t seen anyone try.

    • Um…Amazon is providing a distribution platform. That’s what they’re doing. Baker & Taylor and the other paper distributors also take a percentage. Writers usually don’t see it, though, because they work through traditional publishers.

  6. Widdershins says:

    The problem with ‘exclusivity’ is, as it has always been, what it excludes.

  7. D J Mills says:

    “Essentially, if Amazon’s Australian customers bought from Amazon Australia, then Amazon wouldn’t have to pay the GST. If those customers bought from Amazon.com (A U.S. store), Amazon would have to pay the tax.) Amazon had started geo-blocking Australian customers from using the U.S. store. and there is speculation in the indie community that this geo-blocking marked the beginning of the problem across Amazon.”

    My understanding is that all Australian purchases within Australia must have GST added (10% of the sale price added to the sale price). If an Australian bought something outside Australia then NO GST collected if under $1000.00. Australian businesses complained that it was unfair as they had to charge GST on sales less than $1000.00, so Australia changed the law to state that all Australian purchases (including under $1000) outside Australia had to also collect the GST. That was when Amazon stopped Aussies purchasing from the Amazon US store.

    Nothing to do with the actual collection of the extra 10% tax via web sites, but just because Amazon decided they were not complying with Aussie tax laws. Amazon still collects VAT and all other countries sales tax. 🙂

    A side effect from Amazon stopping Aussies purchasing from the Amazon.com (US Site) is that we can not purchase proof copies of our print books from Amazon anywhere, inside or outside Australia. So, we now have to decide to purchase expensive ISBNs from Australia and use Ingram Spark for POD books to get proof copies, or trust the Amazon print layout is how we want it through Amazon.com and once approved and on sale, then purchase our own Author Copies at full price via our Amazon.com.au store which includes GST.

    Then Amazon said we can again purchase Amazon products from the US website, but we still can not purchase third party goods (including POD proof copies) via Amazon.com or any other Amazon site, except via the Amazon.com.au site, which has less than 10% of items for sale that Amazon.com site has for sale.

    I live in hope that Amazon will relent and just collect the 10% on top of the sale price at any Amazon site and send it to Australia Tax Office, so we can again purchase many products outside Australia. 🙂

    As for ebook sales, I have been wide from the beginning, and never used Select. However, I am also thinking of putting a new series in Select for 3 months to see how it goes, then move it wide. Hopefully, the readers will also find all my other books outside Select. 🙂

  8. gabby says:

    I have all my eggs in one basket because Select exists and it’s too good money to pass up. I’ll be thrilled once Select gets cancelled though and cross my fingers that it will happen…

  9. This is how monopolies work (or don’t work, as the case may be). They demand exclusivity, then start screwing over anyone dumb enough to comply. If we keep giving Amazon the right to screw us all, we will see royalties drop to single digits. It will be worse than that if they are trying to save themselves. Stop giving Amazon a monopoly for short-term gain, if you want to have a writing career five years from now, when Amazon is using AI to write bestsellers.

  10. I think Amazon’s problems are more technical than business. The Kindle platform has had more and m ore problems of late because it is growing to complex.

    For example, the ebook availability issue actually affected titles on all sites, affected readers both inside and outside the US, and started a couple weeks before David’s post. Then there was the issue of audiobooks being dragooned into Kindle Unlimited, or the bug that blocked reviews.

    • I keep waiting for the point when Amazon decides the KU experiment is no longer worth the staff. It will happen, unless KU makes a huge profit for them. If it does, then it stays.

    • Nate says:

      It belatedly occurred to me that Amazon’s technical issues are actually a sign of the cycle you discuss in this post.

      One thing I have noticed that divides “old” companies and “new” companies is that as companies age, they are saddled with inefficient tech, processes, and other problems. All the bugs I have reported on are symptoms of Amazon’s tech getting long in the tooth – just like you would see with an “old” company.

  11. Great blog. Interesting ideas to ponder. I like the analogy between Amazon and Sears. Seems apt. I’m a wide author and I can dispute one of your statements. Amazon does not offer the widest reach as it leaves out many, many countries and an entire continents, Africa, which is reachable through other sites. Amazon is huge, I won’t dispute that. But other sites reach farther, wider, thus providing more opportunity for sales.

    • I don’t think I said Amazon has the widest reach outside of the States. If I did, it was just a lack of clarity. Amazon has the widest reach in the U.S. Kobo and iBooks have a wider international reach. Not to mention all the sites you can hit with D2D. Thanks for clarifying.

      • If you’re responding to the link that says Amazon is trying to be the biggest online retailer, well, it is. And that’s not books. That’s all kinds of stuff. I’m not sure if the article I got the quote from looked at the competitors in Asia, but still…in retail, Amazon is a very very big fish.

        • Felix J. Torres says:

          FWIW, retail provides Amazon with free cash flow and, currently, half its gross revenue but the bulk of its profits come from its tech products and services. AWS most prominently, a business where they are neck and neck with Microsoft and miles ahead of everybody else. Where backend online functions are a cost center for, at WalMart, at Amazon they are biggest profit center. Amazon also used their “special deals” Kindles and Fires to ramp up an ad sales business worth $2B a year so far. It’s still growing. It’s not Google/Facebook money buy it’s still decent money with much better than retail profit margins. Their Alexa voice interface tech is also ramping up nicely.
          So I would caution against reading too much into the Sears parallels.Bezos is copying their playbook but he is also clearly aware of the perils of being a one trick pony which is why Amazon isn’t just a book company.
          I would suggest people think of Amazon as being closer to Microsoft (which is strong and resurgent under their newest CEO after 40 plus years) or GE in its prime, under Jack Welch).
          When Bezos talks about Amazon someday failing (and he’s 100%right) he isn’t talking about anything imminent but rather focusing the troops to delay that eventuality for another decade or three.
          What people in publishing need to be aware of is that books and publishing are a very small part of Amazon’s business, not a top priority. Their book business is already as big as it can effectively be, given external constraints, so putting more money and effort into it will not result in significantly higher revenues much less more profits. The reason authors aren’t seeing the same results as they used to is because the book business as a whole has been a stagnant business since 2003 and because ebook adoption isn’t growing as fast as the supply of ebooks, mostly because of tradpub’s anti-digital zombie memes.
          Expectations need to be tempered, especially by anybody without a large established career.
          It will be a slog for the foreseeable future.
          But at the same time, Amazon will no more go away than IBM, Microsoft, Apple, and Google.
          Not for a generation, at least. They are still in growth mode. Now if Bezos pulls a Gates and retires young…

          Anyway, it is B&N that will go away most likely go away and soon.
          And the smokescreen hype about the abundance of small bookstores will continue to obscure the decline in title diversity at B&M. Want to worry, folks? Worry about the large-ish B&N catalogs being replace by multiple smaller catalogs, which means more relative shelf space for the “big name” authors and used books and less for midlist and new backlist. Patterson and Roberts and their neer-peers will be shelved everywhere but for authors whose only B&M exposure is two spine out copies at B&N the coming implosion will only make Amazon even bigger in the pbook space.
          B&M shelf space visibility will be a crisis long before Amazon fading becomes an issue, glitches and all.
          Eventually the loss of exposure will be replaced but it won’t be soon.
          The publishing disruption is an ongoing thing.
          Sorry.

          • Yes, books are a small part of Amazon’s business, which is why they might mess with KU at any point. It all comes down to internal bottom line, which we can’t see. So…that’s what I’m talking about here. I want people to stop thinking of Amazon as permanently the big thing in books. (And I’ve already written about B&N, and its [ahem] future.)

            • Felix J. Torres says:

              Fair point and worth keeping in mind.

              But there are more imminent threats that need addressing, especially by the tradpub authors.
              You’ve pointed out how the BPHs are reducing title output and dropping authors; well, with their 18-24 month pipeline they are reacting to the decreased shelf space.
              Online pbooks and digital are going to become more important but who is going to be left, post B&N? Kobo? Google? Microsoft? Those are ebook only.
              Apple only sells digital and only to their hardware and their hardware business is flattening.
              Being dependent on Amazon is sub-optimal but what options are viable?
              Direct sales from author websites?
              As long as the competition is weak Amazon will keep on raking and as long as they keep on raking they won’t go away. And the primary reason the competition is weak is KU lock-in.

              KU gives Amazon a catalog nobody else can match which gives them first crack at consumers.
              If everybody quit KU it would level the ebook playing field, at least on paper.
              But who is going to be the first to quit, trading today’s income for tomorrow’s potential?
              You hear a lot about how Amazon refusing to support epub serving to lock-in readers, which is true. But readers don’t care despite the crusaders’ windmill tilts.
              Well, KU, is Amazon’s lock-in for Indie publishers.

              It’s the classic conumdrum: who bells the cat?
              Who sacrifices their immediate income in the hope of future growth?
              Established authors with thousands of true fans all over can afford it. In fact, as you pointed out, they can’t go to KU. But newcomers without any established reader base? What are they going to do? Revert to permafree? That doesn’t work as well as it used to. Any newcomers aren’t going to stop coming.

              It’s a classic trap and Amazon knows it.
              Why would they drop their biggest competitive advantage, that both locks in suppliers and consumers, starving competitors? It is doubtful they lose money at it because they control the payout. And by now they have a couple million readers that would be annoyed if it went away.
              So no, KU isn’t going away soon. And when it outlives its usefulness to Amazon we’ll know it because Amazon will start squeezing readers, just as Scribd did and how Oyster did.

              Still, you are absolutely right that independent publishers need to think long and hard about how they use KU. Not in all or nothing terms but as another marketing tool. Whether going all in is wise, whether it might be better to rotate titles in and out, whether to treat it solely as a replacement for permafree. To think of where they are in their own career, where their customer base lies, where they want to go, and what role KU can play for them.

              KU does bring benefits: it brings somewhat better discoverability –it is after all a subset of the full Kindle store less than half the catalog size with few if any big name authors. That is not a bug, but a feature. It also caters to the most avid, most adventurous reader’s. And it costs those readers no added costs to give an unknown a try. For somebody starting at zero, KU brings visibility they otherwise would struggle to get. That it isn’t as useful as it was four years ago should be no surprise: it has a lot more readers but it also has even more authors playing. Everybody wants a piece of the $300M annual payout. Which keeps on growing as readers jump in, trading discrete sales for cheap rentals.

              KU isn’t going away anytime soon but individual authors can go away and some should.
              But it really needs to be a case by case decision because mass defections are not going to happen.

              It’s a brave new world that trades one set of challenges for another set.
              Not nirvana.
              Just normal business challenges of the 21st century.

              Again, there is in fact a storm coming, but it’s not KU.
              There’s still some time to prepare for a world of newsstands and small bookstores of 20,000 title catalogs and few if any cathedrals of literature.
              And at some point audio is going to plateau.
              It won’t be pretty.
              Just my two cents.

              That said, love your blog, ma’am.
              It is a joy. Thanks.

              • Except…your post is U.S. centric. Not every country has access to Amazon or K.U. When you look at it from a global perspective everything changes. I will do posts on bookstores, etc, upcoming (I plan to anyway.)

                I appreciate the good thoughts. And I love the “Not nirvana. Just normal business challenges of the 21st century.” Yep.

  12. Marie Force says:

    Thank you for this thoughtful analysis, Kris. As always you are spot-on. Like you, I’m a big advocate of being everywhere the readers are. That said, I put a few single titles into KU for a few months to see how they did and can see the benefit of limited engagements there. But I have 70 books to experiment with and would never put all my eggs in any one basket. I’m one of those indies who has benefitted tremendously (and financially) over the last 8 years from what KDP made available to us, but I agree with you that it often feels like we’re all just one “tweak” away from disaster at Amazon, thus my desire to keep the vast majority of my books widely available. Thanks again for spelling out the reasoning for being wide so clearly!

    • Thanks, Marie. I experiment too. You and I have the luxury of a large backlist (and we write fast), so we can see what works for us and what doesn’t. I worry about the writers with 20 novels, all in Select, and their income might go away tomorrow if Amazon changes something. Scary, scary, scary.

      • Darryl says:

        But in the end, Kris, there is no helping people who simply won’t be helped. The environment is complex and constantly changing. Whether Indie or Trad pubbed, authors do not have the option of refusing to sully their hands with tawdry commerce. As you often say, they are in business, and must recognise this. In fact they always have been, and those who refuse to manage their business affairs properly do so at their peril. There is simply no one size fits all answer to whether to go exclusively Amazon or how to use KU. Authors need to stay informed. They need to experiment. And, so far as the peril of Select going away altogether, they need to recognise the risk and plan to deal with it if it does happen. Many who are not well known and have relied exclusively on Select realistically have very few options when it comes to doing anything about it quickly without losing substantial revenue. They need to be in a position to cope with the worst and/or have a longer term plan to at least try going wide on some titles.

        So far as KU is concerned I have noticed a number of authors, particularly those who write quickly and have a following, will put the first book in a series and some backlist in KU, with subsequent books reasonably priced at $2.99 to $4.99. To me this seems to be a very viable way to use KU, in one sense getting the best of both worlds.

        But in the end, serious writers who want to make a living from it are running a business with all that entails. If they don’t have the skills to do this competently themselves, they need to invest some money, both on competent advisers and on attending seminars etc. of the type you mention where they can benefit from expert advice and discuss strategies.

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