Tuesday, May 06, 2008

How much will it cost me to continue working with Amazon?

I'm late posting to my blog because I've been spending time trying to figure out how much extra it will cost my press if I add Booksurge to my printing bill. I'd like to continue working with Amazon, but can I afford it? After several days of hunting, I still don't know.

I'm trying to discover:

1)How much will Amazon's new policy of requiring POD printers to use Booksurge cost?

2)How does that affect my book production budget?

3)What am I getting exactly for my money?

4)What are the marketing benefits of continuing to sell books through Amazon that I will lose if I decide not to use Amazon?

5)How much will those lost marketing benefits cost? How does that affect my book marketing budget?

6)What is the advantage of just using Lightning Source, and therefore Ingram?

I'm trying to look at the Amazon/Booksurge issue with clear, hard, business eyes, setting aside whatever emotional response I have to the perceived strong-armed tactics of Amazon. This isn't easy, because if I feel that I'm being bullied, I get terrifically stubborn and fight back. You think you can push me around? Hah! I'll show you just how tough this short-chick can be!

Not always the right response when you're running a business. Sometimes making decisions for your small business based on emotions, without clear facts to back up those emotions, can get your business into financial trouble. You have to ask yourself, what is the ultimate goal?

So, back to my list of questions. How much will Amazon's new policy cost? This question has been surprisingly difficult to answer.

I went to the Booksurge website and found information for publishers:

Maximize Sales Potential

Titles available as “in stock” on Amazon.com
Extend book lifecycle indefinitely
Publish more books with lower risk

Reduce Costs and Increase Profit

No inventory or small-order risk
No shipping or logistics overhead
Decrease excess costs in your supply chain
Low setup fees and printing rates

However, there was zero information about the ACTUAL cost of printing. For that info, you have to "contact publisher's services for information." That irks me. I had to do that too at Lightning Source, but then they quickly sent me the info I needed regarding pricing and set up costs without being hounded by a sales-rep. Maybe Booksurge will do the same? Usually when I contact a company for more information, they give me the "sales-pitch" rather than answering my questions. Just give me the cost, please, and leave the rap out of it. I can make up my own mind. But this is another one of those moments when I need to hold back my immediate emotional response (just tell me how much it costs!!!!!!!!!!!!!!!!) and go through the process to collect the best information I can.

The one thing on that above list that stands out to me is Titles available as “in stock” on Amazon.com . That is disconcerting. I have seen publisher's buy-buttons vanish. So far, my buy button is still there, but for how long?

I also went to the Amazon Advantage website to learn more about that program. It states, "The annual fee for Advantage is $29.95, regardless of the number of titles you enroll." Okay, not bad. $29.95 for your press, not per each book. I read more: "There is an annual fee of $29.95 to be a member of Advantage. Your fee includes unlimited title enrollment. Advantage is a consignment inventory strategy. The standard commission rate is 55% - you keep 45% of the List Price."

"The standard 55% commission rate means that Amazon.com is entitled to 55% of the List Price for each unit that sells. You, the vendor, receive 45% of the List Price. You set the List Price, also known as Suggested Retail Price, of your products, and all payments made to you are calculated based on the List Price. If Amazon.com decides to further reduce the sales price to the customer below the List Price, the customer discount comes out of Amazon.com's percentage. For example, if the List Price is $39.95, you will make $17.98 from each copy sold, even if the Customer Price or Our Price on Amazon.com is discounted from the List Price."

55% is the standard in the industry, meaning Amazon's cut on the sale is the same as Barnes and Noble or any other bookstore. It's the percentage I gave Ingram when I signed my contract with Lightning Source. Lightning Source lets you set the percentage at anything (I know many small publishers who do only 40%) and I decided for the broadest potential sales I should follow the industry standard. Amazon has set the percentage.

Currently, Advantage is for publishers who are not listing their books with Ingram. I couldn't find any specific information about the relationship between the Advantage program and Booksurge. I thought there was one, but maybe I'm wrong?

I will contact Booksurge and request info. Once I have pricing information, I can compare that to what I know Lightning Source charges. Then I can answer the next question, how does that affect my book production budget? Can I afford to use both Booksurge and Lightning Source? Can I afford not to?

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