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iBook Lessons: Picking vendors, price, and exclusivity

iBook Lessons is a continuing series about ebook writing and publishing.

There's a dilemma faced by many new ebook authors: how to sell a book for "not much at all" and still earn a decent living. Apple and Amazon policies complicate this decision.

Amazon offers a multi-choice royalty system (all prices are USD). You can

  • charge up to $2.98 for your ebook and earn 35% of the list price. That equates to just over 34 cents for a $0.99 ebook.
  • charge between $2.99 and $9.99 for your ebook and earn 70% of the list price less delivery costs, which are $0.15 per megabyte. For big illustration-filled books, this can be a deal breaker. TUAW reader Rosie McG's color photo book ships at over 40MB in size. She writes, "With my book priced at $9.99, my net would have been less than zero."
  • charge between $2.99 and $9.99 for your ebook and earn a straight 35% of the list price with no delivery fees. That equates to between $1.05 to $3.49 of earnings.

With Apple, you earn a straight 70% royalty on all sales, regardless of price and you can add up to 2GB of content. So long as you deliver in straight EPUB, without using iBooks Author, you can also sell in any other outlet.

So there's no question, right? Sell in both places, and just try to make the most of the Amazon situation as best you can, yes?

It turns out the situation isn't so simple, especially for new ebook authors. That's because the $0.99-book, which earns you 34 cents at Amazon and 69 cents at Apple, is the workhorse of the new author. It, like its App Store-based compatriot, represents many authors' first step into self-publishing. And Amazon, with its Kindle Direct Publishing arm, has thrown a big monkey wrench into this decision.

That's because Amazon has two weapons on its side. First, it's monster presence in the ebook arena. Kindle titles can be read on nearly any platform you throw at it, from iOS to Android, OS X to Windows. That alone gives Kindle books a cachet not found with iBooks. Authors report that the majority of their sales, by quite a margin, come from Amazon. It's not unusual for the Amazon-iBooks split to be closer to 75%-25% than 50%-50%. It's a big incentive to pick Amazon.

The second incentive is KDP Select, Amazon's exclusive borrowing program. In exchange for committing your book exclusively to Amazon, your title can be borrowed for free by any Amazon Prime member. Each member may borrow one title per month. If they choose yours, the reward is vast. A $0.99 book that normally earns 34 cents will bring in over $2. This May, the earnings were $2.26 per borrow: over 6 times your normal earnings. (Amazon has not yet announced June earnings. April earnings were $2.48, March $2.18, February $2.01.)

To get in on this, you must drop your book from iBooks and any other vendor, and agree to an exclusivity period of 90-days at a time.

KDP Select is transformative. It changes your list price from "Do I really want to waste a buck on this book" to "Oh, that book was good, let me pay a little extra to keep it." Psychologically and emotionally, you get to keep that $0.99 list price to entice a value-reward tradeoff from potential buyers, but the real money comes from getting people to give it a try.

Both Steve Sande and I have participated in KDP Select since it launched this past winter. And it's been a surprising source of income for a couple of our books (on using the Kindle Fire with 3rd party content and for setting up the device's email). Neither topic was Apple-related and both books outperformed our hopes in terms of earnings for borrows. The $2.99 books, which would earn us under $2 per sale after delivery charges, consistently earn more than $2 per borrow due to the well-funded KDP library pool.

And that brings me back to the fundamental question. How would you, yourself, advise a new author to choose given this situation, especially for the $0.99 or $1.99 first title? Would you recommend going for KDP Select exclusivity and borrowing earnings or would you suggest marketing to iBookstore and the other outlets? And, given our TUAW audience and their likely book topics, would writing a book specifically about an Apple-related subject-matter affect that advice, and if so, how?

You tell us. Add your comment below and sound off about iBookstore, the KDP Select program, and markets.

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