Last Updated on August 23, 2022 by Ben Oakley
Amazon KDP is king when it comes to self-publishing and selling books, and it’s not going to change anytime soon. If authors and publishers follow the rules laid out by Amazon, then it can be incredibly lucrative for both sides.
With no real global competitor, Amazon has a lot of power at its fingertips. Here, I look at what might happen if Amazon KDP decides to change things and what it might mean for authors utilising the system.
1. Removal of ISBNs in favour of ASIN
An ASIN stands for Amazon Standard Identification Number, the company’s way of identifying products on their website and throughout their extensive distribution network. ISBN stands for International Standard Book Number.
It first appeared in 1967 as the SBN (Standard Book Numbering) system, and became the ISBN from 1970, so it really hasn’t been going that long. One day, Amazon might decide they don’t need ISBNs anymore and remove them.
On average, Amazon accounts for around 75% of all books sales, in all formats, though the number tends to fluctuate upwards depending what country you’re in. There is a massive precedent already in place for Amazon to not use ISBNs.
When Kindle Direct Publishing first materialised, all eBook submissions to KDP required an ISBN and were not handed out for free. It wasn’t until Amazon saw they could make more money by scrapping ISBNs for eBooks that things started to change.
They replaced the ISBN with the ASIN and the floodgates opened to millions of writers and book publishers from then. If they hadn’t, KDP would not be as big as it now, though there might be a higher level of quality throughout the store if there was still a financial barrier to entry.
Amazon KDP also began issuing free ISBNs to publishers for their print books. Though considered free, the costs are pennies to Amazon but don’t be surprised if they account for that in the royalty amount.
They already have the largest book distribution system in the world, their own bestseller lists, and larger international access than anyone else. As Amazon continue to grow, there may come a time when they decide to replace ISBNs with their own ASIN system.
2. Royalty decrease in line with prime video direct
As with book publishing, independent film distribution is made easier with Amazon’s Prime Video Direct (PVD). Though the process is more difficult than uploading a book as there are additional legal processes to go through, it remains one of the better distribution avenues for indie filmmakers.
For their trouble, content providers receive 50% of net revenue, in the same way that Amazon KDP offers between 60-70% royalties on the price of a book. Of course, there are variations with print and eBooks which are explained on the KDP help pages but generally it’s between 60-70%.
PVD also have a programme similar to KDP Select in which publishers are paid per minute watched. The lower PVD revenue makes sense as the entire video product would have to be stored on Amazon’s servers, which takes up far more space than a 200-page book.
But there’s no reason why Amazon wouldn’t make it 50% across the board. Yes, it would lead to an exodus of authors, jumping ship to Apple Books or B&N and others but if Amazon retained that massive audience advantage then many authors would be forced to stay with them despite the lower royalties.
We’re signed up with one of the biggest corporate machines on the planet, and if they want to keep their shareholders happy, and it is about them, then it wouldn’t be a surprise to see royalties decrease in the future.
3. Increase in royalty thresholds
KDP already have thresholds in place for cheque and wire payments but for EFT payments it is still zero. For cheque payments – though I don’t know who still uses them – there is a $100 USD threshold or equivalent such as £100 GBP for the UK.
The same goes for wire payments which are $100 USD or equivalent and I can understand why some people may have the need for wire payments, in case of previous fraud, different accounts etc.
EFT (electronic fund transfer) payment threshold remains at zero, and for good reason because aside from admin work, there are rarely any costs involved in making EFT payments between accounts all over the world.
Amazon could though decide that there are costs involved and raise the threshold. Additional expenses could include creation of admin AI, more human employees, higher bank rates (though Amazon tend to incorporate those) and further investment into KDP.
And of course, raising the barrier for pay-outs to try and deter the ocean of scammers that crash into the KDP system on a regular basis. Raising EFT threshold payments to fall inline with cheque and wire seems like a no-brainer but one that would still raise eyebrows.
If we are to believe that most KDP publishers make under $100 USD per month, then Amazon could make more money by holding unpaid royalties in a high interest account, while the author struggles to hit that threshold.
4. Raising minimum order quantity for author copies
I feel this one has been on the cards for a while. Many authors are under the assumption that Amazon don’t make any money off you when ordering author copies. Well, they do. Amazon does nothing for free, it is a business after all.
At the moment, the minimum purchase for author copies is just one. The author pays ‘printing costs’ plus weight-ratioed shipping from their respective resident countries. Amazon are not printing author copies for free.
I don’t know how much they are making exactly but I would imagine they’re making around 10%, in line with a wholesaler purchasing from a manufacturer, if not a little more. A book that costs £3.30 to print might be making Amazon 30p.
As I said that’s a guess, but they are making something, and rightfully so as their POD author copies costs remain one of the cheapest in the entire industry. There is a benefit of ordering 5 or 10 copies of your own books each month for asset or stock accumulation.
Because of the low costs of printing, Amazon might one day decide to set a minimum order quantity (MOQ) of 100, to deter the one-book buyers or those who order in a small number of copies each month to keep a stock.
That way, Amazon would be making £30 off your £330 purchase, instead of a fiddly 30p for your £3.30 one. From a business perspective it makes sense to be able to sell in quantity in what is essentially a business to business (B2B) environment.
Other changes Amazon KDP could make
Longer payment windows
PVD payments are paid out 90 days after the end of the month which is a whole month more than KDP’s current 60-day payment schedule. Amazon may decide to bring KDP in line with PVD.
Requirement of ordering a proof copy
To combat the barrage of formatting errors, Amazon might require that all authors and publishers order a printed proof copy for the author to sign off on before publication.
Of course, I hope none of this happens, but I think it’s right to be prepared for when it might!