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Exclusive Is Actually Optional at Amazon

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by Mark Coker, Founder, Smashwords —


Mark Coker

There’s some confusion among authors, publishers, and media people about the difference between Amazon’s KDP and its KDP Select.

KDP Select is the Amazon e-book self-publishing option that requires exclusivity. The regular KDP service does not require exclusivity.

At nearly every writer’s conference I attend, authors tell me they enrolled in KDP Select because they thought exclusivity was a requirement at Amazon. Other writers often ask me, “How do I choose between Amazon and Smashwords?”

My answer is that exclusivity is not a requirement, and it’s not an either/or question. Authors and publishers should diversify their distribution and sell everywhere, including via iBooks, bn.com, and other major sales channels. These writers often feel suckered and embarrassed once they learn exclusivity isn’t required.

Not ExclusiveAmazon is responsible for much of the confusion. Its KDP user interface acts like a funnel to drive people into KDP Select at every opportunity. The KDP Select option is the first thing you see when you go to upload a book, and many people just click the boxes without reading the fine print. If you don’t enroll, your account configuration looks incomplete.

And if you don’t enroll on the first publishing page, when you get to the second page, where you set international rights and pricing, you learn that you’ll earn 50% lower royalties (35% list vs. 70% list) in India, Mexico, Brazil, and Japan if you’re not enrolled. Amazon does a good job of communicating that you’re disadvantaged in its store if you don’t choose KDP Select.

It’s no wonder that Amazon has attracted over 500,000 exclusive books, primarily from indie authors and small independent presses. But by enrolling their books in this exclusive program, these authors and publishers are undermining their opportunity to build readership elsewhere.

If you do enroll in KDP Select and your book appears for sale anyplace else during the three-month exclusive term—which renews automatically—Amazon will send you threatening e-mails informing you that you’re in violation of your agreement, and warning you that your earnings are in jeopardy if you don’t immediately remove the offending book from other channels.

Despite all the media coverage about Amazon’s apparent heavy-handedness with publishers such as Hachette, the media haven’t generally reported on Amazon’s heavy-handed moves against self-published writers and small independent presses. [Editor’s note: See “Up Against Amazon” in our August issue.]

Problematic Pricing

For the last four years, thousands of indie authors and publishers have suffered financial harm at the hand of Amazon’s draconian price-matching policies. If you don’t enroll in Amazon exclusivity and Amazon spots another retailer selling your e-book for less, Amazon matches the price, even if that retailer has made a pricing error. If the author informs Amazon that the pricing error is not the author’s fault, Amazon doesn’t care. I recall multiple instances over the last few years when bestselling Amazon authors had their titles deep-discounted against their will, or price-matched to free, when major retailers suffered pricing glitches. These glitches weren’t the author’s fault, yet Amazon punished the author. No other retailer does this kind of thing.

While Amazon deserves major kudos for catalyzing the e-book market and creating exciting opportunities for authors and publishers, it should be held accountable for the author-unfriendly aspects of its policies.

A couple of years ago I met with a top Kindle executive and informed him of the financial harm and emotional trauma Amazon was causing Smashwords authors with price matching when our retailers were slow to update prices or made pricing errors. I suggested Amazon should price match against the prices at Smashwords, since the Smashwords prices reflect the author’s true real-time intentions (some retailers take two to three weeks to update prices). He acknowledged that it was a sensible option, but Amazon never changed its policy. Amazon’s price-matching often leads authors to make decisions that favor Amazon but not necessarily the author, such as pricing their books higher at other retailers or going exclusive with KDP Select.

Channel Choices

For years, I’ve recommended that authors and publishers avoid KDP Select because I think exclusivity is detrimental in the long term to authors, publishers, and retailers, and bad for the future of books. When authors go exclusive, that starves Amazon’s retail competitors of books. This works to Amazon’s benefit by undermining the viability of its competitors, which will ultimately lead to fewer e-book stores.

Millions of readers are reachable today through other outlets such as Barnes & Noble, Kobo, OverDrive, Scribd, Oyster, and the Smashwords store. These channels often provide publishers with benefits not available at Amazon, such as e-book preorders, more flexible pricing control, unlimited free pricing without restrictions, and broader global distribution. And they provide these benefits without the handcuffs of exclusivity.

The next time you release a new title, consider the advantages of distributing everywhere.

Mark Coker, founder of Smashwords, a distributor of indie books, reports that more than 90,000 indie authors and publishers around the world publish and distribute more than 300,000 books at Smashwords. To learn more: @markcoker and http://blog.smashwords.com

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