Apr 23, 2019 10:32:41 AM
Principal Consultant, Strategy
It has been official for some time now. Amazon has taken over the world. In January 2019 they became the most valuable public company in the world, and their brand dominates the eCommerce scene. Amazon is the de facto benchmark case for selling goods online. In addition to the marketplace, they provide cloud computing platforms through Amazon Web Services. The serverless things they provide represent the future of computing. AWS develops with incredible speed. It is cool and cost efficient.
These two aspects of Amazon have thought provoking depth and width. What often gets overlooked, is the Kindle part of the ecosystem. With the introduction of the physical Kindle device that connects to their own bookstore, they have taken over the publishing industry. With the help of Amazon, basically anyone can make their book available on the biggest marketplace in the world and start selling it. Sure, publishers have jumped on the bandwagon, and Kindle is just one additional channel for them. On the other hand, there is no need to involve publishers and take part in the cutthroat competition with other authors. The promise is certainly there. Is brilliant content enough to generate revenue? We should also note that the competition shifts from the screening to the marketplace. It does not make things easier for the buyer.
We wanted to experiment with all this, first-handedly. Simultaneously we wanted to share some of our thoughts and learnings along the way.
What is the value that a professional publishing house actually brings? Some of them have quite strict guidelines and demands when it comes to submitting a manuscript. We even found a company that states on their web pages that a very small fraction of manuscripts sent to them ends up published.
For aspiring authors publishing houses often communicate a long lead time and promise no feedback at all. It is their market. They want manuscripts that are basically ready to be published as they are. It is the responsibility of the author to finalize the manuscript and polish it. Of course, manuscripts that show exceptional potential or value get special treatment. In any case the message is clear – there is an abundance of candidates and very few of them reach the printing machinery.
Amazon offers a digital sales channel. They even provide printing based on demand if someone wishes to buy a paperback. If authors are expected to provide finalized work to publishers, why not bypass them completely and go for the digital channel? Well, it’s not that black and white. Undoubtably publishers do provide professional editing to the manuscripts they think are worth their salt. Also the strict screening that they exercise forces the manuscripts to go through rigorous improvement efforts. Then there is the question of technical publishing and marketing. I imagine these companies understand their sales channels, have the connections where it matters, and command a proven ability to get things printed.
At the beginning of the year we had a brilliant piece of content in our hands. The 2019 edition of Growth Hacker’s Handbook was received well. It represents what we do and shows how our story has developed. Our idea was to send printouts to our clients and prospects. We do offer the PDF, but the thought of trying the Kindle Direct Publishing with it was intriguing. From the start we did not expect to make any significant revenue with it, but wanted to see the ins and outs of the process ourselves. The idea of selling digital content was lucrative. Just an upload of a source file and no logistics related to physical assets needed. Was it really that easy?
The first discussion we ran into was pricing it. We were basically giving it out, so why not just provide it free for the interested Kindle users. Obviously, Amazon needs to make some money too. They do not allow freebies. We started with the idea to go for the minimum price of .99 USD. We wanted to experiment, not maximise the revenue or even the number of downloads. On the other hand we did not want to sell our brand too cheap. And please, do keep in mind that we do expect an email address in exchange for a download.
After some discussions at the office that led to random numbers, Amazon saved us. In the pricing section of the publishing process they provide visibility on how similar books have generated earnings. They do have an impressive data set based on categories and tags. We decided to go with what Amazon recommended us. The picture below is courtesy of Amazon.
The taxation was another thing we were worried about. Could selling things in Amazon introduce us to a bookkeeping hell spiced with an obscure pile of tax legislation across multiple countries? That’s something we as a company try to avoid. Fortunately the problem had been solved for us. Amazon is the party who will conduct the trade, and they will handle the requirements related to international sales. Whatever happens beyond our dealings with Amazon, has been taken care of. It is their core business to make life simple for the authors. All we had to do was to follow the requirements from the IRS. It basically means completing a tax interview (a form, no need to get actually interviewed).
To our pleasant surprise the U.S. and Finland have a tax treaty, and there is no need to apply for anything additional. The national Company ID is enough to get rid of the 30% withholding tax. It’s pretty sweet! Of course, we want to see the first sales reports, and see how we understood the whole concept with the reality.
Stay tuned for another blog post about the technicalities of the publishing process that. We might even remember to update this blog with a link! For the interested, we recommend the Tax Information Requirements section. And in case you are planning to publish something, why not look at the Jumpstart part of it. It was very helpful for us!
To see the result of our experiment and to learn how growth hacking works, you can find The Growth Hacker’s Handbook on the Kindle Store.
Feb 4, 2019
Senior Consultant, Design
Aug 7, 2018
Senior Consultant, Design
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