Home » Amazon, David Gaughran, Ebook/Ereader Growth, Kindle » Amazon Holds Back The Growth Of Ebooks Around The World

Amazon Holds Back The Growth Of Ebooks Around The World

12 July 2011

Frequent visitor and commenter David Gaughran is a 33-year old Irish writer, living in Sweden.

David provides details, in dollars and cents, that explain why ebook sales are so low in some countries where they should be much higher. Low ebooks sales mean that authors in those nations have a hard time reaching their audiences and indie writing is very tough to pull off. For indie authors in Amazon’s favored zones, it means your 99 cent ebook costs readers much more in most of the world.

Excerpts:

Writers often wonder why the growth of e-books is so much slower in the rest of the world.

There are a number of reasons for that, but one big factor is the $2 surcharge that Amazon levies on all e-books in most international countries.

This charge is levied by Amazon, and kept by Amazon, and has nothing to do with taxes.

This charge is applied whether the user downloads e-books through their Kindle or not, and whether the user even owns a Kindle or not.

. . . .

If you live in USA, Canada, UK, Ireland, Australia, New Zealand, or the “Amazon Germany” countries (Germany, Austria, Switzerland, Luxembourg, and Liechtenstein), you escape this surcharge.

However, if you live anywhere else that Amazon sell e-books, you will get hit with this $2 surcharge. In fact, the surcharge used to be applied much more extensively.

. . . .

If you don’t think this is a big deal, you are missing the point. There are millions of readers around the world who enjoy reading English books. Indeed, in some countries such as Denmark, the original English versions outsell the translated versions.

Also, many emerging economies, such as Brazil, lack a bookstore infrastructure, and publishers have to resort to methods such as selling books door-to-door. These countries should be ripe for e-books, but Amazon is suffocating growth.

When you go to Amazon.com and search for my e-book, you will see a price of $0.99, $1.16 or $3.44, depending on which country you live in. Whichever price you pay, I still get $0.35. Aside from around 15 percent in sales taxes, Amazon keep the rest.

Let me be clear. This is nothing to do with sales tax or VAT. Sales tax (VAT) is levied on top of this surcharge.

. . . .

Why A Surcharge?

Now that we have clearly established that this surcharge is nothing to do with taxes, and none of it is going to the author, what is it for?

First off, there is no point asking Amazon. I have emailed them several times about this issue, and they have never responded.

Some of my readers have done the same, and got fobbed off with bogus excuses about higher operating costs in certain countries.

This is patently untrue. There is no cost difference to Amazon in selling my e-book to a customer in France rather than Kentucky, especially when that customer is using the Amazon.com site, downloading the book through their own computer, and on their own internet connection.

At first I thought this surcharge was something that only affected Kindle owners, that it was a surcharge for downloading books wirelessly because they bought their Kindle in the UK or the US and are using it in another country.

Amazon might have had some justification for that.

However, this is not the case. It affects all purchasers of e-books in those countries whether they own a Kindle or not.

My guess – and this can only be speculation as Amazon refuse to answer my enquiries – is that this $2 surcharge is bankrolling the free 3G access that certain Kindle owners enjoy.

If this is the case, it’s completely unfair to levy this charge on all the other users who don’t have a 3G Kindle, and indeed, only international readers.

. . . .

Since I discovered this issue, I have been directing all affected readers to purchase through Smashwords or iTunes instead (where there is no such surcharge).

Smashwords has gone from an insignificant portion of my sales to almost 10% (and even more in revenue because they pay me $0.56 per copy sold instead of $0.35).

And that’s just the readers I am reaching with this message. How many readers are we all losing because they think our books are overpriced?

David has a lot more detail and makes a compelling case for change at David Gaughran

Amazon, David Gaughran, Ebook/Ereader Growth, Kindle

12 Comments to “Amazon Holds Back The Growth Of Ebooks Around The World”

  1. Thank you. This was very informative. I’ve been selling a few of the Tess Allen EBooks in the UK, along with my US sales, but no where else. This helps me to understand the other important markets.

  2. This is really interesting and somewhat worrisome. Are there international laws to control this sort of thing?

  3. That’s a shame for Amazon (and authors). This will promote piracy in developing countries where people can’t afford to shell out a lot of cash for books.

  4. This is an issue I’ve been aware of for some months now, since I first heard a rumour of Amazon’s ‘arbitrary pricing’. As an indie author-in-the-making who live in Denmark it is obviously very frustrating and worrisome to get this rumour confirmed. And it just ads to my list of doubts about whether or not I would like to do business with Amazon:

    1) I have to pay taxes in the US if selling through Amazon.com (the biggest market). This is not Amazon’s fault but I’ve read that several int. authors got very little or no help in securing the correct documents from Amazon (official company letter confirming the author’s status and so on), documents which would enable a tax refund later on.

    2) Amazon locks e-books to a Kindle. This is obviously central to their (perception of) a viable business model because it discourages “piracy”. It also pisses me off because when I’ve purchased something I want to be able to do with it as I please. I suspect I’m not the only one.

    On another level, I also feel that it is quite against the nature of the Internet and the ideal of free information to be so obsessed with controlling information, in order to secure income frome every imaginable ‘consumption’ of a piece of information.

    3) Amazon is trying to control my ebook even after I purchased it, with opaque references to an interpretation of their terms that my purchase really wasn’t a purchase of an item but some sort of rental or licensing. Remember the infamous case where they remote deleted ebooks from users’ Kindles?

    (http://www.nytimes.com/2009/07/18/technology/companies/18amazon.html)

    4) Amazon seems to act quite arbitrarily in terms of sanctioning authors who promote their ebooks on their website in ways that may or may not be against Amazon’s rules. This is a common complaint I’ve read.

    5) Amazon’s customer service sucks. It just does. I’ve been there.

    So would I promise that I will never use Amazon to promote my own products?

    No, probably not. All Big Companies act unethically to some capacity. I don’t know which childworkers dug out some of the alloys in the electrical components in my laptop from some hellish mine in the Congo. I choose not to think about it and set my limit of personal responsibility for the world’s ills at buying fair trade and organically produced foods in the supermarket. Practical sense says I should do the same as regards doing business, especially considering that I am new in the game and would benefit from being able to sell from as many outlets as possible.

    But it does leave a bad taste in my mouth. So I’m not sure …

  5. Just another quick comment, Kobo are rolling out a major European expansion. I wrote about why this could be a real threat to Amazon, given the surcharge:

    http://davidgaughran.wordpress.com/2011/07/13/kobo-target-europe-while-amazon-sleep-at-the-wheel/

    • Thanks for keeping us up to date, David.

      Amazon generally has a positive reputation among US consumers and I’m surprised they’re making so many bone-headed mistakes elsewhere.

Sorry, the comment form is closed at this time.

Page optimized by WP Minify WordPress Plugin