A Reminder That Amazon’s Pernicious Price-Parity Clause Is Illegal In The UK And EU.

GoGlobalIn2014_500One of the great urban myths of the indie revolution is that when we self-publish we have control over our pricing.

If only.

In reality of course the retailers set parameters within which we have some limited choice over how we price, subject to their whim.

On Amazon the minimum we can ask is $0.99, but if we do try to offer the reader a real bargain we are penalized with lower royalties. Just 35%. To get the much-vaunted 70% royalty we need to set the list price at $2.99 or above.

If we want the 70% royalty in Kindle countries like India, Brazil, Mexico and Japan we have to sign up to Select as well, otherwise we get the 35% payout regardless of what price we sell at.

In countries outside the Kindle Zones we also get paid just 35%, regardless of list price. And that list price may be considerably more than we set, because Amazon bizarrely surcharges many readers around the globe. Your $2.99 title may cost a reader in the US $2.99 but a reader in Poland or Norway or Malta may have to pay anything from $4.99 to $6.99 for the same book. The author will still be paid a single dollar – 35% of the $2.99 they listed at originally.

Curiously Apple can deliver our ebooks to these same countries and pay us 70% regardless of list price. And it doesn’t add surcharges.

Not satisfied with dictating how much we can sell at on Amazon’s own site, which is fair enough – its their site – Amazon also dictates what price we can sell on other retail sites.

No, seriously.

It’s a little known fact that when you sign the KDP T&Cs you sign away your right to choose how much you list on B&N or Apple or Kobo. Amazon dictates that for you, if you list through KDP on the Kindle sites, you may not list at a lower price anywhere else.

Selling well on Amazon at $2.99 but want to run a sale over at Books-A-Million or Nook or Apple iBooks or All-Romance/OmniLit or Diesel or Smashwords at $0.99? Amazon won’t let you.

If you list at $0.99 on one of the other sites – or even at $2.98 – you’ll get a threatening email from Amazon.

No, it doesn’t say they’ll send the boys round to break your legs. But it will say this (or a variation on this, as they seems to have a small selection they send out).

Hello,

We recently noticed the digital list price for the title(s) listed below is higher than the list price of the same book listed on Amazon.com or another website.

TITLE REDACTED is listed on Amazon.com at $2.99 and at $0.99 on Barnes & Noble

According to our pricing policy, your book should be priced no higher than the list price on Amazon.com or any other sales channel for either the physical or digital edition of the book. Please adjust the list price for the above book(s) within the next 5 business days. If the price isn’t updated within 5 business days, we may remove the book(s) from the Kindle Store, at which point you will need to republish the book with an updated price.

For more information on our list price requirements, see section 4 on our Pricing Page below:

https://kdp.amazon.com/self-publishing/help?topicId=200634500

Thanks for your understanding.

Sincerely,


The Kindle Direct Publishing Team

Let’s just have that key bit again: “…your book should be priced no higher than the list price on Amazon.com or any other sales channel…

Amazon is dictating your pricing options on other retail outlets that it has nothing whatsoever to do with.

And if you don’t comply? As the email says, they “may remove your books from the Kindle store.” A variation of this email adds that repeated breaches of this policy may result in account closure.

# # #

Is this legal? We’re not based in the USA, so we don’t know what American law is in this regard, but we can say that this is completely illegal in the UK and across the European Union (EU).

So much so that after a major investigation by the UK’s Office of Fair Trading and Germany’s Federal Cartel Office, Amazon conveniently dropped this pernicious policy before legal proceedings could be initiated.

As of August 2013 you may price how you like on Amazon UK, Amazon France, Amazon, Germany and Amazon Italy and run lower prices for the same title at (for example) Waterstone’s in the UK, Fnac in France, Hugendubel in Germany, or Mondadori in Italy – and you won’t get a nasty letter from Amazon telling you to change it or else.

Savvy indies listing in the UK and other EU countries have been taking full advantage of this climb-down by Amazon to gain traction in the many smaller stores across Europe.

Few will have missed the fact that indie authors have been doing very well on Amazon Germany recently. What has received somewhat less attention is how well indies are doing on other German ebook sites, like Thalia, Bucher, Bol, Buch, Ciando, Bild, Der Club, etc.

Is it coincidence that since last summer when indies were allowed to list cheaper on rival sites in the EU without Amazon interfering, Kindle Germany’s market share plummeted, from around 90% at the end of 2012 to (estimates vary) between 50%-65% by the end of 2013?

Other factors were at play too, of course, as we’ll be discussing in a forthcoming post on the rise and rise of the Tolino Alliance, but safe to say indie titles listed cheaper on rival sites than on Amazon helped.

# # #

One of the few indie spokesfolk to publicly challenge this policy of Amazon’s has been the Smashwords head honcho Mark Coker.

While lamenting the imminent closure of the Sony North America Reader Store, Coker this past week delivered a blistering attack on Amazon’s predatory small-print.

While not blaming Amazon directly for the demise of the Sony store, Coker makes the point that you may find yourself in violation of Amazon’s insidious price-parity clause through no fault of your own.

For example, Google Play are very actively discounting. When you list on Google Play (and with forty-four stores world-wide you certainly should be listing on Google Play) it’s very likely they will discount your title.

When Google Play US discounts your title and your price goes below your Amazon price, you’ll very likely receive “the email” from Amazon KDP telling you they may remove your titles from KDP or even close your account because you have listed on another retailer cheaper than on Amazon – even though in reality you listed at exactly the same price on both.

This creates the ridiculous situation where indie authors are pricing their titles higher on Google Play to start with so that if Google Play does discount, the author will not be penalized by Amazon.

Is it any wonder this pernicious policy of Amazon’s was ruled illegal in the UK and across the EU?

The real wonder is how this can possibly be legal in the US.

In India the online giant Flipkart is busily discounting indie titles listed in their ebook store and Amazon India is busily price-matching. We haven’t heard (yet) of anyone receiving the threatening email from Amazon regarding the price on Flipkart. If anyone has, do let us know.

Hopefully it’s not happening. Amazon is trying to push the door open to further investment in India, so perhaps is playing it safe rather than risk an embarrassing investigation like the ones in the UK and Germany.

Elsewhere we might not be so lucky. We’ve not heard of this happening with authors listing in Australia since the Kindle AU store went live, but that’s probably because so few indies are on more than one or two Australian ebook sites in the first place.

But in the event Amazon revives its international expansion plans for the Kindle stores, which seem to have ground to a halt, this could be a recurring issue. Sadly the indie spokesfolk who were so quick to lambast the Big 5 for their price fixing policies are not so vociferous when it comes to Amazon’s dark side.

One indie spokesperson  that does say what we need to hear rather than what we want to hear is the aforementioned Mark Coker. We leave you with this thought from Coker, from the afore-linked Smashwords blog:

“Amazon punishes the author with full knowledge that the price discrepancies are not the author’s fault, and then authors feel pressured to abandon the smaller retailer rather than risk facing Amazon’s future wrath. The behavior this motivates (opting out of the smaller retailer forever) then harms the smaller retailer and makes the author more dependent upon Amazon.”

# # #

Retailer Round-Up

We mentioned several ebook retailers and stores in this post. Here’s how (or if) you can get your titles into them, In order of appearance in the post.

NB This list is hopefully accurate, but doesn’t purport to be inclusive. If you see any errors, or know of other options, do let us know.

  • Amazon – KDP. One portal to all the Kindle sites.
  • Apple – Direct if you have the right i-device, otherwise most aggregators will get you there, including Smashwords, Bookbaby, D2D, Xin-Xii, Untreed Reads and Ebook Partnership among many.
  • B&N Nook – Direct via NookPress if you are in the USA, otherwise most aggregators will get you there, including Smashwords, Bookbaby, D2D, Xin-Xii, Untreed Reads and Ebook Partnership among many.
  • Books-A-Million – A great little North American site overlooked by most indies. Supplied by OverDrive and possibly also by Ingram.
  • All-Romance/Omni-Lit – With international payments, no territorial restrictions and multiple formats this is a great little site to be on. Accessible direct or through Ebook Partnership.
  • Diesel – A California based pioneer indie ebook store that accepts international payments and has no territorial restrictions. Accessible through Smashwords.
  • Smashwords – As well as being a key aggregator that can get you into many stores other aggregators cannot, Smashwords also has its own retail site offering an excellent range of format, does not have territorial restrictions and does accept international payments.
  • Waterstone’s – The UK’s equivalent of B&N, but sadly not the UK’s equivalent of Nook. Nonetheless the Waterstone’s ebook store can deliver useful results. Accessible through OverDrive or through Ebook Partnership.
  • Fnac – Little know outside Europe (although it is also in Brazil), Fnac is a key player on the French ebook scene. Theoretically accessible through Kobo (via Kobo Writing Life or most aggregators) , but the Kobo distribution channels are a mess right now, so it’s hit and miss.
  • Hugendubel – Accessible through Ebook Partnership and probably through Xin-Xii.
  • LibriMondadori –  Italy’s biggest player. Theoretically accessible through Kobo (via Kobo Writing Life or most aggregators) , but the Kobo distribution channels are a mess right now, so it’s hit and miss.
  • Thalia – Accessible through Ebook Partnership and probably through Xin-Xii.
  • Bucher – Accessible through Ebook Partnership and probably through Xin-Xii.
  • Bol – This is Bol.de, not to be confused with the Ditch ebook retailer Bol.nl). Accessible through Ebook Partnership and probably through Xin-Xii.
  • Buch – Accessible through Ebook Partnership and probably through Xin-Xii.
  • Ciando – Accessible through Ebook Partnership and probably through Xin-Xii.
  • Bild – Accessible through Ebook Partnership and probably through Xin-Xii.
  • Der Club – Accessible through Ebook Partnership and probably through Xin-Xii.
  • Google Play – Accessible direct if you are in a Google Play country and have the patience of a saint, or through Ebook Partnership.
  • Sony North America Reader Store – No longer accepting titles, as closure is imminent.
  • Flipkart – India’s biggest online retailer. Accessible through Smashwords or Pothi.

Ebook Bargains UK

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