A Self-Publishers Tale: The Disadvantages of Amazon's Advantage Program

Dennis Danziger writes: "I am the world's worst Jewish businessman. I don't understand why I'm so bad with money. It can't be genetic. My brother is a professor of economics. My cousin Leilah, a college dropout, created a company that trades on the NY Stock Exchange. And I am very good at three-point shots.

Not only am I inept at everything money-oriented, but I am unorganized and have no patience for details. So self-publishing my novel, A Short History of a Tall Jew, a dark, romantic comedy set in Los Angeles, was something most of my friends and family warned me against.

I could have hired an on-line self-publishing company to do the work. They're fast and inexpensive, but I got all snobby and didn't want a name on my book's spine that would instantly identify my work as a vanity production.

So I farmed out the cover art, the page lay-out and the web design to a place where skilled craftsman earn a fraction of what they're actually worth - Cleveland - my wife's hometown.

And before my website was up, I astonishingly received an order from the Amazon Advantage Program.

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Amazon has a better answer: CreateSpace

I have my book on CreateSpace which automatically makes it available on Amazon.

I typed my book, edited it to the required specs, saved it as a pdf, uploaded it, and waited for it to be checked and approved.

I used the CreateSpace instant book cover maker and took a quick photo of a toy on my desk to customize the cover and selected the layout and colors.

Once this was all approved, CreateSpace only required that I print a proof copy which cost me about $7 shipped. And that has been my only expense. The book has a bar code and an ISBN, and like I said, on Amazon for all to see.

I can purchase copies of my book very cheap. And when Amazon sells a copy, I make a few bucks, and if someone buys a copy from the CreateSpace site, I make a few more.

here it is on Amazon... it looks almost like a real book, http://www.amazon.com/Thomas-Questionable-Fortune-Tom-Cipullo/dp/1434863654/

and here is how it looks on CreateSpace, http://www.createspace.com/3336543

Bad businessman is right

Bad businessman is right

When using Amazon Advantage you are supposed to have stock available at Amazon. If he would have mailed the books to Amazon ahead of time instead of waiting until he had an order he could have saved a ton. You could mail 25 books to Amazon via media mail for just under $12. This would make the per copy cost of shipping less than 50 cents.

The point of Amazon Advantage is that you are in the role of a publisher. You provide your books to Amazon and they put them in their warehouse. Because they are then in Amazon's warehouse your books qualify for "Free Super Saver Shipping." If a customer buys more than $25 in books or other items that qualify for "Free Super Saver Shipping" they purchase your book and get free shipping.

Here is what Amazon says on their website about that last point:

How will I know if my product is available on Amazon.com?

Once we receive your inventory, it will be stored in one of our world-class fulfillment centers, and will be available for purchase. The item will appear as "In-stock" on its Amazon.com product page, and it will be eligible for Prime(TM) and FREE Super Saver Shipping.

If the author had read the FAQ that Amazon provides for Amazon Advantage he should have had no problems. He is a bad businessman because he is trying to use a program without understanding how it works.

Some excerpts from the FAQ

What is the Advantage program?

Advantage is a program that enables authors, musicians, filmmakers, publishers, studios, and other content providers to list and sell their products on Amazon.com right alongside products that have massive marketing and distribution. The Advantage program provides a simple, efficient way to have a direct relationship with Amazon.com. Vendors enroll in Advantage and ship us inventory. The Detail Page shows the "In Stock" message to customers. Similar to a consignment program, Advantage vendors are paid following the sale. Restocking orders are automatically generated when we need more.

How much does Advantage cost, and what are the terms?

There is an annual fee of $29.95 to be a member of Advantage. Your fee includes unlimited title enrollment, access to our Vendor Services team, and access to the Vendor web site to manage your account. The standard terms for Advantage vendors is 55% - you keep 45% of the List Price. That means that Amazon.com is entitled to 55% of the List Price for each unit that sells. You, the vendor, receive 45% of the List Price. You set the List Price, also known as Suggested Retail Price, of your products, and all payments made to you are calculated based on the List Price. If Amazon.com decides to further reduce the sales price to the customer below the List Price, the customer discount comes out of Amazon.com's percentage. For example, if the List Price is $39.95, you will make $17.98 from each copy sold, even if the Customer Price or Our Price on Amazon.com is discounted from the List Price.

Who pays for shipping?

As a member of Amazon.com Advantage, you agree to pay for all shipping charges incurred in sending your titles to our distribution centers. (Sending 25 books would cost around $12 Media Mail to send to Amazon's warehouse)

He isn't necessarily a bad businessman

The fact of the matter is that there's no competing with Amazon.com. They are the gods of cheap.

They are cany...they charge you an annual fee to sell your books even if they don't sell a one. And they set their prices as they see fit...they just want a profit and they don't care about authors/self-publishers or other sales outlets. They care about the proverbial bottom line. Period.

Worst businessman

First line of Danziger's article: I am the world's worst Jewish businessman.

Birdie says "The fact of the matter is that there's no competing with Amazon.com. They are the gods of cheap."

Response
Under the Amazon Advantage program Mr. Danziger could set the price at any amount he wanted. Here is an excerpt from the Amazon FAQ that shows that:

How much does Advantage cost, and what are the terms?

There is an annual fee of $29.95 to be a member of Advantage. Your fee includes unlimited title enrollment, access to our Vendor Services team, and access to the Vendor web site to manage your account. The standard terms for Advantage vendors is 55% - you keep 45% of the List Price. That means that Amazon.com is entitled to 55% of the List Price for each unit that sells. You, the vendor, receive 45% of the List Price. You set the List Price, also known as Suggested Retail Price, of your products, and all payments made to you are calculated based on the List Price. If Amazon.com decides to further reduce the sales price to the customer below the List Price, the customer discount comes out of Amazon.com's percentage. For example, if the List Price is $39.95, you will make $17.98 from each copy sold, even if the Customer Price or Our Price on Amazon.com is discounted from the List Price.

Birdie says "they charge you an annual fee to sell your books even if they don't sell a one."

Response
If you use the Advantage program you pay a fee of $29.95 per year. The Advantage program looks focused on small publishers. $30 per year is a drop in the bucket. It is not like Amazon is some vanity press shaking people down for hundreds of dollars.

And as Tom mentioned in a previous post if you use the CreateSpace option all you have to buy is one proof copy of your book and there is no yearly fee. Hardly onerous.

Birdie saysThe fact of the matter is that there's no competing with Amazon.com.

Response
From the read of Mr. Danziger's article he had a thousand copies of his book published and is now using Amazon to sell them.

Birdie's view on where Mr. Danziger could sell his book
1) Amazon

Bibliofuture's view on where Mr. Danziger could sell his book*
1) Amazon
2) eBay
3) His own website
4) Lulu
5) iUniverse
*I seriously doubt my list is comprehensive

He didn't even need to pre-publish a thousand copies. He could have used Lulu and directed buyers to Lulu to buy copies.

As an example here is one of Walt Crawford's books at Lulu:
http://bit.ly/aUjBHB

The book is also available on Amazon:
http://bit.ly/bv9wXk

It is the same cost at either place at either Lulu or Amazon. It looks like Walt used CreateSpace on Amazon instead of Amazon Advantage. If someone hated Amazon they could list the book on Lulu and direct people there.

Birdie's view on where Mr. Danziger could sell his book 1) Amazo

Bibliofuture:

This is completely incorrect. I never suggested that you, Mr. Danziger or anyone else sell their book on Amazon, nor did I offer any alternatives. Please do not misquote me.

Likewise, I never pay the least bit of attention to Amazon 'reviewers' or 'rankings' or any of the other utter "world-class" b.s. that is the corporate-speak of Amazon.com.

Not quite comparable

I did use CreateSpace, not Amazon Advantage--because these books are purely publish-on-demand. Unlike the author, I had no interest in footing the bill for a large quantity of printed books (and, given that I've sold a baker's dozen of But Still They Blog, that's a very good thing!)--and since neither Lulu nor CreateSpace puts their name on a spine (unless you want them to), that wasn't an issue.

Realistically, you can't use Lulu for a book that's already printed. Nor is that how CreateSpace works. CreateSpace takes a *huge* chunk out of any book sold via Amazon listings (the production cost plus 40% of the retail price--thus, more than 55% of the retail price for most books). (I haven't used them for my latest book. Of course, that book has even more pathetic sales...)

Once the author decided to use traditional self-publishing techniques, it's really up to the author to (a) do lots of publicity, (b) see whether local bookstores will stock the book, (c) make sure it's in Books in Print, try to get Ingram to stock it, try to get B&N to take a bunch, etc., etc., (d) sell it directly...in other words, act as a small publisher. Shipping one copy at a time to Amazon for resale doesn't work for anyone concerned--all the disadvantages of publish-on-demand with none of the advantages.

There's no competing with Amazon.com.

You did type this exact line: The fact of the matter is that there's no competing with Amazon.com.

And there was a context to this. You posted in reply to the article about Mr. Danziger. So it would seem you were saying that Mr. Danziger had no way to distribute his book but via Amazon.

Maybe when you said The fact of the matter is that there's no competing with Amazon.com you meant that no one can compete in selling books against Amazon.

I would disagree with that also. If you don't want to buy from Amazon and want to purchase online you have:
1) Powells
2) Advanced Book Exchange
3) Biblio
4) Barnes and Nobles
5) eBay
6) Half.com
7) Buy.com

So when you say The fact of the matter is that there's no competing with Amazon.com. What do you mean by that?

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