Wednesday, November 10, 2010

Aiming sales at Amazon versus selling direct yourself

Anyone familiar at all with the industry of self-publishing is likely to have heard of, if not read, Aiming at Amazon by Aaron Shepard. This book covers in great detail the Aaron's business model for making a profit as a self-publishing author by selling books on Amazon (I also strongly suggest reading Aaron's latest book on self-publishing, POD for Profit, which focuses on using Lightning Source (LSI) as a POD printer and the business model of using a short discount).

Without giving away the contents of Aiming at Amazon, Aaron's business model points out several advantages of directing all book sales to Amazon. The most important of these advantages is what is known as the "long tail" of Amazon. The more a book sells on Amazon, the better its sales ranking, the higher it comes up in the search listings and the more the book sells. Pretty neat!

There are other advantages and they might not seem as important as engaging the virtuous cycle of the long tail of Amazon, these additional advantages are important in terms of profitability. Amazon handles the overhead of distributing, collecting payment, sales taxes and shipping the book to the buyer. For a self-publishing author, these services performed by Amazon means a significant savings in time and money, neither of which are in great supply for authors.

The author who uses LSI has the advantage of being able to set a short discount on the wholesale price, as low as 25%. Author's who use CreateSpace, the POD company owned by Amazon, must grant Amazon a 40% discount. I use CreateSpace for my POD printer because the price per copy is lower and I sell books at speaking opportunities. 

I also sell books directly from my website, but not for much longer. By the time I factor in my time and expenses for packaging a book, invoicing, depositing the funds in my business account and going to the post office, the difference in profit earned from selling direct instead of through Amazon has vanished and in some instances the profit is even less.

The store on my website is undergoing a redesign. Using direct links obtained from the Amazon Associates page, potential customers will be directed to the product page for the book on Amazon. If the customer purchases the book, not only will I have sold a book, but I will receive an additional commission of about 6% from Amazon for directing the sale to Amazon.  

This approach eliminates time and expense yet still allows me to use my website as a means to sell my books. Visitors to my website are not looking for books, but rather the content I provide for free on the site. Many of them visit the store while on my website, confirmed by Google Analytics, and some purchase books. The amount of sales generated is lower than those generated by speaking and Amazon sales but still important. Directing all sales to Amazon will further engage the long tail of Amazon and reduce expenses and free time to be spent on other tasks such as finishing the next book.

If you sell books directly to readers, it might be worth the time to calculate the savings if you converted the store on your website into an Amazon outlet and as Aaron Shepard would say, "aimed your sales at Amazon."