The new Amazon KU payout program. How much will you win (or lose)?

Now that we have some more info about the new KU payout program, I decided to write a follow up on my previous post, to see where I was right and where I was wrong.

In a recent message, Amazon announced that the fund in June 2015 will be at least  11 M\$. Notice the “at least”. Because it hasn’t been uncommon in the previous months that Amazon raises the fund on the last moment by 30% or 40%. However, given the predicted KU fund it is unlikely that it will be much bigger (or less) than this figure.

I predicted \$11,7 mln, so that one was pretty close. And we’re not at \$700.000 close, are we ?

Furthermore, Amazon announced a total of 1.9 billion pages read as part of the KU/KOLL borrow program in June. This means that the payout per “page read” would have been 11 mln / 1.9 billion = \$0.00578 if the new KU payout program would have been applied in July. If we round it of we get to 0,6 cts per page.

My prediction, which I thought was pessimistic, was somewhere between 0,9cts and 2.5 cts. Here is that table again.

The green area is where I thought the payout would be. The orange area is where we are ending up. This means that the average nr of pages per book is much higher than the 100-200 pages I guestimated. We’re closer to the 400 pages.

The next table seems to confirm that. With a comparable KU payout of \$1.4 (if the old program would have continued), and an average page count of 400 pages, we get into the 0,4-0,6cts per page.

Amazon introduced the KENPC. This is the “normalized” page that will be taken into account for the number of pages read by your borrow customers. No further detail has been given about this KENPC, but with some reverse engineering we can find what a KENPC looks like.

This table probably needs some explanation. The first thing is the rather confusing discussion about “What is a page”? So let me try to explain.

Often, when an author talks about his book, and he says “I have written a 400 page book”, what he refers to is the page count that appears on the bottom of his screen when he is writing his book with MS Word. Obviously, this page count may differ considerably between authors depending on the page size used, the font, point size etc. For example, when I hammer in my books, I use the standard European A4 format instead of the US format or a 6X9” format. In the rest of this article I will refer to this number as “Author pages”. (third column in the above table).

When you submit your book to Amazon a “print length” will show up on the detail page of your book. This number is calculated as follows : if your book also has a printed version (created on createspace), it’s the number of printed pages of your printed book, that will appear on your book detail page. If your book does NOT have a printed version, Amazon will estimate what the number of pages would be, if it was printed. For this, they will use a 6×9” 11 pt layout (I have no further details, like font, line spacing , etc. about this).

This is the number that appears in my table in column 2.

Next, we have the KENPC pages, which was recently introduced by Amazon. You can find this number for every book, by going to your bookshelf, click on the book and click on the TAB ‘KDP select’. This is in my table in column 5. The fourth column shows the number of pages as they appear on CreateSpace. Notice that books 7 and 8 don’t have a printed version.

For my printed books, they are all printed as 6×9”, Book Antiqua, 11pt.

This explains that the number of CS pages is, on a couple of pages close, similar to the print length on the detail page.

But how is the KENPC calculated? Because as you can see in my table , the KENPC is NOT the same as the “print length” on your detail page. So what can explain the difference between the “print length” and the KENPC pages? In my case, the difference is varying from -10% to +26% with an average of +11%.

All my books are printed with the same font, size , line spacing etc. So one might have expected that the difference between the “print length” and the KENPC pages ,in percentage, would be roughly the same. But they aren’t. Another criteria might be images. So I included an image count for all my books. But even that doesn’t give a clear indication. For example, my book 2 and book 3 both have 58 images. But one gains 4% KENPC and the other one loses 10%. I haven’t gone any further by analyzing the size of these images, but maybe the answer is somewhere in there. But overall, my books have only 11% more KENPC pages than their printed version. Which makes me conclude that the point size for a KENPC is probably an 11pt font, which seems to be also an industry standard.

Actually, when I started publishing my books in printed format, I looked up what the ‘most common’ practices where for paperbacks. And that was 6×9” 11pt. And then there are about a handful of  common fonts for print books.

Now how come that certain authors report 70%, 80% or even 100% more KENPC pages than their printed version? The reason is simple. They ‘crammed’ more characters on a page than the KENPC standard that Amazon is using. For example, an author that has published his book in 10 pt, with a small font, single line spacing, in 8×10”, will see a considerable increase in his KENPC pages compared with his printed book. And in the same way, an author who  has published his book in 5×8”, 14pt, 1.5 line spacing will see his KENPC count much lower than his printed pages.

How many words are there on a KENPC page? On my own books it’s about 180 words per page. But I screened a couple of forums and this figure seems to vary from author to author from about 170 up to 240.  This is a rather big difference. What could explain those big differences? It cannot be the font, size, spacing or whatever, because those are set at the same “standard” size. And if we talk about novels only, there are no images, so that cannot explain it either. The only thing that may create a considerable difference between the two novels could be… the number of page breaks. Let’s compare two authors. One has written one 300 page story. And let’s assume that it gets exactly 300 KENPC pages and it also comes out at 300 printed pages. The second author has written 150 short stories, each one filling up just about more than one page. And every story starts on a new page, which makes sense.  His printed book is also 300 pages. But given that about half of the book is blank, his word count per page is also about half  the word count per page of the other author. Notice that in this example, both would earn the same because their KENPC pages would be the same. But this explains why the word count per page can vary considerably. But given the different figures I saw, it seems that most books turn around the 200 words per page, plus or minus 25.  So if we take 200 as a reasonable average, we can conclude that an ‘Amazon KENPC standardized novel’ has 20k words for a 100-pager. And 100k words would turn out as a 500 pager.

Who will be the winners and losers? In my previous post I already predicted that only the authors of long books would be winners, as compared with the previous KU payout system. All the others will lose. Now that wasn’t too difficult to predict. The only thing that we didn’t know at what page count you would belong to the winners or the losers. I guestimated that the break even point was around 100 pages. But now that the payout per page is much lower than I expected, the breakeven point gets to 233 pages. So if your book has less than 233 KENPC pages, you will lose out as compared with the old KU system. Assuming that all borrows will be read for 100%. And if we use the 200 words per page count this means that your book should have somewhere around 46k words or more, to belong to the winners.

Is this new system fair? With this new system, Amazon has decided to ‘pay for entertainment time’. The longer you can keep a reader busy, the more you get paid. Which isn’t unfair. Especially for novels where the major purpose is, to entertain your readers.  But it’s only one of the criteria that is taken into account. For non-fiction writers, the objective is  not entertainment time, but value. Or at least, that’s what I consider what it should be. An author who explains without the fluff in a 50 pager how to stop smoking, may bring great value to his readers. Actually, they might be more satisfied with this 50 pager, then the 100 pager from another author that contains the same information but who has filled it up with 50% fluff. Which will normally show in reviews. So in this case, the author of the 100 pager would get paid 2 times more than the 50 pager, although the performance of the second one is considerable better . He explained the same problem (and the solution) in half the space. For the non-fiction writer, his ideal objective should be : write the most informational book in the least number of words without the fluff. And this is actually counterproductive with this new KY payout system. But everyone should decide for himself what his first objectives are. For me, it is writing books that are valued by my readers. The overall review rate is close to 5 on my books and I like to keep it that way. They are to the point, with facts and figures, without the fluff. And I won’t change anything in the future to make a couple of cents more with unnecessary fluff.

But for the moment, Amazon has decided to not take into account ‘value’ and reviews. And I can understand why. Because how do you measure value? And how should they take into account reviews, knowing that the whole review system is pretty open for all kinds of scams.

To resume, and although I belong to the losers (as the far majority), I still think that this system is better than what we had before, where the author of 50 pages of crap would get paid the same as the author that wrote a great 500 page novel. And maybe in the future, Amazon will somehow tune their system, taking into account value and/or reviews.

How much will you win/lose as compared with the old KU system? To calculate this, you would have to know how much your borrows weigh in your total revenues. I did this calculation for my own books. And as you can see, my borrow revenue makes up about 42% of the total . Had I taken into account my CreateSpace revenues it would have been less. On average, I will lose 52% of my KU revenues, which turns out as 21% of my total book revenues. And if I had taken into account my CS revenue, it would have been somewhere around 15%. Not nice, but not a catastrophe either. And because I have multiple streams of revenues, other than my books, on the total of revenues it’s only a snippet. Which proves again that you shouldn’t put all your eggs in the same basket. .  Of course I cannot give an estimation for you who is reading this, because this depends a lot on your own personal data and situation.

How good are your books? Now that we get paid per page read, we can also get an idea how good our books are. Because the calculation is simple. Divide your number of pages read for every book, by the number of borrows (multiplied by the KENPC), and you have your % read. The only small problem is, that from 1st of July, in our reports from Amazon, we only get pages read and not the number of borrows anymore. But… you still have that data from the past. Now this will only be valid if

1. You have at least 4-6 months of KU data
2. Your borrows have been significant every month. I would say at least 50-100 per book.
3. Your borrows have been rather steady over the past couple of months.

In this case, your average borrows over the past couple of months is a good indicator of the number of borrows in future months. As for the pages read, you should have some patience. Because your pages read (and their payout) will be smeared out over several days if not weeks. Which means that this calculation of your satisfaction rate, will only approach a more or less viable number after about 2 months of KU data. Which means that mid-November you can maybe draw some conclusions about your percentage read per book.

If you’re one of the losers, what can you do about it? The answer is simple : write more in a shorter time and increase your ‘customer entertainment’ time per borrow. For the non-fiction writers : publish more (good) books in a shorter timeframe. Or for those that want to take the easy way out: add fluff and BS to your books

Will there be a massive exodus from KDP? Now that certain books will get paid \$0,10, \$0,20 or \$0,50 per borrow, will there be a massive departure from KDP? I don’t think so. But there may be a major shift. The low paid books may give it a try on other platforms and therefore leave KDP. Which is not a bad thing. And good authors that were not in KDP because they didn’t consider the payout decent, might be tempted to step in, now that their 500 pager will make a nice royalty on a borrow.

Let’s see how all this pans out mid August when we have the data available for the full month of July.

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Detailed Analysis of Amazon New KU Payout. Your revenues may triple !

On June 15th, Amazon announced that they will change the reward system of their KU borrows from 1st July onward. In short, in the past , 1 borrow of a book would earn the author a payout of the ‘KU pot’. So if the pot was \$5.000.000 and there were 3.333.333 borrows, each borrow would earn 5.000.000/3.333.333=\$1.5

With the new system, Amazon will count the ‘pages read per month’ and calculate the monthly Payment Per Page Read (which I will call PPP). Let’s assume as an example that the PPP is \$0,02. If a customer borrows a 100 page book, the author will get paid 100x\$0.02=\$2 . This is, IF the customer reads all 100 pages that month. If he only reads 10 pages, the author will get only \$0.20. Notice that if a customer reads the complete book but spread out over several months, the total \$2 will be spread out over several months.

The complete announcement can be found here.

As we all know, ebooks don’t have pages. So Amazon had to come up with some kind of formula that determines how many pages a book has, taking into account all the different devices, font types, font sizes, line spacing etc. To make this as fair as possible, Amazon has defined a standard Kindle Edition Normalized Page Count (KENPC). The only thing that is known about it at this moment of writing is , that KENPC has been defined. The full text is here. Unfortunately, they haven’t specified in detail what the font size, font type, spacing etc is used for the KENPC. So we will have to guess that for the moment.

Another thing mentioned in the full text from Amazon, is that they will take images, graphs and charts into consideration in their KENPC formula. (without any further detail). I guess that this means : if an page has a chart on it , it will count as X lines of text in the calculation of the KENPC.

The whole purpose of the exercise seems to be, to reward the actual work of an author. As a quick example: With the “old” KU payment system, an author that gets 10 borrows a month for his 500 page novel, would earn the same as the scam artist who also gets 10 borrows of his 20 page scamphlet. With the new system, and if we assume a payout of \$0,02 per page read, the successful author of the novel would now get paid 10x500x\$0,02=\$100 (assuming that the customers read his whole book in the same month), while the scam artist would only get 10x20x\$0,02=\$4 . And if the customer doesn’t get further than 50% in this scamphlet, it would even be reduced to \$2 . Seems fair enough.

This indeed is a first step into the direction of ‘pay for performance’. But there remain a number of questions unanswered.

Before I get to these questions, let’s analyze a bit what may happen, using the data of the past that we have.

First , let’s see what the KU pot, KU payout and total number of borrows was from August 2014 onward.

(The numbers in yellow are future estimates. The nr of future borrows is calculated with the TREND function)

In graph form we get:

We see that the borrows are still growing every month. And to keep the payment to a ‘reasonable’ level, the KU pot is also growing every month. But the KU payout seems to stabilize somewhere around the \$1.40 level. Notice that there is no reason why the nr of borrows in the future should change, because there is nothing that changes for the readers. So we may fairly assume, that IF the old KU payment system would have continued, the average KU payout would have been around \$1.40 .

Now what will be the average payout per book in the new system? The first thing that we would have to know is what the number of pages are in the ‘average’ book. Is it 50 pages? 100? 200? 400? Of course Amazon knows this number, but I don’t. So how to get a feeling for that number? The best I’ve come up with, was to select totally random 50 books and look at the ‘page count’ that is shown for that book. I realize that there might be some flaws in this. First, the number of pages on the current detail page of a book is not necessarily similar to the new KENPC. Second, I assumed that sales will be completely random  over all books on Amazon. Which is probably not the case. Novels, which are typically a couple of hundred pages, sell more than non-fiction ‘how-to’ books which in general have much fewer pages. But since I don’t have these numbers, I decided to go for a complete random selection.

For these 50 books I calculated the average number of pages over all books, the average number of pages of all ‘short’ books, and the average number of pages of all ‘long’ books.  Short being, less than the overall total average and ‘long’ being above the overall average. The results were:

Overall average length : 225 pages
Average length of short books : 70 pages
Average length of long books : 400 pages

Now using an estimated KU payout we can make a 2 dimensional table with horizontally the number of pages per book and vertically the % of the book that will be read. This gives something like

How to interpret this data? For example, if in the old KU payment system the KU payout would have been \$1.40 per borrow, the new PPP (Payout Per Page) for a book with 200 pages that is read for 80% would be \$0,009 .

If we take the same table for a more realistic KU payout of \$1.40, we get

And if we do the same for a more pessimistic payout of \$1.35, we would get

The green areas are the areas of which I think that they are the most plausible. If we study the above a bit more in detail, we can conclude that the expected PPP will probably be somewhere between \$0,005 and \$0,05. Which is still a pretty large range.

There is another way to look at it. If we assume a certain number of pages per book, we can make a 2-dimensional table with horizontally the KU payout and vertically the % read. This gives for example for a 70 page book.

And for a 100 page book

And for a 200 page book

Now if we look at these 3 tables, we see that the average PPP is somewhere between \$0,008 and \$0,045. And even with an upper limit of \$0,023 if we look at the 200 page book. So if I had to guess ONE number for the future PPP, I would set it at around \$0,025.

Now how will this impact the average author? Well, first problem : what is the definition of an ‘average author’. I don’t know. But instead, we could define a couple of typical authors. For this exercise, I have imagined 5 typical profiles:

1. The short story writer. Writes books with less than average pages  (40-80 pages)
2. The long story writer. Writes books with more than average pages (200-300 pages)
3. The scam artist. Writes useless books. As short as possible. (20-30 pages)
4. The reference book writer. These authors write dictionaries, quote/joke collections, reference articles etc. These books are typically used only to lookup something from time to time.
5. The children books writer. These books have lots of images. This one is a bit tricky because we have no idea how the images will be counted for in the KENPC

For all 5 profiles, I have defined 3 levels: The successful one, the average one and the poor one. For example, the successful long writer, gets 1000 borrows a month and are read for 100%. The average long writer gets 100 borrows which are read 100% and the poor long writer gets 10 borrows which are read for 60%.  This gives 15 different profiles. Now we can plug in some figures for these profiles and compare their payment with the old KU payment system and the new one. For an estimated KU payout equivalent of 1.40 and an average PPP of \$0,01 we would get the following table:

In this case, only the writers of long books and the writer of good reference books would benefit from the new system. Their revenues could almost double. The clear losers are the scam artists. Which is of course a good thing. But the short story writers would also get less.

If we assume a slightly higher PPP of \$0,02 we get the following table :

In this scenario , almost everyone wins except for the scammers who lose up to 90% of their revenue. For the good long writers, their revenues may get multiplied by 4 !

We could make two more simulations , similar to the above, but with a more conservative page count per book.

The result is similar to the table above, but the gain for the long writers is more modest . But still 43%!

For the PPP of \$0,02 we get

Again, similar as above , but now the increase for the good long writers is ‘only’ 180% . Or almost tripled by 3.

If we know the PPP and the corresponding KU payout in the ‘old’ system, we can calculate what the ‘number of pages read’ should be to break even. In other words, if your book has fewer pages than the break-even point, you will earn less than what you would have earned in the old KU system. And vice versa.  This gives us the following table :

In other words, if we assume that the payout will be equivalent to the old system (\$1,4 per borrow) then depending on the PPP, we would get

which means that at a PPP of around \$0,02 books with less than 70 pages would earn less in the new system as compared with the old one. Given the data above we could guestimate the break even point at around 70-100 pages.

To summarize , I would guess that the expected PPP would be around \$0,02. The writers of good long books will be the big winners. Their revenue may increase anywhere from 50% to triple. The good short story writers will also benefit but their gain will not be as spectacular as the long story writers. Whatever the scenario, the scam artists will be the big losers.

As stated in the beginning of this article, there are still a number of questions that remain unanswered.

-How long will Amazon keep paying the author?

As we have seen, a customer may buy a 1000 jokes collection of 300 pages and read every month only a couple of pages. Will Amazon keep paying pages that are read 1 year, 2 years, 5 years from now?

That’s a pretty tricky question. It takes maybe 5 minutes to read a full page of a novel, but only 5 seconds to ‘read’ a page with an image. Now I cannot imagine that Amazon will go as far as measuring the time spend on a page. So my guess is : a page opened is a page read. Of course, because pages read will only be taken into account when that data is recorded on their servers, it means that pages read offline will only be accounted for whenever (and if), the device is connected again to the internet and gets synchronized. And of course, read pages will only be recorded once. Even if the customer rereads your book 10 times

-How will charts/images/graphs me counted?

I already addressed this question above. For the moment there is no information whatsoever how these images will be counted for in the KENPC.

Let’s see mid August, when we get the first KU/KOLL payment calculations ,how far I was off.

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Why AMS (Amazon Marketing Services) don’t work

Some time ago, Amazon launched their Amazon Marketing Services. This service enables authors to run advertising campaigns for their books. I decided to give this a try to see what the results would be although I had read already in several forums that most of the people who tried this were not very successful.

I decided to take 6 of my books and let it run for about 3 weeks. I decided to use product targeting. For that, you type in one or more keywords and Amazon proposes you a list of books and other products that are related to your keywords. In my case, I just went with the 146 products that Amazon proposed for each book.

I ran this from 23 Mai till 15 June 2015. And here are the results :

amazon marketing services stats

To summarize, for the 6 books I got 170.300 impressions resulting in 122 clicks at a total cost of \$8.39 and….. 1 sale. Which made me \$2,10 . In short, I lost \$6,29 with this little experiment. Not a big deal.

If we look closer, I had a conversion rate of 0,8%. Now let’s do some backwards calculations. If I sell a book for \$3, my royalty is \$2,10. Let’s assume that the average CPC is \$0,10. (In my case it was \$0,06). That means that you have to make a sale on every 21 clicks. Which roughly comes down to a conversion rate of 5%. And as we can see, with my 0,8% I’m faaarrrr of from 5%.

Even if I would fiddle around with targeting, I doubt that I could multiply my results with a factor 7!

Now what conclusions can we draw from this? Personally, I don’t think that a conversion rate of about 1% isn’t too bad. The problem is simply, that the product I’m trying to peddle is not expensive enough. Or if you want, the margin of the product is too low to do any efficient (paid) marketing.

Can you do something about the CPC? Not really, because that is determined by some secret formula behind the scenes. Also notice that if you set your CPC low, you still will get clicks, but at a lower speed. And then the question is: Do you want to run an ad campaign for 6 months at \$0,01 per click to (maybe) sell 1 copy?

Can you do something about the targeting? My reasoning is, because you pay per click and not per impression that targeting is not that important. When someone is looking at books for cars, and you are selling a book on diets, maybe that person has also a dieting problem. So when someone clicks on your ad , he has some reason to do so. Even if the book/product he is looking at is something completely different.

On one of the books, I noticed another interesting phenomena. This book was getting about 50 impressions per day for the first week. And then suddenly, from one day on the other, without me having changed anything it went to around 5000 impressions a day, and after a couple of days it went back to around 1000 a day ! Why? I can only guess. Were there less advertisers and my book got suddenly boosted? Did Amazon tweak their targeting formula? I don’t know. But bottom line was, the result remained zero sales.

To conclude, I think that my results are in line with what I have read in other places. And I think the simple explanation is : books are too cheap with a margin too low, to do any efficient paid marketing. Of course, my results might have been completely different if I were selling \$25 books. But I’m not.

This book is a complete guide to book cover creation. Without the fluff !

In the first part you will learn what makes a good book cover. Both for fiction and non-fiction books.

-What makes a good book title and how to create one.
-The importance of blurbs, subtitles and testimonials.
-How to select colors.
-How to select fonts and where to find them.
-The importance of images and where to find good ones.
-How to select the right resolution for your book cover
-The importance of thumbnails
-Awards and bestseller blurbs or images
-The most important thing on your cover
-Visual branding

In the second part you will learn how to create professional book covers yourself with free software. You will learn all the basic operations you need to compose and create book covers that sell. It also contains lots of step-by-step examples how to :

-make selections.
-draw text with outlines, drop shadows etc.
-quickly skim through hundreds of fonts to find the right one.
-resizing and cropping
-feathering
-removing imperfections
-making image compositions
-filters and paint tools

Etc.etc. This book is for complete beginners. Even if you have never touched image editing software, you will be able to create beautiful covers when you have finished this book.

The book also contains three full examples how to create real existing covers, explaining step-by-step how they were created.

Part I and Part II are also available as separate books. But you save 30% if you buy this bundle instead of the individual books!

Here is an example of a book cover that I will go through in detail on how to create a cover like that.

How to choose categories for Amazon Kindle books

A lot of authors that publish on Amazon don’t really understand how to select book categories and why the categories during the submission are different from the categories that are shown on the Amazon site. I covered this issue , amongst dozens of others in my book “How to Make Money with eBooks“, which I will reproduce here.

———From my book ———————–

When you submit your book, you will be asked to specify maximum 2 categories for your book. Now this chapter IS going to be a bit more complicated as the previous ones, because… it is a rather complicated subject.

Actually, on all blogs, forums and books I went through, the most common phrase is “the whole category thing on Amazon is a mess” or something similar. And that’s about it.

I gave this a second thought and said to myself: How come that the biggest multi-billion dollar retailer in the world cannot make this a smooth process? Cannot they pay a programmer for 30 minutes to get this job done? Is this whole thing REALLY a mess? Or is there something behind all this which finally makes a lot of sense?

And my intuition said that there is no such thing as “a mess” on Amazon who is dealing with this stuff already for 20 years now with the smartest developers and marketing people in the world.

So… time to dig into this to figure out how this REALLY works. Why is this important to understand? Because, as I pointed out already in previous chapters, there are THREE things that can make the difference for your book. The cover+title, the keywords and the categories.

So take a cup of coffee, and try to follow this chapter. If you don’t grasp it on first read, reread it again. This IS important.

Here is the short description:

“A browse category is the section of the Kindle store where users can browse to your book. Think of the browse category like the sections of a physical bookstore (fiction, history, and so on). You can select up to two browse categories for your book. Precise browse categorization helps readers find your book, so identify the most appropriate categories for your book.”

Well, that doesn’t help us a lot.

On the more extensive help page on Amazon about the choice of categories, we can read the following:

“There are three main criteria that will help you choose the best browse categories.

Picking the most accurate categories. Make sure the categories you’ve picked correctly describe the subject matter of your book.”

That one seems obvious.

“• Selecting the most specific categories. It’s better to choose more specific categories instead of more general categories. Customers looking for very specific topics will more easily find your book, and your book will be displayed in more general categories as well (for example, a book in the “FICTION > Fantasy > Historical” category will also show up in searches for general fiction and general fantasy books). You should only select a “General” category if your book is actually a general book about a broad topic.”

The first part is just plain wrong. You CANNOT select a category AND a subcategory of that same category. You can only choose between lowest-level categories. I’ll explain that further on.

“• Ensuring the categories you choose are not redundant. Since your book will be displayed in a variety of searches by choosing even a single category, you shouldn’t place it in both a category and any of that category’s sub-categories (for example, selecting both “FICTION > Fantasy > Historical” and “FICTION > Fantasy”). Even selecting just one specific, accurate category is preferable to selecting an inaccurate category just to have a second category listed.”

This is a repeat of the second point and impossible anyway. The last sentence is correct. But it does imply: IF you can find TWO categories that fit correctly with your book, you should use these two categories. And it is even better if these two subcategories belong to two different main categories. Like the example I described before.

Now let’s see how this category selection works in detail. When you come onto the submission page you will see a button “Categories”. When you click on it you will get this screen:

There are 51 main categories listed here. Now go back to Amazon to the top of the Kindle eBook store. And have a look at the main categories. You will see the following list (it may have changed slightly when you read this).

In this list there are 29 main categories. If you look at the first entry in both lists, on the submission form we have “Antiques & Collectibles” and on the Amazon site we have “Arts & Photography”.

Yes, the two lists are completely different. And that makes things a bit complicated. Why are these lists different?

The reason is the following: The list that is used on the submission form is the so called BISAC Subject Codes list. This is an international standard that is used by publishing companies to categorize books based on topical content. You can find more on this list over here.

https://www.bisg.org/bisac-subject-codes

This means that this list is NOT maintained and controlled by Amazon, but by an independent organization. And Amazon uses that list because it is an industry standard.

However, the way that Amazon presents books on THEIR site, IS under their control. And the BISAC list is not the best way to browse through a catalog. Amazon has made it in such a way, that there are multiple ways to find a book by a customer who is browsing around.

Let’s take an example: On the BISAC list you see the main categories “Juvenile fiction” and “Juvenile non-fiction”. Juvenile is a word that isn’t used very frequently in the English language and means “intended for young persons”. If you develop the “Juvenile Fiction” list you’ll see for example:

And if I go to the Amazon site and I drill down in the main category “Children’s eBooks” I now see the list:

And here we see the same categories of Animals, Alligators and Monkeys. Conclusion: Amazon is using the term “Children’s eBooks” instead of “Juvenile Fiction”. And I think they are right from a customer perspective.

So the only complication for you as an author is to find the two best categories where you want to see your book listed, by using the process that I described before with the Dracula example. And then you have to find in the BISAC submission list the entry that corresponds with it.

For most categories this is not a problem. Because the name and subcategories are the same in both lists. But for others you may have to search a bit. To make this is a bit simpler, I have done the following:

• Expand the BISAC list on the submission form by clicking on all the + symbols. Now I select the whole list and copy and paste it into a spreadsheet. Now it’s only a question of some basic formatting to get the complete list of 4246(!) entries.
• The same can be done for the categories on the Amazon site. Select all main categories on the highest level in the Kindle eBook store. Including the number of books in that category. Copy and paste into a spreadsheet. Develop every sub category and repeat. Apply some basic excel formatting and voila. Now I have a complete list of all categories and subcategories with the number of books in each. I only did that for the main categories that I’m writing in, because I don’t need all the other thousands.

http://onlinemoneyexplained.com/download/amazon_categories.zip. Notice that the first sheet in this spreadsheet contains all categories from the BISAC list, but the second sheet contains the Amazon categories and this one is not complete.

Now if I have some categories in the Amazon site list, it’s quick to use the find function in excel to find the corresponding entry in the BISAC list.

Another way to do this, is to use the site http://browsenodes.com . Without going into the techie details, with this site you can browse through the Amazon category tree, but it is a bit faster than on Amazon. And you can download search trees in CSV format and then import it into excel to analyze it.

I come back to what Amazon writes on their help page and which I qualified as plain wrong. If I develop the BISAC list under Fiction->Fantasy by clicking on the small +symbol in front of the categories, I see the following

And as you can see, I can only select (=check) boxes that are UNDER “Fantasy”. I cannot select the category “Fantasy” as a whole because there is no check box in front of it. So I can only select the lowest level sub category.

What they MIGHT have meant is that if you select for example the subcategory “Dark Fantasy” don’t select also a second category on that same level like “Epic”. Rather take another subcategory that is in a completely different main category. Again, as long as it fits with your book.

Why are books listed in the category “Kindle eBooks” and “Books”? Like in this example:

The answer is simple. All eBooks are also part of the bigger category Books. The Books category contains ALL books on Amazon. Hardcopy and eBooks. Therefore, IF your book has a rating in both categories, the rating in the Books category will always be lower, because there are more Books in that category than in the category ‘Kindle eBooks’. Also notice, that the category structure under ‘Books’ is NOT the same as the one under ‘eBooks’.

I hope that I have now cleared up this whole issue about category selection.

Can You Make a Living as an Author ?

When I wrote my book “Amazon Reviews Exposed“, I had to dig a bit into the details of how many books were sold on Amazon and how much money (approximately) authors were making. I publish here this extract which gives a rather good insight what you might expect for income when you start your author career..

From “Amazon Reviews Exposed”:

________________________________________________________

How many Kindle eBooks are there? About 2,7 million titles. This is easy to look up on the Amazon Kindle store.

Although we don’t know exactly how the Amazon Bestsellers Rank is calculated, by cross checking data from different authors it is possible to recreate an approximate table with sales rank versus daily sales.
I have published one in my book ‘How to Make Money with eBooks’, but you can also look it up on my blog over here. These are the first two columns in the following table.

From that data we can construct the following table:

Now if we plot the Rank against the cumulative percentage of total sales volume and against cumulative percentage of titles, we get the following chart:

What does this chart tell us?

• 50% of the sales volume is made with the top 0,16% of the titles.

• 80% of the sales volume is made with approximately the top 3% of the titles.

• This means that the remaining 20% of sales is distributed over the 97% of the remaining titles.

• These 97% of the titles sell less than 1 book a day. A good part of this 97% sells zero.

This means that the probability of having a book in the top 100 is very small. Believe it or not, a book that sells (on average) 2 copies a day ranks already in the top 2%.

A study on the top 500 list (2013) reveals that only 700 indie authors are earning more than 25.000\$ a year. So if your book, which will start as just one of the 2.7 million books on Amazon, ends up in the top 0.025%, you can start make a full-time income from your writing activities. You can find the full report here.

Some people might say that these figures are a bit skewed, because a lot of titles are just ‘dead’ stock. And indeed, of the 2.7 million titles we can assume that only the top 500.000 sell. All the rest are books that sell nothing or maybe a couple of copies a year.

Some of these books were published years ago and never made any sales. Or they may have sold only a few copies. They might have been abandoned by the author. If we ignore everything in the table above but the top 500.000, does that change a lot? The table would now look like this:

And the chart like this

And indeed, the results are slightly better. But not a lot. 83% of the sales still make up 4% of all the titles.

The good news is, that you can publish as many books as you want. But from the above we can conclude that if you have a book that sells 1-2 copies a day (30-60 monthly), you are doing already rather well. So if you want to make a living from writing books, then there is only one solution: write a lot of books.

How many should you write? Let’s say you want to make 6000\$/month and you make \$2 profit on a book. That corresponds roughly with 100 sales/day. So if you want to make a living with books that sell 2 copies a day, you know how many books you have to write.

Don’t forget that the 6000\$ mentioned is gross income. And depending on the country you live in, you may have to pay 20-50% income tax on that.

Amazon Kindle Unlimited. Part 3

Now that the data is out for the KU royalty for August, time to do some further analysis where we are going with KU.

In my first post on this subject (which somehow disappeared in cyber space), I predicted after the announcement of the KU commission of \$1.81 in July, that we MIGHT be in for a downwards spiral.

\$2 in June, \$1.80 in July and than \$1.6, \$1.4 etc.

Now that the KU for August is announced at \$1.54, I wasn’t far off. In my previous post I stated that the KU units in August would approximately be the same as in July, calculated over a complete month. (Ku only started mid-July). In July we had roughly 1.5 mln KU/KOLL’s, so I had counted on about 3 Mln in August.

Now let’s do some math and try to understand what is going on:

Given that the KU is \$1.54 and that the pot is 4.7 Mln, it means that the number of units is exactly what I predicted .  About 3 million. My KU/KOLL units over the first half of September (recalculated over a complete month) are 13% less than for August. I don’t take into account the 80K that was aside for the non-US KU’s, because for the far majority of authors (=US) this doesn’t help. I’m outside the US, and the majority of my sales are in US/UK anyway , so even for me it doesn’t change anything.

As I wrote in my previous post, it was clear that the 2mln set aside for August wouldn’t be enough to make some decent payout and that Amazon would have to top it up. So comes the question for Amazon, by how much? With 3.5mln to ensure a \$1.80 payout, or less? And if so, how much less? They topped it up with only 2.7 mln, which makes that the payout is \$1.54.

And I think that confirms my prediction that we’re into a downwards spiral. I think Amazon will continue to lower it, until they notice a massive departure from KDP by authors.

If your book is on 2.99 you cannot go any lower, because your royalties will be ridiculous. At this price, to not lose out on a KU, the KU would have to be \$2 which it was in June (well, at that time it were only KOLLS). In July it went to 1.80 so you were losing out 10%. Now it is down to \$1.50, so now your losing out 25%. And if it goes down to \$1.30 next month you will be losing out 35%.

Every author has it’s own threshold were he will get out. For me, losing out 25% is enough to go and look elsewhere. So I’ll pull my books out of KDP at the end of the running period. Maybe I’ll be back when I’ve made it into the top 100 bestsellers to participate in KDPS.

Now let’s look at my sales/KU/KOLL chart.

Because my first post with the explanations disappeared, I’ll explain again:

I’ve plotted here: sales, borrows(KU) and sales+borrows. For every line I have plotted a short-term chart using the moving average over the last 10 days, and a long-term chart using a 30 day moving average. This technique is frequently used by traders to detect changes into trends. When the short-term line crosses the long-term trend in a downwards direction, the downward trend is confirmed. When the short-term line crosses the long-term line in the upwards direction an upward trend is confirmed. The vertical scale doesn’t really matter because it’s only to show trends. You can put on the vertical axis 0-10 or 0-100 or whatever.

Sales: (blue and green). It’s a bit difficult to see what’s happening because the lines keep crossing. So there isn’t really a confirmed trend in one direction or the other. But what’s clear is that if it remains on that level, I’ve lost about 30% on the volume of my sales compared with the pre-KU period.

Borrows:(orange and black). After an initial peak, things nose-dived till end of August, but seem to pick up slightly again. And seem to stabilize between the peek of July and the bottom of August. This would mean that KU over September would be slightly down compared with August. This is confirmed by my own KU figures which are 13% down.

sales+borrows:(red and brown). The volume is slightly down compared with the average volume of the pre-KU period. I lost about 14% in volume in August, but about 20% in revenue. And I’m afraid that this trend will continue, until authors will abandon KDP massively.

For my part, I’ve unchecked all my auto renewals on KDP and I will start moving my books to other platforms. At the same time I will increase the price of all my books to \$3.99.

Now what can we do about this? Not a lot. But if we don’t give a signal to Amazon that \$1.50 is not enough, it will very likely go even lower next month. So what I suggest: Uncheck all your books for auto renewal of KDP select. You do this by going to your bookshelf and clicking on “info” under the KDP select column. Notice that this doesn’t change anything for you immediately. So if you still have a month or two to go, nothing changes. But if hundreds or even better , thousands of authors will uncheck their auto renewal over the next days, I’m sure that that will not remain unnoticed at Amazon. And maybe they will say : “Hmmm apparently \$1.50 was too low, so next month we put it back to \$1.80.”. If you don’t do it NOW and you wait another month when it’s down to \$1.30, they will reason “Ahh ok, we’ve reached the limit. They don’t accept \$1.30, but they did accept \$1.50 last month, so we’ll put it back to \$1.50″.

So, do it NOW! Uncheck all your auto renewals. Share as much as you can to spread this amongst authors!

Amazon Kindle Unlimited Data Analysis. Update

After my previous post (which disappeared in cyber space) 10 days ago about the KU analysis, I decided to post an update.

What do we see in this chart?

As expected, the downwards spiral in sales and KU/KOLL units seems to stabilize and the short-term graphs seem to pick up again. Let’s see if that trends continues (which will happen if the short-term graphs crosses the long-term graphs).

Now what may we expect from the KU commission for the month of August?

As we can see in the chart, the KU units moved steep upwards right after the introduction, but then boiled down to a level that seems to stabilize. The level on which it stabilizes is about half of its peak. But KU was only started mid July. This means that mathematically speaking, because the average volume is only half of the peak, but the period is twice as long, the total KU units in August should be somewhere around two times the amount of July.

On a couple of units close, that’s confirmed by my own data.My total KU units for August are twice of those from July.

Now the total fund that was set aside for KU/KOLL in July was \$2.785.000 . The fund that has been reserved for August is \$2.000.000. Which is just   7,7% more then in August.

So if all these suppositions get confirmed within 10 days or so, it means that either we  or Amazon will have a problem, because the fund only grew with 7.7% but the volume has doubled. I will spare you the math, but this would mean that if the fund doesn’t get topped up, the KU/KOLL commission will be …. \$0.65 cts.

I cannot imagine that Amazon will slam it down to that level, because a lot of authors would abandon the ship.

Second scenario: Amazon tops up the fund with such an amount that the commission will be 1.80 like last month. How much do they have to put in? \$3.536.000  … (which makes the total \$5.536.000)

Yep, that’s a lot.

And than there are of course all the scenarios in the middle. Let’s hope that Amazon realizes that they cannot do without their authors, and that they are playing this for the long-term, even if they have to put in some extra dollars at the start.

I’ll keep my fingers crossed and keep it on \$1.80 like last month.

Bets are open.

Keep writing!

Amazon Reviews Exposed is an Invaluable Resource for Amazon Authors and Sellers!

Anyone that is selling eBooks or other products on Amazon will sooner or later ask the question: “How do I get reviews?”

Reviews influence sales. And since there is financial gain at stake, certain authors and sellers don’t hesitate to game the system with fake reviews.

This book has valuable information that you NEED to know.

How are fake reviews created? And do they work? How many fake reviews are there on Amazon? How do you detect them? What does Amazon do about these reviews (WARNING!! Your Amazon account may be at stake)? How do reviews influence sales? Does it pay to use fake reviews? Or are there ethical ways to get genuine reviews?

The author thoroughly investigated the obscure world of fake reviews, bought reviews, review circles and other “black hat” tactics that people use in an attempt to trick the Amazon review system. This book is about his amazing discoveries.

For a laugh, the author included an hilarious chapter with fake review bloopers and a top 10 of the most funny reviews.

So if you want to know what’s going on behind the scenes of Amazon reviews, or have been thinking about buying reviews, don’t hesitate to get Amazon Reviews Exposed.

How to Select Keywords for Your eBook on Amazon

How do buyers find your book when it is published? Sure, if you have a mailing list of 50.000 subscribers that helps. But most of the readers of this book will not have such a list.

You’re also going to announce it through all kinds of other media (free websites, YouTube, etc.). And that helps. I will handle all that further on in this book.

But the majority of people will get to your book by landing on Amazon. Then, they fall into the hands of an enormous marketing giant, who excels into marketing all the stuff that they have for sale. Not that you don’t have to do anything anymore and sit back. But having the marketing bulldozer of Amazon working for you will really make the difference.

So back to the initial question: How do buyers find your book? Smashwords has published an interesting study on their blog which you can find here

I won’t go into all the details but let me resume the main results of this marketing study and what works best to sell your book(s):

1. Word-of mouth. This accounts for about 30%. That’s everything which includes: recommendations from friends, online communities and other people that a potential buyer will trust. Problem for you as a starting writer is: How do you get word-of-mouth if you have no visibility yet?
The same holds for the number two in this list…
2. Author brand. 18% of buyers go and look for their favorite authors. It is clear that you don’t become a recognized author overnight. This takes a lot of time and effort and probably 6 months to a year to get anywhere on the scale of ‘favorite authors’ (if ever).
3. Random browsing. This overlaps for a good part with the previous 2 points and therefore can climb up to about 80%! That’s anything from “I just go onto the book store and I browse the categories”, “I just browse free books sites”, ”I look for books to review” etc.In short, those buyers didn’t have a specific idea what they were going to buy when they went online. “It just happened”.And this is a category where even the starting author can benefit from, because it has not so much to do with your sales or your history as an author.

Random browsing can be subdivided in:

• Someone might just browse through the categories. For example, someone who is looking for ‘classic cars’ would have to browse through:

Kindle eBooks -> Nonfiction -> Professional & Technical -> Automotive -> Classic Cars.

And every time that he clicks on one of these categories, a number of book covers will be displayed on his screen on the right. Which may catch his eye… So do the counting with me: Above I have mentioned 5 categories and their subcategories. On every click he will see something like 10 titles. That’s 50 titles in total.

And if he doesn’t browse immediately to the right sub category, he will first go through a couple of other categories and sub categories before he gets into the right one. So you can add easily another 50 titles. That’s 100 titles. And yours may be one of them…

• Someone types in a couple of words because he is looking for a topic but without having a specific title or author in mind. Something like ‘classic cars’ or ‘horror stories’. And this is where your title/subtitle AND your keywords come into play.

The last point brings us to the importance of keywords. Amongst all the things that you have (or may) fill out when you submit your book, one of the most important fields is the one with your keywords.

You may fill in maximum 7 keywords for your book. Here are some things you should consider when selecting your 7 keywords:

• Use all 7 of them. The more you use, the bigger the chance that your book will show up in a specific query.

• A keyword can actually consist of several words. So it doesn’t have to be a list of just 7 words, separated by a comma.

• Use keywords that describe as much as possible what your book is about. Make a list of at least 20 keywords when you start writing your book. From time to time, throw a glimpse on it and remove some. Until you have the 7 best left.

• Use the predictive search feature from Amazon. This works exactly the same way as in Google. I have written a 148 page book “Find GOLDEN Keywords with FREE Software. Dig up GOLDEN Nuggets with Google Keyword Planner”. You can find it here. This explains you in detail how to find good keywords for your articles, website and other writings. So why not use it for your book?

But let me explain with a short example how this works and how you can take advantage of this predictive search. Suppose I’m now an author of a book about classic cars. How and where to find them, how to restore them, how to maintain them etc. And I have come up with the keywords:

• Classic car repair

• Old-timers

• Car repair

Now I’m going to put those words to the test with Amazon’s predictive search. In the search bar on the top, I type in the word classic (don’t hit ENTER). Now I see:

Hmm, nothing with cars. I now add a space after the word classic. I get:

Again. No cars Notice that the words that are shown by Amazon are actual words that have been typed in by real visitors. (You see the first 10 results). Apparently there are not a lot (if any) visitors searching for “classic car repair”.

I repeat the same exercise for the second keyword “old-timers” (or oldtimers” or “old timers”). Again, nothing pops up.

The third keyword “car repair”.

Good. Here we have something. And indeed ‘car repair’ is typed in frequently by visitors. So I select the keyword ‘car repair’ from the list. I now look at the left which categories come up.

And I see in which categories this keyword is used. This is valuable information. I keep my keyword ‘car repair’ and I make a note of the categories (just right click and bookmark them to a bookmark list). I also skip quickly through the titles. The first 15 titles are books about general maintenance on any car. Nothing specific to classic cars.

On N° 16 I see the first book that is a bit on the same topic as my book:

I click on it to see how it ranks:

Rank 350.000+. Published June 2013. 2 reviews. All this indicates that this is not really a high selling book. Actually, it may have sold only a few copies. Conclusion: my ‘car repair’ keyword is maybe not as good as I thought. Normal, because I haven’t used classic in my query.

I hope the process is clear. Find keywords that people are indeed searching for.

What’s the difference if I would have typed in straight ‘car repair’ followed by ENTER? I would have seen the same results, but I wouldn’t have known that this is a keyword that visitors are actually searching for.

• You can do the same thing with your keywords in Google. Use the predictive search capability of Google to see what people are actually looking for. For more details about Google keywords, see my full book on the subject. This will also explain how to do this with Google Keyword Planner.

• Use one of the keywords that Amazon suggests to be listed in a specific category. Huh? What’s that? Yes, Amazon publishes a list of keywords for all major categories and subcategories specifying that if you want your book to appear in category XYZ, you should include the keyword(s) ABC in your submission form.

Very nice of them isn’t it? And it cannot get any easier than that. Here is the full listing from Amazon.

Categories with Keyword Requirements

Note that this listing is mainly useful for fiction books.

• Go to the category where you want to list your book. Now look through the competing books on the same subject. Take one and scroll down to the bottom of the page. Now you see the categories where this book is attached to. Either through its title OR its keywords.

Make a note of these categories. Now you can use one of these categories as a category for your own book OR you can use certain terms as a keyword. For example: I have selected two categories for my book. Now I see a competing book that is listed in the category