Friday, February 22, 2013

Amazon puts FREE ebook promotion sites out of business?

Drinking my coffee, going through a ton of email & social media crap, I happened upon an email from Amazon.  The Associates Operating Agreement has changed.

Now normally, this would bore me to tears, and I would probably ignore it for the moment. I don't really make any money as an Associate.  I'm in the business of selling my books as a publisher (Indie).

So I clicked on it anyway, and it had some seemingly innocuous stuff about counting up items sold and the kinds of items.  As you may know, the number and type of items sold affects your Associate's commission.

Then I noticed a section about FREE ebook promotions:




Associates Program Advertising Fee Schedule – Limitations on Advertising Fee Rates for Certain Products


March 1, 2013 version
The following is added at the end of the sub-section:
“In addition, notwithstanding the advertising fee rates described on this page or anything to the contrary contained in this Operating Agreement, if we determine you are primarily promoting free Kindle eBooks (i.e., eBooks for which the customer purchase price is $0.00), YOU WILL NOT BE ELIGIBLE TO EARN ANY ADVERTISING FEES DURING ANY MONTH IN WHICH YOU MEET THE FOLLOWING CONDITIONS:
(a) 20,000 or more free Kindle eBooks are ordered and downloaded during Sessions attributed to your Special Links; and
(b) At least 80% of all Kindle eBooks ordered and downloaded during Sessions attributed to your Special Links are free Kindle eBooks.”
Again, this doesn't really affect me.  I don't worry about selling other stuff through Amazon.  But then it occurred to me who it might affect, all those wonderful websites that promote FREE kindles.  I use those websites weekly to promote my FREE novel The Nightlife New York, the first in the Nightlife Series.

These freebie sites don't make money from free books.  They sell ads. But they do make a fair amount of Amazon Associates commissions from people entering Amazon to catch a free ebook, who then shop for something else. If all these free kindle sites can no longer collect Associates commissions because they are disqualified by virtue of promoting free kindles, can they afford to stay in business based on their ad sales alone?

Maybe.

Maybe not.

I have a strong suspicion the promotion of free kindles is about to see a severe drop off.  It kinda looks like maybe Amazon is shooting themselves in the foot.  Many people who enter their system via a freebie site, who pick up a freebie, go on to shop for something else.  It's a logical procession that less freebie promotional sites = less downloads of freebies = less impact of free promos = less sales boost to novels, and less sales of other items through impulse shopping.

I suppose I can understand Amazon might think its unfair that guys promoting free stuff can make a commission from other stuff just by virtue of a simple link.  But then I realized this is the fundamental basis of Amazon's Associate Program, when someone enters via your link, you get commissions for anything they buy.

Not really making sense anymore.  Not to me.  I'm sure there's a department of bean counters somewhere in Amazon who thought it made sense.

Now we could do the conspiracy theory thing: It's a conspiracy to smack down all those upstart Indie authors who were making huge leaps and gains competing against traditionally published novels via free promos.  I'm not going there.  Not yet anyway.  But it kinda begs the question....

It will be interesting to see how this affects free kindle promotion.  It most certainly will be negative for us Indie authors, indirectly.

Until next time,

Travis

15 comments:

  1. Wow, you really have given us something to think about. I too am one of those who visits other sites advertising free books on kindle. I also follow fb leads and have downloaded several books. (I also help other authors out by sharing freebees daily on my fb page). Where is all this going to lead - or yet leave me? I have no idea. I guess only time will tell. Thanks for the heads up - loved the post. V

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  2. You have given me food for fodder and a lot to think about. Thanks!

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  3. And yet- if they are trying to kill authors from promoting their free days then why have a KDP select at all ROFL. You are right- it does look more like they are shooting themselves in the foot!

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    1. Its hard to say what their up to. But it seems it might have the indirect result of slowing down the bustling FREE Kindle business. There are easily over 20 sites that maintain heavy traffic because of their FREE kindle promotions.

      I am certain these site's primary income source is from advertising. But I also know they are easily pulling down several hundred a month in Associates commissions from shoppers entering Amazon initially via the free ebook link.

      The problem is this: Some of their revenue on their Amazon Associate account is from actual ebook sales, because these freebie sites also promote non-free ebooks (for an advertising fee). But if they reach that percentage/download threshold mentioned in this new Associate's rule, their entire month's commissions are lost.

      See that happen once or twice, and you will quickly abandon your business model. But its the freebies that bring the traffic. So if you decide to stop offering freebies, nobody shows up to see your other ads on ebooks (non-free). BAM. Out of business.

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  4. It certainly looks as though not enough thought has gone into this decision. They expect to gain from sales through Amazon links and also by not having to pay commission because those links were reached while promoting free ebooks. The haven't realised as you have that bloggers who depend on that commission will soon drop free ebooks adverts and then Amazon will also lose sales through the links, hurting them in their own back pockets.
    I suspect this will be short lived if any Amazon exec reads your blog.

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  5. If it's not one thing it's the other with Amazon.

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  6. Might be shooting themselves in one foot, but Amazon has many feet. Perhaps they're just leveraging themselves to earn more money with another one.

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    1. That is probably true. It almost seems like a kneejerk reaction to complaints. But who would complain about the thriving free ebook trade? The Big 6 publishers, and/or the authors published by the Big 6. I suspect this will impact Indie publishers more than any other group.

      However you look at it, its very suspect.

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  7. Amazon's been throttling sites that promote free Kindle books for a while now. Some of them have even announced that they've gotten direct and vaguely threatening emails (I think I saw it on the Passive Voice blog?). I've also heard that Amazon isn't so quick to price match free as they used to be. Free ebooks do cost them in terms of electronic delivery - not much, granted, but multiply a tiny bit by millions and I'm sure they've done the math. I know I sure don't stick around and purchase when I pick up a free book, although I may come back later if it's an author I want to read more of.

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    1. On my Associates account I have seen people buying music, car parts, household cleaning products, all kinds of stuff, and I only have one free ebook I toss around here and there, my own book.

      Like I said, it wasn't a big enough commission to worry about. But if my free ebook link brought in all those sales after the fact, imagine how many sales would result from an entire website filled with hundreds of free ebooks that gets thousands of hits daily/monthly.

      Now imagine you no longer qualify for commissions off of these thousands of dollars of sales from people who entered Amazon via your free ebook link.

      That's dirty.

      Amazon is catching thousands of dollars in sales off people who originally entered the site for a free ebook. Why not pay out the commission to the Associate?

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  8. Combine this with the fact that Amazon is planning on selling USED EBOOKS (yes, you read that correctly), and the whole review fiasco, and it looks more and more like a crackdown by Amazon on the indie author industry.

    So, not only are they going to hurt indie authors, but their supporters as well. Let's hope other ebook sites such as Kobo and Smashwords start significantly gaining in popularity.

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  9. Smashwords.com has a simple, hassle-free affiliate system and they pay at least 11% on sales.

    I'm sure they would LOVE to have your former Amazon traffic, free ebook sites.

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  10. Indies should start promoting Smashwords as the place to buy their books from. Easy sign up, no refunds, and lots of formats to choose from.

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  11. This is so very interesting & not to be ignored. Perhaps it will push more .99 cent sales somehow? Idk. I'm trying to find a benefit here & I don't see one accept for Amazon. great info, sharing!

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