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Kindle touch

Making money from Kindle publishing

Posted on 28 Jan 2013 at 14:16

Kevin Partner investigates whether Kindle publishing could be a lucrative sideline for small businesses

But back to Jeff Bezos, who spent almost half his press conference talking exclusively about E Ink devices and the ecosystem built for them, despite the fact that he had a new range of considerably more sexy Fire tablets to unveil. I came away feeling that Kindles (and potentially Barnes & Noble’s Nook devices too) represent huge opportunities for online businesspeople with specialist knowledge, because they present far lower barriers to entry than does app development. So I decided to run an experiment by setting aside more than 100 hours to produce a book.

It’s difficult to work out exactly how much time to devote to such experiments – too little and a poor product will invalidate the results; too long and it becomes unaffordable. What I needed was an efficient way to create a worthwhile product – the obvious one was to write about something I already knew (can you hear the trap snapping shut around my ego?). It had to be something that would sell, of course, and it so happens I’ve been receiving emails for around two years from customers of my craft-retailing business, asking for advice on starting up their own home-based enterprise – usually selling candles. My first idea then was to turn that advice into the book.

The main experiment, then, is to see whether KDP can be used as a platform to generate a decent income

But then I had a sudden attack of unaccustomed humility (or perhaps simply a failure of confidence) and rather than merely ploughing ahead with what I thought this book should contain, I decided to email 1,000 of our most active customers and ask them which questions they’d like the book to answer. Within four days I had received more than 100 contributions, and I created a mind map of the points they raised, grouping them together wherever possible and keeping tally of the most popular ones, from which I was able to build an outline for the book.

I researched the market on Amazon.co.uk, looking particularly at the most critical user reviews of rival publications to find areas of weakness. Armed with this information, I locked myself away and spent ten working days writing 50,000 words. For me at least, setting aside a dedicated period is the best way of making sure such a project gets finished, even at the expense of sore fingers and late nights. And most helpfully, it became apparent as I wrote that the content I was creating would be worth something, whether or not this specific experiment proved profitable.

The Kindle model

Amazon offers two tiers of royalties, 35% and 70%, and to qualify for the higher rate your book must be priced between £1.50 and £7.80 (bands defined by the dollar price). At first sight this might look counter-intuitive, but it seems Amazon wants to discourage very cheap books, in an attempt to prevent an App Store-like race to the bottom, while also suggesting an upper limit that makes Kindle books just cheaper than printed ones. The higher rate makes Amazon’s commission exactly the same as for apps, while leaving you a far larger royalty than a traditional publisher would offer.

Just how big is the market? Back in August, Amazon announced that it now sells more ebooks than paperbacks and hardbacks combined, but what it didn’t say was which of the two, digital or paper, generated more cash. It did exclude free downloads from the figures, but even so, many Kindle purchases (especially of classic fiction) would have been very cheap – the complete works of Charles Dickens, for example, can be bought for less than £2.

Furthermore, it doesn’t break down the figures into fiction and non-fiction, let alone sub-dividing factual books into the massive category of biography versus everything else. Suffice to say, the proportion of the market I’m targeting is tiny, and it’s by no means certain that my audience will prefer a Kindle version to a paperback.

Nevertheless, I wouldn’t have invested so much time if I wasn’t confident that I could use the content generated to make money one way or another: my first target may be Kindle Direct Publishing, but I’ll also be creating a printed version via Lulu.com’s on-demand service to compare sales across media. The content could also be deployed to create an online course, an audio book or, failing all else, a series of blog entries.

The main experiment, then, is to see whether KDP can be used as a platform to generate a decent income. The first phase was to write the book, edit it rigorously, format it for Kindle and publish it. For many authors this will be where their effort ends, and so I wouldn’t be surprised if a large percentage of all the Kindle books published sell no more than a handful of copies.

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User comments

Good move

You do have one key advantage over most of us, in that you've just got yourself free advertising through PC Pro, a magazine with a circulation of 100,000. Good move. What we'd give for exposure of that kind.

By 0thello on 28 Jan 2013

Maybe the profits are going to a charity to avoid a conflict of interest as pointed out :)

By snoog on 29 Jan 2013

@0thello

Thanks for your cynical comment. Do you think there's a big crossover between PCPro readers and craft business entrepreneurs then?

If you paid attention you would spot that none of my experiments feature demographics typical of the PC Pro audience since that would invalidate their results.

By KevPartner on 6 Feb 2013

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Kevin Partner

Kevin Partner

Kevin is a contributing editor to PC Pro. He's managing director of NlightN Multimedia, a Milton Keynes-based company specialising in web application development and internet marketing.

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