I was asked today to 'have a word' with my publishers as The Liar's Key ebook is £9.97 on Amazon.
I don't have any say in setting the price for my books, and while my publishers would listen politely if I were to talk to them about it ... they would do exactly what they think is right for the company, to maximise their chances of earning back the sizeable investment they have already made.
£10 is not an insignificant amount to me - I would have to want something quite a lot to put down a tenner for it. Even if it was a book that could entertain me for a week. So I'm not dismissive of people's concerns about cost.
However, here is the breakdown of that cost as I understand it:
£9.97 ---- Amazon take 20% of the price as Value Added Tax. You might imagine this is then paid to the government, and I understand from the news that bad press has finally convinced Amazon to do that in the near future - but certainly until recently they were registered in a tax haven and kept the bulk of the VAT for themselves. This leaves:
£8.31 ---- For all self published books over £1.99 Amazon takes 30% of the sale price (after VAT) for themselves. I'm assuming it's similar for everyone. This leaves:
£5.82 ---- As with all big publishers Voyager take 75% of the money that Amazon hands over from the sale of ebooks. This is standard and much better than the deal on paper books. I'm not complaining. This leaves:
£1.46 ---- My agent takes the standard 15% from all my royalties. He's a good hard working chap and I wouldn't be an author if he hadn't risked his reputation on me. This leaves:
£1.24 ---- The tax man takes 20% of my income. Given that I benefit from free healthcare for my very expensive disabled child, I can't complain. This leaves:
99 pence to buy (on publication day) the longest book I've ever written and one that I laboured on night and day for 12 months.
If you're prepared to wait a year the kindle price will be considerably less. Prince of Thorns is now £1.99 on kindle.
So, when I look at it as a brief window where I can put 99 pence in my pocket for each copy sold ... I don't think it's too outrageous a price.
And, thanks to author Jason M Hough I have his understanding of the breakdown for US Amazon:
Consider a $9.99 ebook.
The split is based on retail price, regardless of what Amazon decide to sell it for.
$9.99 ---- Amazon and the publisher split this 50/50. Amazon give the publisher $5. They can sell the book for $1.99 ... they'd just lose $3 a copy. This leaves:
$5.00 ---- 75% of which goes to the publisher. This leaves:
$1.25 ---- 15% of which goes to the agent. This leaves:
$1.06 ---- on which Jason pays income tax, leaving in his pocket:
Edit - a word on why I have no problem with my publishers taking the share that they do:
Publishers (often) pay advances - which aren't in addition to royalties - they're royalties 'in advance'. However, if the book doesn't sell, the author doesn't have to return the advance - so the advance is a financial gamble for the publisher and a guarantee/surety for the author. All this helps take the sting from the division of the sale price. The publishers invest significant sums in the advance and in production, and potentially in advertising, and this risk taking is why they're rewarded with the percentages they get.
My publishers have paid me advances that I was very happy with and that allowed me to plan ahead with security, risk free.