Just when you think you have the “system” figured out something comes along that makes you realize that you really don’t.

Amazon has this nifty feature related to Kindle edition ebook purchases. There is a yellow button over on the right hand side of the screen that allows you to GIVE AS AS GIFT.

As an Indie author or Indie publisher, gifting a book to a potential reader can be a pretty good choice. There are other choices in giving your book to someone, and we could get into a lengthy debate about whether it’s better to use Smashwords’ free coupons, send people PDF’s, or any one of numerous other options. There are arguments for each. But this post isn’t about that choice. It’s just about what happens when you do choose to use Amazon for your ebook gifting.

The “advantage” of gifting a Kindle edition ebook to a reader is that it should show up as a sale, thereby improving your Amazon sales statistics. Your book’s relative sales statisitics are so very important in driving future sales that it may be worth it to you to spend money on your own book. Think of it as a form of advertising. Bear in mind that, assuming you are in a price range to get a 70% royalty, (taxes aside) you are only actually paying 30% of the sales price of your book, since you get the 70% back in royalties. Thus, the cost of your advertising is 30% of the cost of your book. However, there is a catch. A BIG catch, which we only discovered a few days ago.

When you buy your own book and gift it to someone, Amazon charges your credit card the full sales price, and emails the link to the address you provided for the recipient of the gift. So, let’s say that Pamela Fagan Hutchins buys Saving Grace and gifts it to her grandmother. BUT, unless the ebook is actually downloaded, IT DOES NOT COUNT AS A SALE FOR ROYALTY PURPOSES. In other words, if Pamela’s grandmother can’t figure out how to download the ebook to her new, never-used Kindle lovingly given to her by her doting great grandchildren  (a likely scenario), it does not add to Pamela’s number of ebooks sold. ANNNNND, most importantly PAMELA DOESN’T GET PAID! Seriously, YOU the author, don’t get paid. Amazon, for the sale of your eBook, does.

Let me take a moment to let that sink in for you. AMAZON collects for the sale of your book, BUT THEY DON’T PAY YOU! Really.

So let’s put it in another context. Let’s say a friend of yours buys your book as a gift for someone else. But that gifting email gets forgotten, ignored or deleted. Again, a likely scenario. Your friend’s credit card gets charged. Amazon gets paid for the purchase of your book. You, the author, get nothing.

Moral of the story: Do everything you can to insure that the Kindle eBooks you purchase (or others purchase) on Amazon as gifts to others are sent to people who actually download them. Only when they are actually downloaded from the link does Amazon count them as a royalty-worthy sale.

Tsk, tsk, Amazon. Not very nice.

Eric H.

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4 Responses to The gift that keeps on giving, to Amazon.

  1. Pamela says:

    Excellent post, Eric. I revere, fear, and appreciate Amazon, but I still don’t like this.

  2. Rhonda Erb says:

    Now, that’s just wroooonnnnnng! Surely something can be done about this. It’s not even my book and my feathers are a little ruffled here. What can I do? Seriously, something should be done about this.
    On that note, I better go download my copy! Yeesh!

  3. Your post made my skin burn. Amazon’s practice of pocketing the gift money without remorse is reprehensible. A post on the CreateSpace Forum might be in order.

    I’v also read that Amazon’s book matching price policy is predatory, e.g. when offering a free book on SmashWords, Amazon will match that price, permanently.

    The only way to correct these sins is to plaster them on the Internet.

    • Eric says:

      It’s a tough balance. They have an explanation — that it is like a gift card,and, until redeemed, no other merchants/sellers benefit. Of course, it is a gift card designated for a specific product, which is the critical difference. They argue that a gift book involves a transfer, and an unredeemed gift ebook card involves no transfer of book until it is downloaded. Yet they both involve the transfer of money. The real problem is that it doesn’t matter how angry it makes authors/sellers — we need Amazon, they don’t really need us. It only matters if it angers customers enough that they make purchases elsewhere. We try very hard to stand up for ourselves with Amazon but not to just piss them off on battles we can’t win. I don’t object to someone putting this in a CreateSpace forum, at all. I just don’t want our name or Pamela’s name attached to it. A blog is one thing, especially because we try to be solution-oriented instead of only angry. The angry hordes on the forums are another. We avoid those at all costs!

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