Amazon’s Vested Interest in Indie Authors

Why?

Well, for one thing, Amazon thinks the ebook market does best when most titles are $2.99 – 9.99. Major publishers prefer to charge as much as they can. Indie authors price almost exclusively at $0.99 – 5.99 and are probably the single biggest pressure for downward prices in the ebook market.

But yes, Amazon has no use for us and it’s just a matter of time until we’re stuffed into the closet.

In the meantime, rather than fostering the race to the bottom (another major indie boogeyman), comparing Smashwords’ yearly surveys from 2012 and 2013 indicates indie prices have gone up in the last year, with more and more indies pricing and selling well at $3.99 – 5.99. Meanwhile, the average price of ebooks on Kindle bestseller lists has recently fallen to the $7-7.50 range. Right in the middle of Amazon’s $2.99 – 9.99 sweet spot. There now exists a band of prices covering every point between free and $14.99 (and up), allowing Amazon to target every conceivable type of reader, from extreme bargain-hunters to those who equate low prices with low quality.

But I’m sure now is the time when the ebook market will stabilize forever, allowing Amazon to toss us out like last week’s leftovers.

Even if prices were to magically stabilize here, a thriving indie market gives Amazon access to tens of thousands of titles no one else has. They have more books and more data than anyone else in publishing. By not setting arbitrary prices or restricting what gets published, they don’t have to make guesses about what might sell or how to sell it. They have hundreds of thousands of books creating a living ecosystem they can analyze to make their storefront even better–and they’re the only ones with access to that data. The more authors they allow in, and the more those authors are allowed to innovate, the more Amazon learns, and the bigger the advantage they have over every other publishing company on Earth.

But obviously, sooner or later Amazon is going to decide the jig is up and they’ve learned everything there is to know about ebooks and publishing.

We cost Amazon nothing. We’re free money. The only possible threat indies pose to their business is if we somehow poison the pool with bad books, but they’ve built their system so no one sees those books. And sometimes books that everyone would agree are “bad”–terrible editing, ugly covers, derivative plots–sell like gangbusters anyway. Why? I don’t know. But I bet Amazon has a few theories.

Because they were happy to let everyone publish, let consumers decide what they wanted to buy, and take advantage of that emergent behavior to get even better.

It’s tougher than ever to get started as an indie, but I think that has much less to do with Amazon squeezing us and more to do with how hypercompetitive indie authors have become at every aspect of the business. As we continue to innovate, not only does Amazon get 30-65% of everything we sell, they learn everything about how we sell it and what their customers want. The moment Amazon starts segregating us from the market is the moment they forfeit their knowledge-advantage to Kobo, Apple, Barnes & Noble, and anyone else looking to grab a corner of the ebook world.

If Amazon’s business model is a) be stupid and b) hand over the keys to the castle to their competitors, then yes, they might want to quash or segregate indie books.

But if they want to maintain dominance, they’ll let us continue to mix it up with the big boys just like we’ve been doing since the launch of KDP (or DTP, if you’re old school). Because collectively, indie authors continue to be one of their sharpest tools they have to remain the biggest, the smartest, and the most powerful player in the bookselling industry.

And that’s not going to change any time soon.