Want to know how many sales a given Amazon Kindle rank represents? Here’s a quick and dirty formula:
100,000/rank # = sales per day
In other words, if a book’s rank is #100, then 100,000/100 = 1000 sales/day. If a book’s rank is #1000, then 100,000/1000 = 100 sales/day. At #100,000, then 100,000/100,000 = 1/day.
The formula breaks down at the extremes. It probably overestimates the sales of the top 100 books by a little, and the #1 book in a given day probably sells much more like 10,000/day than 100K, although as ever, at the top, it varies tremendously. And at #1,000,000, that’s not a book that sells 1 copy/10 days. We’re talking about a book that might not have sold more than 1 copy ever, or at least within the last 6 months.
Overall, though, it’s a pretty good rule of thumb. It’s probably a little conservative–tack on 10-20%, and you’re probably closer to the truth for most ranks–and it also depends on factors like velocity of sales in the last 0-48 hours, so books that have recently been boosted by a sale may be +/- 50% of the sales numbers or more. Also, a book that has hung out at a certain rank for a while needs fewer sales to maintain that ranking long-term.
Treat it as a guideline, though, and it’s pretty close to the truth. Does that mean you could extrapolate it to estimate how many ebooks Amazon sells per day? Yes. You totally could.
Very early this morning, Amazon posted the following changes to their Affiliate program, effective March 1st:
“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.”
Here’s my reading of this: if you’re a bargain ebook site that gets at least 20,000 free book downloads a month, and at least 20% of your total orders aren’t paid books, then you don’t earn any affiliate money that month. If you think I’m misinterpreting, please chime in.
So. Major sites like Pixel of Ink earn scads and scads of money off their affiliate sales, which include any Amazon purchases made by a customer who was driven to the site by clicking on one of POI’s free book listings. I don’t know how many freebie orders POI generates, but I’m pretty positive they’re good for well more than 20K a day.
In other words, they’re going to be way, way past the cap.
Here’s the question: what percentage of their current orders are of paid books vs. free books? If they’re past the 80% mark, how much are they going to have to change their listings–by decreasing free mentions, increasing paid mentions, or both–to not forfeit their affiliate earnings?
Turns out I can drop some very rough math on this. I think that, generally speaking, a free book listing will get about 15 times as many orders as a paid book listing. In other words, that’s a 15:1 ratio. To come in under the new requirements, sites need to hit a 4:1 ratio. That means the bargain book sites will have to post approximately four times as many paid books as free ones.
Right now, nobody’s all that close to those numbers.
POI’s closest; they already run around a 2:1 ratio of paid:free. ENT runs about 1:1. So does BookBub. FKBT runs several times more free books than paid. My figures are extremely back-of-the-envelope here, but you can see that major change is on the way. Either the major sites are going to have to offer a lot more paid books (although I doubt that tripling their paid listings would triple their paid orders), or offer a lot fewer free books. It could shake out that they list 50-80% fewer free books every day than they do now.
Now, it’s possible things aren’t as grim as that. These sites are so big that Amazon may have reached special arrangements with them to allow them to run more freebies–POI and ENT were already contacted about this general issue a few months back. Or my 15:1 ratio could be off. It’s extrapolated from ad results, but it’s not like I have direct access to these sites’ affiliate numbers. But it could be closer to status quo than I think.
That said, it’s pretty clear that things will change. The question is how much. And there are two obvious outcomes of these changes.
First, if you’re an author, it’s going to be tougher to get your free book mentioned on the major sites. Probably the medium-sized sites, too.
Second, the bargain sites may open to more for advertising of discounted titles, giving authors more venues to promote $0.99 sales and such. If demand from authors for freebie mentions is high enough, and supply is limited enough, the sites might start charging to list free books. And if the results are there, we’ll totally pay them for that, too.
This will be another blow to Select, making the program more winner-takes-all than ever. Why would they harm the program? Because they care infinitely more about the overall ebook market than they do about Select. EDIT: And it might not even be about the ebook market. This could be nothing more than an attempt to correct a problem with the affiliate program, which may feel it’s overpaying for the results its ebook affiliates are providing Amazon.
Whatever the case, it may be extremely chaotic over the next few weeks and months. As the bargain sites attempt to adjust to the new guidelines, you can guarantee they’re going to err on the side of caution, meaning very few free books will be listed each day. They might loosen up as they learn to work with the new system, but who knows how long it could take.
This is why I remain ambivalent about Select in general. Success depends heavily on these bargain book sites. If they change their rules, or Amazon changes the rules for them, it can leave authors caught on the carpet.
As they say, though, from crisis comes opportunity. If there are fewer site-launched freebies dominating the charts each day, that may leave more room for more “organic” free runs for books to claw their way up the ranks on their own (or aided by a bevy of small sites instead). Especially in the transition period, the books that do very well on free runs could do even better than ever, because there’s less competition vying for clicks.
That’s about as far as I can squint into the future. I fear that shit is about to get real. If you’ve got any questions, thoughts, or predictions, fire away.
EDIT, 2/28: Some numbers have started to emerge from affiliates who links to ebooks. The performance of free books vs. paid books varies heavily depending on how the site owner built their readership, but the order numbers have looked.. challenging. The best ratio I’ve seen was 91% free books, 9% paid. Others have been as high as 98.5% free. Michael Gallagher, owner of FKBT, estimates his links to free books get 148 times as many clicks as his links to paid books.
It sounds like virtually all of the freebie sites are going to have to make some changes: some minor, some drastic. March should be interesting.
It’s here: book three in the post-apocalyptic Breakers series, Knifepoint. Picking up a few years after the first two books, Knifepoint is the story of the survivors’ struggle for control of Los Angeles, and what it means to grow up in a world where plague and war have killed 99.9% of humankind. Oh, and Walt’s back, too.
Because it’s a new release and I want it to do really really well, it’s just $0.99 this week:
KNIFEPOINT
Amazon | Barnes & Noble | Kobo | Apple
What’s that? You don’t already have the first two books, Breakers and Melt Down? Well, good thing they’re also $0.99 for the next week. Because I love you. If you’ve got any friends who might enjoy the read, now’s a good time to let them know. All three books won’t be on sale together again for a while.
BREAKERS:
Amazon | Barnes & Noble | Kobo | Apple
MELT DOWN:
Amazon | Barnes & Noble | Kobo | Apple
NOTES:
Everything’s now live!
Anyone who follows this blog knows that last May, Amazon drastically changed their popularity lists (available on the left sidebar of the main Kindle store) to change the way free downloads were factored into the ranks. On last week’s Self-Publishing Podcast #42, I was asked whether this change was done in order to present readers with better books.
The short answer: yes.
The longer answer: not necessarily better books, but certainly more profitable ones. That’s a very important distinction to make right off the bat. In all media, there’s an ongoing, centuries-long debate about whether a work’s value is based on its commercial appeal or its artistic qualities. As it turns out, I have nothing to contribute to that debate. So what follows should in no way be taken as a judgment of books that have failed to thrive under the recent Select model. Some of my books did worse as well.
But here’s what we know. Between the birth of the Select program in December 2011 and mid-March 2012, all it took for a book to hit the first few pages of its category after a free run was a few hundred downloads. 2000+ would essentially guarantee you’d be near the top of your category, probably for 2-5 days. Because a free download was weighted the same as a paid sale. And very few books are currently selling hundreds of copies per day on Amazon. Right now, about 1000 sell 100/day. Maybe 500 sell 200/day. And only something like 100 sell 500+/day. The numbers were a little lower a year ago, but not by all that much.
Meanwhile, every day, freebie aggregate blogs were pointing their readerships toward several dozen free titles. The biggest blogs had tens of thousands of subscribers, more or less guaranteeing every book featured would pick up at least 1000 downloads. There was some level of curation involved–covers had to be at least halfway decent, and there was typically a rating threshold of some kind–but the blogs had no real way to test the commercial potential of the books they mentioned. And when a book is free, the resistance to downloading it is much, much lower than when that book has a price tag attached to it.
The result is that a lot of books with lower commercial appeal wound up displacing books with higher commercial appeal. On Amazon’s popularity lists, 1000 free downloads beat 100 paid sales, and new Select books were picking up thousands of free downloads every single day. The gatekeepers weren’t strong enough to keep out the low-appeal books, meaning readers were less likely to buy the books in front of them or to be satisfied with the titles they did purchase.
What was the solution? Well, Amazon wasn’t about to start curating these books themselves. Amazon is all about letting massive numbers of consumers reach their own decisions, proving in the most meaningful possible fashion which books have the highest commercial appeal. So some churn of their lists was probably a good thing, as it broke up the stagnation of long-term bestsellers (by the way, the iBookstore is currently struggling with this problem) and presented more voracious readers with fresh material. But this was too much, and it was too unregulated.
The answer was to raise the standards for which books would get prime placement. And in typical Amazon fashion, they would tie that standard to consumer behavior.
In March, they started testing new popularity lists; in May, there was a new algorithm. The winner no longer weighted free downloads equally with paid sales, but at something near a 10:1 scale. And instead of weighting the last 1-7 days of sales + downloads, it looked at the last 30.
So instead of needing 2000+ downloads to land high on the charts–a number most decent-looking books promoted by the top sites could cross; about 100 free books managed that number of downloads per day–their new formula required somewhere between 8000-20,000 downloads to really hit it big. The more niche or iffy books couldn’t hit those numbers anymore; fewer than twenty per day could climb those heights. With exceptions, the only books that could rake in that many downloads were the ones that would have guaranteed commercial appeal when plunked in front of readers. The gatekeepers–readers, making their download decisions one click at a time–were made stronger.
They crowdsourced commercial appeal. In the environment of the time, one or two or three thousand readers downloading a free book wasn’t a terribly accurate predictor of that book’s potential. But if you upped those numbers ten times over–to ten or twenty or thirty thousand reader downloads–you had a much more accurate barometer for which books would sell when they were awarded with extra visibility.
It was a net gain for readers, who had an easier time finding appealing books, but a net loss for writers, fewer of whom could pull in the number of downloads required to hit the jackpot.
Again, I’m presenting this without judgment. A book’s surface appeal, which prompts free downloads, doesn’t necessarily represent its deeper appeal, which prompts word of mouth and long-term sales (to say nothing of literary or artistic appeal). And Amazon’s current algos aren’t perfect. Certain factors–the readership demographics of the major blogs, crossover appeal of the larger genres, Amazon’s categories, etc.–means that certain subgenres (romance, thrillers, etc.) have an easier time of it than more niche subgenres (epic fantasy, Westerns?, etc.).
This is just my narrative of what happened. Amazon’s standards/algos weren’t high enough to deal with the emerging free book market; the rewards for making your book free were disproportionately high compared to their average commercial value.
So they raised their standards. And a lot of authors were left scrambling for a new solution.
~
The silver lining to these changes is that we as authors can take advantage of the raised standards to gauge the appeal of our own books. But since this post is already closing in on 1000 words long, I’m going to tackle that in a followup.
Outcome is a novella set at the beginning of the plague outbreak in my Breakers series:
“Ellie Colson is the only one who believes in the end of the world.
As an agent of the Department of Advance Analysis, she’s one of a handful of people who knows about the spread of a new virus—one she believes will wipe out mankind. With her bosses in denial, she flies to New York to get her ex-fiance Chip to safety.
But he’s already been scooped up and quarantined—and so has his adopted daughter. Pursued by her own agency, Ellie will stop at nothing to break Chip out before the virus claims them all.”
Note that it’s free everywhere but Amazon and B&N–I want Outcome to be a gift to my readers, and a way for new people to check out the series and see if they like it. It’ll (hopefully) be free on Amazon and B&N within a few weeks, but they make you jump through some hoops first.
In the meantime, please grab it from whichever store you prefer. Oh, and you won’t hurt my feelings if you want to spread the word.
In one sense, it isn’t news that Amazon wants the payment to authors for Select borrows to be about $2.00. The program is now over a year old, and in that time, the rate has always been pretty close to that mark. But this December, a lot of people thought things might be different. Amazon announced that they were adding a bonus payment to the Select pool, doubling their borrows budget to $1.4M. There was talk that borrows might pay $3 or even $4 apiece. I didn’t think it would get that high, but I figured it would be a big enough pot to keep borrows in the $2-2.50 range.
The December 2012 borrows rate was recently announced. The payout? $1.88.
Well. A bit skimpy. But how does that compare to the history of the program? Here’s the per-borrow payment each month since Select started.
12/11 – $1.70
1/12 – $1.60
2/12 – $2.01
3/12 – $2.18
4/12 – $2.48
5/12 – $2.26
6/12 – $2.08
7/12 – $2.04
8/12 – $2.12
9/12 – $2.29
10/12 – $2.36
11/12 – $1.90
12/12 – $1.88
Over the course of the program, Select has paid an average monthly rate of $2.07 per borrow. Its lowest payout was $1.60 in January 2012; its highest was $2.48 in April 2012. The payment rate has never been more than 20% lower than $2.00 or 25% higher than $2.00. Trend-wise, the per-borrow payment has never increased more than 3 months in a row, and it’s never decreased for more than 3 months in a row.
Based on these numbers, I think we can conclude a few things about Amazon.
- Amazon wants borrows to pay about $2 apiece
- Amazon doesn’t want to set the borrow rate at a hard $2 apiece
- Amazon is really good at modeling consumer behavior
- They’ve done better over the holidays than expected
Rad. All this raises a few immediate questions.
Why $2?
The glib economics answer is Amazon believes $2 is the rough price point at which enough authors will stay enrolled in Select to give Prime customers an enjoyable selection of books and thus incentivize them to re-up next time, too. As for how Amazon reached that $2 figure in the first place, I don’t know. The obvious answer is that $2 is about what an author would be paid for a sale of a $2.99 book at a 70% royalty, making a borrow just as good as a sale.
Why not a hard $2 monthly payment?
I think there are several reasons for this. For one thing, a $600,000 or $1,500,000 pot looks a lot more enticing to authors than $2/borrow. There’s a bit of a gambling element to it. Sure, borrows may only have been $2.04 this month, but what if they go up to, say, $2.40 next month? And what if I can get more of them than I did last month? That could really add up. *click, enrolled*
For another thing, maybe Amazon doesn’t have perfect confidence in their predictions of customer behavior. If they set borrows at $2, and next month Fire sales explode and they wind up with double the borrows they had last month, Select would cost them twice what they had budgeted. Amazon’s got riches for days, so maybe an extra $200K or $600K is no big deal, considering it’s a cost incurred by selling all those new Kindles/getting all those new Prime subscriptions, but even Amazon has budgets.
But the most important thing, I think, is that Amazon loves complex systems. They don’t want to lay down rules from above, they want to build dynamic ecosystems, because if you build them right, such systems are self-correcting–and provide you with all kinds of awesome data. For instance, if you set the borrow payment at $2, and authors slowly decide that’s insufficient, they’ll unenroll. The selection of titles in the Kindle Online Lending Library will shrink, making it less attractive to Prime members, leading to fewer subscriptions and less $$$ for Amazon.
But if you make the per-borrow payment dynamic, then you have a self-correcting element to push the system back to equilibrium. Maybe $2 isn’t worth enrolling, but as there are fewer books sharing the pot and/or fewer Prime customers borrowing them, the borrow payment creeps up. Maybe at $2.25, a few more authors decide it’s worth their while to join up. At $2.50, even more jump ship for Select. The KOLL has more titles, making it more exciting for prospective Prime customers, leading to (hopefully) a resurgence in subscriptions. And then as more authors and Prime customers join up, the per-borrow payment shrinks again, but who cares? You’ve got fresh blood in the program. To leave it, they’re going to have to a) decide it’s no longer worth it and b) take action to get out of it. Until they do, you’ve got authors’ content and customers’ money.
And in the meantime, you get to collect all this awesome data about how all these groups react to the changes in the system.
Because Amazon doesn’t know that $2 is the ideal borrow payment. Maybe authors will flood Select with titles for just $1/borrow. If so, great news for Amazon. They can offer even better service to their customers at little or no extra cost to themselves.
Why might Amazon have had better holidays than they anticipated?
I don’t know that for a fact. But look at the numbers above. To date, the only months the borrow payment rate has dipped below $2 are in November, December, and January–the leadup to Christmas, Christmas itself, and the post-Christmas boom. If they wanted borrows to be around $2, then they’ve had a few more Prime customers both holiday seasons than they predicted.
What does this mean for authors going forward?
Well, that would seem like good news. Because a lot of those new Prime members have their membership because they bought a Kindle Fire. And new Kindle Fire owners means more people around to buy ebooks.
It also means the Select program is pretty stable. There are still a lot of authors in the program and a lot of Prime members borrowing their books. From Amazon’s perspective, this is just dandy. And if everything’s working as they like, it’s less likely that they’re going to put out a lot of shiny new incentives to the Select program.
Note: there is a big difference between “less likely” and “won’t”. However well Select is doing for Amazon, the bloom is off the rose. They could decide to do something about that at any time.
But the program looks stable, and it looks like a winner. I’m having a hard time typing this, because I feel like there are good odds I’ll soon be proven hilariously wrong at any moment, but don’t count on any big changes to the program soon.
And in the meantime, expect to be paid about $2 per borrow. Amazon appears to want to keep it there–and Amazon is pretty good at getting what they want.
Outcome
As an agent of the Department of Advance Analysis, she's one of a handful of people who knows about the spread of a new virus--one she believes will wipe...
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