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Paperback Rights & Pricing is the final tab in the KDP setup process:
On this tab you can set distribution rights and pricing, check royalties, and request a printed proof of your book.
This section is about your rights – i.e. where you have the right to sell your Paperback. The two options shown are ‘Worldwide’ and ‘Individual territories’.
If you are a self-publisher and own the copyright to your book, click the button for All territories (worldwide rights). This will allow your paperback book to be offered for sale via Amazon’s standard and expanded distribution outlets.
What is Standard Distribution?
Amazon in the US, UK, Germany, France, Spain, Italy, Canada and Japan are deemed to be Amazon’s ‘standard distribution’ outlets.
If your paperback sells through these outlets, Amazon will take 40% of the sale price as payment for selling your paperback. Your share of the sale will be 60%, but the cost of printing is taken from your share.
What is Expanded Distribution?
As at July, 2018, all other countries in the world, including Brazil, Mexico, India, China and Australia [which have Amazon stores of their own], fall into the category of ‘Expanded Distribution’
Your paperback is not automatically sold in these expanded distribution outlets.
KDP does offer Expanded Distribution, but it does so by outsourcing the supply of your paperback to third parties. As these third parties must be paid for producing your paperback, your share of the sale price drops from 60% to 40%, but the cost of printing still comes out of your share.
Pricing & Royalty
This section is a calculator that allows you to check your royalties at different price points. It all begins with the List Price.
The List Price is the price at which your book will sell on Amazon. As a self-publisher, the Author sets the List Price.
To set a List Price, simply click inside the List Price box and type an amount:
Once a List Price is set, KDP displays the Rate, Printing and Royalty at that price. In the example shown below, the List Price was set at $12.99:
If you sell your paperback through Amazon’s standard distribution outlets [figures shown in blue], your share of the List Price is 60%. This is the ‘Rate’.
The value shown under ‘Printing’ is the cost to print your book.
The value under ‘Royalty’ is how much you receive from the sale of each book.
But your royalty is not 60% of the List Price. It is 60% of the List Price minus the printing costs:
Royalty = (List Price – 40% [to Amazon]) – Printing
Or to put it another way, when your paperback sells on Amazon:
- Amazon takes its share – 40% – from the total sale price,
- This leaves 60% of the total sale price.
- From this 60%, Amazon takes the actual print costs.
- Whatever is left over is your royalty.
To illustrate this point, let’s say the List Price of a book is $10 and the print cost is $5. From that $10, Amazon takes $4 – i.e. 40%.
That leaves $6.
From that $6, Amazon takes $5 – i.e. the cost of the printing.
That then leaves $1 as the royalty owed to the author: [10 – 4] – 5 = 1
Minimum List Price
Although the Author sets the List Price, KDP will not allow that price to fall below break even so it will always set a minimum price.
In the example below, the minimum price is $3.58 :
If the List Price is the same as the Minimum Price, the printing costs are covered, as is the 40% owed to Amazon [for selling the book], but the royalty to the author is zero.
Royalty with Expanded Distribution
As explained in the previous section on Distribution, KDP relies on third parties to produce paperbacks for Expanded Distribution.
If you tick the checkbox for Expanded Distribution, your Rate – i.e. your share of the sale price – drops to 40% because the cost of outsourcing comes out of your share as well. So now, the calculation looks something like this:
Royalty = ((List Price – Amazon’s 40%)- company X’s 20%) – Printing
Using the same figures as before, the calculation would look something like this:
|Royalty||=||((10 – 4) – (20% of 6) – 5|
|=||(6-1.2) – 5|
As you can see, the Author ends up 20 cents out-of-pocket.
To ensure this does not happen, KDP automatically increases the Minimum Price when Expanded Distribution is enabled.
Although this ensures that the Author doesn’t lose money, the fact that the increased Minimum List Price is applied to both Expanded and Standard Distribution outlets means that overall sales may drop [because the price in Standard Distribution is now too high]. It also means that authors will be limited in how much they can use pricing as a tool in their marketing.
Marketing and the Primary Marketplace
The Primary Marketplace is the Amazon distribution centre chosen as the default. The List Price for all other Amazon marketplaces is based on the Primary Marketplace and its currency.
In the examples shown so far, Amazon.com is set as the Primary Marketplace, and the List Price of $12.99 is in US dollars by default. If someone wanted to buy that book in one of the other Amazon marketplaces, the price would be converted to the equivalent in that currency. But this assumes that the accepted price of paperbacks in the Primary Marketplace is the same for all Amazon marketplaces. This is not always the case.
For international authors, it makes more sense to optimise the List Price for the marketplace in which most books are likely to be sold. For example, an author in the UK might want to change the Primary Marketplace from the US to the UK.
To change the Primary Marketplace, click the small arrow next to ‘Amazon.com’:
KDP will display a drop down list of the other standard Amazon marketplaces:
Amazon.co.uk – is for the UK.
Amazon.de – is for Germany.
Amazon.fr – is for France.
Amazon.es – is for Spain.
Amazon.it – is for Italy.
Amazon.co.jp – is for Japan.
Amazon.ca – is for Canada
To change the Primary Marketplace, simply click one of the other marketplaces on the drop down list.
In the screenshot shown below, Amazon UK has been selected as the Primary Marketplace, and all the pricing is shown in English pounds [£].
All the other markets will now be based on the UK List Price.
Different pricing per region
KDP also allows you to set different prices for each of the standard marketplaces.
In effect, this means that you can optimise the List Price of each marketplace to suit the cost of books in that marketplace.
If you know the best price for each marketplace, this option can be a very powerful marketing tool.
To set the List Price for individual marketplaces, click 7 other marketplaces as shown below:
You should now see calculators for all seven marketplaces:
To change the List Price of one or more of these non-primary marketplaces, click inside the price box of the chosen marketplace and type in the new price.
To bring the List Price back in line with the Primary Marketplace, simply click the option to ‘Base this price on Amazon.com’. The name of the markeplace will change, depending on which country is selected as the ‘primary marketplace’.
Terms & Conditions
By clicking the Publish button, you agree to KDP’s Terms and Conditions. You can find the Terms and Conditions at this address:
Printed Proof Copies
Although you can make changes to your book after it has been published, I strongly recommend ordering and reviewing a printed proof before clicking the ‘Publish Your Paperback Book’ button.
To order a printed proof, click the blue link as shown below:
When you click ‘Request printed proofs of this book’, KDP displays the following screen:
At the top, KDP explains that proof copies ‘…have a ‘Not for Resale’ watermark on the cover and a unique barcode but no ISBN. You pay only the printing cost for your selected marketplace times the number of copies. Shipping and applicable taxes will be applied at checkout.’
You can order up to 5 proof copies at a time – i.e. for yourself and/or for beta readers.
Finally, you should select a marketplace that is the closest to where you live. This will reduce waiting time and shipping costs.
When you have selected the relevant information, click the Submit Proof Request button to be taken to the payment processing area.
Proof Copies vs Author Copies
Although Proof and Author copies are both supplied ‘at print cost’, Proof copies can only be requested before the book is published while Author copies can only be requested after the book is published.
Author copies can be sold by the author. Proof copies are clearly marked ‘not for resale’.
Publish your paperback
To go ahead and publish your paperback with Amazon KDP, click the yellow ‘Publish Your Paperback Book’ button located at the bottom of the screen.
KDP will display a confirmation screen which includes the following message:
Once the review is finished, you should see your paperback listed on your KDP Bookshelf and on Amazon itself. Congratulations!
Part III is devoted to information specifically for Australian authors. This information includes step-by-step instructions on buying an ISBN in Australia, applying for a US Tax Exemption, and the Australian National Library’s requirement that a copy of all material published by Australian authors is deposited with the library.