Books written by Ray Sullivan

Thursday, 28 February 2013

Amazon Improves Payment Options for Authors

As a self published author I have mixed feelings about Amazon.  On the one hand they have made the self published eBook market what it is today.  That they have done so using strong arm methods and resorting to outrageous bribery only diminishes them as they would do well in the eBook economy without resorting to these methods.

But, regardless, they have made self publishing, warts and all, a reality and there's no going back now.

One of the things that Amazon have done is break eBooks out of being a purely US occupation, they led the field in liberalising the market.  In the traditional book publishing world you have to negotiate individual publishing rights country by country, region by region.  And it is the publisher who has the biggest sway in which markets you can pitch in.  With Amazon, and with the other eBook retailers it is trying to oust, you can publish world-wide. You can opt not to sell your books in specific countries, if that is your wish, and I suspect part of that is related to those traditionally published authors who are still contracted to specific countries but retain the rights in others.  I can't think of any other reason why you'd want to restrict selling your books in any given country, unless you're trying to make a statement.  Or avoid a Fatwa.  And who wouldn't want to make a statement?

Amazon haven't got the international sales right at the moment; if you sell through all their international outlets then you sell to the US (and India via the US?), the UK, Germany, France, Spain, Italy, Japan, Canada and Brazil.  Their Createspace subsidiary breaks the sales down to the US, UK and Europe, with payments in Dollars, Sterling and Euros respectively.  That makes monitoring your sales much easier, especially as it is presented on one page.

Apple, however, appear to have trading stores in pretty well every country on the planet, with plans to expand to the international space station, no doubt.  I'm not sure how they pay their authors directly, but I sell through Smashwords which collates all payments made to them in whatever currencies, then converts them to US dollars and that sets the payment. Smashwords does the same with the likes of Barnes & Noble, Sony and so on, as well as selling directly themselves, and then pull all the payments together.

But the downside of all of the Amazon payment method for the author is that they tend to fragment them in that US sales are paid separately from UK sales.  Apart from Smashwords, which converts UK sales to US dollars and mashes them all together.  Although the Smashwords model is simpler than Amazon's, it does have one major drawback, in that none-US authors have to be paid their royalties less 30%, which is withheld by the US Government.  If your country of residence has a bilateral agreement with the US, which the UK does, then notionally you can have 100% of the royalties but it does involve a lot of form filling being witnessed by notaries who charge more than the 30% amounts to, unless you're a very successful author.  And of course the remaining 70% is subject to UK income tax.  The irony is that most of my Smashwords sales are split between the US and the UK, with a small amount originating in Canada, so a reasonable percentage of the money held back by the US Government relates to sales made in the UK.

Now Amazon have made a change that breaks the mould a little.  UK authors can elect to have any or all of their payments made by electronic fund transfer to a UK bank.  Not only does it seem to avoid the problems with the US tax withholding issue, but it also addresses another bugbear - up until this change Amazon only paid funds outside of the US by cheque and the minimum cheque payment is $100.  For many authors this is a lot of royalties to earn, especially if they are pitching their books at the economy end of the market as Amazon only pay 35% royalties on books retailing at under $2.99 (but bizarrely £1.49 in the UK and 2.60 Euros in Europe) so building up $100 can take a long time.  The EFT payments, in contrast, are anything above £10.

Time will tell if the next payments from Amazon from the US are free of US tax - it may be a step too far given that they already partition the UK origin sales anyway, so the US Government may not be amenable to the concept, but it should set a new standard for the other eBook sellers to follow.

Hopefully I will be able to report more in the near future.


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