First, in my previous article I explained that authors typically earn as much in royalties for e-books as for hard copies. In KDP you set your own price, and can opt for either 35% or 70% royalties. The difference is that, at 70%, the cost of delivery is deducted from the royalties. For the US, Canada, and Australia this is 15c of the local currency per megabyte. When the time comes, therefore, you can do your sums and decide which is the best for you. Remember that royalties are calculated on the retail price before sale tax, GST, or VAT is added. Remember, too, that customers normally expect an e-book to cost about half or a third of the print edition.
With paperbacks, KDP operates differently from traditional publishing. Traditionally, the publisher pays all the expenses, and gives you 10% of the retail price. KDP pays you 60% of the pre-sale tax price, but deducts the printing expenses. It gave an example:
U.S. Dollar VAT Exclusive List Price = $9.99.That's not bad! It's the equivalent of 15.4% royalties, or 14% if you add the 10% Australian GST to the retail price. Normal royalties are 10%. Obviously, when setting the price, you decide what royalties you want for each copy, add it to the printing cost (it will be quoted in American dollars), and multiply by 10/6. Don't be greedy. Remember that the purchaser will also have to meet the sales tax and postage/shipping costs.
Your book is a 300-page black ink paperback sold on the US marketplace.
Your Royalty per sale to a customer from Amazon.com is: (0.60 x $9.99) - $4.45 = $1.54
(Royalty Rate x List Price) – Printing Costs = Royalty
Applicable Printing Cost calculation: $0.85 (Fixed Cost) + (300 (Page Count) x $0.012 (Per Page Cost)) = $4.45 (Printing Cost)
Since it is POD, it will stay in print indefinitely, which allows royalties to trickle in year by year. (Traditional publishers budget to sell the whole first edition in just a few years.) However, there is an obvious disadvantage: potential readers have to know the book exists. The best way for that to occur is for browsers to happen upon it in a bookstore or library. KDP therefore offers an expanded distribution facility, to make it available to distributors. For this, the royalties are 40%, so you need to multiply by 10/4 when setting your price.
Therefore, by way of experiment, I decided to self-publish the same book which originally came out in 2010 - not expecting to gain any sales or money, but simply to see whether it could be done. It turned out the exercise was simplicity itself. It came out at only half the original online asking price. (The original bookshop price had been even higher.) If I had opted for expanded distribution, it would have ended up three quarters of the original price. Perhaps I should have been more greedy with respect to royalties.
If you wish to go in that direction (and why not?), I have a couple of tips. First of all, I suggest that when you come to building your book, you download the 16 page set of instructions rather than follow the video clips. Secondly, when uploading the final draft, I kept getting messages that some paragraphs were "bleeding" ie extending into the margin. I found the only way to get around it was to either add an indentation of about one character to the offending paragraphs - something that is invisible in the finished product - or to hyphenate a long word.
I've also discovered that, for convenience in reading, it is best to make the inner gutter ie the space attached to the binding - larger than the minimum.
What About Us Australians?
You should understand that we Australians are the poor relations as far as Amazon is concerned. Previously, local companies found themselves undercut by foreign online sales companies because the latter did not have to pay the 10% Goods and Services Tax (GST). So, in 2017, the Australian Government applied the GST to everything coming into the country. This caused that mammoth company, Amazon to have canniptions. Their immediate respond to refuse to sell anything to Australians except what was in their Australian warehouse. As far as books were concerned, that wasn't such a big deal; you can still get a tremendous number from the Australian branch. You can even buy KDP books. I know, because I have purchased a couple from a Scottish author, and communicated with him to confirm it.
However, for some reason, Australian users of KDP are unable to purchase their own books at cost price like citizens of other nationalities. We are informed that we have to purchase it at the retail price like any ordinary buyer.
When I published my book, within just two or three days it turned up on the US, UK, French, German, Japanese, and quite a few other Amazon branches, all offered in their own currency equivalents. But not in Australia. So I sent them a query. To their credit, customer support will give you a reply in just a couple of days. They said it would take time, and I should ask again if it wasn't available within 45 days. A week or two later, the title and cover thumbnail appeared on the Australian website - but with the words, "Currently unavailable". So, at the end of 45 days, I asked again. The result was a polite apology for inadvertent misinformation.
It can take up to 45 days for your book to filter through the Global Store, however, we cannot guarantee that your book will be available on the Australian marketplace. Due to the new GST laws for Australia, KDP is cornered to look for alternative solutions so that Australian publishers can order their books. Our teams are hard at work to find a suitable solution. For now we can only ask that you order your books from an available market place.The last sentence presumably means that, if I opted for expanded distribution, it might eventually appear on the list of (say) Booktopia. If the algorithm produces a cover thumbnail and book description on the Australian website, presumably there is also some mechanism for making it available when the planets are in the right conjunction. In the meantime, I shall try it with works of more cosmopolitan interest.
But right now I can't even purchase a copy of my own book.
Up-Date 17.10.19 KDP has now solved the problem of allowing Australian authors to purchase their books at cost price although, since they have to come from the US, the postage is a bit on the high side. However, it is possible to publish an e-book in this country, and the process is also simple. They even notify you of the best price to balance royalties with sales. My second book is also available in Australia, although it has to be ordered from the UK. I note, also, that the books of Roland Watson, a Scottish author who publishes on KDP, have to be ordered from US Amazon, which normally can't be done in Australia. It seems that this is how Amazon deals with KDP books in Australia. Probably, it does not yet have POD facilities over here, and so it outsources it.
Further U-Date 12.5.21 KDP has now opened a print-on-demand facility in Australia, with effect from 20 May 2021. It will now be possible to order paperbacks direct from Amazon Australia.