Episode 81

Free Audiobooks, Wholesale Discounts, and Amazon's New Policy on AI-Generated Books

Today we are talking about what wholesale discounts mean for authors, free audiobooks from Spotify, Amazon’s new policy regarding AI-generated books, and a bit more.

Music licensed from Storyblocks:

“More Jam Please” by Raighes Factory

"Strawberry Daiquiri" by Sarah Angel

"I Like You a Latte" by Amber Waldron

"The Calmest River" by The Turquoise Moon

"Slow Water" by Enzo Orefice

"Sweater Weather" by Amber Waldron

Rosemi Mederos:

If you have plot bunnies coming out of your plot holes, it’s time for a writing break.

Today we are talking about what wholesale discounts mean for authors, free audiobooks from Spotify, Amazon’s new policy regarding AI-generated books, and a bit more. We are ushering in autumn this week at a cozy riverside used bookstore that has an inviting cafe just next door, so let’s head there first.

a used bookstore housed in an:

Once you see the chestnut beams painted red and the deck overlooking the river, you’ll know you’re somewhere special. And it’s just as picturesque inside with all of those used books. There are plenty of seating options, including comfortable wingback chairs for an extended stay. But this isn’t the only worthwhile business in the mill.

“The Montague Mill is also home to Sawmill River Arts and an outpost of the Turn It Up! music and movie empire. There is great food and drink all day and deep into the night at the astonishing Lady Killigrew Cafe and the beautiful new Watershed Restaurant. We have concerts and performances spring, summer and fall. The Bookmill and its environs are an amazing and lovely place where you can lose yourself for hours. We’ve been lost here for years.”

How about we catch up on publishing news at the Lady Killigrew Cafe? They serve excellent food and drinks, including hot apple cider and cold local beer.

There’s a new literary agent over at Martin Literary Management. Mara Cobb is currently open for submissions. She is seeking Adult Nonfiction and Women's Driven Fiction, particularly stories with strong female heroines who are in their 20s. She is also seeking Christian Fiction, Christian Romance, and Christian YA.

Amazon has a new policy regarding AI-generated content. Under this new policy, authors using the KDP platform must disclose if their content contains AI-generated text, images, or translations.

The policy does not apply to AI-assisted content. According to their guidelines, AI-generated means that AI output the text, image, or translation and a human might or might not have edited it afterward. That has to be disclosed.

AI-assisted means that a human created the content and then used AI tools to edit or improve it. That does not have to be disclosed. As of right now, the disclosure does not appear on the book’s product page.

The Authors Guild is calling this a welcome first step, but would still like Amazon to extend the policy, and the Society of Authors stated that they believe readers deserve to know when a book’s content is AI-generated.

There are tools that can identify AI-generated content, but none have 100% accuracy. So, I guess we’re working on the honor system for now.

Spotify subscribers will soon be offered 20 hours a month of free audiobook listening. This seems to be a way to figure out what audiobooks their users want and what their listening habits are, so if you are a Spotify subscriber who likes audiobooks, this will be your chance to influence their audiobook program. The program is expected to start soon and is expected to be for a limited time only.

Spotify already offers several audiobooks for free. Check the show notes for a link to their free audiobooks.

For our friends in New York, the Brooklyn Book Festival begins September 24 and runs until October 2. There will be more than 150 authors in attendance and even a Children’s Day on Saturday, September 30th.

If you cannot attend the Brooklyn Book Festival in person, take heart. There will be a Virtual Day on Sunday, September 25.

Now that the US district court has approved a permanent injunction that prevents the Internet Archive from lending out digital copies of books that have commercially available ebook editions, the Authors Guild has provided authors with clear instructions on how to get their books off of the Internet Archive.

Check the show notes for a link to that and all of these news stories. Now, let’s head down to the river to do some overthinking.

We are only a few episodes away from the end of this season, so I’ve been overthinking about what to talk about next season. Seeing as how I’m currently writing a true crime book, I decided next season should be on the similarities and differences between writing and publishing fiction and nonfiction. If you have any questions about writing or publishing that you would like me to cover next season, now is the time to ask. Send me an email to podcast@writingbreak.com.

Before we get to today’s writing tip, let’s take a stroll around the Bookmill and check out an independent author.

What better way to catch those fall vibes than with a psychological murder mystery? Autumn's Game by Mary Stone is the first in a spinoff series of Stone’s famous Winter Black FBI series.

“As a child, a single blow from her father left [forensic psychologist Dr. Autumn Trent] changed forever. Her body survived the aftermath, but her brain was altered in ways that were both good and bad. Different from the world, she poured herself into her studies, accumulating all the knowledge she could, intent on whipping broken systems into shape and taking down criminals one by one, even if it means putting her own life on the line.

When a brutal double homicide shocks the town of Sawmill, Oregon, the FBI needs Autumn’s specialized assistance. The couple’s daughter . . . disappear[ed] . . . Was she kidnapped by a merciless killer, or is she his equally heartless accomplice? Or worse?

Accompanied by a boss who undermines her instincts and patience at every turn, Autumn soon realizes that their killer has just begun his true mission of punishing parents who break their marital vows. As the body count rises, so do the stakes as the killer escalates quickly. What began as a hunt for a nineteen-year-old girl turns into Autumn’s game of cat and mouse.”

Autumn’s Game is available in paperback and ebook, and it’s free to read with KindleUnlimited.

Now let’s commandeer a couple of armchairs for today’s publishing tip.

Last week I told you that IngramSpark is raising their minimum wholesale discount from 30% to 40%. The minimum discounts in the UK, EU, and Australia are 35%. IngramSpark says that most of the books they sell have the wholesale discount set to at least 40% already. Authors who do not increase their wholesale discount to at least 40% risk having their books removed from global distribution.

So what are we talking about exactly? Well, a wholesale discount for books is a percentage off the retail price that a publisher or independent author offers to wholesalers and retailers who purchase books in bulk. The standard wholesale discount for books is 55%, but it can range from 40% to 60%, depending on the publisher, the sales potential of a book, and the terms of the distribution agreement. Anything less than 40% is considered a short discount and is an unacceptable discount for booksellers because their profit margin is too small to make carrying the book worth their while. Even though the industry standard is 55%, owners of independent bookstores have told me that only 30% of the 55% is passed down to them. It seems the distributor keeps the rest. This might not be the case for chain bookstores or even for all independent bookstores. That’s just what I’ve heard from several indie bookshop owners.

I do know that Amazon’s KDP requires a 40% wholesale discount for local distribution and a 60% wholesale discount for global distribution. Keep in mind that you still have to factor in print costs before you can determine how much you’ll actually make per book. In self-publishing, the cost of printing comes from the author's share of royalties.

Let’s look at some numbers. According to Amazon, a standard size 300-page black and white print book costs $4.60 to print. With US-only distribution, that book sold on Amazon through KDP would have a 60% royalty rate, which means the author keeps 60% of the royalties after print costs. Amazon keeps the rest. So, if that 300-page print book is listed for $12, 60% of that is $7.20, and from that number, you subtract print costs, which in our example is $4.60. That means the author would make $2.60 in royalties while Amazon makes $4.80. With global distribution through Amazon’s KDP platform, the author has a 40% royalty rate, so they would only make 20 cents per book while Amazon would make $7.20.

When you’re setting a wholesale discount, you want to make sure that you are still making a profit after the wholesale discount and print costs are applied. You also want to make sure that your book is priced competitively with other books in the same genre.

If you’re wondering how much you should charge for your book, check the show notes for a link to KDP’s royalty calculator. The calculator provides print estimates, but it does not provide estimates for global distribution. You can do the math yourself by changing the royalty rate from 60% to 40%.

So, some distributors, like IngramSpark, require less of a wholesale discount and have a few other perks. In Ingram’s case, for example, you can get into schools and libraries. If you’re being published by a publishing house, you’ll have no control over this end of publishing, but if you’re an independent publisher, you’ll have to look at all of your options and decide which distributor and what wholesale discount is best for you. Maybe you’re not interested in getting into bookstores or don’t think you have a global audience, so you might prefer to offer a short discount instead of the 55% industry standard. You might even just want to sell your book on your own website.

Remember that as an independent author, you are the publisher of your own book. No matter what you decide as far as book prices, distributor, and wholesale discounts, as an independent author you’ll need to keep monitoring your rates and fees and be ready to pivot as needed. IngramSpark authors who are now being told to increase their wholesale discount have to decide if they are happy with their new royalty payout or if they would prefer either removing their books from global distribution or raising their prices.

An author who chooses to raise a book’s price will need to redo the book cover to reflect the new price. If the author previously made a bulk purchase of their own books, it could leave them stuck with an inventory of books that have the wrong price on them.

So, how do royalties work for traditional publishing and for other book formats? OK, here we go. For traditionally published print books, the author makes 8% of the sale price for the first 150,000 copies sold, and 10% thereafter. So, in our previous $12 book example, the author would make 96 cents per book and $1.20 per book after selling 150,000 copies. Right off the bat it might sound as though it would make more sense to self-publish, and that might be true. I think self-publishing is a great option. However, readers are more willing to pay a higher price for a traditionally published book than for a self-published book, so it’s likely that a publishing house can list a 300-page book for $24 without hurting expected sales. Then there’s also the marketing power of a publishing house. They know how to sell books, so you’re more likely to sell more copies than if you had self-published.

As for other book formats, here are some estimates from selfpublishingschool.com. An author’s hardcover royalty rate on Amazon is about 25%, but that depends on a lot of factors, such as the book’s size. And, of course, the author pays for print costs. For publishing houses, the royalty rate for hardcover books is 10% for the first 5,000 copies sold, and 12.5% after that.

The ebook royalty rate is 35%-70% on Amazon and 25%-50% with a publishing house, and the audiobook royalty rate is 20%-40% for both.

If you have different rates, I would love to hear them. Wholesale discounts and royalty rates are a big factor in deciding whether or not to self-publish. Again, I think self-publishing is a fantastic option, and with today’s royalty rates, an author who can market themselves well stands a good chance of making more money than if they were traditionally published.

Well, our break time is up. Until next time, thank you for listening and remember, you deserved this break.

If you would like us to visit your favorite independent bookstore, feature your favorite independent author (even if it’s you), or discuss something you’re overthinking about, please email me at podcast@writingbreak.com.

Thank you for making space in your mind for The Muse today.

Writing Break is hosted by America’s Editor and produced by Allon Media with technical direction by Gus Aviles. Visit us at writingbreak.com or contact us at podcast@writingbreak.com.

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Rosemi Mederos


Rosemi is the founder of America's Editor, a book editing company.