A few rumours have been circulating that Amazon has finally shuttered its CreateSpace POD operation. That’s not the case. It’s the CreateSpace e-store that is being closed.
Given Amazon has for some while now been ushering its indie author CreateSpace clients into KDP Print, offering the convenience of having both POD and ebooks in the same dashboard, the rumour was understandable, and the mix-up easy to make given so few people knew the CreateSpace e-store existed.
Put simply when Amazon first acquired CreateSpace it maintained the CreateSpace site separately from Amazon itself, and also maintained the original CreateSpace online bookstore with its original royalties structure.
Which generated the bizarre situation where Amazon was paying higher royalties for a product produced on an Amazon sister site and sold on another Amazon sister site than for the sale of the exact same product on Amazon itself.
Yet most indie authors, taking the path of least resistance, never bothered to send traffic to the better-paying CreateSpace e-store, which perhaps was a factor (along with paying out more cash than was necessarily) in its closure.
Now Amazon is redirecting readers with CreateSpace e-store links to the main Amazon site. And for an interim period will be paying an averaged higher royalty for those sales coming through CreateSpace e-store links.
Here’s how it works. The CreateSpace ebook store paid 80% royalties. Amazon sales on the main site paid 60%. Until April 2018 Amazon will average payment across the e-store and direct Amazon sales and pay that value.
After April 2018 it’s 60% across the board.
Well, after a fashion. Anyone thinking they’ll be getting $6 for every $10 sale will be disappointed. It’s not quite that straight-forward.
From the CreateSpace example.
For a 184 page black and white book, you set your USD list price at $8.99. A customer purchases your book on Amazon.com and a book is printed to fulfill that order.
Sales Channel % = $3.60
Fixed Charge = $0.85
Per Page Charge = $2.20
Your Royalty = $2.34
So the 60% royalty, which would have been a healthy $5.39, is actually a pay-out of $2.34 which is 26% of list price.
And that’s for a sale on Amazon, where the sales channel percentage deducted is 40% (hence the 60% royalty referenced – before all the other costs are deducted).
For “expanded distribution” that percentage taken by Amazon soars to 60%, and then the fixed charge and per page charge come in, so the actual royalty received tumbles dramatically. That sales channel deduction rises to $5.39, plus the fixed charge, plus the per page charge, meaning an actual payout of $0.55, which equates to 6% of list price.
That said, CreateSpace remains the easiest way for indie authors to get their books available in paperback with no up-front costs, and in the Amazon online book store.
What’s next for the CreateSpace store? That’s the big question.
CreateSpace offers a two tier service – one for indie authors and one for publishers, and the strategy seems to be to gradually shift authors across to KDP Print, which is currently in beta.
For an overview of the differences between CreateSpace and KDP Print, there’s a great post on Dave Chesson’s Kindlepreneur site.