Higher royalty than sales price

Amazon goes lower price elsewhere policy with e-books, and fixed royalty rates in Japan.  These 2 policies make some publisher company and self-publishers to earn higher royalty than sales price which is matched with competitor store by Amazon.

Amazon pays royalty by fixed rates of registered list price.  The rate could be differ from publisher company who contract directory is closed by parties but rate for KDP is known, as you may know, 35%.  (In Japan, moving 70% rate is limited for KDP select).  Both this fixed royalty and “lower price elsewhere” policy of Amazon make them to pay higher royalty than their sales.

If a KDP author set $5 for a book, royalty per book sales is $1.75.  And when this author set $1 on Rakuten Kobo for campaign, Amazon sell this book by $1 and pays $1.75 royalty for this author.  Amazon pays $0.75 back spread from their pocket.  What a trick!  And when large publisher which has thousands backlist did same way, Amazon should pay millions dollar for back spread.

A news, “$0.099 e-comic sales earns $1,170,000 royalty” tells that a comic author got 1.3 million dollar royalty with super cheap $0.099 comic sales campaign in Kobo.  If all royalty are earned with Kobo, number of purchase should be 26 million, but it is too much considering number of Kobo users.  During this sales, price of Kindle comic are set same with Kobo, $0.099, then I guess 1.17 million royalty are paid by Amazon by collected with list price of his comics.  Amazon might pay $1 or higher royalty for $0.099 per sales.

I didn’t care if a publisher company or self-publisher get royalty from Amazon who pays out of their pocket, even if publisher know, and I also don’t sympathise with Amazon’s Catch 22 situation which they made themselves.  These are their business.  But if publisher had a plan to earning with back spread is planned AS BUSINESS, I will not rely on this publisher.  And if this type of “business”, digital goods business habit will face serious moral consideration.

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