Aggregators and sales channels
In my last blog post for beginning indie writers, I wrote about various ways to format your manuscript for ebook publishing and some of the more important sales channels where you might want to upload your books.
The sales channels I mentioned there, however, are only a few of the very many online bookstores that have started cropping up in the last few years, such as OverDrive, Flipkart, Oyster, Scribd, Baker & Taylor, Page Foundry and more. Not to mention the genre specific eBook stores like All Romance.
The thing is, for every channel where you sell your books directly, you have to register, format your book(s) according to the store guidelines, and upload the file, cover, description, and whatever other information the site requires. That can be a lot of work for one measly sale a year. (I personally have never sold anything in most of the stores mentioned above.)
But if you don’t want to miss out on those possible sales, there is an alternative. A new business model that has sprung up since the beginning of the ebook revolution is what is now most often referred to as “aggregators” — an ebook publisher who will distribute your book to multiple ebook vendors, while you, the writer, only have to upload your book once, rather than registering at ten different sites and uploading your book individually to each one.
Some reasons for using an aggregator
Such a service naturally comes at a price, in this case, a percentage of what your book earns at the stores the aggregator distributes to. While Amazon, B&N and Kobo typically give the author 70% of the sales for books priced at $2.99 or higher, at the aggregators the return for the author is usually 60% or less. (By comparison, books under $2.99 on Amazon only earn the author 35%, and some aggregators make no distinction according to price, making the question of whether to use their services even more complicated …)
So assuming your book is priced at 2.99 or more, why would anyone want to allow a simple distributor to take a percentage off their profits?
1) Uploading directly is too much work for too little gain
As I implied in the first section of this post, where I described the service that aggregators provide, sometimes it just isn’t worth it in terms of time and effort to upload your books directly to every single store out there.
As an example: say you have a novel selling for 3.99. At 70% from a sale of the book (standard for Amazon at that price), your take is 2.79. At 60% from Smashwords, for example, it comes out to 2.39. If you sell one book a year each to Page Foundry and Oyster, you have handed over a total cut to the aggregator of 0.80 — and you have saved *at least* an hour’s worth of work, and probably much more — registering for and uploading to all those channels directly (since you had no idea where you might possibly make a sale). Of course, if you’re seeing hundreds of sales to these channels, it would be worth it to register and upload individually. But it is very easy to opt out of distribution on both Smashwords and Draft2Digital, if your sales on one of those channels start taking off.
2) You can’t get into the market otherwise (frex: iBooks)
As I mentioned in my last post about preparing your manuscript for various channels, some stores have high or even insurmountable hurdles for uploading your books there directly. The iBooks store only accepts files uploaded through iTunes Producer, which means you need a Mac running OS X 10.8 or higher (as of July 2014). As I do not use a Mac, I have to rely on an aggregator to get into the iTunes store. For authors with a greater sales volume, it might be worth it to buy a Mac in order to submit to the store directly. But when you calculate that you are handing over 0.40 to the aggregator for every sale of a book priced at 3.99, you would need to sell over 1000 copies of your ebooks on iTunes before breaking even on the purchase of a MacBook.
Another example of not being able to get into the market is Barnes&Noble. For a long time, only writers with a US address and bank account could publish directly to B&N. They have since expanded to the UK, France, Italy, Germany, Spain, The Netherlands, and Belgium. Nonetheless, that still leaves many writers who have to rely on an aggregator in order to reach readers with a Nook.
3) You can’t be bothered
I do not mean this in a snarky way. Some writers would much rather be writing the next book instead of keeping track of a dozen sales channels. They have no problem giving up 10% of their profits to an aggregator, as long as they don’t have to worry about uploading new versions of their ebooks to every single ebook retailer, and would much rather stick with only Amazon and one or two aggregators. This is a completely valid choice and something to consider when you start publishing.
4) You want to make a book or story permafree for promotional purposes
Most ebook retailers will not allow you to set your price to free if you upload it directly. For some mysterious reason, though, this is possible when using aggregators. Thus, if you have a first book in a series or a short story in a fictional world that you want to make free, you will have to use an aggregator. (I have discussed some reasons why you might consider giving a book away for free elsewhere.)
In my next post, I will include more detailed info about the three aggregators I have worked with until now, Smashwords, Draft2Digital and Xinii.