Friday, March 13, 2009

Direct Selling on Amazon - Advantage vs CreateSpace

If you are self-published, you of course want to be in the Amazon sales channel. I’ve mentioned before that subsidized alternatives such as iUniverse, LuLu, etc are not the best choice for the author since you don’t control price and you are only get a royalty as opposed to the full profit.

The two best options for a self-published author are:
Amazon Advantage – You supply the books
CreateSpace – They print the books on demand

NOTE: It may also make some sense to have an Amazon Marketplace account but I'll cover that separately since it will give you an "ancillary" sales avenue and not a main Amazon page.

In both cases the books can look exactly the same – i.e. no one will know that they are self-published you can use your own ISBN etc. But which one to choose? Let’s start by looking at price.

WHICH IS CHEAPER
While not the completely trivial it is actually a pretty easy thing to determine which will yield you the most $ in your pocket. The factors come down to sales prices and number of pages. Let’s look at some of the facts:

  • Create Space has a $40 setup fee
  • Create Space takes 40% of list price
  • Create Space Printing is .85 + .012*pages
  • Amazon Advantage has a $30 setup fee
  • Amazon Advantage takes 55% of list price

I’m going to not worry about the $10 difference in setup fees over time they mean nothing. So the real question comes down to how cheaply can you get your book printed.

If we let:
w = your profit
x = # of pages
y = list price
z = printing cost (when printing yourself)

We have the following formulas:
CreateSpace w = y - .40y – (x*.012 + .85)
Advantage w = y - .55y – z

This results in the final equation:
z = .012x - .15y + .85

So let’s say you have a 300 page book you want to sell for $12.00
Z = .012 * 300 - .15 * 12.00 +.85 = 3.6 – 1.8 + .85 = $2.65

So if you can get your book printed for $2.65 or less then Amazon Advantage is the way to go. If your book costs you $3.50 each to print then you would by better off with CreateSpace as you would make $0.85 more per book.

For Michael’s 2nd book Avempartha the specifications are: 344 pages @ $12.95
Z = .012 * 344 - .15 * 12.95 + .85 = 4.13 – 1.94 + .85 = $3.04. Printing prices vary with quantity and I can get books from $4.00 each to $2.07 each so depending on my quantities would decide which would yield the highest profit.

OTHER THINGS TO CONSIDER
There are some other things besides price to consider. Books done through Advantage come from your stock of books – so if you are concerned with having a bunch of books you can’t get rid of using Advantage will decrease your books for each one sold where CreateSpace is going to make the books one at a time and not reduce your inventory.

With Advantage you are going to have to pay for shipping the books to the Amazon Warehouse. So you need to account for additional money there in postage and packing material.

In general, books listed through CreateSpace will always be offered to the buying public at full price. When going through Advantage since the discount is so high (55%) Amazon may offer your books at a 10% or even 20% discount which makes it more attractive to the buyer. Your compensation is based on list price so if they decided to discount it you are paid the same amount but it may offer a more attractive price for the consumer and increase sales. Whether a discount is offered is at the sole discretion of Amazon and you have no control over this.

WRAPPING IT ALL UP
Amazon has some pretty stiff fees associated with it but it is the 800 lb gorilla and you cannot afford to NOT have your books listed on a main Amazon page. The good news is it is remarkably easy to do and they provide some very flexible alternatives for self-published authors

33 comments:

Jessie said...

I'm with lulu at the moment but I'm going to use Create Space for my next novel which is a young adult one just to test them out. It's my understanding that the $40 setup fee is optional, but optimal.

Robin Sullivan said...

You are correct Jessie the CreateSpace has two different options one with the $40 fee and one without. But I HIGHLY recommend doing the $40 because you make more per book. I'll do another post on the differences between the two but I think you'll find that you want to go with "Pro Plan".

Anonymous said...

I am a bit confused...if I go with Create Space to sell my book, will it appear on Amazon? How will my customers find my book and how can they make a purchase?

villain2 said...

CreateSpace has proven to be a better resource. In this day and age, the less overhead the better.

www.aoestudios.com

Moses Siregar III said...

Thanks for this, Robin. Michael just sent me over your way.

The two I'm looking at are CreateSpace and Lightning Source, Inc. With LSI, you can choose a 20% short discount. That of course keeps you out of bookstores, but getting paid 80% of your book's list price is pretty darn good. Their per-book cost is a bit higher than CS's, but they're still the best route for the money, I think. LSI will get you into the major online stores.

One advantage of CS is that it's a lot easier to use them, and you can make changes to your book for free.

I'm still undecided on these options. I know that the very serious self-publishers recommend Lightning Source over CreateSpace, but for my first book, CS might be the way to go.

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