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The hidden cost of publishing on Kindle and Smashwords

28 Aug

To be strictly fair, it costs nothing to publish on Kindle because Amazon don’t charge for their publishing service.

However…

In order to publish on Kindle you need to open a publishing account with Amazon. You have to fill in a form that details things like your name, address, bank account, etc., all of which is fine, and then you have to have an exemption certificate (as a foreign writer) from US taxes. Amazon send you to an IRS site that tells you how to get a certificate.

You have to send documentation, preferably a copy of your passport (but there are other things that will serve if you don’t have one). Fine.

However…

Your copy of your passport has to be certified by a notary. (Well, unless you fancy sending your passport to America by post and hoping it will return within three months… They don’t advise that, by the way.)

This is where the costs start to mount. To begin with, notaries are few and far between so wherever you go it will probably take you at least half a day to make the round trip. (There are none in my local town.) Then, they charge. I did some research. They are, most of them, quite reticent about their charges but a few make some general charges public, whilst pointing out that there might be further expenses in any particular job. (Note that I think it’s quite reasonable that they should charge for doing work – I am not criticising notaries in any way.)

It seems the minimum would be £140. If I wanted two certificates – and I would need one for Amazon and one eventually for Smashwords – it would probably cost more. Possibly not twice as much, but still more. Plus, for some reason I can’t apply for one for Smashwords until I earn a certain amount and then get a letter from Smashwords so that could mean two separate outlays of £140.

Now, if I paid that out,  even working on Amazon’s (and Smashword’s) generous royalty rates, I would have to sell about 200 books to break even. That’s right. I would effectively earn nothing until I had sold 200 books.

In a niche genre such as m/m fiction, a new writer is unlikely to sell this many straight away, if at all. So publishing with Kindle begins to look like vanity publishing for a non-American author.

I already knew about the requirements and the possible costs from Smashwords. There is, however, a huge difference. Smashwords do not ask for an exemption certificate ‘up front’ so you can wait and see how your book is doing before deciding to spend a lot of money getting one. And even if you don’t, Smashwords imply that the only problem will be that they will have to withhold 30% of any money due to you unless and until you provide the certificate. That reduces your earnings considerably but you would still be earning. Amazon won’t let you create an account until you have the certificate.

I feel really disappointed. I could, in theory, afford to get a certificate. But is there any point? This isn’t false humility by the way, just realism. Yes, I believe in my work, but I know that sales in the genre are not that high whether authors are self-published or published by a publishing firm. Yes, I have more than one book to publish, but it could still take a long time to see any return on my ‘investment’. I’m just not convinced I could justify it to myself. It sounds, as I said, too much like vanity publishing. Of course, I could offset the costs against each of the books I have ready, and it doesn’t sound so bad when I break it down like that, but I’m still not sure whether it’s really justifiable, with no ‘track record’ or whether I’m just indulging in wishful thinking about publication. The figures are further affected by the conversion rates from dollars to pounds and the 20% tax rate in UK. I would end up earning about £1 per copy at best, even before the notary costs or the withholding of tax by Smashwords. I really wonder if it’s worth it!

To add insult to injury, I had looked at Amazon’s formatting after posting here about it, and it wasn’t really so different from the Smashwords variety. The biggest difference is that you upload a filtered web page instead of a word.doc. and the table of contents has to be generated before you start rather than after you’ve uploaded. So I spent the afternoon playing with formatting, had the thing ready for Amazon, felt really proud of myself, and then went into the account set-up only to be faced with the costs I have outlined.

Oh yes – and it can take a minimum of two months before the IRS send you a certificate of exemption so it would be November at the earliest before I could realistically hope to upload to Amazon. And that’s if I could get an appointment with a notary before we go back to Portugal in the next couple of weeks. It would be more likely to be early next year.

Free and simple self-publishing? To say I’m disillusioned is the understatement of my year. I’ll be sticking with Smashwords for now, and as I’ve sold one copy of my novella at $2.99 I don’t think I’ll be contacting a notary any time soon.

Any comfort, encouragement or commiseration gratefully received…!

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14 Comments

Posted by on August 28, 2012 in publishing

 

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14 responses to “The hidden cost of publishing on Kindle and Smashwords

  1. InkAshlings

    August 28, 2012 at 10:17 am

    I remember that Australian writer, Sophie Masson had some difficulty with this and she has published about 50 books through publishing houses. Check out her blog via a google search and read up on how she managed smashwords/amazon. Alternatively, a lady I know, Emily Craven, knows quite a bit about ebooks and may be able to offer advice. She has a website too. I could ask her or you could via her webpage? Isobelle Carmody recently self published Greylands as an ebook and she might have some stuff to say too. Maybe try any of those three people for some advice? I can ask another person in the field too if you like?

    I hope that helps!

     
    • jaymountney

      August 28, 2012 at 10:29 am

      Thanks! I’ll definitely check out the blog you mention. I don’t think I need advice, exactly – the facts are pretty cut and dried. I need to convince myself one way or the other. Is it worth carrying on or not?! If I was your age and wanting to create a writing career I would probably say yes. As it is, I’m not at all sure. A writer like Isobelle Carmody had some kind of track record to give her an idea of how many sales she might envisage, which give things quite a different perspective. I suppose I was naive in thinking that free self-publishing really would be free!

       
      • InkAshlings

        August 28, 2012 at 10:39 am

        Well I guess it depends on how much you are willing to invest in your words. Have you tried the traditional publishing route too? What about short stories or poems? Maybe making a website and having those as free samples for people to view but longer works at a fixed price might increase sales?

         
      • jaymountney

        August 28, 2012 at 11:31 am

        I’m not willing to invest much because I don’t actually need to make a career for myself and unless I can see probable outcomes it all seems too much like self-indulgence. ‘Retired teacher desperate to see name in print’ kind of thing!! I have sent a couple of things to publishers – wrong length, hard to market, comments like that. No actual criticism of the work – on the contrary, praise – but I suppose I just felt put off. Plus wanting control over things like Brit English spelling, cover images, etc. I will have to do some hard thinking and come up with a plan! Thanks for contributing to the thoughts!!

         
  2. Nick Thiwerspoon

    August 28, 2012 at 8:44 pm

    Of course, the same problem applies even if you publish paper books. The American market is by far the largest English language market in the world. So we’re forced to fit in with their requirements. But — here’s a thought — what about doing it via Amazon.co.uk? Wouldn’t the UK Kindle stories still be accessible in the US?

     
    • jaymountney

      August 28, 2012 at 8:57 pm

      I have, of course, an Amazon UK account, but the self-publishing log in takes me to the American version – presumably because the books will be sold, in dollars, in America. The same thing applies to UK-based platforms, because unless you sell to America you might as well forget the whole thing. And yes, the paper books have the same problem, though I assume if you are published by a publishing firm they absorb the costs of getting the American payments though to UK. I have no idea… just speculating.

      I need to decide whether the entire idea of publishing is just self-indulgence, given the meagre rewards, and if not, whether I can or should afford the upfront payment. Meanwhile, I shall stick with Smashwords for now and see whether I can add to my one sale!! I suppose I was carried away with the idea that self-publishing would be free and this was a shock! And I still can’t work out whether you need a separate exemption certificate for Amazon and Smashwords. I think you do.

       
  3. Aletheia

    August 28, 2012 at 9:27 pm

    Hm, looks like in fact it’s not self-publishing, but rather the old traditional way, with this difference that the publisher shifted on the author the job of dozens people, including the proofreader, typographer and others… Sounds like a good business, as long as you’re the publisher, or rather the bookstore.

    Sorry for being hardly comforting. I wish you some light at the end of the tunnel (and hopefully not a train).

     
    • jaymountney

      August 28, 2012 at 9:46 pm

      Well, part of the attraction, for me, is that I have control over all the things the traditional publisher would have done. I just believed all the hype that said it didn’t cost anything – and of course, to Americans, it doesn’t!! That’s the really annoying part!! And of course Amazon and Smashwords don’t profit from the tax system – but the notaries do! Another of my commenters here has pointed out that the same thing applies if you want to sell printed books in the American market. I can see the basic reason for it and I can see why they charge, but I just hadn’t realised it would all be necessary and I still haven’t decided whether to go ahead or not. I might have to, for Smashwords, in the end, as I’ve already started the publishing process. But Amazon is still a question in my mind. And maybe a swamp rather than a tunnel…

       
      • Aletheia

        August 29, 2012 at 7:10 pm

        to Americans, it doesn’t!! That’s the really annoying part!!
        I see. Another thing which could use some sensible adjustment of the law, and instead we get ACTA-like rubbish.

         
      • jaymountney

        August 29, 2012 at 8:44 pm

        It’s all due to some tax treaties and I think a Hague Convention on the subject so we can probably blame at least some of Europe, too. I imagine it was all drawn up to deal with businesses, not with individuals who might want to self-publish a book… I expect Americans would have the same problem if we had European self-publishing platforms. Well, we do, but they go through American servers on the whole, and certainly sell to the American market. That’s the biggest market for any kind of books, so I suppose we have to put up with the ‘entry fee’, especially as it isn’t imposed by the publishers, but by their and our governments.

        My daughter is trying to persuade me to set the cost against all the books I want to publish instead of just the first stories, and to shrug my shoulders about it, but I still need to investigate whether I really need two certificates or just one which I could copy. I might shrug, but I will still feel annoyed!

         
  4. Martyn V. Halm

    September 2, 2012 at 6:41 am

    Well, you could just phone with the IRS in Philadelphia, get an EIN over the phone in 5-10 minutes, download W8BEN from the IRS website, fill it out, print it out and send it to Amazon. Will cost you some time and a stamp. That’s how I [Dutch author publishing on Amazon.com and Amazon.co.uk] did it. Just go to this blog for more information: http://catherineryanhoward.com/2012/02/24/non-us-self-publisher-tax-issues-dont-need-to-be-taxing/

     
    • jaymountney

      September 2, 2012 at 2:43 pm

      I am really really grateful for your comment!! By linking me to that post you have answered so many questions and made my life a comparatively worry-free zone again!! I was somehow unable to get hold of all that information myself, even though I am perfectly capapble of reading and understanding tax info, legal documents, etc. I think I need to set up Skype to avoid huge telephone bills, and that will have to wait a few weeks, as I shall be away for most of September and I need to get a headset with microphone. I don’t mind that kind of expense as it will be useful for other things such as keeping in touch with various friends. Once I have jumped through all the hoops I shall comment to the catherineryanhoward post, as so many other people have done – she and David Gaughran should probably be nominated for some kind of new Nobel prize…!!! I shall also post here and pass the word on to other people, though not until I’ve completed the process. Thank you so much – for reading my blog and for taking the time to let me know what to do!

       
      • Martyn V. Halm

        September 2, 2012 at 8:48 pm

        You’re welcome, Jay. Be careful calling the IRS on Skype though – they dislike speakerphones.

         
      • jaymountney

        September 2, 2012 at 8:57 pm

        Quite a few of the people who commented to David’s post used Skype so I will give it a try. If they object, I will consider other options!

         

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