Like Gandalf once pointed out while discussing Amazon.com with his fellow author, Saruman, “There is only one lord of the ring and he does not share power.” On second thought, that was probably Stephen King to George R.R. Martin. Anyhow, Amazon is more like Voldemort. He’ll share a few things with you: Death Eater decoder rings, the back of some dude’s head, or a bathroom urinal as long as you promise not to cross the streams. You probably won’t make a cool trill… or even a million… but you could certainly make some real cash from their system—you’re not going to put them out and make more money than Amazon, but the Associates program is a way to get even more money off every book you sell when you promote your book as an Indie author. If you are an indie author you really ought to be using this program (even despite the difficulties chronicled in Pt.1).
Using Amazon Associates is kind of like filing taxes when you’re poor. If you don’t file, you are leaving money on the table. This may be my political libertarianism coming through and disdain for our tax system, but if you don’t know how taxes work here it is in a nutshell: if you are middle-class or below and have taxes withheld from every paycheck you have essentially given the government an interest-free loan which they pay back during tax time the following year. If you don’t file you are essentially “leaving money on the table.” Yes, it’s a little work, but it can really pay off.
Here’s a breakdown on the dollars and cents for a hypothetical book. Let’s say we can sell about 50 copies in a month: 20 paperbacks, 20 Kindle, and 10 audible, making 4.50, 3.50, and 3.00 each, respectively—you may be way lower or higher, but it’s a good starting place for many indie authors. For the sake of the argument let’s say that each sale came from a FB ad you purchased and every sale went through your affiliate link. The total is $190 profit. Let’s say it takes about 800 hits on a FB ad to make those 50 sales but you’re paying .09 per click on average (see my other blogs about setting this up). That was $72 spent on ads (you made $118! Yay!) An affiliate account gives you an advertisers commission on anything you sell: at this number it would be about 6.5% off net, which in our hypothetical book’s case is about $500 giving you an additional $32.50 which really helps offset that ad budget—it’s money left on the table that Amazon will just keep if they don’t pay that commission.
The commission is already built in to Amazon’s pay structure. Our hypothetical book in the above scenario is retailing at $15 and costs about $4 purchase as the author via Createspace. You’re making $4.50 and it costs about $4 to make, so what about the other $5.50? they’ve built into their profit margin at least an extra buck and half into that commission setup (Amazon Associates cap the ratio at 8.5% provided you sell and ship 3,131 items or more per month.)
I know that I hate spending money with no or little return and it always makes it difficult for me to venture my hard earned money to pay for internet ads. Here’s something to help you breathe easier. Let’s say someone clicks our ad for hypothetical book and isn’t really into it but sees on the product listing, “Customers who viewed this item also viewed…” and they decide instead to purchase Fifty Shades of Gandalf for $25 (because I assume that book would really necessitate being read in hardcover.)
Your Associate’s account will record a $25 sale but you won’t get commission on it until it’s paid for and ships. Let’s say our hypothetical customer (an aging Kindergarten teacher with a vanilla marriage and a sketchy past—she really know which states do thorough background checks before giving out either teaching or bounty hunter licenses,) doesn’t check out just yet. She leaves the browser open and decides her husband (his name is Jack and he’s got his own history: as a high-stakes Magic the Gathering player who really needs to win the pot at a back-room game at Wizardcon or else he loses the house!) could really use a Black Lotus proxy card for another $15. That would also go on as another purchase from you. (I know, you can’t buy proxies on Amazon, but I didn’t want the scenario to be too realistic.)
The nice thing about the Associate link tag is that you get credit for all of the purchases made within that browsing session. A customer you sent to Amazon might not buy your book, but get distracted and decide to do some regular shopping and you earn a percentage off of those items!
It may be new territory for you as a writer, but indie authors have to be their own sales staff, promo team, and wear a million other hats as well. Take some time to learn the system and work it to your advantage. It’s in your best interest. It may feel like you’re betraying your call as a writer to spend a bunch of time on other non-writing aspects of being an indie author, but as Chuck Sambuchino says in his writing conferences, “It’s called getting paid.” Sometimes we do what we must in order to do what we want, and this is something you can add to an existing promotion structure to make it pay off just a little more.
Don’t leave your money on the table. Someone else is bound to keep it.
Inside the Inkwell 