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To KDP Select or not to KDP Select, that is the question

February 13, 2012

By Carolyn McCray

It’s funny how whenever I discuss the KDP Select Program, I feel as though I must either carry a pitchfork or a harp.

The program is either the salvation of indie authors, or its damnation.

The KDP Select Program is neither. It is a marketing opportunity that may or may not work for you.

Utilizing KDP Select’s tools has worked for me. I leapt into five-figure monthly royalties and was announced as one of the top-ten authors in the Kindle Owners’ Lending Library for the month of December.

I could sing the praises of the program all day long, but it would not help you decide if the program was right for you.

In this article, I hope to demystify KDP Select and give you actionable advice on how to evaluate if the program is a good match for your marketing efforts (whether you’re just entering the program or renewing in ninety days).

Quickly, let’s review the major “pros” and the “con” to the KDP Select program.

Pros

  1. You are allowed into the Lending Library, where the current value of a lend is $1.70.
  2. Each lend counts as a “unit sold” and helps your Paid sales rankings.
  3. You are allowed to control five “free” promotional days.

Con

  1. You must commit to exclusivity with Amazon for ninety days.

Notice how I didn’t say “commit to Amazon for your entire lifetime,” but commit to them for only three months. In the scope of your book’s longevity, that is a blink of an eye. Now, it may be an important blink, but a blink it is.

I know that many people have had an exceptionally sharp knee-jerk reaction to this exclusivity clause, but hopefully, after this article, you will understand how to interpret that clause as it relates to you directly, so that you can make the most informed decision possible.

The exclusivity clause does mean that you must remove your eBook from all other retailers and give up royalties from B&N, Smashwords, Kobo, your own website, etc.

This is the first factor that we consider when deciding if KDP Select is a match for your title(s).

As a general rule of thumb, if, on the books you are thinking of enrolling, you are making 95 percent+ of your royalties from Amazon, then the decision to go exclusively with them in order to enter the Kindle Owners’ Lending Library and have control over free promotions is a pretty easy one.

There is very little downside in losing 5 percent of your monthly income on these books to gain these exceptional tools. Therefore, most authors in this 95 percent+ Amazon royalties bracket can jump into the KDP Select program with both feet.

You are risking so little by leaving the other sales platforms and potentially gaining so much with KDP Select, that the decision is simple.

Conversely, if your KDP Select-enrolled book is earning >30 percent of its monthly royalties from non-Amazon sources, the decision is pretty easy.

Why?

Because, on average, by joining KDP Select, you can earn an additional 26 percent in royalties from the KDP Select fund, on top of royalties from your paid sales (see the Amazon KDP Select Press Release here for details on that figure).

Sure, you could outperform this 26 percent average bump, but you would be gambling on having greater than a 30 percent return on your exclusivity investment for these books.

And what if you happen to underperform and only increase your sales by 15 percent? How many royalties would you have lost from those non-Amazon platforms?

You also must consider that in leaving those other platforms you are also giving up your current sales rankings.

This is that important “blink” that I spoke of.

A “blink” of three months off of those other platforms could have catastrophic consequences to your overall royalties, since it can be very difficult, if not nearly impossible, to scale those bestselling lists again and reclaim your previous royalties from non-Amazon sources.

For these reasons, it makes very little sense for authors who have a significant royalty stream in excess of 30 percent from non-Amazon platforms to give up those royalties in the hope that they will overperform the average KDP Select revenue bump.

Therefore, those authors who earn between 6 to 29 percent of their royalties from non-Amazon sources must really drill deep to see if KDP Select is for them.

How do those authors decide if KDP Select is a worthwhile risk?

The answer to this question is a bit more complicated.

Let’s take the decision-making process step-by-step.

1. How well are you selling?

The more you are selling, the more likely you are to be on best-selling lists at Amazon which greatly increases your discoverability which usually translates into higher lends and “free” giveaways (and therefore greater post-“free” sales).

On the other hand, you also might be well positioned on your non-Amazon platforms.

Which weighs more heavily? Being well ranked on Amazon or non-Amazon platforms?

The answer is in sheer sales volume. Amazon has the lion’s share of the market. Therefore your ranking on Amazon is weighted much more heavily than any other platform. You simply have a far greater chance of selling far more books on Amazon.

But let’s drill deeper than even that.

If you are in this mid-bandwidth of non-Amazon royalties (6 to 29 percent), you will need to calculate your exact royalties over the last three months from all other sales platforms combined. Hang onto this figure.

Calculate your last three months’ Amazon royalties.

Then calculate a potential 26 percent bump in Amazon royalties for the book you would like to enroll in the KDP Select program (by gaining royalties from “lends” in the Kindle Owners’ Lending Library).

Now, let’s turn our attention to your rankings.

If you are already on a Top 100 Bestselling list in a genre, what would a 26 percent increase get you?

Meaning, would that 26 percent increase propel you into the Top 80? 60? 40? 20? 10?

On average, increasing your best-selling ranking by each page will increase your royalties by about 7 percent.

Example:

You sit at ranking #85 in your genre. By using all the tools that KDP Select provides for you, your book should get you a bump into the high 70s. That gets you onto the #60-80 rankings, which should give you about a 7 percent bump in royalties.

Now, add together your potential 26 percent pump from the KDP Select Fund along with your 7 percent bump from moving up the best-selling lists (if you are at the cusp of moving up to another page).

How does that compare to the money you would lose from your other sales platforms by going exclusively with Amazon?

You then can decide if the leap to KDP Select is worth it.

One other factor to consider: As other authors enter the KDP Select program and begin using its powerful tools, they may begin to outsell you, forcing your best-selling rankings down, and therefore negatively impacting your Amazon royalties. Remember, if you fall off by a page—going from 79 to 85—it will decrease your royalties by about 7 percent).

Lastly, let’s consider the author who is deriving 6 to 29 percent of their royalties from non-Amazon sales platforms, yet isn’t selling well (ranked worse than 50,000).

How do they determine if KDP Select is for them?

Most importantly, the one factor that is not in play is losing your sales rankings on the other eBook platforms.

More than likely, if you are ranked 50,000+, you are not on any significant bestselling lists, so therefore, you will not feel the sting of leaving that platform and returning far lower.

With that concern out of the way, the decision really is fifty-fifty.

Basically, if you sell well, you will lend well, and you will “give away” well. If you aren’t selling well, you won’t lend well, or even “give away” well.

But what are you giving up to take the chance that your book is one of those “breakout books” that beats the odds?

There is no guarantee with this strategy, but if your sales on the other eBook platforms have been stale, then taking a three-month gamble on KDP Select might be an interesting experiment.

Hopefully, this article has helped to clear up many of the misconceptions and superstitions surrounding the KDP Select program and has given you some metrics to logically evaluate whether KDP Select is for you!

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6 Comments leave one →
  1. February 13, 2012 7:31 am

    Excellent post that clears up all the fog about this subject. Thanks.

  2. February 13, 2012 10:30 am

    Am sharing my experiences with KDP for non-fiction at my blog. It appears to me that non-fiction and fiction are pretty different.

    tldr; I think going forward, there is too much demand that Amazon is not supplying to keep my shorter content exclusive to Amazon.

  3. February 13, 2012 12:34 pm

    At this early point in my writing career joining KDP was probably not the best option. One stumbling block is I cannot give my books to reviewers or even as a gift to friends unless it is within the confines of the KDP program. Not a huge hurdle but something to think about.

  4. February 13, 2012 3:01 pm

    Thanks for breaking that down for everyone. Actually, about 1/3 of my sales are coming from B & N, and then there’s some from all the venues I have through Smashwords as well as Smashwords itself. So, overall, well over 1/3 of my sales come from other places than Amazon. I chose not to do Select because of that, plus the fact that my books are priced so low, I figured people would be borrowing higher priced books instead of mine. However, I’m not one of those authors who pitch a fit over other people trying this. Everyone has to use the marketing tools they choose for themselves. I chose not to use this one. But I’m glad it’s working out for many authors.

  5. February 16, 2012 2:07 pm

    What is your advice for someone publishing their first book? I’d imagine you’d want as much exposure as you could get, so KDP might not be the best way to go, but I’d appreciate your thoughts!

    • February 16, 2012 6:40 pm

      If I had it to do over again I would wait to enter the KDP program. It does constrain you on getting the word out for newbie authors. Also Lauralynn makes a good point, if your books are priced in the lower range (and mine are the .99 cent variety) then it’s probably just as easy to buy them than borrow them.

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