Tuesday, August 25, 2015

Smashwords and Flipkart to End Distribution Relationship - Amazon Scores Victory

Smashwords and Flipkart are ending their distribution agreement first announced in August, 2013.

The unfortunate news effectively hands the market for indie ebooks in India to Amazon.

A few weeks ago, I notified Flipkart that Smashwords was placing its distribution agreement with Flipkart under review.

I provided Flipkart a deadline by which Flipkart was asked to repair certain problems related to the listing and removal of Smashwords titles, and to provide Smashwords an acceptable plan to prevent such issues from recurring in the future.

I informed Flipkart that if these requirements were not met that Smashwords would request the immediate removal of all Smashwords titles.  The deadline was missed and an acceptable plan was not presented.

This morning Smashwords received word from Flipkart that after careful consideration, Flipkart determined their systems are not yet capable of supporting the dynamic nature of the Smashwords catalog.  As a result they will begin winding down the relationship with Smashwords and remove our titles.

Under the distribution agreement with Smashwords signed in 2013, Flipkart - like all Smashwords retailers - is contractually obligated to process new title deliveries, metadata updates and book removals in timely fashion upon notification from Smashwords.  In recent months, Flipkart has not reliably met these requirements. In recent weeks the delays worsened.

Unlike the print book market of yesteryear where books were relatively static objects and changed little over time, ebooks are dynamic living creatures.  Ebooks evolve over time.  At Smashwords, we give our 100,000+ authors and publishers the ability to change any aspect of their book, from metadata updates such as pricing and book descriptions to changing book contents, covers and publishing rights.  Every month, Smashwords is shipping out thousands of new books and hundreds of thousands of metadata updates to existing books.  To process this deluge of dynamic data, our retailers work in partnership with Smashwords to build sophisticated automated content ingestion systems.  These systems - even at the largest retailers - are prone to intermittent error or delay.

The Hand of Amazon KDP Select

Our primary concern was Flipkart's delays associated with the removal of Smashwords titles that had been unpublished. Most of these titles were removed because the Smashwords author or publisher made the decision to enroll their book in KDP Select, an ebook self publishing option offered by Amazon that requires authors to make their books exclusive to Amazon.

Once authors enroll a title in KDP Select, Amazon requires the author to immediately remove the book from all competing retailers otherwise the book is removed from the KDP Select program and the author is warned that repeated offenses could lead to the termination of their entire KDP account.

As you might imagine, these fire-and-brimstone emails from Amazon are unnerving to authors.  Here's an email one Smashwords author received from Amazon after removing their book from all retailers worldwide to make it exclusive in KDP Select.  Their book was being dropped from KDP Select because it was still lingering at Flipkart:

As we emailed to you earlier, KDP Select Terms and Conditions require that books enrolled in KDP Select be exclusive to Amazon in digital format. As the following book(s) is not exclusive, it has been removed from KDP Select, but remains live in the Kindle Store. It is no longer eligible to earn a share of the KDP Select fund, however you will be paid for any borrows that your book accrued prior to its removal from the program.

{Title redacted} (ASIN: redacted) is available on: http://www.flipkart.com/redacted

Once you’ve confirmed your book(s) is no longer available elsewhere, you may re-enroll it into KDP Select. Please always confirm your books are exclusive to Amazon at the time of enrollment as repeated violations of KDP Select Terms and Conditions may result in permanent loss of KDP Select benefits for all books, as well as termination of your KDP account.

At Smashwords, we expect our retail partners to honor the rights of our authors and publishers.  These rights are articulated in every contract with every Smashwords retail partner.  If a Smashwords author wants their book unpublished and removed from a retailer for any reason, our retailers are required to remove the book without delay. At Smashwords, the author is the publisher and we fully support and respect their decisions to manage their rights as they see fit. The reason for removal does not matter to us, thus our insistence that Flipkart process all updates in a timely manner.

That said, I am not a fan of KDP Select.  Ever since the launch of KDP Select in December 2011, I and hundreds of other like-minded indies have spoken out against it.   From my perspective, the publishing industry and media don't yet grok how KDP Select is undermining every large publisher, every indie author and every ebook retailer.  In the process, they're also undermining the future of book culture by limiting the availability of books.

Many indies don't understand the long term implications of KDP Select.  The million or so books enrolled in KDP Select are almost entirely provided by the indie author community. Amazon coerces authors to enroll their books my making KDP Select books more discoverable and more desirable to Kindle customers, while making non-exclusive books less visible and less desirable.   The message is quite simple:  If you want to sell more books at the world's largest ebook retailer, you must be exclusive.

I don't blame indies for their difficult decision.  I met with one indie author a few weeks ago at a conference who told me words to the effect of, "I hate the exclusivity of KDP Select, yet I'm in it because I have a mortgage to pay.  Books in KDP Select sell better than non-exclusive books."  If you want to hear more of my thoughts on how Amazon constructs its policies to prey upon authors, check my recent  interview with the Writer 2.0 podcast:  http://acfuller.com/smashwords-founder-mark-coker-episode-53-august-13-2015-2/

Publishers are suffering too.  This past weekend I met with a publisher in New York whose books were being made less visible in Amazon searches.  Readers search on the publisher's author or title and they're presented with multiple irrelevant search results pointing to alternate books which are exclusive books.

I believe KDP Select is toxic to the future of indie publishing because it forces authors to abandon competing retailers and become more dependent upon Amazon.  When competing retailers lose access to this important inventory of indie titles, they can't compete.

Amazon wields its dominant market share like a club to bludgeon authors who don't fall into compliance with Amazon's exclusivity or pricing requirements, even when the lack of compliance is not the author's fault.  No other ebook retailer practices such draconian punishment of authors.

Amazon has engaged in these heavy-handed tactics for several years, most typically through automatic price-matching which robs authors of their royalties.

Amazon knows the problem is not the author's fault.  Several years ago at BEA I met with a top Amazon Kindle executive and requested that they stop punishing our authors when one of our retailers makes an error or has a delay.  I suggested during that meeting Amazon should enforce based on author intent.  I suggested Smashwords could provide Amazon a direct pricing feed so Amazon could judge the author based on the author's intent rather than price-matching against retailers supplied by Smashwords.  Although he acknowledged it would be a fairer method and sounded reasonable, nothing came of it.  Amazon only stepped up their punishments.

Ten days ago, in response to media reports of a letter Jeff Bezos sent Amazon employees, I wrote my first ever email to Mr. Bezos to express my concern about Amazon's bullying tactics against authors.  The full text of that email is pasted below this post.  I did not receive a reply.

My decision to put Flipkart on notice was not an easy one, and followed months of good-faith effort on Smashwords' part to help Flipkart improve their systems.  To Flipkart's credit, they tried in good faith to meet our demands but in the end acknowledged they're not yet prepared to handle a dynamic catalog of our scale.

To be clear, the termination of our agreement with Flipkart is not Amazon's fault.  However, Amazon was a catalyst because the harm they're causing our shared authors made it impossible for us to give Flipkart the runway they needed to improve their systems.

Although Flipkart is a small ebook retailer and the financial impact on Smashwords authors will be negligible, I'm more concerned by what this signals for the future of ebook retailing around the world.

Amazon's tactics make it extremely difficult for even large well-funded companies like Flipkart to support indie authors (Flipkart has received $550 million in funding and is valued at $15 billion - http://www.wsj.com/articles/flipkart-valued-at-15-billion-after-latest-funding-1432021294).

Amazon's tactics have a chilling effect on the formation of future ebook retailing startups by discouraging indie authors from working with other retailers.  Imagine how difficult it will be for smaller retailers across the global to build regional ebook stores when the bar for entry is the ability to process millions of dynamic books with 100% accuracy and no margin for error?  Amazon doesn't just punish the author in that local market, it punishes the author worldwide.  Why would an indie author want to put their entire Amazon earnings in jeopardy simply to reach a small market at a single small retailer when Amazon allows no margin for error or delay?

Flipkart will lose access to over 200,000 indie ebooks.  Other than Flipkart and maybe Google, Amazon has no viable competitor for ebooks in India. iBooks has not entered India yet.

Amazon is now being rewarded for their draconian policies enforced against indie authors, and their KDP Select program will only grow stronger as a result.

The nascent indie author community in India will have only one viable option to reach their home market, and that's Amazon. Amazon pays indie authors only 35% list for their ebook sales in India, and requires authors to become exclusive if they want to earn 70% list.  Smashwords paid authors and publishers 60% list for Flipkart sales and we've never required exclusivity.

We wish our friends at Flipkart well.  If the day comes when they're able to build more robust ingestion systems on par with our partners iBooks, Barnes & Noble, Kobo and others, we'll welcome the opportunity to reengage with them to serve the Indian readers and authors.

My letter to Jeff Bezos follows....

Mark Coker Letter to Jeff Bezos 

-------- Original Message --------
Subject: Empathy / Smashwords
Date: Mon, 17 Aug 2015 13:29:13 -0700
From: Mark Coker <*****>
To: Jeff Bezos <*****>

Dear Jeff,

We've never had the opportunity to communicate.

In your employee letter reprinted by Forbes, you speak out against callous management practices and state how you have no tolerance for lack of empathy.

Do these principles apply to how you treat your KDP authors?  If so, I can only assume you're not familiar with the draconian punishment Amazon has been meting out against thousands of KDP authors since 2010 through price matching. You've robbed thousands of authors of their royalties though this practice.

Case in point:
When Barnes & Noble experienced technical problems through no fault of Smashwords, you price-matched this author's book to free and caused him (by his estimation) over £1,000 in lost earnings.  The author informed Amazon that the pricing error was not his fault, yet Amazon continued to punish him and refused to return his book to the normal price. The author eventually removed his book from distribution rather
than face the wrath of Amazon.

I think you're the smartest guy in this business.  All of us in the business owe you and Amazon a great debt of gratitude for catalyzing the ebook revolution.  However, I cannot respect the tactics you use to browbeat and intimidate our shared authors.  You hurt innocent people, and this hurt cannot be rationalized away by your many good deeds.

I'm not opposed to price matching.  I'm opposed to how you punish our shared authors when their book prices are out of alignment through no fault or intent of their own.

In recent weeks I've heard from authors who received threatening emails from Amazon regarding their status in KDP Select due to Flipkart in India failing to remove their books in a timely manner.  The authors tell me that Amazon is threatening to kick their books out of KDP-S worldwide simply because this tiny Indian retailer is having difficulty removing titles in a timely manner.

The message you're sending authors is that they risk the wrath and punishment of Amazon if they allow Amazon's competitors to carry their books. Maybe that's the point. If so, your plan is brilliant. But the plan has one fundamental flaw - you're building resentment in the author community.  People will bend to coercion and intimidation if they feel they have no choice.  But if given a choice in the future, they will turn on you.

Might I suggest a kinder, gentler approach?  If you want to price match a Smashwords author, we can provide you an automated pricing feed, because the price at Smashwords reflects the author's true real-time intent.  You could use this instead of price matching against our retailers.


Mark Coker
Twitter:  http://twitter.com/markcoker
Blog:  http://blog.smashwords.com
FAQ: https://www.smashwords.com/about/supportfaq

As of today, I have not heard a response.  I realize he's been extra busy lately.


Derek Haines said...

I'm very sorry to hear the news about the collaboration between Flipkart and Smashwords, Mark. It does not bode well for customers in India.

However, I would just like to pick up on the point you made in your article about KDP Select. I agree, the demand for exclusivity sucks, but as Amazon makes the rules, what can one do? The author you quoted about having a mortgage to pay is quite correct.

But pulling both points together, the fact that Flipkart didn't react fast enough to changes in ebooks from the Smashwords' catalogue is very relevant, as many authors 'pop' into KDP Select for 90 days, and then 'pop' out at the end, and return to Smashwords distribution. This is necessary, sadly, as it can help boost sales and exposure.

I am lucky to have a decent backlist, so I can move my books in and out of KDP Select, and try to get the best from both worlds. However, I would prefer a level playing field, and not have to do such gymnastics.

One last note. Good luck in getting a reply from Jeff Bezos, as my recent open letter to him regarding harsh and very unfair payment practices by Amazon for non US authors has yet to get a response.

Nirmala said...

Hi Mark,

Sorry to hear about Flipkart. Can you give us a ETA for how soon Smashwords ebooks will be removed from their store?

Thanks as always for all you do.

Inkling said...

Amazon's selective search results doesn't just involved KDP books. I'm not sure there's any item for which the search results aren't manipulated. There's a hefty 'what's Amazon's profit' factor in what is displayed.


Last year, I was checking out a particular make and model of Bluetooth headset, searching Amazon by that specific make and model. Surprised at finding so many sources that were all selling at full retail, I starting clicking on other links. Eventually, I discovered that on Amazon the maker itself was selling that make and model headset for $40 off retail. That's what Amazon was hiding from me. And that $40 multiplied by all the trusting Amazon customers who don't look past the original search results adds up to substantial sums.

That's perhaps why, when I was living in Seattle, a software developer with Amazon told me to never trust Amazon's search results.

In short, if you want to find the best price on Amazon, don't trust Amazon to show it to you. Use Google Advanced Search but specify Amazon.com as the "site or domain." Or you can enter yoru search term as a book title followed by "site:Amazon.com"


There are interesting legal implications here. Could deceptive search results be considered a variation of illegal "bait and switch" or deceptive advertising? After all, Amazon is giving users the impression that what they see is all Amazon has for sale. It isn't.

Oh, and I discussed this years ago with an Amazon lawyer. She justified the practice by claiming that, while the search results often withheld lower priced items, if users clicked on enough "bought instead" or similar links, they might eventually get to what they're looking for. What she was saying is that not everything Amazon displays is as deceptive as search results and items are simply blocked. Try enough and you'll find them. Amazon is depending on some people being lazy.

Inkling said...

Here's a bit more I couldn't put in that previous post. It's actually the most interesting part.


There's other weird stuff going on, really weird. For instance, go to Amazon's Advanced Search page and look for a TITLE of

hospital embarrassment


You'll see my Hospital Gowns and Other Embarrassment repeated three times. It's a unique book and apparently the only book Amazon has whose title has both words.

One is what I'm selling with the paperback at $11.76 and the Kindle version at $2.99. But strangely, there are two other offers for the book. Six offer it for prices ranging from $1,158.93 up. Another have ten offers ranging from $72.31 up. What is going on? Do outlets such as Ripplebooks think people will pay $72.31 for a "Used-Good" book when they can get it new for $11.76?

My suspicion is that these outlets are carefully laid traps. Some of the time, Amazon's search results won't display the copy I'm selling since it makes Amazon such little money. Sometimes Amazon's search engine will see a large profit to be made, and show only those overpriced copies. Note how few ratings those sellers have. They aren't selling many books.

Note too that these dubious vendors know how to force Amazon to create a separate page for books, so their results can appear alone in search results. You will notice that my listing not only includes new copies, it includes a a number of used copies at reasonable prices. Why aren't those pricey books listed there instead? Ah, do that and the deception would fail.

I can't see how they'd ever sell my book for over $1,000, but someone desperate to buy might think the book is out of print and pay $70 or so. Some people are that gullible.

That said, I doubt Amazon intends for its search engine to be used in that particularly underhanded way. But some less-than-ethical book vendors are clearly taking advantage of the fact that with Amazon search, what you see may not be all that you can get. And personally I wouldn't be surprised in Amazon has tagged some of their customer base as gullible and reserves those inflated prices for them.

Anna Erishkigal said...

Amazon's predatory practices remind me of Microsoft during the 1990's. Everybody thought they were unstoppable. And then the DOJ got involved and things got messy. In the end, Microsoft got a slap on the wrist and a big, fat fine. But they also got a lot of bad press and a lot of consumers started shying to other products. They're still the dominant operating system, but a lot of the other stuff they used to do, people go with other vendors when they can, including open-source stuff like Open Office.

I suspect that's where Amazon is headed. The Big-5 are all owned by multi-national multi-media conglomerates. d'Zon can only prod the beasts for so long before the beasts band together and start getting the DOJ off it's backside. And then ... I wouldn't want to be 100% dependent upon Amazon while they waffle and backpeddle to deal with the consumer backlash. At the end of the day Amazon will still stand, albeit perhaps wearing a wimpy little leash. But anybody who's 100% dependent upon them will be dog-meat.

Graham Downs said...

I feel your pain about losing Flipkart, Mark, I really do. It's incredibly sad, and not just because I actually made a couple of sales of my books at Flipkart.
What's that, four retailers since I started self-publishing, that have been driven out of the indie e-book market, pretty much single-handedly by Amazon?

You know, I've actually seriously considered, on more than one occasion, unpublishing my books from Amazon entirely. They make such a small portion of my sales anyway, and it's doubtful I'll ever see a royalty cheque from them. But then when I think about it, that would be a bit hypocritical, because I'd be denying buyers access to my books on a certain platform.

I do know at least one author, though, who's e-books are NOT available on Amazon, for philosophical reasons, and he does okay....

You should definitely look into markets where Amazon doesn't actually HAVE a presence, like South Africa, where I live. We have Exclusive Books (which is South Africa's largest bookseller), and TAKEALOT.COM (which is South Africa's largest online store). Both of these sell e-books, but neither (to my knowledge) sell indie e-books. They would both very likely be open to a distribution agreement with Smashwords.

Just a thought. Use it, don't use it.... ;)

Jemima Pett said...

Thanks for supporting us, Mark.

Scott Nicholson said...

Perhaps you should blame the distributors that don't meet their customers' needs. Currently that need involves fast and easy market movement. Most stores and distributors somehow manage this miracle in a matter of hours, not months or years. It's almost like we live in a digital age with dynamic, living content that's always one click away.

HStanbrough said...

I'm sure I'll be alone here, but last part of the title of your post was annoying to me. Yes, Amazon is the 800 pound gorilla, but the decision to pull Smashwords titles away from Flipkart (and thereby bow to Amazon's pressure) was STILL your decision, and yours alone. This action in itself is one more example (in addition to the 800 pound gorilla) of why it's important to diversify not only among booksellers, but even among distributors.

mark williams international said...

Mark, there are other domestic Indian retailers competing with Amazon, and growing fast. Rockstand and Newshunt would make great partners for Smashwords.

mark williams international said...

@GrahamDowns - Exclus1ves in South Africa does field indie titles, as does Kalahari. But the only way is is through OverDrive retail. Smashwords has a deal with the OverDrive libraries but not the global retail outlets, which include Waterstone's in the UK.

mark williams international said...

@GrahamDowns - Exclus1ves in South Africa does field indie titles, as does Kalahari. But the only way is is through OverDrive retail. Smashwords has a deal with the OverDrive libraries but not the global retail outlets, which include Waterstone's in the UK.

wordwan said...

Okay, I'm confused here. You sed this:

>I provided Flipkart a deadline by which Flipkart was asked to repair certain problems related to the listing and removal of Smashwords titles, and to provide Smashwords an acceptable plan to prevent such issues from recurring in the future.

>I informed Flipkart that if these requirements were not met that Smashwords would request the immediate removal of all Smashwords titles. The deadline was missed and an acceptable plan was not presented.

>This morning Smashwords received word from Flipkart that after careful consideration, Flipkart determined their systems are not yet capable of supporting the dynamic nature of the Smashwords catalog. As a result they will begin winding down the relationship with Smashwords and remove our titles.

I presume the issue here is Flipcart cannot handle the process of constant change by your Smashwords writers. What's that got to do with Amazon? You suggest Flipcart took you on BASED on the assumption they'd be able to keep up with this idea of updating information. You would have NOTICED that immediately, I would assume.

So beyond that, why, as usual, bring the concept of Amazon into this? If you have an EXPECTATION of your distributors being ABLE to handle a particular number of books and their 'upkeep', why would your relationship with Flipcart last this long?

If Flipcart doesn't have the software capacity (I'm not sure what the real issue is) to handle say, 10,000 books, you could lower the bar. Say, they can ONLY process 5000 books.

I don't know how you'd arrive at what 5000 books you'd allow them, but hm...I'm thinking visually, mom and pop variety store here. Back in the day, a store only had SO much shelf space for the books they offered. End of situation.

So what's the problem?

Thank you.

Heather Lovatt

wordwan said...

Oh and I just read everyone's comments above me. Coupla thoughts:

When I first came on the internet, I noticed how established groups would try to translate their product to the internet, trying to keep them the way they looked on paper, instead of embracing new ways of presenting their product. Newspapers trying to recreate the standard style of paper version papers and the like, every image anchored in place. *sigh* It amazed me.

Amazon is one entity. Smashwords is another. Each entity has the same ability to use the internet to its best advantage. Authors can use whatever process (or group) that's out there.

These conversations continue to sound like offline issues, in a newspaper office. We don't have to 'follow' those old processes, we can try something new.

To me, Amazon is a huge convenience store. It depends on the implied idea that everyone on the internet is too much in a hurry, or too easily distracted to find best solutions.

Or read other user's replies. *grin*

I checked out Amazon a while back, when it was changing over in its process. That use of imaginary bookstores selling your own book as highly inflated prices was there, easily, five years ago.

There's a sucker born every minute. We ALL tend to attach status to objects that 'cost more'. I imagine if that high priced book scheme wasn't working (making money for the imaginary bookstore, that is merely now, about marketing, cos they didn't have to CREATE that book--it's a perfect situation), the company would stop doing it.

Have you solved any of YOUR problems today, instead of seeking others to blame?

Thank you.

Heather Lovatt

Lacy Tate said...

The biggest lure to indies for listing at all retailers would be selling some books at all retailers, enough to offset the additional sales through exclusivity. Since search functions at other retailers vary from marginal to execrable, this is tough.

I have had the dubious pleasure of searching for an exact author name with the exact title at a major non-Amazon site and not finding it by page 12. [I know it was there: the author asked me to try searching.] By that time I was so angry I wouldn't have thrown water on the site if it was burning, let alone spent money.

The competition is all but hanging out signs saying "It's easier to shop elsewhere." The theory of diversification is good, the results, not so much.

William Ockham said...

Let me get this straight. It's Amazon's fault when the retailers that Smashwords distributes to don't live up to their contracts with Smashwords? Every example you cite here is a problem caused by a mistake by some company that isn't Amazon. How is it Amazon's fault that your business partners are incompetent?

Ruth Ann Nordin said...

I hate seeing another door close. :(

I refuse to be exclusive anywhere. I wouldn't trust any of my books to be at only one place, regardless of how popular it is. You just never know what is coming around the corner.

I think the best strategy authors can do is to get out of debt and save up money. Debt is a chain around the neck. I'm still on this chain, and it bothers me more and more every day. Another thing to do is to save up 3-6 months of expenses (the more saved, the better). This will buffer us from all the changes that happen in the industry, and it will lead to more freedom to do what we want with our books.

Mark Coker said...

1/2 - Thanks for your comments, everyone. I'm taking a short vacation so I'll be slow to respond.

@Derek, yes, Flipkart proved incompatible to the needs of authors who go in and out of KDP Select. Not expecting a response from Jeff. :)

@Nirmala, I don't have an ETA, but I would expect the titles to disappear at Flipkart's earliest opportunity.

@Inkling. That's for sharing these observations. I'll leave it to legal experts to decide if any of this illegal. I suspect Amazon's argument would be that what they're doing is no different than a bookseller in a physical store suggesting that if the customer is looking for title A or author Y, maybe title B or author Z would be more to their liking. Any legal experts reading this? Weigh in!

@Anna, yeah, you're probably right. I know there are a lot of people who to this day will avoid using MS products. But there's another side of the story, one where many of the players have been silenced. Microsoft put a lot of its competitors out of business, and its heavy handed tactics also had a chilling effect on the formation of potential competitors. When you kill the babies, they're not around to continue the fight or cry foul. For all its promises about customer service, Amazon doesn't treat authors with much respect when it comes to rules enforcement (and Amazon says it considers authors their customers). Their rules enforcement basically tells the author that if a retailer makes a mistake, it's the author's fault for allowing that retailer to carry the book in the first place.

@Graham The pain I feel is mostly for what this signals for the future of global retailing. Amazon's draconian enforcement works well for Amazon, and will continue to cause authors to view broad distribution as a risk when it's actually and advantage. On the good side of things, authors who bounce in and out of exclusivity can do so with greater confidence because our other retailers process take downs much more quickly. We'll continue building out our distribution channels. Another new and exciting partner will be revealed soon. Thanks for those suggestions.

Mark Coker said...

2/2 -

@Scott, we held Flipkart accountable, but if it were not for Amazon harming our shared authors, we could have given Flipkart more time to fix their problems. Flipkart owned up to their limitations. KDP Select's ruthless enforcement is perfectly tuned to mete out punishment above and beyond the transgression. If Amazon had any shred of respect for their authors, they'd pull the book from KDP Select in India only. That would be fair. Instead, they pull books out of every worldwide market.

@HStanbrough, fair point. I certainly struggled with the decision, because in order for us to protect the small minority of authors who wanted to be in KDP Select, we ended up harming the vast majority of our authors who wanted to be there. At the end of the day, we serve at the pleasure of our authors and we have a duty to our authors to ensure their rights are respected. This commitment runs through every decision we make, including evaluating and rejecting potential new retail partners, negotiating favorable terms for our authors, or defending our authors' rights behind the scenes in ways that are never publicized. We will always have our authors' backs.

@markwilliams, without naming names, let's just there are retailers out there who might target large markets but they lack the systems to honor our authors' rights and our authors' expectations for timely and accurate listings.

@wordwan, as mentioned above, the issues at hand escalated in recent months to intolerable levels. Every retailer - including the majors - will make errors from time to time, and every retailer is always working to evolve their systems to make them faster and more robust. We've seen every Smashwords retailer over the last five years continually improve their systems, and this is evidenced by their dramatically lower error rates. Smashwords has also improved dramatically in recent years. We expect constant evolution. We have a case here where one retailer decided they couldn't evolve to our expectations and our growth. Amazon played a key role in this, as mentioned above. Were it not for the financial harm Amazon was causing authors whose books were slow to remove at Flipkart, we could have allowed Flipkart more time to repair the slow takedowns.

@Lacy, we've got a lot of authors who've proven that diversification works because they're selling more outside of Amazon than they sell at Amazon. It takes patience, perseverence and best practices. But the fact remains that Amazon is the largest retailer with an estimated 60-65% of the market. On average, most authors will earn more at Amazon than elsewhere. With KDP-S, Amazon has created a caste system where in exchange for an author giving up on the other retailers, exclusive authors receive sales advantages in the Kindle Store. Here's a prediction, and it's not a stretch because it's already happening: If KDP-S continues to attract more authors, Amazon will continue to tighten the rules to advantage exclusive authors and disadvantage non-exclusives. And if too many authors enroll, the benefits of exclusivity will dissipate until they again need to change the terms. It's only a matter of time before they decide that $9.95 for KU is too expensive for their customers, and they can serve their readers better (and also kill the market for single-copy sales that cost Amazon 70% list) by pricing KU at $4.95, or making it free as part of Amazon Prime. Look at what they did with Audible. The success of of KDP Select for Amazon will not end well for indie authors.

@William, our business partners are no more incompetent than Amazon is incompetent when Amazon makes a mistake. Mistakes will happen. KDP-S is brilliantly constructed to leverage the mistakes of others. No other retailer punishes its authors this way.

@Ruth, thanks, good advice.

William Ockham said...

@Mark As you point out, Amazon has the largest share of the market. No more incompetent than Amazon won't cut it. When you are number two, you try harder or else. Whining about Amazon won't solve your problem. The way challengers succeed is to do it better than anyone else. That is how Amazon did it. That is how they will be displaced. If you spent your time figuring out how to win instead of figuring out how to blame all of your problems on those meanies at Amazon, you might win a few battles.

To say that "no other retailer punishes its authors this way" is laughably false. Every other retailer enforces its own contracts. You are becoming a parody of yourself. Your biases are blinding you and you will ruin your business. I think that is sad because Amazon does need competition.

Mark Coker said...

@william, when I point out the hazards of exclusivity, or I report on the very real experiences of authors who've been punished by Amazon for problems not of their own making, I'm not whining. It's a fact, no other retailer has built systems and practices to systematically browbeat authors who stray from the stable. No other retailer steals an author's earnings with price matching. It is what it is. If you're suggesting all other retailers adopt the same forms of author intimidation and punishment to remain competitive, its not a future I'd want to see. No doubt, Amazon's an amazing innovator. But they could do a better job of treating authors and their own employees with a bit more humanity and compassion.

Derek Haines said...

Too true, Mark. Amazon could treat their employees much better, as was highlighted by the New York Times recently.


And yes, I agree that authors, and even those enrolled in KDPS exclusivity don't get treated a lot better. It's very dog eat dog. I could go into the dirt of paid Amazon book reviews here, but I won't. Just to say that nothing is necessarily as it seems.

I also have to say that it is with a sense of guilt, that I am currently with KDPS, because I very well remember how helpful you were personally five or six years ago, when I first published on Smashwords. If you recall, I had a lot of problems, as I was using Apple Pages at that time, and I haven't forgotten how many email messages we exchanged over a couple of months, trying to find a solution. Which, in the end, we did.

So why, after saying this am I with KDPS right now?

Because, no matter how much I would like to offer my ebooks on every platform and retailer available, a return to Amazon KDPS from time to time boosts my sales, and income. Ok, I'm not a huge money maker, but every time I go back to KDPS, my book sales surge instantly.

But, sadly, after one or two 90 day periods of enrolment, they start to fall away again. I have no idea about Amazon algorithms, but my hunch is that there is a reward in enrolling (or returning) to KDPS, which only lasts for so long.

So Mark, expect to see my ebooks back on Smashwords again soon.

But, I really do wish there was a better way than having to jump in and out of bed with a gorilla. If you have an idea, I'm all ears.

Btw, enjoy your holiday!

Pamela's Cummins said...

I’m amazed at some comments here and where this article was reposted on another blog regarding about not seeing how Amazon played a huge role to severing Smashwords and Flipkart’s relationship. If there was no Select program, Flipkart would still be part of Smashwords. Do you really think that if Jeff Bezo was in Mark Coker’s shoes he would have been as diplomatic and ended a vendor’s contract because of author’s complaints of not being able to put their books at another retail store?

Rush said...

Thanks for writing to Amazon about their practices. I really dislike large companies bullying smaller competitors out of business which is clearly what Amazon is doing.

Mark Coker said...

@Derek, I have fond memories of those early years working with you. Always great when you visit. I suspect your hunch about the early reward for enrolling is correct - it's baked in the cake.

Here's sad truth #1, a truth that we've always proactively communicated to authors: most indie authors won't sell well. Most won't reach the readers they feel they deserve to reach. Even authors who implement the best practices I recommend aren't guaranteed to sell well (though best practices will always give them an advantage).

And here's another truth. KDP Select is brilliantly constructed to exploit the reality of #1 above. It preys prey every indie's desire to sell more. Authors who experiment with KDP Select are dramatically less likely to ever break out at other retailers because KDP-S interrupts the dynamics of long term readership-building at other retailers. It creates friction that makes fully distributed authors of equal talent more accessible and more enjoyable to the readers at these other platforms. These last three or four years that you've cycled in and out, there are tens of thousands of other authors who maintained a steady course of full distribution uninterrupted. And these are the authors most likely to be the better sellers at iBooks, B&N and Kobo.

KDP Select is designed like heroin. I remember back in high school learning that heroin's a drug you should never try, not even once because such a large percentage of people who try it get hooked. Most authors who do KDP Select *will* get that big buzz of a temporary sales advantage at Amazon, and every time you do it you will become more dependent upon them because every time you cycle out of the retailers your odds of selling well elsewhere will be diminished, and your odds of selling more at Amazon increase because your books are always available non-stop at Amazon. Each time you cycle back to KDP-S you'll get the rush again. Until it stops. For authors interested in making writing a long term profession, it's risky to allow such dependence. A simple algorithm change, or bad luck or just general randomness and your sales die and you're up a creek without a paddle.

All-in participation in KDP-S guarantees failure elsewhere. Partial participation in KDP-S guarantees disadvantage at the other retailers.

I feel sad every time I see an Amazon-exclusive author fret that their sales have dried up they need to either quit writing or scale back so they can get a real job. This is the danger of dependence. I'm sure these authors felt they were in control because it was their choice to be there. By allowing all their eggs to be in one basket they surrendered their independence.

We know from experience that every author's sales will fluctuate from month to month at every retailer. Diversification helps smooth out the bumps. But diversification doesn't guarantee success either. See #1.

I've always argued that authors should consider the long term consequences of their decisions. Indies will determine the future of the industry. KDP-S harms the other retailers. I've written previously that every exclusive book at KDP-S represents a vote to put Amazon's competitors out of business. It motivates some percentage of Amazon's competitors' customers to migrate their buying habits to Amazon, which undermines the ability to Amazon's competitors to reinvest in their business and remain viable.

Amazon puts authors in a difficult bind. You mentioned you feel guilty. That's unfortunate. Don’t feel guilty. Rather than feel guilty, feel mad that they put you in this position. They're playing indies like pawns. They're using their dominant position in the market to incentivize indies to pull inventory away from Amazon's competitors and to funnel customers to Amazon-exclusive books to the detriment of non-exclusive books, to the detriment of single-copy sales, and to the detriment of indie author independence.

Mark Coker said...

@Pamela, thanks. I think I know what other blog you're referring to. I'll often visit there and discover I'm the devil incarnate and that I hate Amazon, neither of which are true. :)

Derek Haines said...

I have to agree with your Truth#1 Mark. I'm a teacher, blogger and self published author, and this list is definitely in descending income producing order! But I love self publishing, so it definitely stays put.

And ok, I'll drop the guilty feeling because i just checked my publishing blog, and did a search for Smashwords. Over 50 blog posts came up, and all mentions are positive. I think there was one you didn't like so much a couple of years back, but we 'negotiated' that one, and I did a little edit. :)

But as for the great debate? Like everything connected to online sales and marketing, things can and do change rapidly. What worked today, may not tomorrow, so nothing is set in concrete.

But while ebook sales are nice when they come, from wherever or however, I really think the rapid change now will be in ebook subscription services. KU changed their payment model very quickly from 'borrow units' to 'pay-per-page', while I understand that another subscription provider has removed the romance genre from their available titles. Correct me if I'm wrong, but I think it was Oyster. So I'm sure it will take a while yet for this (music) model to be adapted to ebooks.

And I'm also sure Amazon are going to attack subscription ebooks with their usual gusto, so who knows? We may not be debating ebook sales at all in a years time.

mark williams international said...

"there are tens of thousands of other authors who maintained a steady course of full distribution uninterrupted"

and yet we have just been penalised with the loss of access to Flipkart because of those chasing the short-term shiny.

Is it not possible to set-up a scaled distribution option where authors can commit to retailers on the clear understanding they will not be able to pull their titles or implement changes at a moment's notice.

Something as simple as a clear warning that those who opt-in to Flipkart (or whichever) should allow x-time for changes to take effect.

Most serious long-term-thinking indies will already be going direct with the bigger retailers wherever possible, and where not possible they have the choice of other aggregators to use alongside Smashwords that cover most of the same retail options.

It's the niche outlets like the OverDrive libraries and Flipkart that most other aggregators do not offer that keep those authors committed to Smashwords.

How long before Amazon decide to start targeting late-removed titles in the OverDrive library catalogue when an author goes Select? Are we then going to lose the OverDrive option too?

LC_Cooper said...

No doubt, Amazon is the new opiate of the masses, and no matter how you slice s**t, it's still s**t.

US anti-trust laws address predatory, monopolistic, and heavy-handed business practices. Those affected (authors, Smashwords, et al) can file complaints with the US Department of Justice's Anti-Trust/Foreign Commerce division (USDoJ/AT-R). The Federal Trade Commission (FTC) has a similar reporting process. Their links are easy to get to from a Google search.

Also, because Smashwords and Flipcart will be negatively, economically, impacted as a result of Amazon's KDPS exclusivity rules and related punishments, both could file grievances with the World Trade Organization (WTO) because KDPS impedes free trade between (but not limited to) the US and India. Due to Amazon's dominant position in the global ebook market,its scale creates an artificial, non-tariff barrier to market penetration and retention in India (in this instance). India's primary retailers only purchase via distributors, such as Smashwords. Hence, Amazon is restricting free trade.

Although I have not yet been economically affected by the dissolution of Smashwords's contract with Flipcart, this action has eliminated my ability to reach readers in India, a fact that will warrant my submitting complaints to the FTC, USDoJ, and WTO. I urge all others, both directly and indirectly affected, to file complaints. The Sherman Act, Federal Trade Commission Act, and the Clayton Acts take monopolistic, trade-restricting behaviours very seriously, and the punishments are often severe.

mark williams international said...

@LC-Clayton - "this action has eliminated my ability to reach readers in India".

No, it prevents you reaching them through Smashword.

First off, Mark Coker took that decision because Flipkart do not respond fast enough to indie authors wanting to jump in and out of Select.

It would be very simple to state clearly on the Smashwords site that indies wishing to distribute to Flipkart should expect a longer response than from other retailers. Problem solved. All indies who want to could then send titles to Flipkart.

Secondly, regardless of what Smashwords does you can still reach readers in India through Amazon, through Kobo, through Google Play, etc. or you could go to Xin-Xii and get into Flipkart. Or you could go direct to Indian retailers like Newshunt and Rockstand.

Your ability to reach Indian readers has not been eliminated at all.

Nirmala said...

Mark Coker said: " I don't have an ETA, but I would expect the titles to disappear at Flipkart's earliest opportunity."

It has now been over a week and Smashwords books are still appearing on Flipkart, including books by my wife that we unpublished about a month ago. Is there any way to speed up this process?

Mark Coker said...

Nirmala, they're still processing removals. They tell us over 205,000 have been removed and they're still working to complete the rest. Notify our support team of stragglers (include direct hyperlinks of the listing at Flipcart) and our support team will continue to press on your behalf.

Nirmala said...

Thanks Mark, I will keep an eye on it and if the ebooks are still on there in a few more days, I will send a message to support.

Serban V.C. Enache said...

While no doubt Amazon's policies are at work in this issue, the direct problem itself lies with Flipkart. There's no excuse for online retailers, in this day and age, to process author changes so slowly. For instance, the cover for my first book was/is still not updated. And I changed it months ago. I myself opted out of distribution to Flipkart on 2015-08-28. Talking Crows is gone from their store, but my other 2 books are still there. Flipkart couldn't compete with the other vendors who do process author changes much quicker. It's their fault, in my opinion.

Nirmala said...

Hi Mark,

I am getting a bit frustrated since my wife's ebooks are still showing on Flipkart even after I have written three times to support about this. It has been months since we unpublished these books, and it seems like Flipkart is not repsponding at all to your requests to take down the titles.

Is there anything else you can do to speed this process up?

Nirmala said...

Update: My wife's ebooks are finally no longer on Flipkart. Our experience is a good example of how Flipkart was not keeping up their end of the bargain. It should not take months to remove a book from a retailer's website.

Brian Mulipah said...

Thank you very much for your updates and for showing us some light in regards to the publishing industry. Sad to see Flipkart go, but its life.

I do have a few requests in regards to the Smashwords World. The MEATGRINDER sucks! Can you do something about it? I really don't understand why it has to be that difficult. What i mean is: I take my manuscript and upload on Smashwords and I get errors! I then take that same manuscript and upload it at Draft2digital at it goes through. My book gets to apple in 6 to 12 hours. Why not just change and copy the meatgrinder at draft2digital?

This is how I see it: If Smashwords primary purpose is distribution, then it should be so easy to upload and distribute through Smashwords. Unfortunately this is the opposite. Take a look at Google! They are a search engine. When you get there you only see a strip and they are expecting you to search for stuff and it is so easy. You can never go wrong there. Why not adopt the same thing at Smashwords? You are a distribution company, therefore the only thing you should be focusing on is authors and distribution. Make it easy for us Mark!

Another thing is on the payments. Why not pay authors every month? In this day and age, seriously you do not need to wait ages to get funds.

Here is my suggestion and i do not mean to be rude: Stop focusing on Amazon and other competitors. Jeff will never get your advice. He is obviously focusing on building his empire. His amazon ship. His focus is on making amazon and KDP bigger and better than they are now. He really doesn't mind what competitors say. In fact he is out to shut them down.

Focus on making Smashwords a better place for authors. Focus on making smashwords the preferred place for authors.

A lot has changed on amazon, apple and the rest of the internet, except Smashwords. Only Smashwords remains the same. Why? Because the focus is on amazon.

Mark Coker said...

Hi Brian, thanks for your comment. Although Meatgrinder works incredibly well for the vast majority of our authors, I agree, there's much we can do and will do to make it even easier and better in the future. We do intend to go monthly eventually, but I'm not prepared to set expectations for a date because it's not our top priority right now. When we prioritize our projects, we prioritize around projects that create new opportunities and tools that help our authors reach more readers and sell more books. I'll need to disagree on the innovation front. Here, I'll build upon some comments I made over on the Oyster post.. We've continued to innovate non-stop every year and every month since our founding. A couple months ago we introduced assetless preorders, and incredibly powerful tool that has helped thousands of our authors sell more books. Our innovation goes back to the beginning and continues through to today. We were probably the first to strike perma-free pricing deals for our authors at the multiple major retailers, the first after the Big 5 to negotiate our authors agency pricing terms at B&N, Kobo and Sony, the first or among the first to open up library distribution to indies at OverDrive (20,000+ public libraries), Baker & Taylor Axis 360 and now the Gardners announcement yesterday, and the first or among the first to offer indies preorders and then assetless preorders. We operate our own store. Even though it's not our focus, the store itself offers many innovations that stand to this day, and we've continued to enhance it over time. Our store offers the industry's highest royalty rates (up to 80% list, even often for 99 cent books if the overall order is around $10 or more); coupon codes for custom promotions; perma free pricing without restrictions; reader-sets-the-price pricing; self-serve interviews; embeddable videos and trailers on book pages; DRM-free books; Dropbox integration; generous author-controlled sampling; enhanced series metadata to improve series discovery; book search filtering by word count; drill-down filtering into hundreds of categories; the ability to filter by sales rank, latest released and price points; new attractive widgets for embedding on websites and blogs; and multi-format ebooks supporting all devices. Back on the distribution side of our business which is where our authors earn over 90% of their income, we offer same-day and next-day consolidated sales reporting with pretty at-a-glance charts for iBooks, B&N, Kobo, OverDrive and the SW store going back 180 days. And we're not done. A few weeks back we launched an "Also Recommended" feature that offers readers context sensitive recommendations. It's like also-boughts but with some other awareness built in. We also create a lot of free promotional opportunities for our authors at the retailers on the merchandising side and at major conferences (see last week's announcement about our Bouchercon promo). So when you write above that Smashwords has remained the same, I can only scratch my head. We're never standing still. We're always pushing the envelope to deliver our authors more tools, faster deliveries, more sales outlets, better communications and more advantages.

Our focus isn't on Amazon, but since Amazon is top of mind for most authors, I do feel I owe it to our community to share my perspective on how Amazon's strategies will impact their long term future. Their strategy fascinates me for its brilliance and transparency. I don't expect everyone to agree with my analysis, though FWIW I think much of what I predicted back in 2011 in my original KDP-S post has come true. And much more will become self evident in the near future. Best wishes.

Brian Mulipah said...

Thank you very much Mark! Firstly, I am surprised that you responded and my books are still up at Smashwords! :-) Thanks for everything. I apologize for my biased and uninformed analysis on your stance and amazon. I must commend you on the fact that whenever there is a discussion on whether one should go with KDP S or not (among authors) your name always pops up as a standard reference. It has also helped me in making decisions and recommendations for other authors.

I guess my one and only issue and frustration is with the meatgrinder. Six of my books that should be on Smashwords are not there because they just don't pass the meatgrinder. Yes, I have met a lot of authors who have had absolutely no challenges with it, but it just that I have had different challenges. Six books is a lot of potential revenue for me and not being able to upload is a huge daily loss.

So, with this, I would just like to make a request that you please do something for me or the few of us in regards to the meatgrinder. If possible, please do it this year (2015)

Thank you very much Sir Mark Coker

Derek Haines said...

@brian I really have to add my penny's worth about Smashword's metagrinder. I have just republished 15 ebooks on Smashwords, and only one had a small problem. Oddly enough, I am always attentive to metagrinder issues, because it means that there IS a problem. While other platforms may accept files easily, it doesn't mean that there are no problems. On Amazon, as a case in point, I recall uploading a file, only to find formatting errors once it was published.

Sure, the metagrinder and autovetter, as well as manual checking can be a bit of a process on Smashwords, but it does result in a perfect ebook. Well, as perfect as one can expect.

When I have a new book to publish in ebook, I have the habit of getting it up on Smashwords first. Then I know the file is perfect for other platforms.

Just because something is easy, doesn't mean that it's necessarily good.

DrJoeRoss said...

As a doctor, I have watched quality medical care vanish under the oppressive boot of the corporate and government take over of Medical care. Doctors everywhere went from proud creative entrepreneurs to controlled employees of mass medical care. Now we see Amazon.com doing the same to Indie authors. If writers are no smarter or better organized than doctors they will soon find themselves "employees" of Amazon rather than authors and free thinkers! If you still can think read Mark Coker's story and share it!