Who sells ebooks
Most ebooks in the English language today – probably about 90% in fact – are sold through five ebooksellers:
- Amazon Kindle
- Kobo (and its partner sites)
- Apple iBookstore
- Google Ebooks
- Barnes and Noble’s Nook
The Kindle store is the biggest, enjoying a market share of 60-70% or more. These ebooksellers are expanding their international coverage, including into non-English language markets.
There are other ebooksellers serving specific niches, which might be important for some ebooks. An example is allromance.com for romance fiction, or country-specific ebooksellers, such Waterstones and WH Smith in the UK, Dymocks in Australia, and Whitcoulls in New Zealand. Several of these companies partner with major ebooksellers. Kobo has been especially active in this regard.
Setting up and operating an ebookstore is a very expensive and complex business. So several ebooksellers, notably Google, Kobo and Amazon, provide a simpler alternative for booksellers, authors, publishers, and bloggers to sell ebooks.
Affiliate programs allow the participating websites to earn a commission on sales made as a result of sending their visitors to an ebookseller’s store. They can do this without the expensive overhead of building and running an ebookstore themselves by adding affiliate links to ebooks listed on their site.
When a visitor clicks on an affiliate link, it sends them to the ebookseller’s site, for instance Amazon.com, who records where that visitor came from. If the visitor makes a purchase, the referring site earns a commission.
Commissions range from 4-8.5% (Amazon) to 15-25% (Kobo). Affiliate links and marketing tools are simple and free to add to a website.
How digital distribution works
Although only a handful of ebooksellers can cover the world, there are thousands of publishers and self-publishers who want to do business with them, and there are dozens of specialist and country-specific ebooksellers. This has prompted the rise of wholesale ebook distributors — ‘aggregators’ — who will deal with the many smaller publishers that ebooksellers often prefer not to.
Even with a relatively small number of ebooksellers, there are benefits to publishers from using distributors rather than going direct. Here are some of the services distributors provide:
- Negotiate distribution agreements with ebooksellers
- Securely store ebook files online
- Collect and maintain metadata for each book from each publisher
- Check that ebook files and metadata comply with each ebookseller’s terms – they all have slightly different specifications and requirements
- Distribute the ebook files and metadata to ebooksellers in the formats required by each ebookseller
- Collect sales and royalty data from each ebookseller and report the results to the publisher in a combined report
- Collect payments from ebooksellers and remit a combined payment to the publisher, less the distributor’s fees
Two ebooksellers – Amazon and Google – seem to prefer to deal directly with authors, small publishers and publishers from countries without direct ebookseller representation. They are often absent from distributors’ lists of outlets served but they provide good self-service tools for uploading ebooks for sale. This trend is expanding as large ebooksellers build increasingly sophisticated ‘self-service’ portals. However, you’ll probably secure better terms if you can negotiate a direct agreement.
Most digital distributors target one or more of four main markets:
- Medium to large publishers
- Small to mid-size presses
- Library and specialist distributors
We’ll take a look at each of these in the following sections.
Selling ebooks directly from your website
Ebooks are causing many publishers to rethink old business practices, including whether they actively sell ebooks from their own websites. One of the main reasons for considering this option is that it opens the door to direct relationships with readers. For publishers who operate in well-defined niches, this is becoming especially important. It means the publisher can sell other related products or services, earning far more from a customer over time than just the profit from a single ebook.
There are numerous options for ‘shopping cart’ software that will add digital sales and downloads to your website. However, if you plan to use DRM or to sell ebooks from other publishers, things will get more complicated and you might want to consider using a ‘white label’ ebookstore. We’ll look at these in a later section.
Find out more about this topic on our Digital Publishing 101 useful resources site.