A reader who joins the Amazon Prime program pays $79 a year and is limited to borrowing one book from the Prime library per month. I remember that when this program got started many people argued that the program would not benefit authors who sold their books at low prices. The reason being that for that $79 investment to make sense, a reader would have to borrow 12 books a year each costing (79/12) $6.58 just to break even. Therefore, it was argued, Amazon Prime members would only borrow the more expensive books.
This has proven to be false. Many authors selling books at prices lower than $6.58 have reported a substantial number of borrows for their books. So far Amazon has been paying $2.30 to $2.50 for each borrowed book. If you are an author selling your book for $2.99, Amazon gives you a 70% royalty, which means you earn about $2.00 per sale. But if your book is borrowed, you actually end up earning more ($2.30 to $2.50, instead of just $2.00). What is not clear is the situation with books that are priced even lower. Here is where I want to share my experience.
My book The Sun Zebra is priced at $1.99. Out of every sale I make Amazon gives me a 35% royalty, which means I earn $0.70 per book sold. If my book were to be borrowed that would be a great thing. For me to earn $2.5-$2.3 per borrow is equivalent to selling 3.6 to 3.3 copies! But who would use their allocated monthly borrow on my book that costs $1.99 when they are paying $6.58 a month to belong to the Amazon Prime Program? The answer is: many people. I did my last free promotion from April 11 to April 13 of this year. So far about 45% of the income I’ve earned from this promotion alone comes from borrowed books!
So why is this? I think that participants in the Prime program feel they are getting the return on their $79 investment from other things. If you belong to this program, among other perks you also get free two day shipping of Amazon Prime items you buy plus unlimited instant streaming of thousands of movies and TV shows that are available on Amazon (this is cheaper than Netflix which charges $8 per month). This is why I believe Amazon Prime participants have no qualms in using their monthly borrow on lower-priced books.
But what about books that are priced even lower? I have anecdotal evidence from other authors reporting that their books priced at $0.99 are being borrowed. This is huge as in terms of royalties each borrow yields an income equivalent to the sale of 6.6 to 7.2 books. Unfortunately I haven’t found any hard numbers regarding this matter. Ideally I would like to know what percentage of royalties do borrows account for at different price points. Do Amazon Prime participants indeed borrow more of the higher priced books, or does price not affect their borrowing rate?
Please leave a comment if you have any information about this or if you want to share your experience regarding borrows.