Another day, another treatise on Kindle Unlimited. Is that what you’re thinking? We wouldn’t blame you. But we’re here to provide our perspective on this controversial program in the hopes that if you’re considering it, you’ll be able to make an informed decision.
Disclaimer: There is very little self-publishing advice that is universal. About the only item we can think of that would be, is this: Little self-publishing advice is universal. But with that said, here’s what we think about Kindle Unlimited.
Kindle Unlimited is a valuable program, with some serious drawbacks.
That’s pretty much what it boils down to. However, let’s go deeper.
First, let’s detail what’s involved. Kindle Unlimited is a new program from Amazon that allows readers to pay $9.99/month and download and read books on an “unlimited” basis. We’ve put that word in quotes because there are some limits. You can only borrow ten books at once, but if you read ten books in a day, you can borrow another ten the next day. And so on, and so on. And all you pay is the monthly fee of $9.99. If you’re a voracious reader, and one who likes to keep their monthly reading expenses to a fixed amount, it’s a great way to get a lot of books for one low price. If you had to buy the books, you’re getting an unlimited number of books for the price of two or three.
Now, let’s talk about that happens for the authors involved. An author in the Kindle Unlimited program gets paid every time a borrower reads at least 10% of their book. So if a reader borrows a book and reads the first 9%, hates it, and returns it, the author makes nothing. If a reader passes the 10% mark, hates it, and returns it, the author makes the full borrow share. But what’s that share? Well, it varies. On average, a borrow royalty ranges from $1.30 to $1.40.
From a financial standpoint, Kindle Unlimited can make a lot of sense. Consider this. You, the author, have a series of ten short stories that all sell for $0.99. If you sell them, you make approximately $0.30 per book. But if you put those stories in Kindle Unlimited, you’ll make $1.30 for every borrow. However, if you have full length novels priced at $4.99, you make $3.49 per sale and still only $1.30 per borrow. Not as great of a deal there.
So, should you do it? As a general rule, we think Kindle Unlimited is worth it, especially for new authors. Let’s talk a little bit about why.
New authors are almost never going to be able to make a living off of their books. Unless you’re J.K. Rowling, who hit it big once Harry Potter got published, your first, second, and even third books aren’t going to support you. Even if they are phenomenal, you simply don’t have the readership yet to support huge sales numbers. Readers are notoriously wary about dropping $3.99 and $4.99 on a new author, particularly if you don’t have a lot of reviews yet. But, those same readers, who may have Kindle Unlimited, will certainly try your book if they can get it for free. Of those readers, some of them will turn into life-long fans who’ll end up buying everything else you write, for as long as you keep writing.
Will you lose some percentage of sales from Kindle Unlimited? Possibly. One author we work with estimates that she’s seen a 25% decrease in her sales since joining the Kindle Unlimited program. But, despite that, she’s making more money now than she was before. But wait, how’s that possible?
Well, let’s look at some example numbers. These are totally made up, but are based on that 25% sales decrease and some research on the number of borrows authors are seeing.
- Sales in September before joining Kindle Unlimited: 400
- Sales in October with Kindle Unlimited: 300
- Borrows in October with Kindle Unlimited: 600
Let’s assume the book sells for $3.99.
- Sales in September: $1120
- Sales in October: $840
- Borrow Revenue in October: $780
- Total revenue in October: $1620
So with Kindle Unlimited, this fake author had a $500 increase in revenue for the month of October AND 500 additional readers. If you’re a new author, those are numbers you need.
Any good editorial should examine all sides. When shouldn’t you sign up for Kindle Unlimited? Well, there are several reasons why this program might not be for you.
- You have a high number of fans who read books on iTunes, Barnes & Noble, Smashwords, or Kobo. Amazon currently requires you to join KDP Select in order to enroll your book in Kindle Unlimited and that prevents you from selling anywhere else.
- You want to release your books for free in some markets or go permafree for the first book in a series. See above. You can’t go permafree if you’re in KDP Select because you can’t do price matching.
- You’re morally opposed to exclusivity (it happens, and it’s okay). Again, see above.
- Your book sells for more than $4.99. In this case, the difference between your sale royalty and your borrow royalty becomes a lot bigger and that can spell bad news for your profits. On the flip side, if your book is selling for $0.99, then enrolling in Kindle Unlimited is a very smart idea because for every borrow, you’ll earn a whole dollar more than you will for a sale.
We hope we’ve helped you understand some of the pros and cons of Kindle Unlimited. While we, as a publisher, wish the program operated a little differently (say, without requiring exclusivity), we do think the program has merit. What do you think?