Bookstore Arithmetic

Yesterday I saw someone on Twitter encouraging his friends to buy Tim Maughan’s book, Paintwork, from Amazon. Now of course people are free to buy from whoever they please, but if you want to help British writers such as Tim who are publishing their own books, or going through small presses, I’d like to explain why you might want to order from Wizard’s Tower Books instead.

Amazon, being a very big company, is required to charge VAT on all ebooks it sells. (The UK government classes ebooks as “software”, not as “books”.) So before Tim gets any money you have to take off the government’s share. On a £2.14 book that’s 36p. Also, Amazon only gives Tim 70% of the revenue from his sales, so by my reckoning he gets £1.25 per book. (Correct me if I’m wrong, Tim.)

Because my business is very small, I don’t have to charge VAT. I’d like to charge less than Amazon, but I know that if I do that they’ll lower their prices to match mine, so I charge exactly the same as they do: £2.14. When you buy from me, PayPal takes a cut on the transaction. That can vary, but at a conservative estimate that’s 5%. I then give Tim 85% of the net revenue. So for a sale from me he gets £1.73 — 48p more than he gets from Amazon. That’s a 39% increase.

This doesn’t apply to people buying from the US, because Amazon US doesn’t have to charge VAT (and does its level best to avoid having to charge sales tax). But for a UK or European customer it makes a big difference to the writers and small presses that I deal with.

Here are a couple of books you might want to encourage people to buy:

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1 Response to Bookstore Arithmetic

  1. Tim Maughan says:

    Cheryl – sorry for the late reply on this! been bit out of the loop for teh last couple of weeks…damn writing 🙂

    Yes – you are exactly right about the Amazon breakdown. And let me say again – thanks so much for taking the book and all your support.

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