How Well Do Ebooks Sell?
It’s royalty time here at Orange Hat Publishing! We have a new system that I’ve built for handling all the data and calculating what is owed. I wrote it all in the statistical programming language R, because that’s the programming language I’m most familiar with. It does a pretty good job handling datasets, and our data isn’t that complicated. (The most complicated piece is that we have sales and compensation reports from several sources: Ingram, Ingram Ebooks, KDP, our website, and wholesale orders we fulfill.)
One data piece I have enjoyed examining is ebook sales! Ebooks seem like a great thing to offer. After all, producing one isn’t that complicated, and if someone prefers to read that way, why not let them? I read ebooks occasionally myself, usually checking them out through the Libby app. I especially enjoy them while traveling. Ebooks also offer more ways to market, including being able to run time-limited promotional pricing, or even giving away the book for free! (This can be a good way to get folks into the first book in a series.)
But do ebooks actually sell? The industry data I’ve seen shows a declining trend, and certainly the promise of ebooks taking over has failed to arrive. (Thank goodness!) Remember when Barnes & Noble launched the Nook and added a dedicated space for it in every store? I’m guessing that was a losing proposition for them. And Amazon has tried to profit from the Kindle by having the default version be one that shows advertisements on the screen. That doesn’t suggest a product that is successful from hardware sales alone.
And what about our data? What can it tell us? Looking at our own data, here’s what I see!
Looking at sales from July 1, 2024, to December 31, 2024, ebook sales made up 5.2% of our overall sales by volume. And by compensation, ebooks returned 3.6% of our total compensation received. Most ebook sales came from only four titles.
So what does that tell us?
1. There’s no reason to discount ebooks as a perfectly viable way to release a book, in part because there are undoubtedly sales of ebooks that would not have been sales of physical books. We can’t assume that the buyer would have bought the book another way. This is especially true for promotional pricing.
2. Promotional pricing may be the best explanation for why the % of compensation is lower than the % of sales. Selling a book for $0.99 increases sales but cuts the return. (And on Amazon, running a special price below $2.99 cuts the % of retail price that they pay, meaning we receive less money based on price and based on compensation rates.)
3. Ebooks are not displacing physical books. Based on our data, no one should fear (or hope) that paper is going away in favor of screens.
4. There’s still a lot we don’t know. Sales data is limited in scope and mostly serves to prompt more questions. We’re also just one publisher looking at limited data! No one should rush to any big conclusions.
5. That said, authors should take note of these numbers and think carefully about how ebooks may fit in with their marketing. They represent a small fraction of overall sales and offer lower compensation overall. There’s no reason that an ebook can’t be successful, but we want to make sure they aren’t taking away from physical book sales. And we want to make sure they don’t hurt our partners in local bookstores and gift shops, who aren’t able to sell ebooks.
I’m looking forward to using our sales and compensation data to find and share more observations!
Are there any questions that you have about book sales and compensation that we could explore with our data? And how do you see ebooks shaping publishing? What are your preferences for reading, physical vs. digital? Share your thoughts in the comments!