Episode 35 – Hustle, VAT and KU Discontent

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With big news and tips galore, Jim and Bryan discussed the new VAT laws and recent discontent with Kindle Unlimited. Before they got to it, however, Jim announced the Author Marketing Podcast and Bryan discussed his Thunderclap and free run for Ted Saves the World. Their trio of tips included stories on hustling, cover design, and avoiding distractions. Other news stories revolved around Kindle Scout, Sterling and Stone’s lessons learned in 2014 and Jane Friedman’s view ahead to 2015. This week’s Question of the Week: What have your results been like for Kindle Unlimited? Do you plan to join KDP Select or opt-out of it?
What You’ll Learn: 
  • What Bryan plans to do with Thunderclap
  • Why Jim is branching off into another podcast
  • The results of Bryan’s free run with Ted Saves the World
  • Why hustling is just as important as your platform
  • Tips on the most effective cover and web design
  • Tools you can use to avoid distractions
  • What one author learned from using Kindle Scout
  • Johnny B. Truant’s nine lessons learned from 2014
  • What Jane Friedman thinks publishers should focus on next year
  • The results of H.M. Ward’s efforts on Kindle Unlimited
  • Why VAT rule changes could have a significant impact on your income
  • The reasons Jim thinks the new VAT rules will be unenforceable
Question of the Week: What have your results been like for Kindle Unlimited? Do you plan to join KDP Select or opt-out of it?

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  • TheCreativePenn

    Official complaint Jim – cut the coffeetivity (and the jazz!)

    • Bryan

      It’s official. Joanna, you’re my favorite.

    • What??? I’m this close to lining them up as a sponsor! 🙂

      • Bryan

        3 complaints and 1 “yay” from Fat Hands Jimmy Thorn.

    • I agree. It’s annoying. It unprofessional… did I get that right Bryan? What was the other thing you told me to say? Oh yeah, NO to jazz 😉

      • Bryan

        Mark Cooper for the win!

    • I have to say that I’m really enjoying Jim going “of the reservation” and Bryan trying to gently rope him in.

      • I have to agree that I do enjoy Bryan’s sounds of frustration…

        • Bryan


      • Bryan

        You’re not helping.

    • I thought I’d already said that I didn’t like the jazz music in an earlier episode, but in case I didn’t:

      Please stop with the jazz music, turkey noises, applause sound effects, coffeetivity, and any other audible crap. It’s distracting, unprofessional, and extremely annoying.

      • Bryan

        Thanks for the input, Russell. And for your email as well.

    • I was listening to this episode in a coffeeshop. I put my earbuds in to shut out the coffeeshop sounds, and then, suddenly, I was hearing coffeeshop sounds again, which caused me to look around and see what was going on. Fail.

      On the other hand, if you put the Star Trek Enterprise white noise in the background…

  • TheCreativePenn

    On the Amazon thing – Amazon is NOT a US company over here in Europe – they are based in Luxembourg. Amazon is actually made up of tons of companies, based all over the world. Hence, they have to abide by EU laws.

    • That’s true. But shouldn’t Amazon EU stores have to add the VAT onto whatever we are putting down as our list price, since it’s their responsibility to handle these additional taxes as the seller? I just don’t understand why the author has to pony up the tax money when they don’t actually live or work in that country. In the U.S., even if you’ve worked in another country, there’s a certain threshhold you have to reach before you actually have to pay taxes to that country, instead of the U.S., and I would think that would apply here as well.

      • VAT is basically sales tax. Do you have a threshold for that in the US? Amazon already charge vat in the UK for example, but they add it on to the price we input at KDP at the moment. In future, they are not going to add it on (after the one time change) I think the reason is they don’t want all prices to suddenly rocket upward on their site.

        So by keeping the prices looking the same, they still charge VAT from customers, but the net price will be lower and hence our 70% of net will be lower too. All invisible behind the scenes. I will just add 20% to all my prices and call it done. I haven’t raised mine in forever. I’ll call it Vat plus inflation.

        • Bryan

          Good idea on the price raise.

      • Only authors that are selling direct need to collect VAT. If you sell through Amazon, Amazon will deal with the VAT. Even if you live in the EU (as I do), if you don’t sell direct, you don’t have to worry about where the people buying your books are located, because you’re not selling to them, you’re selling to Amazon (or Kobo, or whoever).

        There is a VAT threshold, but the rules change has set the VAT threshold for digital goods and services at zero 🙁

      • That’s probably what they should do, but since it doesn’t appear to be the law that they do it that way, Amazon is kindly (and business-wise, reasonably) passing on all the costs to the sellers–us. That’s why the new VAT law is important (and ridiculous). Because Amazon is complying with it, and in complying taking the VAT out of the publisher’s cut, self-publishers have to either raise prices in the EU, make less money, or both.

        • Bryan

          Agreed. I think there’s going to be a lot of increased prices going forward.

    • Bryan

      Ah, that makes sense. Thanks, Joanna!

  • VAT crap aside, I liked Jim’s comment that we all need to stop worrying about what everyone else is doing to get ahead. I like this show because it gives lots of different tips and approaches to think about, but doesn’t say anything is the Be-All, End-All trick to “winning” as a writer. There’s really no one-size-fits-all approach, so we’re all engaging in trial and error here. I love hearing about different writer’s ideas and the things that brought them success, especially if they’re creative or unusual. Who knows what will work tomorrow? The important thing is to keep at it, keep trying new things, and see what works.

    • Bryan

      Here here, Laura!

  • I don’t get distracted. I get in so deep that I get tired and need a 5 minute break.Then I sink back in again. The story is like a movie and draws me in. Petty infighting is the worst distraction. People who game the system are not writing good books. I think we should try to write books that will stand the test of time then time is less of an issue.
    I used to think I was a slow writer and now that I work with Scrivener, I found out I write 2000-3000 words a day. Lots of authors think that’s quite a bit. It’s the revision that takes a long time.
    I lost money with KU on my best selling book so I took it off and put it back on the other platrforms. It helps my lower priced books and my short stories have started moving a lot. But I’m pretty small time.

    No Coughativity! I avoid coffee shops for writing. Silence is golden.

    • Crissy Moss

      Oh, UG, I hate revision. It takes forever because you are reading a sentence and you know somethings off about it, but you don’t always know what. So you read it again. Sometimes you highlight it and come back to it and read it again. And you STILL can’t figure out why the sentence doesn’t read right. So in frustration you scrap the whole thing and just rewrite that paragraph.

      Takes forever trying to get the words right. Just getting the words on the page has become a pleasure lately.

      • Bryan

        Don’t even get me started on revision lately. I wish I could clone myself and just have HIM do it.

        • Alyne de Winter


      • Alyne de Winter

        I have a bunch of first drafts now–they will all need revising. At least one of these will take a year I’ll bet.

    • Bryan

      Silence is golden. For sure :). Yeah, revision whoops my butt as well.

  • While I love Coffitivity for when I’m writing, it’s super distracting in the background of a podcast 🙁 No opinions on KU yet, but my first book goes up next month, so we’ll wee what happens!

    • Bryan

      Thanks, Leslye. Together we can stop Jim from playing background noise during the show ;).

  • Crissy Moss

    I’ve been adding a few of my short stories to Select and have a few borrows, but not a lot. I won’t put my longer works in KU yet because I would earn less for them than I do by selling them. Maybe it would be okay to do so once I have my trilogy out next year, but only for the three months.

    BTW, you asked about my NaNo prophecy. I finished it early for the first time ever, even after having a lot of interruptions. It was a great month. I’ll be posting a blog post about the experience layer today.

  • Okay, the VAT thing. It doesn’t matter Jim, if it’s enforceable by governments in Europe or not. I don’t sell anything direct and won’t now. BUT, Amazon WILL enforce it on all the indies using KDP simply by automatically deducting the VAT from our royalties. So it won’t blow over. My prices for EU countries are going up from 2.99 to 3.49 after January 1st to cover my losses.

    The KU thing. I’m 60% down and I’m not in KU. My audio sales, which also rely upon Amazon visibility I have found, are down close to 70%. Holly Ward has many more books than me. I only have 12, but the moment KU arrived my sales took a dive. A recent BB helped me regain some, but nothing near where I was. I would say that my growth for the entire year has been wiped off the board (audio was going so well, my forecast was to double my income this financial year) All gone.

    However, I’m one of the lucky ones, because I was always using the other stores and I’ve seen a huge growth at Google and Barnes this year. It doesn’t cover all losses, but it fills in a decent percentage of the hole KU dug for me. So that’s good.

    I’ll write more books and keep running in place, and hopefully the next Amazon algo change won’t bury me deeper, but will lift me up again. Maybe I’ll even run fast enough to keep ahead. Who knows? What I do know, is that I will keep going. I love what I do.

    • Sorry to hear about your sales, but I like your attitude: keep going, keep working, keep writing, do what you do.

    • Bryan

      Sorry to hear about the sales drop, Mark. Thanks for the input about the VAT.

      I agree with Erik, it’s good to have that positive attitude.

  • Connie B. Dowell

    I’ve not got much experience with KU, as I was only enrolled for a few weeks before my book got out of KDP select, but I did get a borrow with the program that came before KU. And I do mean A borrow. That’s right, one measly borrow. I doubt results would be much different under KU. I can see the program working well for many kinds of books, fiction and nonfiction, but mine is education/reference. It’s the sort of book you would rather buy than borrow so that you can go back and reread steps and information down the line. I imagine other reference and how-to books would have a similar experience with borrows.

    Nevertheless, I’ll try it with some of my upcoming books, which are fiction and could be fully consumed in one big reading go. The commitment really isn’t for a long time, so I figure why not give it a shot for a while?

    Great show as always, guys!

    • Bryan

      Thanks, Connie! Best of luck.

  • Patrick Stemp

    I’ll back up Jim, and say that coffeetivity wasn’t loud enough! Try raining.fm for some great white noise. I prefer a thunderstorm to chatter. Crank it up on the next episode.

    • Yes! Looks like it’ll be raining for episode 36!

      • Bryan

        Still four complaints to two “yeses.” Gotta listen to the people, Jim ;).

  • Ken

    VAT thing. This is huge for EU businesses, particularly micros selling digital products such as ebooks, etc. directly to customers who order from within the EU.

    Read this from the Daily Telegraph. http://www.telegraph.co.uk/finance/businessclub/11268706/Victory-for-UK-micro-firms-as-HMRC-tweaks-EU-VAT-MOSS-rule.html

    Sounds positive on the surface, but doesn’t change much. As a UK resident, if I sell an ebook/pdf online DIRECTLY to someone in the EU, I will need to register for and pay VAT in the country in which they ordered the book.

    Also, I would need to perform a multiple address check on you the customer so that I can prove that you are from where you say you’re from. So if you pay via Paypal, I may need to reject the sale if you order from your hotel room in Berlin but your Paypal address is in, say, Italy.

    All because the EU are going after big corps like Amazon who dodge taxes legally because of existing EU legislation. Madness.

    • If you’re in the UK, the point of VAT MOSS is that you *don’t* have to register for and pay VAT in other EU countries. You register in the UK, use MOSS, and HMRC send the relevant amounts to other EU countries. See https://www.gov.uk/register-and-use-the-vat-mini-one-stop-shop for details.

      It’s still a huge burden for small businesses, though.

    • Bryan

      Agreed on the madness. Cool to see Joanna Penn’s tweet on that Telegraph article.

  • L. R. Dennis

    Thunderclap wants to get into your contacts, so it’s a total no-go for me. It will probably die out soon. At least I hope so. What’s the point of spamming your friends? Choking your Twitter and Facebook timelines with dozens of the same message? How can that generate good will? Not to mention the fact that your supporters have let Thunderclap raid their address books!

    • Bryan

      Good points, L.R. I’ll have to see how it goes and report back on the results.

      • L. R. Dennis

        Thanks, Bryan.

        You have to be very careful about social media sites. They’re always looking for ways to glom onto your data.

    • ❤️Marie Long❤️

      From what I understand, the thing with Thunderclap is that the tweet/Facebook blast will go off at once at a certain time. So if someone isn’t at their computer at that exact point in time, then they will totally miss the blast, because the tweet/facebook post will become buried under dozens of other posts.

  • Bryan

    No comments on my VAT Scratch Fever headline? I was pretty proud of that one.

    • If you don’t nuge people now and again, they’ll never notice what you’ve done.

      • Bryan

        So, you’re saying that after a particularly clever headline, I should say, “Eh? Eh?!”

  • Brian Brown

    The sound effects/ambient noise sounds like an amateur playing with “toys” while the other person is trying to have a serious conversation. Please stop. This show’s strengths are 1) good summary of the week’s self-publishing news, 2) good tips and ideas, and 3) very good analysis of #1 & #2 by both Jim and Bryan. Sound effects don’t support any of these points.
    (Jim, nothing bad on you. I understand being a man and having new toys to play with. Perhaps a third podcast called “Crazy Jim and the Douche” would be the appropriate forum for this compulsion.)

    • Bryan

      Your reference to Parks and Rec has brought me limitless joy.

      • Brian Brown

        Bryan, just so we’re clear, I’m not implying you are, in any way, similar to “The Douche.”

        • Bryan

          Understood :).

  • Ember Casey

    Well, I like the coffeetivity so much that I’m sitting in an actual coffee shop as I listen to this podcast, haha. 😉

    As for the question of the week — I’ve avoided KU from the start because even before KU hit, about 45% of my sales for the year were from the retailers BESIDES Amazon (since KU hit, that percentage is even higher). As Jim said, “We know what we want and where we want to get it,” and I knew that even if I made it clear to my readers that they could get my books on most devices through the Kindle app… I’d lose a ton of my audience. It just wasn’t worth the risk of alienating half my readership and losing the traction I’d worked so hard to build on the other big sites. My strategy since then has been to focus heavily on growing my sales on the other retailers–I’ve seen great growth on Google Play and Kobo especially (my sales last month on Kobo were 4-5 times my previous best month ever over there–I’ve definitely drunk the Kobo kool-aid. 😉 ).

    If there’s one thing this whole “KU-pocalypse” has taught me, it’s that *I* want my income to come from as many places as possible. I’m not going to lie–my sales on Amazon are WAY down right now. But my overall income is only slightly down, so I’m just going to keep diversifying and writing as many books as I can (because at the end of the day, writing more books is all any of us can do. 🙂 )

    And in November, I officially hit my first MAJOR indie milestone — I’ve officially sold 100,000 books since I started publishing in 2013! So I’m feeling cautiously optimistic — if still VERY wary of Amazon. As others have said, at the end of the day, Amazon is looking out for their own best interest (and by extension, their customers’), and its our job as publishers to look out for our own as well. 🙂

    • Bryan

      You’re the exact right kind of author to weather this storm, Ember. Congrats on reaching your indie milestone! That’s fantastic. Agreed, we’ve got to look out for ourselves!

  • Thomas Diehl

    VAT: Yeah, as a European, unless I file some paper, I pay 30% tax (I believe it’s income tax or something like that) in the US when I make money from any sales there, or rather the vendors do that in my stead. So how is European VAT for Americans considered bizarre and non-enforcable?

    • Bryan

      Only because there seems to be a different VAT rate for different countries, so you could conceivably have to keep track of dozens of different countries if you’re selling a lot.

  • I haven’t been impressed with KU. Borrows were not impressive, and the payment keeps going down. I’m now getting about 20x the borrows than I used to (that’s right, I’m getting about 20/day now) because one of my books was featured in Pixel of Ink. I was going to jump out of KU when my contract ended, but now I’m going to wait and see if my borrows stay steady or go back down.

    • Bryan

      That’d be great if the POI feature keeps you up there. I had a nice little free boost from POI, but I’ve never gotten in there paid. Good luck!

  • Jim, or someone else, can you share with me the link to the tool that helps format a description for Amazon?

    • Hey Dave, it’s in the Premium area of Author Marketing Club.

  • H R Baker

    I’m going to try KDP select for my new poetry book to test it out.

    • Bryan

      Let us know how it goes!

  • Joey Stoll

    Hey guys,

    I’ve been listening for about a month. Really loving the show, especially for the news items. And Jim ranting about traditional publishing. That may get old eventually, but it sure hasn’t, yet. Just left you an iTunes review. Thanks for the great content.

    Also looking forward to reading Ted Saves the World. I’m working on a similar book (high school students saving the world from an evil wizard prince), and it’s great to find something else out there in the same niche.

    Keep it up!

    • Bryan

      Thanks, Joey!

  • I think the sounds were fun, but not necessary. I find the jazz annoying, but the threat of jazz is funny. Overall, the discussion and playing around is fine (and fun). This is a podcast, not a ‘professionally produced product.’ Have fun with it.

    Also, demonstrating those coffee sounds is a value to the writer. I actually like the coffee shop sounds when I’m writing because it blocks out the leaf blowers, annoying music around me, and even actual coffee sounds at times. 😉

  • ❤️Marie Long❤️

    How do you know who’s been opening your emails? What email service allows you to track this? I’m using TinyLetter (an affiliate of MailChimp), and I don’t see anything like that available. I would love to be able to track this sort of thing so I will know who my true fans are.

    • Mailchimp shows you who opens them and who clicks the links inside. You can even send follow up emails to people who didn’t open the earlier ones.

      • ❤️Marie Long❤️

        Great! Thanks for the response! I’m going to contact the folks at TinyLetter and see if there is (or will be) a way to do it there as well.