A Long Tale of Short Stories

How Amazon strangled the short story, and why we have to try a different strategy to revive them.

by D.M. Atkins

Most publishers, no matter their size, primarily sell novels and sometimes anthologies. Stand-alone short stories are rarely salable to customers.

We wanted to see if short stories—as their own art form—could be given the same intensive care given longer works. This would also help us create a range of both authors and genres, allow us to develop relationships with authors, and help promote the careers of those authors. We had hoped that if those short story authors also wrote novels, they would bring them to us. It can be quite a disappointment when an author we have worked with on short stories, turns and gives their novel to another publisher.

We initially debated whether or not to even put the shorter works on Amazon or other distributors beyond our website. We decided it was important to get the work out, to build a readership for our publishing group and for our authors.

What we didn’t expect would be that it would significantly slow our overall process. And some authors were angry when we didn’t give the covers of short stories the same amount of time and money we put into novels. With science fiction and fantasy particularly, we are unable to afford to commission art for short stories, given their low return.

Some authors we worked with seemed unaware of the challenges involved, whether it was the time in editing or the cost of making covers. And even fewer are aware of the challenges we faced in actually selling the works. In part, this is because Amazon, and other distributors who follow their lead, have sabotaged the short story market.

 

Amazon’s skewed payment structure:

Amazon has a policy whereby they only pay a fair return rate to ebooks sold on their sites under the condition that said ebooks are priced from 2.99 to 9.99 (USD). Anything selling within that range is paid a 70% return.* (Less additional “delivery” fees–yes they charge for delivery to Kindle.) Anything higher than 9.99 or lower than the 2.99 receives only gets 30% (less fees) of cover price.

(*Unless you were in their new markets—such as India, Brazil and others—where ebooks only get 30% return regardless of cover price.)

Since Amazon has convinced most buyers they shouldn’t have to pay more than 9.99 for a novel, they are even less willing to pay more than a dollar for a short story. That means that unless you have something so in demand that you can charge at least 2.99 for it, you will most likely lose money selling on Amazon. And, of course, other leading distributors such as Barnes & Noble set up similarly skewed pricing.

Also, Amazon’s contract with small indie presses like us also requires that we cannot sell the story anywhere else for a different price than we sell it at Amazon. We could not, for example, charge 2.99 on Amazon and then only .99 on our site, which would give authors the same amount back.

These are the highest return we can get from a 99 cent short story through current distributors:
Amazon .35
Barnes & Noble .40
All Romance Ebooks .59
Smashwords .81**

**That is for a direct sale. Sales and subcontractors can lower this. Smashwords has distribution deals (such as Kobo, Apple and others) which can bring sales through them down to as low as 38 cents. Most average in the 76 cent range.

Our site:
FFP .97

The FFP rate used to be lower because Paypal charged 30 cents per transaction but we have since been able to change over to a digital sales contract that waives that fee. Our current payment sources charge around 2.5%. FFP has also issued discounts that range from 5-20% off, which can bring us down sales prices when applied. Even with those sales, both we and our authors do better when ebooks are bought from us.

I can tell you right now that whether a big company or a self-publisher, anyone would struggle to make enough for their effort with Amazon/BN rates. It certainly doesn’t take into account the time an energy of editing, cover art and production necessary to make a good ebook.

So let’s talk about covers:

Most publishers do not create individual covers for short stories. We were idealistic enough in our desire to include short stories in the same process we set up for novels that we may have made a fairly large mistake.

While this process has created some of our most beautiful and interesting covers, it has been an expensive and energy-intensive endeavor.

The least expensive royalty-free photo sites charge rates in the area of $8-25 a photo for non exclusive use rights (depending on resolution and popularity), with many covers taking 2-3 photos. It is often necessary to use multiple photos and/or significantly change them to avoid having one identical to another publisher. Many covers require at least two photos for the characters and a third for background. If we pay for original art we can expect that to be quite a lot more. Then there is the time put in by both cover designer and publisher in creating and vetting the cover.

When we began only three years ago, the costs of photos were significantly less than they are now. Since then, most distributors have raised the resolution and size needed for ebook covers and most photo services have also raised their rates. A cover that could cost us $25 before, will more likely cost us $50 now.

The reality is that means even an inexpensive cover can cost $50. And since FFP is only retains 50% of the sales amount brought in (the rest being divided as 30% author, 10% editor(s), 5% designer & 5% production editor), that means to pay back just the base cover price alone, a short story would have to sell at least 285 copies on Amazon, but only around 100 if sold on our site. To date, only two short stories have sold more than 250 as individual ebooks.

Over the last year, we tried an experiment with several groups of short stories that were connected with our best-selling novels. Because these would likely sell no matter which venue they were placed on, we tried different strategies. What we found is that, no matter how popular they were, only short stories sold exclusively on our site made back their cover costs. The losses in distribution fees were not offset by increased sales on other sites.

And none of them have made enough to cover overhead costs such as office equipment, web hosting, internet service, postage, software and so forth. It really is the novels of our top five top-selling authors who keep the lights on.

The impact on anthologies:

Most of these short stories were submitted in hopes of being included in themed anthologies such as Touched by Death, Wicked Fairy Tales, Taking Flight, and others still in process. Yet, the process of making individual ebooks and covers for each story slowed down the process of creating the anthologies themselves. Time that could have been spent in working on promotions was diffused by the releases of the individual works.

Another unexpected side effect of selling each story individually was that authors themselves were less likely to help promote the anthologies their work appears in. This was particularly vexing given the fact that Amazon’s policy meant everyone involved, including individual authors, get a better return in royalties from anthology sales. For example:

In Wicked Fairy Tales, for example one author had this return for first quarter of 2014:

Individual sale of the short story = 1 @ .11
Share of anthology = 11 sales for share of 2.53. (.22 per sale)

While it varies depending on where the sales are, the consistent fact is that because of the skewed payment structure of Amazon, the author gets twice as much back from every sale of the anthology as s/he gets from an individual sale of the story. Both FFP and the author would be better served by putting our promotions energy into the sales of the anthology rather than the short story.

What are doing to improve the situation:

First, while we still intend to accept and publish short stories, we will be focusing on their connection with other works and producing anthologies. Ideally an anthology is at least 50,000 words of related short stories and novellas. We see three primary relationships:

Traditional themed anthologies. Our submissions calls will focus short stories and novellas for a limited number of anthologies, working to bring them together and helping authors work with us to promote them when they are released.

Universe related works/anthologies. These are short stories and novellas that are related to novels or a series that have a readership from those universe. Good examples are the Deliver Us series by Lynn Kelling, Hojer series by Alicia Cameron and The House of Silence series by J.A. Jaken. The shorter prequels, interludes and even AUs that connect with the popular novels have done well when published first on our site and then collected into anthologies for release.

Solo author anthologies. We have quite a few authors who have contributed enough short works to us at this point that we are working on solo anthologies of their works. These are especially powerful if teamed up with novels by the same authors.

In the interim, we have created a set of ForbiddenFiction themed covers for short works first released as singles on our own site and later to be included in collections. Readers will still have the option of buying the individual stories so they don’t have to wait for the anthology—at our site. Any story under ten thousand words is unlikely to be able to market for 2.99 or more. And only works that break the 2.99 barrier will be considered for other distribution sites.

What we hope to get from this:

By focusing on the collections as a whole, we hope to still be able to give short stories their place in our publishing group without sacrificing the needs of the rest of the business.

We’ve done a lot of amazing work so far—and we’re far from done! We couldn’t have done it without an amazing group of authors who have been changing the way people see erotic fiction.

D.M. Atkins, Publisher
FFP

 

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