Can Authors Benefit From Kindle Daily Deals?

Amazon wants to feature my book as a Kindle Daily Deal. Now what?

Amazon Kindle offers a whole variety of deals for Kindle users, Kindle Daily Deals, Kindle Monthly Deals, countdown deals, holiday specific ones and more. But are they worth pursuing from an author’s or publisher’s perspective when you get invited by Amazon? – We took a closer look.

Our recent video seminar sheds light on the effectiveness of Kindly Daily Deals and Kindle Monthly Deals. If you have not watched it, you can click on the image to do so:

The Kindle Daily Deal and the Kindle Monthly deal are usually by invite only. Amazon approaches authors and publishers, offering them to feature their books in one or more of these Kindle deal sections in the Kindle Store. You may receive an email saying that your book is being considered for a Kindle deal:

“We are considering including some of your book(s) in an upcoming promotion like a Kindle Daily or Monthly Deal in the Amazon.com, Amazon.ca and/or Amazon.in Kindle Book Store(s). We would offer the books at a discount we determine off of your book’s list price for a period of up to approximately one month. Your list price won’t change so that customers see your list price and the discount.”

And further:

“If your books are included, your royalty will be calculated based on our discounted price (not your list price), up to a discount of 85% off of your book’s list price. For example, if we sell your book at $1.99, where the 70% royalty option applies, your royalty will be calculated as 70% x ($1.99 – delivery costs and taxes). To be included in this promotion, your book must have a list price between $2.99 and $9.99.”

Every day, Amazon features some four to six titles as a “Kindle Daily Deal.” Just because Amazon offers you this window of opportunity does not mean you will ultimately get selected, so keep that in mind.

Kindle Deals – Promotion Effect

The good news is, if you get selected, you will see an increased volume for a certain period.

Most authors will argue that it cannot be possibly considered a bad idea to participate in such KDD or KMD promotion. In any case, the book will get more visibility than usual. And if the book is part of a series, the promotion may boost sales of other titles in the series, too.

But the promotion will also require you to set a promotion price that is lower than your list price. Some authors may see an increased volume but less money because of the discounted sale price.

Given these factors, we took a closer look at examined Kindle deals over a period of thirty days. And we also tracked the performance of eight Kindle Daily Deal books over 29 days after their “deal day.”

Here is the typical pattern that the sales rank of a featured book will exhibit: A spike in sales on the day in promotion, followed by a decline over some days back to the “normal” level of sales for the book in question.

This analysis allows answering the key question from an author or publisher perspective: Does the uplift in sales volume thanks to the visibility and promotion provided by Amazon outweigh the decrease in revenue caused by the usually heavily discounted price?

The results are evident. In all cases observed for the Kindle Daily Deals, the uplift in units sold outweighs the percentage discount given to the buyers. In other words, the net effect of the promotion is positive. On the day of the promotion, the volume uplift for the featured books averaged 1,122%; additionally, the sales of the book were 209% higher than usual for some days after the promotion. This significant volume increase stands against an average price discount of 66% applied for only one day in the case of the Kindle Daily Deals.

Some share of positive effect stems from the fact that part of volume increase is sustained for approximately four to six days even after the day of the promotion, i.e., during a period where the price has already been set back to normal. The pattern is very similar for every book. Here is an extract from four books we looked at:

Additional considerations: Returns

Some authors report that they saw an increase in the number of returns. Customers can request refunds within seven days of their purchase. One author said she saw a lot of returns from people who had bought the book at its retail price just before the promotion. They then returned the original purchase to get the book at the discounted Kindle Daily Deal price. We have not empirical evidence that this is a significant factor to consider, but it is certainly worth mentioning.

Kindle Monthly Deals

The analysis for Kindle for the Kindle Monthly Deals is less clear, although we did not track the books’ performance after the promotion. It seems that the Kindle Monthly Deal has a lower impact, though the effect is sustained for a longer period (30 days instead of one day.) In total, there are approx. 600 to 800 books in the Kindle Monthly Deals any given point in time. This represents a much broader pool of promoted books compared to the four to six books only featured in a Kindle Daily Deal. The best, average and lowest sales ranks achieved by the Monthly Deal books are worse than those realized by the Dail Deal books.

Please see our video for the full analysis.

Happy publishing!