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Kindle Publishers, I need your advice on this.

by hecadothhuang
23 replies
I've recently started out with the kindle publishing business, currently have 1 book on amazon with the correct niche and keyword but I'm hesitant to move forward due to the tax withholding rate of 30% (Singapore has no treaty with the US) and to top that off Amazon charges 30% for the 70% royalty payments, so I'm losing a total of 60% of my payments..Do you think it is profitable in the long term? or should I find other ways of making passive income? For every $3000 I make, I lose a total of $1800 to amazon, so I only get roughly $1200 back.

I'm looking for your advice on this, greatly appreciate it.
#advice #kindle #publishers
  • Profile picture of the author Jeff Burritt
    Banned
    Is it worth doing? Well it depends. Are you getting any sales of your Kindle book? Guess it depends upon that. And if so, do you have other book ideas ready? How much work would it take you to do the other books? Really depends on your answers to these questions.
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  • Profile picture of the author TomAndrews
    I'm currently writing my first book (on email marketing) which I will publish on Kindle.

    However, I'm primarily using it as a way of growing my email list.

    The money I make from it will be a nice added-bonus.

    But like I say, I see it as a means to an end.

    I suggest you do the same, my friend.

    Tom
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  • Profile picture of the author trobo
    You didn't mention if you have a site to go along with your ebook.

    If not, that's what I would recommend. Start a blog with valuable and helpful content built around your niche. Write the articles yourself or hire quality freelancers. A good resource to check out would be smartblogger.com by Jon Morrow.

    Put a link at the end of your Kindle book that gets them onto a mailing list where you can offer upsell products and other valuable, targeted info they would like. The possibilities are almost endless from there.

    Also, put a link to your blog on every page of the ebook.

    These things will make your book more of a "front end" effort and hopefully reduce much of the losses you talk about in your post.
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  • Profile picture of the author rehema
    right now it might be very difficult but as you go along you will see the results
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  • Profile picture of the author DABK
    You're not losing 60% of your payments, you're losing 60% of the price YOU put on that product. Put a price that's 60% higher than you want your payments to be. Or sell 60% more copies.

    Or, yes, pick another arena to compete in. But don't count as your payments what belongs to whoever else gets a cut in that arena!

    PS Depending on how much you have to spend to get a sale, this may be very profitable, so-so, not too profitable, not profitable at all.



    Originally Posted by hecadothhuang View Post

    I've recently started out with the kindle publishing business, currently have 1 book on amazon with the correct niche and keyword but I'm hesitant to move forward due to the tax withholding rate of 30% (Singapore has no treaty with the US) and to top that off Amazon charges 30% for the 70% royalty payments, so I'm losing a total of 60% of my payments..Do you think it is profitable in the long term? or should I find other ways of making passive income? For every $3000 I make, I lose a total of $1800 to amazon, so I only get roughly $1200 back.

    I'm looking for your advice on this, greatly appreciate it.
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  • Profile picture of the author Spikeymonster
    If you are making a profit from the book I think it would be worth the hefty fees. When I first read your post I could only think of where Jim Rohn talked in one of his lectures about the goose that laid the golden egg. Just consider the fees as feeding the goose.
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  • Profile picture of the author Shadowrun28
    Originally Posted by hecadothhuang View Post

    For every $3000 I make, I lose a total of $1800 to amazon, so I only get roughly $1200 back.
    Stop whining about what you lose and focus on what you get: Without Amazon you wouldn't be able to make this $1.2k. Focus on the things on which you have an impact (more profitable niches and keywords, better quality, higher prices, more books, better marketing, outsourcing, social media etc.)
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  • Profile picture of the author agmccall
    what exactly does Amazon charge 30% for, I was just on my account and looking around and could not see anything they would charge 30% for

    al
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    • Profile picture of the author DABK
      OP's talking about the percentage amazon keeps from the sale of ebooks. Authors get 70% royalty fees from each sale if certain parameters are met; otherwise it's less (35%, if memory serves).


      Originally Posted by agmccall View Post

      what exactly does Amazon charge 30% for, I was just on my account and looking around and could not see anything they would charge 30% for

      al
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    • Profile picture of the author Mark Singletary
      Originally Posted by agmccall View Post

      what exactly does Amazon charge 30% for, I was just on my account and looking around and could not see anything they would charge 30% for
      Amazon is required by the IRS to withhold 30% of the royalties it pays to non-US citizens. https://kdp.amazon.com/help?topicId=A1CTSIBPDAAJ0M

      Those people from countries with a tax treaty with the US can get a lesser amount withheld.

      I'm not sure what happens to the 30% of the money withheld for those from countries without a tax treaty.

      Mark
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  • Profile picture of the author Revitup
    I started publishing public domain works on kindle in 2010. It took me a year to build a catalog of books and for a couple of years I earned several K per month. But since then they removed about half my catelog and changed some rules so I don't make much anymore, less than a hundred per month. But I have earned a residual income from Amazon since 2010. But you are trying to sell a book you wrote. It's difficult unless you are famous or infamous. But don't even think twice about the royalties. Most authors only got 15% until Amazon came along. You will earn twice that. Best wishes
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    • Profile picture of the author Shadowrun28
      Originally Posted by Revitup View Post

      It took me a year to build a catalog of books and for a couple of years I earned several K per month. But I have earned a residual income from Amazon since 2010.
      Almost the same happened to me. I've published a lot of unique short novellas since 2014 (when Amazon introduced KU). But since autumn 2015 (when they changed the KU system) my income dropped down by 50%. But it's okay because a) I'm stilI making several K per month with Kindle b) I've earned more than enough within one year c) Because of this incident I found another business opportunity outside of Amazon that's more profitable than Kindle.
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      • Profile picture of the author princetotem
        Originally Posted by Shadowrun28 View Post

        Almost the same happened to me. I've published a lot of unique short novellas since 2014 (when Amazon introduced KU). But since autumn 2015 (when they changed the KU system) my income dropped down by 50%. But it's okay because a) I'm stilI making several K per month with Kindle b) I've earned more than enough within one year c) Because of this incident I found another business opportunity outside of Amazon that's more profitable than Kindle.
        May I ask what your main promotional channels are online?
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        • Profile picture of the author Shadowrun28
          Originally Posted by princetotem View Post

          May I ask what your main promotional channels are online?
          For my Kindle eBooks? Nothing at all. Unfortunately my fiction books are dead (about 10,000 pages read per day but almost no sales since KU 2.0). But I had also published non fiction books in very specific niches in the past. Those niches are popular right now and because I was one of the first, I'm currently making good money. So most of my Kindle income comes from my 40-50 non fiction books. Between $8-10k/m (paperbacks included).
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  • Profile picture of the author bestIMtools
    If you're still making a profit, why not? Try it! You still have many roadblocks to overcome even after you publish your book. You're just at the beginning stages. Just go for it and adjust as you go.
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  • Profile picture of the author lermontov
    You have to apply for an employer identification number (EIN) with the IRS. Google it and you will find the info. This is what foreign authors do. Letting them take 30% is crazy.
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    • Profile picture of the author hecadothhuang
      Originally Posted by lermontov View Post

      You have to apply for an employer identification number (EIN) with the IRS. Google it and you will find the info. This is what foreign authors do. Letting them take 30% is crazy.
      This only applies to foreign countries with tax-treaties with the US, countries which are not included will still have 30% after applying the EIN.
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  • Profile picture of the author Marketing Fool
    Open a Limited Liability Company (LLC) in America, have your Amazon account be owned by that LLC and your royalties flow directly into it.. Hence, no more withholding. Once the money is in your LLC bank account, you can dispense it however you like.
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    • Profile picture of the author hecadothhuang
      Originally Posted by Marketing Fool View Post

      Open a Limited Liability Company (LLC) in America, have your Amazon account be owned by that LLC and your royalties flow directly into it.. Hence, no more withholding. Once the money is in your LLC bank account, you can dispense it however you like.
      Yes I've heard of that before when I was looking for ways to get rid of it.

      How exactly do you open a LLC in America ? Do you physically have to be there? Cost involved?
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      • Profile picture of the author Marketing Fool
        Originally Posted by hecadothhuang View Post

        Yes I've heard of that before when I was looking for ways to get rid of it.

        How exactly do you open a LLC in America ? Do you physically have to be there? Cost involved?
        You don't have to be there physically, ever.

        Each state in America has different rules to start an LLC. New Mexico, for example, has very simple rules. You fill out a two page form, mail it in with a (I think) $50 fee. That's about it. You also need to pay someone to be the "registered agent" for the company (to accept mail on it's behalf). You can usually hire a registered agent for around $100 a year.

        That's about it. I don't think New Mexico taxes LLC's for income earned outside of New Mexico. You'd want to talk to an accountant to be sure of your exact tax liabilities though...

        The LLC then gets an EIN number (form SS-4) with the IRS in its name (not your name).

        Google how to form an LLC in new mexico and do some research...
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  • Profile picture of the author kazimuhith
    Kindle Publishing is as close to passive income as it gets. So it is absolutely worth it.

    Be sure to post the same books on createspace for hard copy versions. That will double your profit.
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  • Profile picture of the author onlinelawyer
    Be careful - I don't recommend that foreigners form LLC's in the states. If you do, you will need to file a tax return declaring all your income from all sources (including any income you are earning from a job in your country) on your tax return.

    I typically recommend that foreigners that don't live in the US file as a C-corporation. Here's an article explaining the rationale...

    What is the best corporate entity for a foreigner in the US?

    I do agree with what others have said, however. If you don't want the money withheld, you need to have some sort of legal entity in the states.

    Good luck!
    Jim

    PS - I'm an attorney, FYI. But this isn't legal advice...
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  • Profile picture of the author MValmont
    As others have said there are ways for you not to pay that 30%.

    Also, I don't know any other methods other than Kindle that can produce passive income as fast. I really don't and I've tried pretty much everything.
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