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KDP Pricing

Switch Blayde

When I published my novel way back in 2014, all I had to do was come up with a U.S. dollar price and Amazon did the rest. They converted it to the local currency and added the VAT for that store.

Those days are gone.

Does Amazon still convert the currency for each market? If no, how do I do that?

I know Amazon doesn't add the VAT any longer. How do I know what VAT to add for each store?

Replies:   Lumpy  Ernest Bywater
Lumpy

@Switch Blayde

it still does it. Bring up the suggested price thing, and they show you the graph. Once you select the price on the graph, it fills out all the other regions.

At least, it did that for me earlier today.

Replies:   Switch Blayde
Switch Blayde

@Lumpy

it still does it. Bring up the suggested price thing, and they show you the graph. Once you select the price on the graph, it fills out all the other regions.


The VAT too? I remember Amazon saying they won't be adding the VAT in anymore.

Ernest Bywater

@Switch Blayde

When I published my novel way back in 2014, all I had to do was come up with a U.S. dollar price and Amazon did the rest.


The above is how Lulu does it, but the last I heard about Amazon, they now have a calculation sheet where they show you the relevant figures for each area and suggest prices based on some figures you give them, and then you have to set the price for each of the relevant price zones you're giving approval to sell in. That was from an explanation by someone who uses Amazon, so I don't know how accurate it is.

Replies:   Switch Blayde
Switch Blayde
Updated:

@Ernest Bywater


the last I heard about Amazon, they now have a calculation sheet where they show you the relevant figures for each area and suggest prices based on some figures you give them


That would be great. So I'd choose a price in U.S. dollars for the U.S. market and instead of automatically calculating the conversion and VAT (where applicable) and automatically price it at that, they show it to me.

Replies:   Ernest Bywater
Ernest Bywater

@Switch Blayde

That would be great. So I'd choose a price in U.S. dollars for the U.S. market and instead of automatically calculating the conversion and VAT (where applicable) and automatically price it at that, they show it to me.


That's how I took it to be, from the description given. However, 2 downside were:

1. You had to go to another screen to enter each individual retail price for each country, and

2. It never adjusted the price due to exchange variations or VAT changes, so if the exchange rate changed the price stayed the same and you got less or more depending on the change, and if the tax went up it came out of your cut. Thus you needed to watch those things and keep adjusting the price.

...............................

That's what I like about Lulu - I give it the US retail price and they adjust the price for other countries for me, and they make the adjustments as per the day the customer is looking at the book or buying it. I know this because I often check my page without logging in and then see the current prices in AUD instead of USD. It's a nice 'set and forget' arrangement.

Replies:   Crumbly Writer
Crumbly Writer

@Ernest Bywater

Sorry, but Ernest is wrong (in regards to Amazon's practices). Amazon does not account for the VAT. However, it does convert the price for you. It also shows your 'profit' once the VAT is taken into account (so you can base your price based on the VAT).

A bigger dilemma, however, is that if you believe all the supposed research supporting $.99 pricing (that readers buy more when you drop the price by a penny), then having Amazon adjust the price for you automatically would hurt, rather than help your sales.

Instead, I periodically reevaluate my prices, adjusting each price so it conforms to Amazon's own $.99 pricing strategy (accounting for the difference in VAT). Thus I'll see the dollar amount that Amazon recommends, adjust it for VAT and then jack it up (or down) to the next $.99 adjustment.

In other words, there's a LOT more thought involved that just 'Amazon handles it all for you'. You need to consider whether random prices (7.32 Euros) are best for you, adjust for VAT (possibly taking a hit on European sales, and then figure out what price point you think will sell the most books.

On the other hand, most users prefer letting Amazon handle everything, especially since you need to adjust ALL your prices every time any single currency changes, which is an onerous hurdle for the average author to keep track of.

One process requires a LOT of thought, and continual price adjustments, the other might impact sales and lower your income slightly, but is MUCH easier to manage.

Replies:   Switch Blayde
Switch Blayde

@Crumbly Writer

Amazon does not account for the VAT.


That's what I remember. Where do I find the VATs for the various countries?

Replies:   Crumbly Writer
Crumbly Writer

@Switch Blayde

Where do I find the VATs for the various countries?

Had to dig through several pages to find it.

Under "Edit eBook pricing" you select "All territories (worldwide rights)". Once that's selected, you NOW have to click on "Other Marketplaces" (under the Amazon.com site's prices) to see the full listing.

There you'll see (using one of my book's pricing details as an example):

Amazon.com $5.99 USD

Amazon.co.uk 4.99 GBP (4.15GBP without UK Vat)

The above is new, as it used to list what the price was "with Vat adjusted". Thus, it no longer lists the effect of the VAT, now leaving authors to guess at what the actual VAT is! :( Grrr!

However, I'm guessing (based on the phrasing) that in the above case, 4.99 GBP includes the VAT, so the VAT is actually the difference between the adjusted price and the 'without' price (i.e. 4.99 - 4.15 = .84GBP).

Consistency has never been Amazon's strong suit!

Also, because conversion rates vary, if you prefer consistent pricing strategies (i.e. $.99 or $.00 increments), you'll need to periodically hit "Base this price on Amazon.com", which recalculates the conversion. Again, it's easiest for authors to let Amazon violate their own $.99 pricing requirements.

Replies:   madnige  Switch Blayde
madnige
Updated:

@Crumbly Writer


Amazon.co.uk 4.99 GBP (4.15GBP without UK Vat)


...and to confuse matters, in the UK there is no VAT on print books, but there is on digitally delivered content (ebooks)

https://www.gov.uk/government/publications/vat-notice-70110-zero-rating-of-books-and-other-forms-of-printed-matter/vat-notice-70110-zero-rating-of-books-and-other-forms-of-printed-matter

Switch Blayde
Updated:

@Crumbly Writer


There you'll see (using one of my book's pricing details as an example):

Amazon.com $5.99 USD

Amazon.co.uk 4.99 GBP (4.15GBP without UK Vat)


I'm confused. Is what I quoted from your post what I'd see if I chose $5.99 for the U.S. market? Does Amazon show me the 4.99 GBP, the 4.15, or both? And if it shows the 4.99 GBP, is that what it sets the price as in the U.K. market?

Maybe when I'm ready to go to the pricing screens it will make more sense, but right now I'm confused.

Replies:   Crumbly Writer
Crumbly Writer

@Switch Blayde

I'm confused. Is what I quoted from your post what I'd see if I chose $5.99 for the U.S. market? Does Amazon show me the 4.99 GBP, the 4.15, or both? And if it shows the 4.99 GBP, is that what it sets the price as in the U.K. market?

Sorry. The 4.99 GBP price was my adjustment of Amazon's adjusted price to hit the magic .99 number. However, the 4.15 is what MY price would be once the British VAT is taken out, based on my 4.99 figure (which doesn't relate to what the final price I'll receive).

Replies:   Switch Blayde
Switch Blayde

@Crumbly Writer

However, the 4.15 is what MY price would be once the British VAT is taken out,


But where did you find the British VAT? And the French one, and the German one, and the...?

Replies:   Crumbly Writer
Switch Blayde
Updated:

I got my answer.

"When you enter list prices, you see the VAT rate for the primary country in each Kindle store" found on https://kdp.amazon.com/en_US/help/topic/A30464Q6OVH578

which I got to from https://kdp.amazon.com/en_US/help/topic/A2MLJ06E7JKXLN

Replies:   Crumbly Writer
Switch Blayde
Updated:

I didn't get my answer after all. As I read further, I found an example:


If you set your EU list prices to automatically calculate from your U.S. list price, your list prices for EU Kindle stores will automatically include VAT. For example, if you set a suggested U.S. list price of $10.00, we convert that price to Euros for the German marketplace. If the exchange rate is 0.8 that day, the Amazon.de list price including VAT will be €8.00. For a sale to a German customer, we would deduct 19% VAT and calculate royalty on a VAT-exclusive list price of €6.72.


This part — "If you set your EU list prices to automatically calculate from your U.S. list price, your list prices for EU Kindle stores will automatically include VAT." — makes it sound like they will do the currency conversion and then add the VAT (which is the way it was when I published in 2014).

But this part — "we would deduct 19% VAT and calculate royalty on a VAT-exclusive list price of €6.72." — says it didn't add the VAT to the price so if you don't you end up paying the VAT.

So I will still need to know the VAT for each country to add that to the price in that country's currency. And to make matters worse, it says the EU uses the VAT rate for the buyer's country, not where he bought it from. That's impossible to take into account.

And then there's Italy which says: "*Italy note: Due to country-specific legislation in Italy, a lower VAT rate of 4% will apply to eBooks with ISBNs purchased on the amazon.it Kindle store by customers in Italy. A higher VAT rate of 22% will apply to eBooks without ISBNs. KDP doesn't require ISBNs for eBooks, but having an ISBN will ensure a lower VAT rate for sales of your eBook to customers in Italy." Can you believe that? But I've never had a sale in Italy so who cares?

Crumbly Writer

@Switch Blayde

But where did you find the British VAT? And the French one, and the German one, and the...?

I tried explaining that, but apparently failed. The price Amazon lists is the VAT included price. The other price they list is the difference between the VAT and the 'non-VAT' price. So in my case, if the Amazon price is set at 4.99 and the non-VAT price is 4.15, then the VAT tax on the product is .84. Doing a manual calculation, the VAT is 5%.

Amazon used to report is better, but they keep revising things to make them less clear. I swear, they must use IKEA translators to write their websites.

@Switch

... says it didn't add the VAT to the price so if you don't you end up paying the VAT.

Sorry, but that's not possible. According to the law, Amazon is required to collect the tax, not the individual author. Instead, the VAT is the difference between YOUR price and the "without VAT" price, converted into a percentage.

Replies:   Switch Blayde
Crumbly Writer

@Switch Blayde

"When you enter list prices, you see the VAT rate for the primary country in each Kindle store" found on https://kdp.amazon.com/en_US/help/topic/A30464Q6OVH578

The website you checked is dated. That's how they did it a month or two ago, but they no longer do it that way (listing the VATs).

Oops! Rereading that page, it apparently does the conversion on ANY price you use, but reports both the VAT included and VAT excluded tax. The Amazon 'suggested price' is your price with the conversion and the VAT added. If you enter your own price, like I do, I'm essentially screwing up the VAT.

Replies:   Switch Blayde
Switch Blayde

@Crumbly Writer

According to the law, Amazon is required to collect the tax, not the individual author.


I didn't mean the VAT wouldn't be collected. I meant if I don't bump the price of my novel up by the amount of the VAT, I would end up paying it (since Amazon will collect it from my list price).

Switch Blayde
Updated:

@Crumbly Writer


The Amazon 'suggested price' is your price with the conversion and the VAT added.


It was that way in 2014, but changed 1/1/15. The example I posted above from their website indicates the price listed (after they do the currency conversion) is the price with the VAT. But they didn't add the VAT to it, so unless you do you end up paying the VAT not the buyer (because it's not figured into the price but Amazon collects it).

This is the example from above (from their website):


If you set your EU list prices to automatically calculate from your U.S. list price, your list prices for EU Kindle stores will automatically include VAT. For example, if you set a suggested U.S. list price of $10.00, we convert that price to Euros for the German marketplace. If the exchange rate is 0.8 that day, the Amazon.de list price including VAT will be €8.00. For a sale to a German customer, we would deduct 19% VAT and calculate royalty on a VAT-exclusive list price of €6.72.


It says they convert the currency for you AND that price includes VAT, BUT the VAT is not added into the price so when they pay your royalty they first deduct the VAT. In the example, that was 19%.

So as to not pay the VAT myself, I would have to take their converted price AND add 19% to it for Germany. Some other amount for Italy and another amount for France. How would I know Germany's VAT is 19% if it wasn't in this example?

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