Important Warning for Smashwords Authors

If you are using Smashwords to distribute your ebooks to online retailers, go there right now and OPT OUT of having your books distributed to Kobo.

Today Kobo, without my prior knowledge or consent, has slashed the prices on a bunch of my ebooks from $2.99 to as low 99 cents….and Amazon has followed suit. This is going to cost me thousands of dollars in lost royalties this month if I don't resolve this situation fast.

I don't know how long it takes for Kobo to remove books after an author has opted-out of distributing to them through Smashwords, so I have contacted Mark Coker, owner of Smashwords, to see what he can do before I lose a lot of money.

In the mean time, get your books off of Kobo now before they do the same thing to you…if they haven't already.

I am furious about this. It's as if they've hacked into my checking account and started making unauthorized withdrawals. I am assuming there is some language buried somewhere in the Smashwords agreement that allows Kobo to charge whatever the hell they want for my books. The problem is, Amazon matches the lowest price out there…and adjusts your royalty accordingly.

So now on Amazon, instead of making $2.06 each sale of  THE WALK, I am making 70 cents. And instead of making $2.06 a sale on THREE WAYS TO DIE, I am making 35 cents. This is a major blow for me, since those two books are my bestsellers…

I really hope I can get my books off of Kobo quickly…and then convince Amazon to restore my original prices immediately thereafter.

UPDATE: 4/12/11, 8:37 pm: I got an email from Mark Coker, who tells me this is a big technical glitch at Kobo and that they are working on fixing the problem.  He hopes to have it resolved by Thursday. Even if they do, I don't know how long it will take Amazon to restore the original pricing…and I still will have lost money in the interim. I doubt I'll be posting my books on Kobo again…my pitiful sales on their platform are not worth the risk of future accidental or intentional price cuts.  

UPDATE 4/14/2011 – My books are off of Kobo and, from what I am hearing from other authors, the prices have been restored. I appreciate Kobo and Smashwords resolving this problem quickly…but I won't be back on Kobo any time soon. Now I've got to get Amazon to jack my prices back up to where they were before….

22 thoughts on “Important Warning for Smashwords Authors”

  1. Thanks so much for this post. It looks like this has been going on for weeks now to various authors. I found a discussion in the Amazon KDP forum of someone seeing the pattern back on March 29th. Here’s the link:
    Looks like this has gone on before. Here’s a discussion on the Kindle boards about Kobo from last September:

  2. As I understand it, Amazon reserves the right to mark down any title that is selling for the same price elsewhere. Thus, if you have a title selling for $2.99 at BN, Amazon’s fine print allows them to drop the Amazon price any time they choose. My e-book preparer put me onto it, and I keep my BN prices higher than the Kindle prices.

  3. The same thing happened to me yesterday with the best-selling of my books. Mark was apologetic, and is trying to resolve the problem. I’m going to give it a couple of days before I opt out, but I’m definitely keeping an eye on Kobo.

  4. I think the people at Kobo didn’t think that through very well. It’s not like a normal re-seller discount where the book publisher (you, via Smashwords) isn’t affected by the seller’s discount. I kind of wonder if that’s even legal.
    Good luck with this issue!

  5. That’s very, very strange. On December 1, Smashwords announced via its blog that it had instituted agency pricing for its authors and that all retailers had to use the price specified by Smashwords authors. I look forward to hearing what Mark Coker has to say. Do let us know.

  6. Mark just updated Smashwords site w/ the following info:
    April 12, 2011 – Bugs of a different variety. Kobo has experienced a glitch that in the last two days that has caused an automatic repricing of some number of Smashwords titles. We don’t know how many are affected yet, but I’ve personally confirmed about 20 books affected in the last two days. I have noticed an initial pattern that in some cases, the prices reverted back to a previous list price, so it might only be affecting authors who raised their prices after first landing at Kobo. Kobo is aware of the problem, and they’ve escalated it to the highest priority. If you discover your books are affected, click the comments/questions link and send us a direct hyperlink to your book at Kobo, along with a notation of the proper price, and we’ll forward the information to Kobo in case they’re not aware of it already. Whatever you do, DO NOT opt out. I expect this to be resolved shortly because Kobo doesn’t want this error taking place any more than we do.

  7. I call foul.
    It’s a LOT more than 20 books. Hell, I have five of them myself. And I have heard from dozens of other authors who have had their prices slashed.
    Mark is understating the problem.

  8. From Mark Coker, to the Kindleboards:
    Hi Everyone,
    Amazon is having a wet dream over this.
    Kobo is very aware of this problem. I urge everyone here NOT to opt out of Kobo unless you want to compromise your long term potential as a author. Kobo has been growing quickly, as have our other retail partners, and it would simply be dumb for anyone to abandon them over such a glitch.
    I understand this is causing some authors some serious short term pain, so I don’t blame Lee or anyone else for being angry. Kobo has already responded to this problem.
    We first notified them of it yesterday and by today they confirmed and identified the problem and escalated it. Some of the authors affected have already had their prices adjusted to normal. I can assure everyone this was an honest error Kobo made with the noblest of intentions. Ironically, the error was introduced while they were updating their software to improve the reliability of their pricing systems. As anyone who’s ever worked with software can appreciate, one change in one line of the code in one place and it can have unintended consequences elsewhere.
    Someone on the thread made a comment about Amazon’s predatory price matching practices. I would agree. Amazon knows that these titles are distributed by Smashwords, and they know what the true correct price is because they’re spidering the web site where the author-set price is always displayed.
    This means Amazon has the data to realize that the price change at Kobo was not the author’s fault.
    Yet Amazon punishes the author.
    Last year, I even offered to share our price list with Amazon so they could use it to satisfy their price parity needs, as opposed to punishing authors for glitches that can occur between us and the retailer.
    Amazon knows that each time they give their best-selling authors a firm spanking, that author is reminded how important Amazon is to their daily bread, and it makes that author leery to explore other opportunities. On this thread alone, there are multiple authors who are afraid to work with Smashwords or Kobo over such concerns, and some might find this new incident with Kobo as validation for their caution. Such a conclusion would be erroneous and self-limiting, because this event will be over within a couple days and the pricing systems at Kobo will be all the stronger for it.
    No Smashwords retailers are allowed to discount. We negotiated agency agreements will all our retailers last year, and by December 1 all our retailers agreed to give our authors the power to set their own price. Kobo was actually the first to agree to this. They moved us to agency in November.
    If Amazon had compassion for authors, they would do you the courtesy of shooting you an automated warning email, and give you a 24 – 48 hour grace period to correct the problem. They could do that with one day of coding (I know they have the talent to do it because last year they hired the former Smashwords CTO who coded the original Smashwords platform three years ago. He’s a smart guy!). If our retail partners had 24 hours notice, they could all make such price corrections. Amazon has the ability to do the right thing and give you fair warning. Will they?
    Instead, to date at least, Amazon sits behind their rules, and reminds authors that the authors agreed to these rules in exchange for 70%. And Amazon’s right. They have every right to do this. Yet it doesn’t mean what they’re doing is right. I wouldn’t treat my authors this way. I encourage our authors to maintain price parity, but I don’t mandate it and would never punish them for it.
    Amazon understand that each time you opt out of another retailer, or each time you decide not to expand your distribution opportunities, it makes you more dependent upon Amazon and it harms the other retailer. It’s a double win for Amazon.
    It pains me every time I see an author hurt themselves by opting out of a great retailer like Kobo. Amazon’s market share is dropping thanks to the great progress of Kobo, B&N, Apple, Sony and others. We specialize in serving these non-Amazon retailers. We hope to one day serve Amazon too.
    I would encourage all authors here to make a commitment to make themselves less dependent on Amazon. It’s in every author’s best interest to support and encourage a thriving and competitive ecosystem of ebook retailers. Indie authors have this power to make a difference today, starting with your marketing. If you’re promoting your books here on Kindleboards, or on your website, blog or social networks, add links to all your retail outlets, not just Amazon. Give your customers a choice.
    Last year, people were talking about Amazon’s 75+% market share. More recent accounts show that market share declining closer to 50%, and dropping. According to the Crains NY story, it was a possible reason Amanda Hocking refused to sell out to Amazon (, because Amazon wanted an ebook exclusive and Hocking and her agent probably realized Amazon’s not the only game in town any more.
    This isn’t the last time you’ll see a Smashwords retailer (or Smashwords for that matter) make a mistake. Remember these are only bumps to a higher road. I know all our retailers have made improvements over the last 18 months to improve the speed and accuracy of their ingestions from Smashwords. Overall, things have been working great for a long time now, and they’ll only get better in the future.
    Thanks, all.

  9. My reply to Mark:
    I appreciate your efforts, your good intentions, and your fast response…
    That said, I won’t be opting in with Kobo until I am convinced that they are worth the financial risk. And right now, they aren’t. Even if they resolve their problems by Thursday, there’s no telling how long it will take Amazon to restore my original pricing. I will have lost a week of sales at my 70% royalty.
    You’re right, I make most of my ebook income from Amazon….far, far more than I am earning from all the other ebook platforms combined (from Amazon alone, I am on track to earn $80,000 this year on just my out-of-print backlist). That gives Amazon incredible influence over my ebook publishing decisions. So when Kobo makes a big mistake like this, it does more than shake my confidence in them…it costs me financially. In fact, it wouldn’t surprise me if I have already lost more in Amazon sales in three days than I’ve earned from Kobo to date.
    This experience also forced me to look at Kobo for the first time…and I was shocked by how far behind they are in terms of updating my listings. They are still using cover art and titles that I changed on Smashwords over a year ago. So either there is a glitch at Kobo or at Smashwords…or in the communications between the two of you. Either way, it doesn’t instill a lot of confidence in Kobo in me…or in Smashwords, to be honest. Right now, there is no upside for me in doing business with Kobo…and a costly downside. I’ll be back when, and if, they get their act together.
    I am all for exploring other platforms for my ebooks….but until those other platforms can prove their reliability, and demonstrate the potential to earn me the money that Amazon does, I’ll be favoring Amazon over all the others.

  10. What do you mean by this comment, “I call foul.” Are you trying to say I’m soft peddaling the truth as I know it? If that’s the case, you’re mistaken. I reported the facts as they stood, as our authors reported them to me, and I was very clear to point out that I don’t know the true extent of this. If someone wants to vent on Twitter or a message board, it’s an extremely inefficient method of communicating with us when we make ourselves so accessible. Every Smashwords member has my email, and the “comments/questions/support” link at the top of every page is copied direct to me. If people don’t contact us, we don’t know. When you contacted us, we alerted Kobo, and as a result your issue will be resolved.

  11. Mark,
    And that is much appreciated and I owe you a sincere apology for implying you were under-stating the problem as you knew it. That is clearly not the case. I appreciate your fast response to customer concerns…and to mine personally. I’m sorry — my anger over this should be directed at Kobo, not at you.

  12. Oiy, where to start.
    Konrath says Marketing Opportunity; going out of his way to lower a book to .99 on purpose – climb the Kindle ranks, then raise it back to 2.99…
    It looks like you are in this for the long term, so why are you so overly concerned that today, some of your readers got a thrill, just maybe you’ll get more readers in the end…, which is the point, isn’t it?
    Do you yell at reviewers for a bad review too…?
    -SL Clark

  13. Hi Lee,
    I can assure you that this was not done intentionally by Kobo and has been top priority since Mark brought the issue to our attention last night.
    We’ve updated your prices manually this morning, and we’ll have more news for you – and all Smashwords authors – shortly.
    Ashleigh @ Kobo

  14. Ashleigh,
    Thanks for stopping by. I appreciate it.
    It’s almost midnight now. I just checked my books on Kobo…and the discounted prices are still there.
    Please remove my Smashwords titles from Kobo immediately. If you need a list of those titles, I will be glad to supply them to you.

  15. Hi Lee – below was what was posted on KindleBoards:
    Thank you for your comments and patience with us as we worked to correct an issue that caused discrepancies with some of your prices. As of today this issue has been corrected, and you will see appropriate prices reflected on the site.
    Earlier this week, Lee Goldberg and others noticed that their titles were listed at the wrong price on Kobo. After investigating on our end, it was discovered that an older pricing file was used in an update that attached incorrect pricing to some Smashwords titles. These titles weren’t being discounted from the original prices – but out of date pricing was applied to these titles. (The older file lowered some prices and raised some others.) This was not a deliberate action to discount and beat Amazon’s list prices; we are fully aware of the issues that this can cause to authors and work hard to avoid it. Instead it was an honest technical mistake, one that we’ve taken very seriously to correct and ensure doesn’t happen again.
    Correct pricing is something very important to us at Kobo, and I would like to assure that this problem was an issue at the highest levels of our team until it was corrected. I’d love to be able to promise that we’ll never have another error, but unfortunately that isn’t realistic for any website. Issues with code can and do happen at all websites, regardless of how extensive the QA and deployment process is. What I can promise is that we will continue to work to correct any errors as quickly as possible.
    We understand that in addition to hurting your trust with Kobo, some of you have expressed disappointment with Smashwords. I can assure you that Mark and Bill take every request seriously – and are quick to respond and escalate any issues direct to Kobo. Once Mark was notified he immediately began working with us to correct the issue. Now that the issue is corrected, we’re looking at how we can improve our processes even further to give you more control of your distribution and pricing.
    We’d hate to see any of you opt out of distribution through Smashwords. Today, Kobo has over 3 million users, and customers in over 100 countries worldwide. In addition to our global store, we offer locally merchandised stores in US, Canada, UK, Australia, New Zealand, and Hong Kong – with an announcement this week to launch local stores in Germany and Spain this May. We’re dedicated to providing authors and publishers greater distribution in more places and on more devices than ever before. We’d love your books to be part of that. We’re excited to have you with us as we grow, and we truly apologize for any issues caused to our authors with their other retail partners.
    If anyone has any questions or concerns, I’d love to talk further at
    Ashleigh Gardner
    Kobo | Content Manager

  16. The system Smashwords is using has a lot of glitches and it always has. I never opted in on having Shadowfire Press titles up at Kobo and when I contacted them (Smashwords), they said they hadn’t sent our books to Kobo. I contacted Kobo and guess what? They said the books were from Smashwords. I doubt I ever received all the payments my authors were owed from sales at Kobo, and I know we haven’t received the last money owed us after I took all the books down. (The account still shows an outstanding balance owed which I doubt will ever be paid to us.)
    I pulled all my company’s titles from Smashwords after this, and several other problems with distribution. While this method may work all right for self-publishers, it’s crap in a hat for publishing companies.


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