When Amazon first rolled out its author payment system for Kindle Unlimited, I was ecstatic. Kindle Unlimited lets readers borrow books for free, sort of like a digital library. As an author, any book I had signed up through Kindle Select (a special program for self-publishers) would automatically be made available for borrows through Kindle Unlimited. True, I would not be receiving any sales profit from people who read my books via KU, but that was alright because Amazon was paying me for each borrow instead—and what they were paying per book was actually more than the royalties I would have received from a sale.

At least, it was. I’ve been tracking all my sales data ever since 2012, and I’ve noticed a definite trend. KU sales are going up (to the point where they outnumber my “real” sales by a factor of six) whereas Amazon’s payments for borrows are going down . . . way down.

$ Per Unit 2014

If your book is priced really low, this probably won’t affect you, but for authors with books $2.99 or more, the impact from this is huge. Essentially, we’re losing at least half of our royalty payment for each borrow (the amount we lose increases dramatically as our book’s non-KU price increases), and because KU borrows are beginning to outnumber non-KU sales, an author can’t just leave the Kindle Select program without losing all those sales (even if they wanted to leave, they would still to finish out their 90-day exclusive membership term).

Wouldn’t readers just buy books instead of borrowing them if a book wasn’t made available through KU? Not necessarily. Many KU borrows are “impulse purchases,” and a reader is much less likely to impulsively buy a book they have to pay for than one they can get for free through KU. As a result, an author leaving Kindle Select would have to let go of their KU sales while receiving only a marginal increase in paid sales in return.

So congratulations, Amazon, you’ve figured it out. Authors cannot leave your program without losing the KU income that makes up most of our royalties, and you’re getting away with paying us far less for each borrow than you would for a corresponding sale.

Authors, if you are as frustrated with this as I am, let me know! If you have a different experience, tell me that as well. I’d love to hear any suggestions you might have as to what other writers should do!