International markets can be an effective source for finding new readers. When you submit your book for a BookBub Featured Deal, you can choose to run a price promotion to all of our international editions, which include the UK, Canada, and Australia. This will help you find new readers, gain worldwide momentum, and diversify your revenue streams.
However, we know that discounting internationally can be really tricky. One mistake can have an outsize impact on the success of a price promotion or a BookBub feature. This post will help you avoid the four most common mistakes authors make when discounting internationally so you can ensure your next international price promotion runs smoothly.
1. Forgetting to take VAT into account
When discounting in the UK, the biggest snag for most authors comes in the form of Value Added Tax (VAT). This tax on consumer spending is a Europe-specific concern, and it’s handled differently at each retailer. This can make discounting difficult if you’re trying to reach readers in the UK.
- Amazon automatically includes VAT in your deal price. They will also automatically deduct applicable VAT when calculating royalties, and will adjust your listing price based on current conversion rates. For example, to display a £0.99 deal price to Amazon readers, you should enter £0.99 on your Amazon dashboard. Your royalties will then be based on £0.82 of the sale price because Amazon will automatically factor the VAT into the deal price you set.
- Other retailers like Apple iBooks, Google Play, and Kobo automatically include VAT. Like Amazon, this means if you want to display a deal price of £0.99, then you should enter £0.99 on the retailer dashboard. Some of these retailers make it optional to include VAT automatically, so double-check your account settings and final price to make sure everything looks right. These retailers will also deduct VAT from your sales before calculating your royalty payment.
- Ebook distribution tools like Smashwords and Draft2Digital both automatically include VAT when setting up discounts worldwide at each retailer.
Not accommodating for VAT on certain retailers means that your book could be priced higher than you intended for your promotion. If you’re running a BookBub Featured Deal, this means your book won’t be included in the daily deals email on the retailers where the price is higher. Since we want you to be able to reach the biggest audience possible, we recommend checking your book’s product pages on each of the retailers a couple days before your feature to make sure your ebook has been discounted to the correct price point, VAT included!
2. Trying to run Countdown Deals in Canada and Australia
One reason many Amazon-exclusive authors choose to run Countdown Deals is to maintain a 70% royalty rate on discounted ebook sales. But Amazon does not offer Countdown Deals in any regions other than the US and UK. This restriction can cause authors who include all regions in their BookBub promotions to unwittingly lower their royalty rate not just in Canada and Australia, but also in the UK and US. This leaves you with two options:
Option #1: Discount in all foreign regions. If you’d like to include all international regions in your promotion, you’ll need to accept a 35% royalty rate across all regions on Amazon. This means you’ll sacrifice the higher royalty rates you’d get with a Countdown Deal, but you’ll be reaching readers in more than two markets. This is what we recommend if your goal is to increase readership across foreign regions.
Option #2: Run a Countdown Deal in the US and UK only. If you’d prefer to maintain the 70% royalty rate, you should set up your Countdown Deal as you normally would in the US and/or the UK but leave your book at its normal price in all other regions. If you’re planning to run a Countdown Deal for a BookBub Featured Deal, you should only include the US and UK in your BookBub submission. This way, you won’t get stuck trying to discount in Canada and Australia the day before your promotion or accidentally lowering your royalty rates in all regions.
3. Not distributing your book to all retailers
It’s also important to note that Amazon is not always the best way to reach international readers. In Canada for example, running Amazon-exclusive promotions through KDP Select means you won’t be able to include Kobo in your promotion, which is the market leader in Canadian ebook sales with a market share somewhere between 33 and 50-something percent.
It’s always a good idea to maximize the impact of your promotion by choosing to discount on as many retailers and in as many regions as possible. Not only does this help you get your book to new audiences, but it also helps make your book more competitive when being considered for a BookBub Featured Deal! We receive between 100 and 300 submissions per day, and we’re only able to select 10%–15% of them for Featured Deals. Our editors prefer books that are available across multiple regions and retailers because they help us (and you!) reach more readers worldwide.
4. Discounting in the US when you don’t need to
Sometimes, authors choose to run international-only promotions via BookBub without including their book in the US edition of the email. In doing so, many authors automatically discount their book in all regions, including the US, which can unnecessarily affect pricing and royalty rates in the US. When setting up your discount on each of your retailers, you can set the price for each region where you want to discount your book. This allows you to discount only to the UK, Australia, and Canada, for example, but keep your book full price in the US if you’d prefer to avoid discounting there.
It’s important to note, though, that because Amazon requires you to choose one royalty rate that applies across all regions, you will need to accept a 35% royalty rate in the US while discounting below $2.99 elsewhere. So keep in mind that you’ll be generating lower US royalties on Amazon while running your international promotion.
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