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Thread: Avg. List Price without tax went below $2.99 for 2 sales on Amazon.com


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Chris Paiva

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Registered: 07/14/17
Avg. List Price without tax went below $2.99 for 2 sales on Amazon.com
Posted: Jul 16, 2017 1:15 AM
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I set my price at $2.99 US. Amazon.com is set as my primary marketplace.

In a couple European countries with a VAT like the UK (Amazon.co.uk) and France (amazon.fr), some of the list price is shaved off due to the VAT. But in the United States they don't dock a VAT/sales tax from the list price. It should always be $2.99

However yesterday I noticed that in my sales dashboard looking at royalties earned (I am looking at the sales dashboard report excel file) the Avg. List Price without tax dropped to $2.82 for one of my sales. And then just today I noticed that I had a sale where the Avg. List Price without tax dropped all the way to $2.43! The rest of my Amazon.com sales were at $2.99 though. What is going on? I lost 12 cents in royalties revenue yesterday (6% loss) and lost 38 cents today (18% loss). That's insane. This is all Amazon.com (in case someone inevitable says "foreign sales").

I expected the VAT hit from my European sales but the United States doesn't have a VAT. Why is Amazon reducing the price below the $2.99 threshold without my permission? Is there a sales tax they charge for Kindle purchases in certain US states but not others? What kind of US state charges a 18% sales tax? lol

After some searching I see that apparently if your country doesn't have an Amazon domain, you can still order ebooks from Amazon.com. So these countries charge a 6-18% sales tax then? For both the $2.82 and $2.43 figures, it shows 1 Net Units Sold for each. So there is no "averaging" going on. And the file size for those sales was the same as the $2.99 sales I had. So I'm looking at a 6-18% haircut from each.
Notjohn

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Re: Avg. List Price without tax went below $2.99 for 2 sales on Amazon.com
Posted: Jul 16, 2017 2:43 AM   in response to: Chris Paiva in response to: Chris Paiva
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Could be foreign sales! Strange things happen when someone from say South Africa buys an ebook (all such sales are made on Amazon.com).

Did you get 35 percent on those sales?

Good luck! -- NJ

Notjohn's Guide to E-Book & Print Formatting

The blog:
http://notjohnkdp.blogspot.com
Chris Paiva

Posts: 5
Registered: 07/14/17
Re: Avg. List Price without tax went below $2.99 for 2 sales on Amazon.com
Posted: Jul 16, 2017 3:02 AM   in response to: Notjohn in response to: Notjohn
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"Could be foreign sales! Strange things happen when someone from say South Africa buys an ebook (all such sales are made on Amazon.com).

Did you get 35 percent on those sales?

Good luck! -- NJ"

No I didn't get 35% on those sales.That is what tripped me up. Because you or someone else on the forum said that sales from South Africa and such are at 35%. I'll show you what I got from these two sales (the units sold on each of these lines in the excel report is 1. So there is no averaging here)

List Price Without Tax: $2.82 (I have it set at $2.99. That's 6% less than $2.99). Royalty: $1.95 (I usually get $2.07). Royalty to Price Ratio ($2.99): 65%
List Price Without Tax: $2.43 (should be $2.99. That's 19% less than $2.99). Royalty: $1.69. Royalty to Price Ratio ($2.99): 57%

So yeah definitely higher than 35% but lower than 70%. My delivery cost is only 3 cents. Hence $2.07 royalty for my usual $2.99 sale.
Ward Rogers

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Registered: 12/02/16
Re: Avg. List Price without tax went below $2.99 for 2 sales on Amazon.com
Posted: Jul 16, 2017 6:46 AM   in response to: Chris Paiva in response to: Chris Paiva
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Could be an applied tax. Yes, some American states tax ebooks. While you can adjust prices in most countries for VAT, you unfortunately cannot do the same for administrative areas within a country.
writerbn

Posts: 5,225
Registered: 05/12/12
Re: Avg. List Price without tax went below $2.99 for 2 sales on Amazon.com
Posted: Jul 16, 2017 8:44 AM   in response to: Chris Paiva in response to: Chris Paiva
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Chris Paiva wrote:
However yesterday I noticed that in my sales dashboard looking at royalties earned (I am looking at the sales dashboard report excel file) the Avg. List Price without tax dropped to $2.82 for one of my sales. And then just today I noticed that I had a sale where the Avg. List Price without tax dropped all the way to $2.43! The rest of my Amazon.com sales were at $2.99 though. What is going on? I lost 12 cents in royalties revenue yesterday (6% loss) and lost 38 cents today (18% loss). That's insane. This is all Amazon.com (in case someone inevitable says "foreign sales").

I see this on my reports every month, and I've given up trying to make sense of it. It's not foreign sales, as you said, because it's not the 35% royalty bracket.
Chris Paiva

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Registered: 07/14/17
Re: Avg. List Price without tax went below $2.99 for 2 sales on Amazon.com
Posted: Jul 16, 2017 9:16 AM   in response to: Ward Rogers in response to: Ward Rogers
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Surprised no one knows for sure what the "hidden tax" is. I guess I should shoot Amazon KDP support an email and see what it is. Are their staff approachable or do they get annoyed by questions from authors who have small sales volume?
thrasherll

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Registered: 06/27/12
Re: Avg. List Price without tax went below $2.99 for 2 sales on Amazon.com
Posted: Jul 16, 2017 9:42 AM   in response to: Chris Paiva in response to: Chris Paiva
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Chris Paiva wrote:
Surprised no one knows for sure what the "hidden tax" is. I guess I should shoot Amazon KDP support an email and see what it is. Are their staff approachable or do they get annoyed by questions from authors who have small sales volume?

Google states that tax sales on ebooks . You can also add to the search box the two-letter postal abreviation followed by .gov and get the information for particular states.

L. L. Thrasher

Chris Paiva

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Registered: 07/14/17
Re: Avg. List Price without tax went below $2.99 for 2 sales on Amazon.com
Posted: Jul 16, 2017 10:47 AM   in response to: thrasherll in response to: thrasherll
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After looking at Google, Tennessee has the highest combined state-local tax rate at 9.45%. One of my amazon.com sales was taxed at 19%. I was pretty sure that the sales tax wouldn't be that high anywhere in the United States. The other sale had a tax rate of less than 6%. Which is a very typical sales tax rate.

When they say "highest state-local tax rate" though, they are taking into account average local tax rate. Not every city within Tennessee has 9.45% combined tax. That's the average across the state. When I looked at the data. What kind of US city has a 19% combined sales tax rate? lol.
Joseph M Erhardt

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Registered: 12/21/15
Re: Avg. List Price without tax went below $2.99 for 2 sales on Amazon.com
Posted: Jul 16, 2017 11:08 AM   in response to: Chris Paiva in response to: Chris Paiva
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Chris Paiva wrote:
Surprised no one knows for sure what the "hidden tax" is. I guess I should shoot Amazon KDP support an email and see what it is. Are their staff approachable or do they get annoyed by questions from authors who have small sales volume?

In the U.S., sales tax is always added to the specified price. A $2.99 book would never include sales tax in the price. So I have no idea what's going on either.*

Yeah, do send a message to the Contact Us folks. Maybe they do get annoyed by questions from authors with small sales volume, BUT it's the authors with small sales volume that spot the system bugs. Authors with large sales volume would likely never detect them.

*occasionally you will, at bazaars and similar events, see signs that say "Sales Tax Included"--but those are special circumstances, usually designed to keep from having to deal with change. A $5.00 item, in Virginia, would be 105.3% of the original price, and the vendor would have to do the sales tax calculation differently to set aside the proper amount.

Edited by: Joseph M Erhardt on Jul 16, 2017 11:08 AM
thrasherll

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Registered: 06/27/12
Re: Avg. List Price without tax went below $2.99 for 2 sales on Amazon.com
Posted: Jul 16, 2017 12:50 PM   in response to: Chris Paiva in response to: Chris Paiva
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State sales taxes aren't the only possible explanation for variations in royalties. People in countries without their own Amazon store have to buy from amazon.com. They wouldn't be charged a state sales tax, of course, but Amazon has to pay to do business in those countries -- import/export taxes, tariffs, customs, whatever. Plus, there's probably a fee, maybe an annual one, that allows a business from one country to do business in another country. Many larger countries have reciprocal agreements, I'm sure, but not all countries do.

L. L. Thrasher
writerbn

Posts: 5,225
Registered: 05/12/12
Re: Avg. List Price without tax went below $2.99 for 2 sales on Amazon.com
Posted: Jul 17, 2017 5:30 AM   in response to: thrasherll in response to: thrasherll
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thrasherll wrote:
State sales taxes aren't the only possible explanation for variations in royalties. People in countries without their own Amazon store have to buy from amazon.com.
Except, as stated, these aren't foreign sales, because they're not the 35% royalty. They're a shade under 70%

I also don't buy the sales tax argument, because the spreadsheet column is labeled Average Offer Price Before Tax (or words to that effect).
chiranjeev singh

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Registered: 07/17/17
Re: Avg. List Price without tax went below $2.99 for 2 sales on Amazon.com
Posted: Jul 17, 2017 6:36 AM   in response to: Chris Paiva in response to: Chris Paiva
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yea it could be due to different countries.
writerbn

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Re: Avg. List Price without tax went below $2.99 for 2 sales on Amazon.com
Posted: Jul 17, 2017 7:29 AM   in response to: chiranjeev singh in response to: chiranjeev singh
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chiranjeev singh wrote:
yea it could be due to different countries.
Please actually read the discussion before simply restating the obvious.
P.M. Laidlow

Posts: 88
Registered: 05/21/17
Re: Avg. List Price without tax went below $2.99 for 2 sales on Amazon.com
Posted: Jul 17, 2017 9:41 AM   in response to: Chris Paiva in response to: Chris Paiva
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Per the Payment page in the Help guide, these are the countries that qualify for 70% royalties:

Andorra
Australia
Austria
Belgium
Brazil*
Canada
France
Germany
Gibraltar
Guernsey
India*
Ireland
Isle of Man
Italy
Japan*
Jersey
Liechtenstein
Luxembourg
Mexico*
Monaco
The Netherlands
New Zealand
San Marino
Switzerland
Spain
United Kingdom
United States
Vatican City

(Those marked with an asterisk qualify only if enrolled in Select.)

Several of those countries do not have their own Amazon and would shop through .com.

From the same page:

Royalty Calculation for List Price

The 70% Royalty Rate times the amount equal to the Digital Book's List Price, exclusive of VAT, less Delivery Costs, for sales to customers in the Available Sales Territories indicated above.

70% Royalty Rate x (List Price – applicable VAT - Delivery Costs) = Royalty

In other words, you pay the customer's VAT and delivery costs.

Chris Paiva

Posts: 5
Registered: 07/14/17
Re: Avg. List Price without tax went below $2.99 for 2 sales on Amazon.com
Posted: Jul 17, 2017 9:45 AM   in response to: Chris Paiva in response to: Chris Paiva
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I got a reply from Amazon support. They just basically said for a Amazon.com purchase, they charge VAT based of the country of the purchaser plus any other applicable operating costs. And they provided me with a list of worldwide VAT rates effective 2015 on their website. So it's not state tax, it's foreign purchases on amazon.com. The 35% thing I imagine probably doesn't apply to every foreign country purchase on amazon.com.
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