10 Questions to Ask Before Committing to Any E-Publishing Service

With an avalanche of new services promising to help writers self-publish or distribute their e-books even better and more profitably before, it's imperative that writers educate themselves about how these services typically operate—plus read the fine print of any new service before deciding to commit.

Note that when I discuss "services," they typically fall into 2 categories:

single-channel, retailer-driven services (e.g., Amazon's Kindle Direct Publishing, Barnes & Noble's PubIt, and Apple iBookstore)
multiple-channel distribution services that often include some kind of formatting and conversion service; sometimes these distribution services sell e-books, too. BookBaby and Smashwords are two of the most well-known and recommended services.
… and there are also other types of services, such as those offered by agents or even traditional publishers.

Here are 10 questions you must ask of any new service you consider using.

1. Is the service exclusive or nonexclusive?

E-publishing services marketed directly to authors almost always operate on a nonexclusive basis. That means you can use their service to sell your e-book while also selling your e-book anywhere else you like (or using any other service).

There are two notable exceptions right now:

E-books created with Apple's iBooks Author tool (available only to Mac users). This only applies if you plan to charge for your iBook. If your Apple iBook is made available for free, you are welcome to distribute anywhere and everywhere outside the Apple iBookstore. There's another important caveat about this under #7.
Self-published e-books made available for lending through Kindle Select. Amazon asks for a 3-month exclusive if you join the Kindle Select program (which allows your book to be lent out to Kindle users). If you want to read more about this option, click here for an excellent analysis by Carolyn McCrary.

2. If it's exclusive, what's the term of the contract?

If you're working with an agent to publish your e-book, you will likely be asked to sign a contract that has a 2- or 3-year term. This is simply to ensure that, after your e-book files are prepared, your cover designed, and all ducks put in a row, that you don't suddenly change your mind and take your e-book elsewhere. There are sufficient upfront costs that the agent needs to be confident of recouping their initial outlay. I recommend you not commit for longer than 2 or 3 years due to how fast the market conditions can change for e-books.

3. Do you control the price?

While some services may have reasonable pricing restrictions (e.g, not allowing you to price below 99 cents), standard practice is to give the author complete control over pricing.

Caveat: Most e-book retailers mandate that you not offer more favorable pricing anywhere else (whether at another retailer or direct-to-consumer from your own site). Amazon in particular is known for carefully policing this and will automatically lower the price of your e-book if they find you pricing it lower somewhere else. (Some authors use this to their advantage and make their e-book available for free elsewhere so Amazon will then push the price of the Kindle edition to free, which is tricky to accomplish through other means.)

4. What's the upfront fee and/or how is the royalty calculated?

While different services have different models, the fees should be transparent and upfront. For example:

Amazon Kindle, Barnes & Noble PubIt!, and Apple's iBooks are all free to use. They make their money by taking a cut of your sales. Usually you earn 60-70% of your list price (assuming you price in the range they specify).
Smashwords is free to use and distributes to all major e-book retailers except Amazon. Smashwords pays you 85% of your list price on sales directly through the Smashwords site, minus PayPal transaction fees. They pay you 60% of your list price on sales through retailers (in other words, they take 10% after the retailer takes their cut).
BookBaby offers conversion services and distributes to all major retailers. It costs $99 up front, plus $19 every year thereafter. You earn 100% net—BookBaby keeps no commission. It makes its profit on the upfront fee that you pay, as well as other fee-based services.

Always, always, always read the fine print in these cases. For instance, if you price your book very low (99 cents), and there's a 25-cent transaction fee for each of your sales, you've just cut into your profits even if you're earning 70% or 80% of list.

Unfortunately, I'm starting to see less transparency in how payments work. For instance, a new service from AuthorSolutions called BookTango is very deceptive in its marketing. It claims to offer free e-publishing services PLUS 100% royalties. First of all, that's only if the sale is made on their site. Second, in the case of such sales, there's a 30% "bookstore fee," meaning you're getting 70%, not 100%. (Click here to see for yourself.)

5. Are there hidden fees or charges?

You can end up paying more than standard rates for conversion/formatting if your book runs very long, if you have an inconvenient file format that needs extra work (common with PDFs), if you have a lot of chart/table/image formatting, and so on. If your work has any kind of "special needs," expect a service to charge you more. (The best services, such as BookBaby, are very specific about what these costs will be.)

6. What file formats do they accept?

This is critical to know upfront because it usually determines (1) whether or not you can use the service in the first place and (2) how much you'll get charged for formatting and conversion if that's a service you need.

A few things to know:

Microsoft Word (or any text file) is commonly accepted. However: If you're publishing direct to Kindle or Nook (or use Smashwords, which is automated too), unless you "unformat" your Word document, it is likely to look like crap on an e-reading device when automatically converted to an e-book format. (That is: Your e-book file may have converted successfully, but the formatting/styling is awful.) Most retailer's e-publishing services have extensive guidelines, preview programs, and other ways of ensuring things look OK before your e-book goes live.
EPUB is the industry standard e-book file format. If you want to create your own EPUB file, see the end of this post for recommendations.
Many conversion/formatting services typically offer you EPUB and MOBI files since that covers you on Amazon and just about any other e-book retailer.
PDF is one of the most difficult file formats to convert to EPUB. Expect to pay.

7. Who owns the e-book files after they are created?

It is ideal if you own the e-book files, and that is usually the case when you pay out of pocket for conversion and formatting services. In the case of some free services, such as Smashwords, you do not. (Why so? When you upload your Word document to Smashwords—the only format accepted—it goes through their "meatgrinder" conversion process to create a variety of e-book files. You then have access to those e-book files, but you're not supposed to turn around and sell them through other services.)

8. Are DRM protections or proprietary formats involved?

DRM stands for digital rights management. DRM is supposed to prevent piracy, or illegal copying and distribution of your e-book after is sold. However, I agree with those who argue that DRM is not reader- or consumer-friendly, and should not be used. The industry standard e-book format, EPUB, does not use DRM.

There are only 2 areas where you're likely to run into a proprietary format or DRM.

Amazon Kindle uses a proprietary format with DRM. If you use the Kindle Direct Publishing program to publish your e-book, no matter what type of file you upload, they will automatically convert it to their proprietary, DRM-locked format. However, because their service is not exclusive, you can always make your e-book available in other formats through other services, without restriction.
The Apple iBooks tool creates e-books in a proprietary format. No other device aside from an iPad or iPhone can view an e-book created by the Apple iBooks tool.

9. Where is your e-book distributed?

If you're using Amazon Kindle Direct, or Barnes & Noble PubIt!, the answer is pretty simple: Your e-book is distributed only through those specific retailers. When you use a multiple-channel e-book distribution service (such as Smashwords or BookBaby), then the mix of retailers they reach will vary. At minimum, you want to reach Kindle & Nook, since they currently make up about 85% of all e-book sales.

One common strategy among authors is to use Amazon Kindle Direct combined with Smashwords (which distributes to all major e-book retailers except Kindle). You can probably reach 95%+ of your market with that approach, if not 100%.

10. Can you make changes to your e-book after it goes on sale?

If you're working directly with retailers (e.g., Amazon and Barnes & Noble), you can upload new and revised files as often as you like—they don't care. Same goes with Smashwords. However, if you're using a multiple-channel distributor other than Smashwords, you will likely have to pay fees to make changes.

Single-channel services (retailers) I recommend

Amazon Kindle Direct Publishing
Barnes & Noble PubIt!

Distribution services I recommend

Smashwords
BookBaby

EPUB (e-book) creation tools I recommend

PressBooks
Sigil
Apple iBooks Author (for image- or media-driven e-books), just be aware of the exclusivity they demand

Still have questions? Leave a comment.