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Ebook Direct Sales, Part II

24 hours later, and I’ve discovered several things about doing direct ebook sales online. Not the least of which was that Payhip’s fancy little “Buy Now” widgets don’t come through on LiveJournal and other automatically-mirrored sites. Oops!

Sokka Facepalm gif

More significantly, there are two areas I wanted to talk about based on comments, emails, etc.

1. But Jim, most readers don’t want the hassle of sideloading files onto their e-reading platform.

Selling ebooks directly means you get the .mobi, .epub, and .pdf files. Not everyone knows how to get those files onto their e-reader of choice. I get that. This isn’t for everyone. Some people — maybe even the majority of people — will prefer the convenience of one-click buying at Amazon and having the story automatically appear on their Kindle. (Or B&N –> Nook, iBooks –> iPad, and so on.)

Then I read comments like:

It doesn’t matter how easy it is for us to set-up; if a reader can’t figure out how to sideload the book, the first sale will be the last. There are far too many who don’t know how to get the most out of their e-readers and tablets, and side-loading may be beyond their skills for whatever reason. And even fewer will download Send to Kindle.

I’m not linking to this one, because I don’t want to argue with or put a spotlight on the person who said it. It’s felt to me like the message wasn’t, “a lot of people prefer to buy ebooks from Amazon and other vendors,” but “direct sales are a waste of time because too many readers don’t know how to load the files.”

It’s not an either/or thing. My Bookstore page still has links to Amazon, B&N, Kobo, Indiebound, and so on. As of yesterday, it also has links for people to directly purchase my self-published work. Since it’s relatively easy for me to set up and costs me nothing now that the links are out there, I’m not seeing the downside. I’ve had 28 sales in the first 24 hours. Maybe I’ll only get a handful more this year, now that the initial wave has passed. But that’s still a handful of sales I might not have gotten otherwise.

And there are some people who like the security of owning the actual e-book files, as opposed to having them stored and hosted by a company that could theoretically engage in shenanigans and delete those books from your device.

(I do think I may write up some basic instructions on how to load files into various e-readers and add that to the .zip file bundles, though.)

2. Sales Tax.

Aw, crap. I’m selling stuff directly. That means I have to figure out tax stuff.

Sokka What gif

Obvious disclaimer: I’m not a tax lawyer, accountant, or anything like that, and you should not take any of this as personal tax advice.

For sales to certain other countries, that means Value-Added Tax (VAT). Author Juliet McKenna is part of EUVATAction, which has a lot of useful information on how VAT works. McKenna has also been campaigning against the law, because it’s an elephantine pain in the ass for small businesses.

If you’re located in the U.S. like me, then  yes, you have to worry about VAT for European Union countries. Fortunately, Payhip takes care of that automatically, adding the applicable VAT to the purchase price and making sure that money gets where it needs to go.

Payhip does not, however, take care of State Sales Tax. And state tax laws vary from one state to the next, which means you have to figure out things like:

  • Does my state charge sales tax on electronic books?
  • Do I have to collect sales tax on sales within my state?
  • What about sales to other states?

Do your research, and get help from people who know what the hell they’re talking about.

Right now, it sounds like roughly half of the states in the U.S. tax sales of e-books. Michigan does not appear to be one of them. Michigan sales tax law states, “A Michigan sales tax license shall be obtained by every person selling tangible personal property at retail.” (Emphasis added)

In Michigan, sales tax needs to be collected on tangible goods, which excludes things like e-books. As long as I don’t start doing mail-order sales of physical books, which I really don’t want to get into, I’m good for the moment. I would not be surprised at all to see this law change in the not-too-distant future, though.

What about sales to people in other states? The way the laws appear to work is that you have to collect sales tax for any state where you have a physical nexus — in other words, if you’re physically located in a state, have a warehouse in that state, or travel to that state to sell stuff. This means yes, theoretically, if you fly to Alaska and hand-sell some of your books at a convention, you’d be expected to collect and remit state sales tax. (Assuming Alaska collects sales tax? I dunno, and I’m feeling too damn lazy to look it up right now.)

So, I stay in Michigan, and someone from Alaska buys my ebook directly through my website. My understanding is that I don’t worry about sales tax, and when that person fills out their state tax forms next year, they mention paying $2.99 for an ebook from another state, and pay Alaska their sales tax as part of their state tax return. (If you do your own taxes, you might remember that question about purchasing items from other states that you didn’t pay tax on.)

I will be following up with the Michigan Treasury Dept. tax folks to make sure my understanding on this is correct. I can’t emphasize enough the need to do your own research and talk to the experts. But I think (hope), for the moment, it’s a non-issue for me.

So, anything I missed? Or anything I’ve managed to get completely wrong?

Mirrored from Jim C. Hines.


( 18 comments — Leave a comment )
Mar. 10th, 2016 12:51 am (UTC)
What about selling ebooks as .epubs or other digital files on Ebay?
Mar. 10th, 2016 03:33 pm (UTC)
I'm not an expert, but eBay has some information about sales tax and selling on their site.


Looks like you can set it up to charge sales tax as needed, too.

Mar. 10th, 2016 01:06 am (UTC)
Maybe my family is weird, but we all read a ton of e-books and only one of us has an actual e-reader. Downloading a file to the ipad or an android phone and having it open in overdrive/kobo/whatever is easy peasy. PDFs are even easier.
Mar. 10th, 2016 01:23 am (UTC)
All my kindle content is backed up to a dropbox file my device knows nothing about.
Mar. 10th, 2016 01:33 am (UTC)
Very sensible. Nook/B&N just shut down their UK operation, and any material people had bought through their Nooks was transferred to a new third party UK retailer, but only that material that the new retailer had in stock. So people may have lost quite a lot of their purchases because B&N shut down the service.
Mar. 10th, 2016 01:33 am (UTC)
I am not a tax professional, but I did implement the sales tax code for ThinkGeek, and your understanding matches mine. This is actually why ThinkGeek doesn't do a lot of conventions! And also why they started collecting sales tax in Washington State, because of exhibiting at PAX.

And figuring out the tax rates can be very complicated. Each state has its own rules. It can vary by county, city, and even at the ZIP code level. What kinds of goods that are taxed varies from state to state. And some states have 'tax holidays' where some goods (typically school supplies) are tax-free on certain stretches of the calendar. Which is to say, once it gets more than just your home state, it quickly becomes a burden that an individual wants to push off onto his e-commerce platform (or if you are that, onto a third party. ThinkGeek used Avalara, but others exist.)

Good luck!
Mar. 10th, 2016 03:34 pm (UTC)
Thanks! And that's interesting (and sad) that the sales tax requirements led to ThinkGeek not doing many cons...
Mar. 10th, 2016 02:17 am (UTC)
Oh good grief. Sales tax. *gets a little less excited about maybe doing this herself*
Mar. 10th, 2016 02:24 pm (UTC)
When we were wee writers dreaming of success, nobody ever warned us about things like sales tax and self-employment taxes and quarterly estimated taxes and all that other fun stuff.
Mar. 10th, 2016 08:21 pm (UTC)
Or that book contracts were a good thing, but deadlines would suck all the joy out of your writing and occasionally try to kill you ;-)
Mar. 10th, 2016 04:23 am (UTC)
I'm one of the people that person was talking about. My one and only attempt to buy something from Smashwords was a dismal failure because they didn't have a direct way to load something into the Kindle APP on my smartphone -- and asking them about it only got me instructions on how to download something to my Kindle DEVICE, which I Do Not Have. Needless to say, I've avoided Smashwords since then.

But obviously other people have better luck with that sort of thing than I do, so I don't see any reason not to offer as many purchase options as possible.
Mar. 10th, 2016 05:35 am (UTC)
I stick my files in dropbox, open them there on my phone or ipad and it asks me if I want to open it in an appropriate app or one of the other apps that will open it on my machine.

No idea how one does it on Android but I believe calibre can be used to send files to your kindle app as well.
Mar. 10th, 2016 08:00 am (UTC)
Hmm, can you not email from your device? My usual way to get things to a Kindle app that I didn't buy on Amazon (e.g. from my work computer), is to email the file to the address they give me here: https://www.amazon.co.uk/mn/dcw/myx.html/ref=kinw_myk_redirect#/home/devices/1

Click on the device you want (it's one of the reasons why I always name my devices!), and there's an email address listed. That usually seems to be in the form of firstname_####@kindle.com

Attach the book to an email and send it to that address. It should upload a few minutes later :)

* If the link doesn't work, hover over My Account > Manage Your Content & Devices > You Devices.
(no subject) - gummitch - Mar. 10th, 2016 12:49 pm (UTC) - Expand
Mar. 10th, 2016 02:41 pm (UTC)
I am a sales and use tax auditor (for state redacted) and it would be safe to assume that you would be required at the very least to collected for taxable sales within your own state ... and don't let that wording "tangible" fool you as often there are carve-outs for certain services and non-tangible sales that might be considered taxable (or conversely exempt.)

Also, nexus is a tricky thing. Even if a state law seems to imply physical evidence (warehouse, store) it might also means sales force presence and appearing and selling at conventions might be considered to qualify (not that you would have that much exposure as an individual ... unless you go best-seller numbers.)

Check with a competent accountant who SPECIALIZES in sales and use tax practices. Not all tax accountants do. Some are worth their weight in gold.
Mar. 10th, 2016 04:38 pm (UTC)
You might try pointing to http://www.baen.com/t-ereaderinstructions for instructions on how to get stuff onto various devices. It's not a perfect match for what you're doing, but it's a reasonable starting point.
Mar. 10th, 2016 09:45 pm (UTC)
Mar. 23rd, 2016 03:01 pm (UTC)
I have nothing useful to say, just love for your Sokka gifs.
( 18 comments — Leave a comment )


Jim C. Hines


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