A lot of these articles are generically bullshit. They will tell you:
- Pick a “niche”
- Write, or pay someone to write, a book
- Have a cover made
- Rake in money
I’m going to take the opposite approach. I’m going to try and write the post that I would have wanted a few years ago so you have all the resources and knowledge necessary before starting in KDP or paying someone $1,000 for a course. I’ll give you a quick spoiler alert as well!
Do not use Amazon Kindle KDP to make money. You won’t!
Here, I’m going to break down:
- What are Kindle eBooks
- Why are they a popular passive income strategy
- The best strategy to publish a kindle ebook to make money
- My detailed numbers to date and why I think Kindle requires
- How you could make KDP work for you
- Why I’m not going to invest this way
Let’s get started
What are Kindle eBooks?
This is a silly way to start off the post because you probably know what Kindle books are. However, if you’ve never seen KDP as a money-making strategy before, then it’s worth briefly discussing.
I’m going to just briefly cover this section as it’s pretty self-explanatory.
Kindle is Amazon’s reading tablet and its answer to the iPad. You can buy books through the Kindle store as a 21st century version of Barnes & Noble. It’s been a wildly profitable and fast-growing part of Amazon’s business. Remember, Amazon started off only selling books.
What internet entrepreneurs figured out back in the day is that anyone could publish an eBook on Amazon’s site. It didn’t take long before this quickly became one of the internet’s best ways to make “passive income.”
Why Kindle is a favorite of passive income gurus
There are a couple of reasons that Kindle is described as one of the best ways to get started in the passive income game. Below, I’m going to highlight three of the most common rationales for why Kindle is so popular.
Here is a key point to keep in mind. All of these are, on the surface, objectively true. However, there is a bit more context you need. This context is why I’ve left the Amazon KDP game and why I recommend you do the same.
Ebooks are passive income
If your book sells on Amazon, the author makes a portion of the sales.
At it’s core, this is “passive income.” The author does not need to re-write the book every time it sells. The author simply needs to write the book once and upload it to Amazon. The book could then sell consistently for a decade, with a check sent to the author every month.
That’s an extremely attractive proposition and what initially got me excited about eBooks. It’s truly passive income, paid directly to you from one of the biggest companies in the world.
You can get started for no money
Unlike starting a business, dropshipping, or other common “passive income” strategies, eBooks often have the lowest starting cost: zero.
It doesn’t cost money to post a book on KDP. Simply sign up for an Author account and you can publish your content to the masses.
Dropshipping, which I also don’t recommend as a business model, often requires some setup cost with Shopify and digital ads. Real estate is another common passive income strategy, which I do recommend, but that takes tens of thousands of dollars to get started in.
It requires no talent
It’s running underneath most of the posts about eBooks, so let’s just be explicit about it: writing an eBook doesn’t take much talent.
Can you coherently write a sentence?
Then you can write an ebook.
You can outsource most of it
Since an eBook doesn’t require talent to write, you can outsource 100% of the process.
- Hate keyword research?
- Don’t want to invest a dozen hours writing the book?
- Failed art in middle school (I did!) and need a more artistic eye for the cover?
- Don’t want to pay for software to help format your book?
No worries! There are hundreds of people on Fiverr and UpWork who can do all of these tasks for you.
The best strategy to publish a Kindle ebook to make money
Let’s say you don’t want to do this for free and are willing to invest in outsourcing and tools to do this right. In that case, this is the best and ideal strategy to publish a money-making ebook.
Before we go any further, it’s time to define what I mean by a money-making ebook.
What is a money-making ebook?
A money-making ebook is very different than a “regular” book. In fact, it’s better if you don’t think about an ebook as a book.
Think of an ebook as a revenue-generating digital asset. This is incredibly important: it’s not a book. It’s an asset.
Here are a couple of characteristics for a money-making ebook:
- Hyper focused on a very specific question or topic
- Sells for $2.99
- Typically 10,000 words or less. For context, Harry Potter books are around 80,000 words.
A good example of a money-making ebook
Looking at our checklist above, we can see that this book fits all of the criteria that we are looking for. It’s short (66 pages, or roughly 10,000 words), and hyper-focused on a specific keyword. Here’s the link to it if you would like to check it out in more detail.
But, does it make money? It feels like it shouldn’t since it’s so short and specific.
In short: hell yes it makes money.
If you scroll down, you’ll get to the details section. The part we are looking for is “Amazon Best Seller Rank”
This book is ranked #33,288 in the Amazon book store. Kindlepreneuer book sales estimation tool allows you to enter a ranking and find out how well a book is selling.
In this case, I input #33,288 into the tool and it returned a total of 9 books per day. At $2.09 per sale, it means this book will bring the author $18.81 in passive income per day.
Yearly, that is $6,865 in income.
Not too shabby at all.
A bad example of a money-making ebook
This book looks like a narrative about someone who works as an Uber driver. As I’ve written before, I have a lot of respect for Uber drivers and believe you should always talk with your driver. For that reason, I’m sure this book is interesting to read.
But, it doesn’t make any money.
This book is ranked #1,343,750. Plugging that into the calculator, it looks like it sells one copy per month. This book, therefore, makes the author about $24 a year.
Here’s the worst part: the Uber book is almost twice the length as the crocheting book. That means the Uber author worked twice as hard to write it but makes less than 1% of the other book.
What separates these two ebooks:
The crocheting book does a better job of adhering to the objectives of a money-making ebook.
The crocheting book is a digital asset. It’s written to answer a very specific question to a specific audience. People are searching in Amazon for questions about crocheting and this solution comes up.
The Uber book is just that: it’s a book. The author made the fatal mistake of assuming people know her name or care about her story. It doesn’t answer any questions for readers.
My point here: Kindle rewards the creation of specific digital assets. Stick to these components of the money-making ebook.
Now that we’ve defined a money-making ebook, let’s jump back into my thoughts on the best process to create and publish these books.
#1: Keyword Research
Last section, I talked about how you are looking to create a digital asset that answers specific questions for rea
Now, it’s time to figure out which questions your digital asset should answer.
There are two different strategies and tactics for this.
The first is the free way. This strategy requires significant time and effort on the Amazon site to figure out which keywords to target. This topic has been beaten to death online, so I won’t add anything here. I found this article particularly good at the explanation here.
The other strategy here is to buy the tool that does a lot of the manual work for you. This is Publisher Rocket, which was created by the same guy who built that free calculator above.
I resisted buying Rocket for as long as I could because I didn’t want to pay for it. In hindsight, that was a really stupid move when I realized the math.
I bought Rocket for $97 and it saved me about 12 hours my first month of using it. When you look at it that way, it means I was “paying myself” $8.03 ($97/12 hours) to do this work myself. That’s less than minimum wage in Chicago.
Since this section is about the best tactics to publish eBooks to make money, then you are going to want Rocket.
If you use Rocket, it has a bunch of tutorials that teach you how to use it to find keywords.
Let’s assume you found a great keyword and are ready to proceed.
#2: Outsource Writing
A money-making ebook has 10,000 words or less. Typical estimates say that it takes around 3 hours to write 1,000 words that are ready for publishing.
That means each ebook would take you around 30 hours of writing.
I have a family, a day job, a consulting business, am starting an actual business, and write all the content here at $10K. I don’t have the time in the day to spend 30 hours per eBook. That means I need to outsource the books.
To do so, I have used Fiverr, UpWork, and iWriter to outsourced writing. It typically takes a week, but then they come back with a decent book that didn’t eat up 30 hours of my life. If you can afford to do so, I strongly recommend outsourcing the books.
Is the quality of outsourced books on Upwork good?
Honestly, it is hit or miss.
You can’t risk bad quality books. If you publish a bad book and you start to get bad reviews, then you won’t be able to sell it anymore.
This was definitely an outsourced digital asset book. It answers very specific questions for readers.
Look at those solid 2.5 stars. This book just won’t sell anymore because of it’s shitty reviews. (it’s only showing free for me because I have Kindle Unlimited…otherwise this is a $2.99 purchase for 2.5 stars!)
Use a three-pronged strategy to make sure the books you will get are good quality that you can publish.
First, ask for a sample book from any author who applies to your job. If it’s not perfect, then don’t hire them. Their sample book is probably their best overall book. If their best work isn’t perfect, then you can guarantee that your book won’t be perfect.
Second, pay good rates. The first 5,000-word book I bought was for $100 and it was crap. I had to throw the whole thing out and rewrite it. Expect to pay at least $250 for a good 5,000-word book. As a tip, offer profit-sharing with your authors. I told mine I’d pay a percent of the sales as a bonus. Make sure you communicate with the author that quality writing will lead to more sales. It’s a hell of a motivator to get good books written.
Finally, run the book through Grammarly once you get it back or insist that any author you hire has it. It’s a small piece but will save you from silly mistakes you shouldn’t be making anyways.
I’ve typically found college students or retirees looking to make money online to be fantastic writers who can deliver great content.
Now that we’ve outsourced that good keyword to an author on UpWork and we know we’re getting good quality, it’s time to outsource the cover.
#3: Outsource the cover
You know the phrase “don’t judge a book by its cover” because people do exactly that: judge a book by its cover.
It’s worth investing $10 to get a professionally designed cover. I always use Fiverr for this (this exact gig). It’s quick and gives you a better product than you could do yourself.
Do this step while the book is being written in order to save time.
#4: Outsource the formatting
Similar to above, find someone on Fiverr to help format the book for you. You actually can not upload a Word Doc to Amazon’s portal. You need to use specific file types, like .mobi.
You also cannot easily convert Word to .mobi without software.
It’s annoying as hell. I recommend you pay $10 to have someone do it for you, with lots of Fiverr gigs on it. This is the exact gig I use.
#5: Publish the book
You’ve got a book back and ready to go! Now you can put it on KDP and begin the process all over again. This article is a great description of how exactly to publish the book using Amazon’s system.
You could do all of these steps by yourself if you would prefer. However, expect to spend 50+ hours per book.
If you follow these 5 steps repeatedly, then you could make money with Kindle. But, I don’t think it’s worth the effort. That’s what the next section is about.
You will not make big money with Kindle. Here’s why
Here are my detailed earnings from Kindle over the past year or so. In total, I made $204 from Kindle and have left the Kindle space as a business.
Let me explain why and how the Kindle model doesn’t work.
The law of big numbers is working against you with Kindle
Let’s say your goal is to make $10,000 a month from Kindle ebooks. I’m picking that number because that seems like the target a lot of people are shooting for on Reddit.
According to an analysis, there are roughly 3.4 million books in the Kindle store.
Let’s use the Kindle calculator again. Your book needs to be ranked 100,000 or higher to sell at least one copy per day. Ranked as 100,000, that means your book is in the top 3% best selling in the entirety of the Kindle Store.
Selling 1 book per day at $2.09 for 30 days of a month means you are making only $62.70 for a top 3% book on Amazon.
Before you go off and say, “Oh, well I can absolutely write a top 3% book on Amazon”, be careful about getting too confident. Malcolm Gladwell, Adam Grant, and Michelle Obama all sell books on the Kindle store. They, and other famous authors like them, will take up a significant percentage of the top 3%.
Even if you do get a book into the top 3%, you will only make $63 a month from it. That means to make $10,000 a month with all of your books making $62.70 a month, you need 159 books in the top 3% on Amazon.
However, it’s not fair to assume that all of your books will be in the top 3% of Amazon. You’ll have some duds that are well below that top 3% threshold. Based on a standard distribution, you should expect to need 250 books or more on the Kindle Store to make $10,000 a month.
This is the most important section of the piece so I want to pause to re-emphasize this point.
You need a lot of books on Kindle if you want a significant amount of money from Amazon.
Think of it this way. You make $2.09 with a standard sale. To make $10,000 a month, it means you need to sell $10,000/2.09 or 4,785 books per month to reach this revenue goal.
I have a degree from the top business school in the world and I absolutely missed this analysis before investing thousands of dollars into Kindle. That was my mistake. My hope with this article is to help prevent you from making a similar mistake with Kindle KDP!
My heart is set on KDP, how can I make money doing Amazon Kindle?
If you are 100% deadset on publishing on Kindle KDP, then there are two different ways you can make money.
#1: Have a huge following
The easiest way to make a lot of money on KDP is to already have a large audience, and then decide to leverage that audience into the successful sale of thousands of ebooks and regular books at a higher price point. For example, check this book out.
Colton was the bachelor a few seasons back (and in my fiancee and I’s opinion, not a good one! We did like Cassie though!) He probably had someone ghostwrite this book for him and it has sold extremely well. Based off the estimates here, he’s easily making $10,000 a month off of this book.
However, check out his Instagram page
With two million followers, he could get the worst book in a world to sell thousands of copies. Assuming only 1% of his audience buys the book, that’s still 20,000 purchasers of the book available.
If you have an audience like this, then it’s totally worth launching a book!
#2: Go for a significant volume of books
The other strategy to really make money in KDP is to have a significant volume of books on the market. The number of books to shoot for in this case would be 250 books on the market.
Earlier, I mentioned how writing a book would be 50 hours per copy. If you wanted to go down this route, that would be 12,500 hours of writing to get 250 books. Since the average America works about 2,000 hours a year, it would take you about six years of full-time work to get this many books.
Not to mention, you’d have invested more than 10,000 hours into this! The opportunity cost is high: you could become an expert at a lot of skills in the same time investment, and a lot of those skills would likely have a higher ROI.
The other tactic would be to outsource them all. The costs to outsource 250 books would be:
- Publisher Rocket VA (to research the topics): $500 total
- Covers (250 covers): $2,500 total
- Formatting (250 covers): $2,500 total
- Writing (250 books): $62,250 total
- A VA to write the descriptions: $1,000 total
- A VA to publish all the books: $500 total
All in, that would be an investment of $69,750 to get enough books on the Kindle store.
You could theoretically make $10,000 a month. You’d also then get completely paid back in only 7 months. You could also sell your entire portfolio of books on Empire Flippers for 30X your monthly income, which would be $300K in this case.
In this world, you are in a golden place and can absolutely make a ton of money.
Why I won’t invest in Amazon KDP
My hope is that this article has shown you that investing in Amazon KDP doesn’t make a lot of sense without a significant investment of either time or money in order to build up a database of books that’s large enough to generate $10,000 of revenue per month.
I think it’s much easier to build a quasi-detailed business plan and build a predictable, recurring revenue business instead of investing that much time into building a database of books.
I could theoretically see an argument, if you have $10M in the bank and are looking for an investment opportunity, to throwing in the $60K necessary to get up to 250 books. At that point, it doesn’t move the needle for you to invest that money and if you make $10K a month as an annuity, then great!
However, I’m skeptical here. The problem is you will forever be at Amazon’s mercy. If they decide to stop allowing authors to have more than 10 books on the platform (a great idea….that lowers the amount of low-quality books that the students of fake-gurus through on Amazon KDP), then your entire investment is gone overnight.
For that reason, at $10M in the bank, I’d prefer to go down the road of real estate investing anyways.
In summary: is KDP a good way to make money can be answered with a firm NO
I hope this article has been helpful for you and has hopefully saved you some time and money before going too far down the KDP entrepreneur path.
Overall, I don’t think KDP is a good way to make money. The big reasons are:
- A top 3% book will only make you $63 a month
- You are competing with famous authors (The Obama’s, for example) to be in the top 3%
- Even if you are in the top 3%, you need 200+ books to make serious money
- You need to invest years or tens of thousands of dollars to get serious money
- There are better uses for both your time and money
If you are interested in truly making money, then follow along with my daily case study. I’m trying to build up to $10,000 a day in passive income by the time I turn 30 and I’m doing it with a combination of a business and multi-family real estate assets
Let me know in the comments of any questions and I’ll do my best to get to them all!