**This is sort of a long post because I felt the need to explain and apologize. Sorry about that too.**
The UK is my second largest marketplace (behind the US, my home country). It accounts for roughly 1/3 of all my sales in a month. Most months, I average $3,000, meaning about $1,000 of it is converted currency – British Pounds to US Dollars.
And on 23 June, the British Pound dropped drastically for political reasons. I have no opinion one way or the other about UK leaving the EU. I don’t live there and I don’t know the whole story, just what has been reported on the news. Frankly, I’m not sure that it matters to me… Except for that currency thing.
Historically, the British Pound has always been valued higher than the US Dollar. There’s some fluctuation from time to time, but on average it’s about $1.45 per £1,00. As a result, I tapered my UK prices to match this. In the US, my ebooks are normally $3.99. In the UK, they are £2,99.
Now, when the Pound first started to drop, I didn’t figure it was a huge deal. My prices allowed for fluctuations. Then I got paid at the end of June and wow! The bank converted at a rate of just $1.12 to £1,00. Meaning my April sales turned out to bring me roughly $1.91 per ebook sold in the UK, instead of the normal $2.68 (VAT is taken out and then my royalties calculated for sales in the UK and EU).
However, June was an excellent month for ebook sales across all retailers. I tripled my average or at least, I had tripled my average before the Pound fell. A few days ago, iBooks sent their new estimates based on the new currency conversion. I lost well over $700 because the Pound has dropped so low and that is just on iBooks. I can’t imagine what the grand total will be once Amazon UK and Google Play* gets calculated at the new rate. iBooks is my second biggest retailer, Amazon UK is my third.
While it changed my numbers for June and didn’t really hurt, I’ve had to look ahead. June was the exception, not the rule. That means in July, my sales will start to fall again. They will continue to fall until I get back to my average. Which is going to be a problem considering one-third of my sales are being affected by the destabilizing of the Pound.
I had two options, I could do nothing and hope the Pound didn’t fall lower or I could try to cushion the blow a little – a decrease of $500 a month doesn’t sound like a huge chunk of money, but it’s 1/6th of my total income. After a couple of days of debate, I broke down and upped my ebook prices in the UK by 50 pence. In the UK, it’s a huge hike, but I figure it’s going to bring me another $0.30 per ebook and bring me back over the $2.00 mark for all books sold in the UK. I don’t mind losing some of it, but I can’t really afford to lose all of it…that might require me to have a job where I don’t wear pajamas and the books would be written a little slower, meaning they’d release a little slower.
When the Pound stabilizes and begins to increase again, I’ll reevaluate the prices and see where they need to be. So, to all my UK readers, I am really sorry about this. I’m hoping it only lasts a month, maybe two. Please bear with me and all your favorite authors who are taking the same steps to compensate for their lost income by the devaluation of the Pound.
Note: If you use a currency converter available on the internet, you will find it says “sterling” and changes daily. This is not the stabilized rate that the banks use to convert currency, there is actually a formula that can be found, but you have to search for it. I found the sterling conversion to be extremely inaccurate on 29 June.
*I’m going to write a post about Google Play separately, because they do their absolute best to make things difficult for authors.