Back on March 2, 2012, we wrote the following in our post Watching the Thug Play the Game
"Amazon proponents say that Amazon is bringing the world a river (yes, that's why it is named Amazon) of affordable material and that has to be good for everyone. Well, yes, they do make things affordable. Now. But, after they've run other publishers and other booksellers out of business and have a virtual - if not actual - monopoly on publishing and bookselling, do you really expect them to continue to discount so deeply? If there is no competition, do you really believe that they won't raise the prices on everything, eliminating discounts, slashing the percentages given to authors? If they're the only game in town, what is to stop them? At some point, if Wall Street is to continue supporting them, they'll have to start showing profits to shareholders. To do that, they'll have to take it out of the hide of those who buy from them and sell to them."
Today the Seattle Times ran a story from David Streitfeld of the NY Times detailing just these things, "Small Publishers Anxious as Amazon Shrinks Discounts". According to the article, by lowering the discounts offered to customers, book prices are higher and that's affecting their sales. Small publishers AND authors are taking notice. Other writers and publishers have the same complaint. They say Amazon, which became the biggest force in bookselling by discounting so heavily it often lost money, has been cutting back on its deals for scholarly and small-press books. That creates the uneasy prospect of a two-tier system where some books are priced beyond the reach of an audience."
There appears to be no warning, no alerts and no decernable pattern. Any Amazon customer who uses the retailer’s “Saved for Later” basket has noticed its prices have all the permanence of plane fares. No explanation is ever given for why a price has changed. Bruce Joshua Miller, president of Miller Trade Book Marketing, a Chicago firm representing university and independent presses, said he recently surveyed 18 publishers. “Fourteen responded and said Amazon had over the last few years either lowered discounts on scholarly books or, in the case of older or slow-selling titles, completely eliminated them,” he said. [Our underline]
So much for the free-flowing river.
Higher prices have implications beyond annoyed authors. For all the hoopla around e-books, old-fashioned printed volumes are still a bigger business. Amazon sells about one in four printed books, according to industry estimates, a level of market domination that the book trade has never before seen.
It is an achievement built on superior customer service, a vast range of titles and, most of all, rock-bottom prices that no physical store could hope to match.
Even as Amazon became one of the largest retailers in the country, it never seemed interested in charging enough to make a profit. Customers celebrated and the competition languished.
Now, with Borders dead, Barnes & Noble struggling to survive and independent booksellers greatly diminished, for many consumers there is simply no other way to get many books than through Amazon.
And for some books, Amazon is, in effect, beginning to raise prices.
Stephen Blake Mettee, chairman of the board of the Independent Book Publishers Association, said Amazon was simply following in the tradition of any large company that gains control of a market. “You lower your prices until the competition is out of the picture, and then you raise your prices and get your money back,” he said.
Authors like Hollock and their publishers say they feel helpless about Amazon’s control over their fate. Hollock says he has called Amazon several times to ask why the price of his book was going up, and never received an answer that made sense.
In its 16 years as a public company, Amazon has received unique permission from Wall Street to concentrate on expanding its infrastructure, increasing revenue at the expense of profit.
Stockholders have pushed Amazon shares up to a record level, even though the company makes only pocket change. Profits were always promised tomorrow.
Small publishers wonder if tomorrow is finally here, and they are the ones who will pay for it.
One small nonfiction publisher, which requested confidentiality because Amazon is a crucial account, said the retailer sold its books at a discount ranging from 25 to 35 percent for years.
Then, despite steady sales, the discounts began to shrink. Their most popular book this week was 16 percent off.
For this publisher, that means less revenue and less profit as some buyers reject the more expensive books.
It is a disappointing turn of events, particularly when he recalls the excitement Amazon initially generated among independent presses.
“Amazon enabled our buyers to find us, before any wholesaler would talk to us,” he said. “Their slogan was about ‘leveling the playing field for small publishers’ and they did.”
Mr. Streitfeld's article begins by relating the affect of these actions on the sale of a true crime book by Jim Hollack. He returns to Mr. Hallock to end the article:
For Hollock, the “Born to Lose” author, the issue is readers, not dollars. His award-winning book, published by Kent State University Press, had a steep list price of $35 to begin with.
In the author’s view, Amazon is simply compounding the trouble by raising its price from $23 to more than $30.
“I see all these other books out there that are cheaper,” Hollock said. “I thought, ‘Man alive, I don’t know how I’m going to compete.’”
Well, Mr. Hollock, welcome to the party.
Amazon - or SPECTRE as we've tagged them - doesn't care about you or us or anything other than marketshare and sales. They've been willing to sacrifice profits to gain control. Their actions and practices over the years prove just that.
Today came the news that Williams' Book Store, selling books in the LA area for the last 104 years, is closing. Not enough sales to pay their bills.
While we can say we told you so, we take no satisfaction in it. The wreckage has been at too high a toll.
And on it goes...