As you may've heard, Ama - er, um - SPECTRE recently put forth an offer to independent booksellers to become part of their 'team'. The gist of it is that we can sell their gizmos and their e-files and get a slice of their action for a period of two years. Here's their press release on the deal.
From The Verge you get the math on this 'offer':
"Let’s clear up some numbers in this article.
Amazon is offering a 6% discount on wholesale purchases of Kindle devices and up to a 30% discount on accessories. That means a KF HDX would cost a bookstore $216. Amazon will then give them a 10% commission on ebooks sold (and only ebooks sold, not apps, movies, music, audiobooks, or ebook rentals). Given that the upper limit selling price for a trade ebook is around $15, they’re looking at a maximum of $1.50, but with average prices in the 6 or 7 dollar range they’re looking at chump change in commissions.
Also, because of Amazon’s proprietary DRM, the bookstores can’t sell their own ebooks directly to try and get more of the pie.
The second option is to forgo the commissions in exchange for a 3% increase on the margin for the devices. Yeah… $7.50 isn’t going to convince anyone.
The thing is that people running independent bookstores aren’t stupid. For them to survive in the current state of the physical book selling market means that they’re actually probably very business savvy. So they are going to be able to see right through the smokescreen here. Business Insider summed it up perfectly: “Amazon has a plan to get indie bookstores to kill themselves”.
In every respect this is a terrible ripoff, especially when Kobo is offering a much better program through the ABA." [We here at SMB are part of the Kobo program.]
The New York Time's David Streitfeld asked JB for his thoughts on this and he's what he sent back:
I can't help but see this as a misleading attempt to counter the in-roads that Kobo has made with readers and fans of independent booksellers. Recently, we've read of Amazon shutting down part of its publishing due to a lack of success and profits (and stories about how Amazon itself is still not profitable). Something about this move has a feeling of retreat.
This release really doesn't provide much info. What's the discount that they're offering to booksellers on their gizmos? If independents can't make much money on the sale of the devices, they're at a disadvantage - selling the competitor's hardware, enriching the competitor, and not making much in return. There's also the issue of how an independent's customers get to the place to order they e-books. Are our customers just clicking on link on our website that then takes them to Amazon's? All that means is that they're selling independents the opportunity to become a new set of portals to funnel customers to Amazon. We help Amazon grow its business and, in return, we get a thin slice of the sale? That's not cooperation; that's being willingly complicit in your own execution.
Here's the final Streitfeld's article in the New York Times.
Since then, there have been any number of reactions, some bemused, some scornful, some perplexed, and some outraged.Here are just a few noted by Melville House Books on their website:
“We are not enticed in the least by the latest ‘offer’ from Amazon. It’s a dagger disguised as an olive branch – the latest effort by Amazon to gain traction with indie customers and loyalists.”
— Lissa Muscatine, Politics and Prose, DC
“Hmmm, let’s see. We sell Kindles for essentially no profit, the new Kindle customer is in our store where they can browse and discover books, the new Kindle customer can then check the price on Amazon and order the ebook. We make a little on their ebook purchases, but then lose them as a customer completely after two years. Doesn’t sound like such a great partnership to me.”
— Carole Horne, Harvard Book Store, MA
“If past experience is any indication, Amazon is not doing this to be sweet to indies.”
— Dorothy Massey, Collected Works Bookstore, NM
and our personal favorite -
“They can go fuck themselves.” — Sarah McNally, McNally Jackson Books, NY
Shelfaware ran a story with similar quotes:
David Bolduc, owner of the Boulder Book Store, Boulder, Colo., called participation in the program "sleeping with the enemy. If anyone thinks Amazon is going to do you a favor, you better have someone walking behind you so you don't feel the stab. Their whole entire business model is predatory.... I don't see any possible way to live in the same ecosystem as Amazon. They don't want anybody else. They want to be the go-to source for everything in the world."
For me, it's a Main Street issue," said Anne Holman, co-owner of the King's English Bookshop, Salt Lake City, Utah. "If I sell their Kindles after everything they've already done to indie bookstores, where would I be? It's about more than just bookstores: it's about the bike shop across the street, it's about the restaurants.... And it's not just the booksellers they've put out of business, it's the electronics store down the street, it's the other small businesses. I like our small businesses ecosystem and want it to flourish."
Nor should you think these reactions are limited to US booksellers. From The Bookseller:
Sheila O'Reilly, owner of Dulwich Books in London, told the Bookseller: "I think I would search my heart and find that morally I just couldn't stock the Kindle. I know Amazon employ lots of people in this country but they also have head offices in Luxembourg and Ireland for tax avoidance reasons and I couldn't ignore that. If it was more of a level playing field between Amazon and independents, then maybe I would think about it, but it isn't."
David Dawkins, manager at Pages of Hackney bookshop in East London, said Amazon "has made a point of aggressively diverting people's habit of using the high street. The company has made it clear that is what they want to do and I would be very surprised if this signals a change in policy towards independent retailers and the high street. I also wouldn't want our customers to think that we were doing trade with 'the bad guys.' I think we may lose quite a lot of respect if our customers thought we were sleeping with the enemy."
Other news on the subject of SPECTRE:
~ There's been a great deal of press about Brad Stone's biography of Jeff Bezos and his creation. Then there was MacKenzie Bezos' heated criticism of the book. If you don't know what to think or who to believe, here's a story about an early employee the company and his view on Stone's book who posted a four-star review of the book on SPECTRE's own site. Shel Kaplan - the former employee - thinks Stone got it right.
~ Last month, towards the end of October, Ama - er, um - SPECTRE announced that it was raising it's minimum amount an order needed to achieve to get free shipping from $25 to $35. Whether this was to recoup some revenue due to the policy, or to drive people toward their Prime service whereby the customer pays upfront for a membership and then is enrolled to get services whether they use them or not, is anyone's guess. (Free shipping on all orders is one of the services.) Either way, they're moving to do less for free and to use their pervasive computer systems to make suggestions to people so that they'll buy just a little more to get up to the now higher free shipping total.
~ SPECTRE announced a joint plan with the United States Postal Service to provide Sunday delivery.The Postal Service plans to use flexible scheduling to do this and says it will hire no new employees, though we've seen nothing about what this will cost in payroll. Is SPECTRE going to eat these charges or are they to be passed along to their ordinary consumers (Prime members will pay no shipping charges for Sunday delivery)?
~Then there is the inexplicable phenomenom of SPECTRE being a massive, worldwide outfit that still makes little to no profit for its stockholders, an anomoly on Wall Street.
Derek Thompson wrote in The Atlantic in October "Defenders say Amazon is trading the present for the future, spending all its revenue on a global scatter plot of warehouses that will make the company indomitable. Eventually, the theory goes, investors expect Amazon to complete its construction project and, having swayed enough customers and destroyed enough rivals, to “flip the switch,” raising prices and profits greatly. In the meantime, they’re happy to keep buying stock, offering an unqualified thumbs-up for heavy spending.
But this theory assumes a practically infinite life span for Amazon. The modern history of retail innovation suggests that even the behemoths can be overtaken suddenly. Sears was still America’s largest retailer in 1982, but just nine years later, its annual revenues were barely half those of Walmart. “The economic countryside is littered with the carcasses of companies that thought they had a [durable] competitive advantage,” says Alex Field, an economic historian at Santa Clara University. “Just look at BlackBerry or AOL.”
Amazon is not as insulated from its rivals as some think it is. Walmart, eBay, and a bounty of upstarts are all in the race to dominate online retail. Amazon’s furious spending on new buildings and equipment isn’t an elective measure; it’s a survival plan. The truth is that the company benefits from a beautiful but delicate tautology: Amazon has won investors’ trust with a reputation for spending everybody to death, and it can spend everybody to death because it has won investors’ trust. For now."
Greg Satwell, writing in Forbes Why Amazon Is A Lousy Business
Benedict Evans wrote this past August, "Equally, the problem with saying 'we can't tell from outside how Amazon is really doing, but it will become profitable, just wait and see' is that you could be waiting for ever without ever knowing if you're wrong."
Eugene Wei is one who thinks SPECTRE's business model is genius, that in this model short-term profits are not the point and are unimportant. Which business model is it that he approves of? The original one where there were to be no warehouses at all, that everything would be done in the great flowing river of the internet, where it would have no physical presense, no stock, no stockers - just office workers sitting at computers and sending customers' orders to manufacturers. Is that the genius business model, the one that was ditched long ago?
Oh - in case you were wondering if we were going to become part of SPECTRE's continuing efforts at Global Domination...
Do you really need us to answer that?
Recently, there have been a couple of news pieces that demonstrate others are sick of Ama - er, um SPECTRE's business practices and are willing to sing out.
First there was an interview with the noted literary agent Andrew Wylie which appeared in The New Republic, a man reknown for his outspokeness as well as his insistance on representing authors and books of "enduring quality". Having been in the publishing business for a great, long time, and having done a little bit of business with SPECTRE, he has strong opinions.
"Question: Do you feel as hostile toward Amazon as you used to?
Answer: I think that Napoleon was a terrific guy before he started crossing national borders. Over the course of time, his temperament changed, and his behavior was insensitive to the nations he occupied.
Through greed—which it sees differently, as technological development and efficiency for the customer and low price, all that—[Amazon] has walked itself into the position of thinking that it can thrive without the assistance of anyone else. That is megalomania."
The second piece is from the Seattle Times, "Book: Bezos' tactics not for faint of heart" with Jay Greene writing about a new biography of Jeff Bezos by Bloomberg BusinessWeek senior editor Brad Stone. While Green notes that the book delves into some psychological profiling of SPECTRE's creator to explain how the company operates (knowing how erroneous profiles of serial killers have been over the years, we put little stock in them), we point to the end of the article, where the scorched-earth business practices are detailed:
"Stone writes about a 2009 meeting between an Amazon executive and the founders of Quidsi, a startup making a name for itself with mothers with its Diapers.com site. Amazon was planning to move into the category. At first, Quidsi’s founders told Amazon that the company wanted to remain independent. But as Amazon moved into the business, their thinking changed.
Amazon cut prices up to 30 percent, and quickly matched any price movement at Diapers.com. Revenue growth at the startup began to stall and venture capitalists became reluctant to pump new money into the company that was clearly in Amazon’s sights.
Quidsi began talks to be acquired by Amazon archrival Wal-Mart Stores. When the Arkansas retail giant made a lowball bid, Quidsi turned to Amazon. At the exact same time that the Quidsi founders met with Bezos in Seattle, Amazon issued a news release announcing Amazon Mom, a deal that gave them a year of Amazon Prime, with its free two-day shipping, and 30 percent off diapers if they signed up for regular monthly deliveries.
'Quidsi could now taste its own blood,' Stone wrote.
Two months later, Amazon acquired the company for a slight premium over Wal-Mart’s original bid, but below its final offer.
'Bezos’ Khrushchev-like willingness to use the thermonuclear option had had its intended effect,' Stone wrote. 'The Quidsi executives stuck with Amazon, largely out of fear.'"
As Mr. Wylie notes in his interview: "If you eat all the grass on the hill, eventually you don’t have any topsoil, Mr. Bezos."
They call it a 'scorched earth policy' for a reason. Nothing useful is left, nothing is left alive, and nothing can regenerate.
That's SPECTRE's business model.
There's a new ad on TV from Ama - er, um SPECTRE - touting their newly updated reading gizmo. You see a carefully chosen variety of 'civilians' sitting in a 'pseudo-living space', with fake walls and big chairs and they're reading on this flat piece of techonology and are simply ecstatic about the experience.
No, they're not reading books. They're reading files on a computer...
The camera pulls back at the end to show this little staged area is right in front of one of New York City's icons, the Flatiron Building. You'll recognize it - it is triangular but seems to be pretty flat, leaving you wondering what the offices and hallways inside it are like. It sits on a wedge of land point north, where Broadway and 5th Avenue intersect. This is mid-way between Wall Street and Central Park, pretty much dead center of the publishing center of the United States.
Now - think back to the big lawsuit where the US government sued Apple and a raft of major publishers for collusion in setting e-book prices in an attempt to stop Ama - er, SPECTRE - from completely monopolizing the e-book market. And here's an ad about the wonders and joys of e-reading staged in the heart of American publishing.
One last bit of this that eliminates any question of coincidence: the Flatiron Building is the home of St. Martin's Press, one of those publishers charged of collusion and the one more vociferously resisting to settlement, and most adamant about the dangers of what Ama - er, um SPECTRE was doing to publishing.
No, no coindence.
Just a bully sticking a finger into the eye of a foe.
Recently, NW Book Lovers republished something that Village Books in Bellingham sent to their customers about the importance of supporting local businesses - booksellers or not. It's thoughtful and important and we think worth rebroadcasting.
In the wake of price wars among online megastores plus the President’s jobs speech at an Amazon warehouse and the American Booksellers Association’s letter about it, we thought we’d share the thoughtful email that the owners of Village Books in Bellingham sent to customers.
We’re so grateful to all of you for the outpouring of support since the reports of Amazon’s predatory pricing onslaught. We’ve received dozens of encouraging notes, quite a number of you have sworn off buying from predators, some have written directly to Amazon, and several of you have mentioned the issue as the reason you were consciously making purchases here. Thank you.
The issue grew a bit more widely known last week when President Obama chose an Amazon warehouse in Tennessee as the venue for a speech on job creation. Critics have rightly pointed out that local retailers, including independent booksellers like Village Books, have been far more successful in creating sustainable jobs than the massive online discounter. Some of you even told us that you have written the White House, protesting the President’s choice of speaking venue.
A number of you have asked, “What can I do?” There are a couple of things. First, you can spread the word widely about the importance of shopping locally. Here are ten good reasons to pass on to your friends:
1. Buy Local — Support yourself: Several studies have shown that when you buy from an independent, locally owned business, rather than a nationally owned businesses, significantly more of your money is used to make purchases from other local businesses, service providers and farms — continuing to strengthen the economic base of the community.
2. Support community groups: Non-profit organizations receive an average 250% more support from smaller business owners than they do from large businesses.
3. Keep our community unique: Where we shop, where we eat and have fun — all of it makes our community home. Our one-of-a-kind businesses are an integral part of the distinctive character of this place. Our tourism businesses also benefit. “When people go on vacation they generally seek out destinations that offer them the sense of being someplace, not just anyplace.” ~ Richard Moe, President, National Historic Preservation Trust
4. Reduce environmental impact: Locally owned businesses can make more local purchases requiring less transportation and generally set up shop in town or city centers as opposed to developing on the fringe. This generally means contributing less to sprawl, congestion, habitat loss and pollution.
5. Create more good jobs: Small local businesses are the largest employer nationally and in our community provide the most jobs to residents.
6. Get better service: Local businesses often hire people with a better understanding of the products they are selling and take more time to get to know customers.
7. Invest in community: Local businesses are owned by people who live in this community, are less likely to leave, and are more invested in the community’s future.
8. Put your taxes to good use: Local businesses in town centers require comparatively little infrastructure investment and make more efficient use of public services as compared to nationally owned stores entering the community.
9. Buy what you want, not what someone wants you to buy: A marketplace of tens of thousands of small businesses is the best way to ensure innovation and low prices over the long-term. A multitude of small businesses, each selecting products based not on a national sales plan but on their own interests and the needs of their local customers, guarantees a much broader range of product choices.
10. Encourage local prosperity: A growing body of economic research shows that in an increasingly homogenized world, entrepreneurs and skilled workers are more likely to invest and settle in communities that preserve their one-of-a-kind businesses and distinctive character.
And, you can also take the One Book Pledge by clicking here.
To be clear, we have no problem with Amazon, or anyone else, selling printed books, eBooks, or even refrigerators. What we object to is the predatory pricing that is fully intended to put other retailers out of business and establish one company as a monopoly. Monopolies have never proven to be in the best interest of the public.
Thanks again for your support, Chuck & Dee and the entire team at Village Books and Paper Dreams
And we agree with them to the core of our beings.
~ the Crew
1 – Craig Johnson, A Serpent’s Tooth, Viking
2 – Mike Lawson, House Odds, Grove Atlantic
3 – James Lee Burke, Light of the World, Simon & Schuster
4 – Mary Daheim, Gone With The Win, Morrow
5 – Carl Hiaasen, Bad Monkey, Knopf
6 – Timothy Hallinan, The Fame Thief, Soho
7 – C.J. Box, The Highway, Minotaur
8 – tie
Lisa Lutz, The Last Word, Simon & Schuster
Robert Galbraith, The Cuckoo’s Calling, Mullholland
10 – Daniel Silva, The English Girl, Harper
As you may've heard, President Obama today visited an Amazon 'fulfillment center' in order to make a 'major policy' speech on the economy and the need for jobs. As you might imagine if you've been paying attention to what we and others have been saying about SPECTRE for the last couple of years, you'll not be surprised that this choice of locale has been controversial. To show that it isn't just us who have problems with SPECTRE, here are a number of messages sent to the White House as posted in today's ShelfAware:
From the board of The American Booksellers Association:
Dear President Obama:
On behalf of the American Booksellers Association, we are writing today to call your attention to how Amazon's business practices are actually harming small businesses and the American economy. While Amazon may make news by touting the creation of some 7,000 new warehouse jobs (many of which are seasonal), what is woefully underreported is the number of jobs its practices have cost the economy.
For you to highlight Amazon as a job creator strikes us as greatly misguided.
As you've noted so often, small businesses are the engines of the economy. When a small business fails and closes its doors, this has a ripple effect at both a local and a national level. Jobs are lost, workers lose healthcare and seek unemployment insurance, and purchasing decreases. And while Amazon may now be boasting about the creation of jobs, any gains are elusive, and not a long-term solution.
The simple fact is that Amazon's practices are detrimental to the nation's economy.
The news this weekend that Amazon is slashing prices far below cost on numerous book titles is further evidence that it will stop at nothing to garner market share at the expense of small businesses that cannot afford to sell inventory below their cost of acquisition. In the end, monopolies are bad for consumers--and there are no examples in American history that prove otherwise.
For more than a decade now, Amazon has flouted sales tax laws in an effort to maintain a competitive advantage over Main Street businesses. To date, 16 states have passed sales tax laws to level the playing field for bricks-and-mortar businesses, and in all but three of those states Amazon (as well as Overstock.com) has fired its online affiliates in order to evade collecting and remitting sales tax to the state (two of the 16 states only just passed their sales tax laws). This has resulted in many online affiliates going out of business. Moreover, by eschewing its obligation to remit sales tax, Amazon has negatively impacted state budgets and services, as well as those of local communities.
In addition, Amazon's continued practice of using books, both in print and e-book formats, as "loss leaders" in an effort to increase their already immense market share of the retail book trade and to up-sell large-ticket items has impacted Main Street retailers and the communities in which these stores are located in ways that can be calculated (job losses, store closures, a decrease in sales tax revenue, etc.) and in ways that simply cannot (urban blight, budget cuts affecting first responders and other community services, etc.).
All told, according to the Institute for Local Self-Reliance, every $10 million in spending that shifts from Main Street retailers to Amazon results in a net loss of 33 retail jobs. That would mean for 2012 alone--using Amazon's own numbers about its increase in sales--Amazon cost the U.S. economy almost 42,000 jobs just last year!
At a time when Main Street retailers, including indie bookstores, show promise of recovering from the recession, we are disheartened to see Amazon touted as a "jobs creator" and its warehouse facility used as a backdrop for an important jobs speech, when, frankly, the exact opposite is true.
Conversely, the value of a local business to its community cannot be overstated--whether through job creation or in the myriad ways it gives back to the community.
We would love to continue this timely and important conversation with you. We'll bring together a group of real job creators to meet at your favorite local, independent bookstore! And we'll buy the coffee!
The board of the New England Independent Booksellers Association wrote:
Dear President Obama,
The news that you are planning to speak tomorrow at the Amazon warehouse in Chattanooga, Tenn., as part of your campaign to highlight the need to bolster middle class families and create jobs has hit members of the New England independent bookselling community like a ton of bricks.
What is the thinking behind this decision? Amazon is the very embodiment of so much that is wrong with our economy. The often-substandard working conditions at their warehouses around the world have been well documented. Their business model is based on fighting those states that have required them to collect and remit sales tax while driving Main Street brick and mortar stores out of business through predatory pricing. As we write, they are slashing prices of bestselling books in yet another price war where independent and brick and mortar businesses will be collateral damage. We cannot believe this is your vision of job creation and the future of American middle class.
This, from a president who has expressed pleasure in shopping at Kramer Books in D.C., and Bunch of Grapes on Martha's Vineyard? We would hope that your administration would be standing with Main Street, and investigating the monopolistic practices of Amazon, rather than either explicitly or tacitly endorsing those practices.
In the words of John Mutter, editor-in-chief of Shelf Awareness, "This is roughly equivalent of going to a Wal-Mart and calling for more of the kinds of jobs it offers."
We urge you to rethink using Amazon as a beacon of hope for the American economy and middle-class. Nothing could be further from the truth.
Hut Landon, executive director of the Northern California Independent Booksellers Association, wrote:
Dear President Obama:
I'm writing you on behalf of the members of the Northern California Independent Booksellers Association to express our dismay at your decision to deliver an address on jobs at an Amazon warehouse.
Amazon is a company that for more than decade fought tooth-and-nail to protect a business model based on sales tax avoidance, in the process fueling other online companies to copy to its actions and costing states cumulatively billions of dollars.
Worse yet, in our state, Amazon's CEO purposely misled the media and public officials by stating that his company shouldn't have to pay sales tax in California because Amazon didn't have a presence here and therefore wasn't using services that sales tax covers. The fact is, of course, sales tax is collected by retailers on behalf of purchasers who are liable for it--Amazon wasn't being asked to pay sales tax, only to do what other retailers are required to do legally in the states.
Amazon now has largely abandoned its sales tax avoidance strategy because it believes it needs to compete on delivery time. So warehouses have been opening across the country, including in Tennessee. Amazon has created jobs, to be sure, but they are often part-time (making those nasty health benefits a non-factor) and barely minimum wage. The company has made news with their warehouses, but it hasn't always been about job creation. In Pennsylvania, employees were forced to work in extreme summer heat with any air conditioning, and you have no doubt been following Amazon's labor troubles in Germany.
On top of all this, your Justice Department handed Amazon a monopoly on e-books with its recent ruling, assuring that independent bookstores will be unable to compete with e-books being sold as a loss leader to attract new Amazon customers. Ironically, while consumers will see lower prices, they will also see many fewer e-books published in the future. When Amazon decides not to lose money on the products, it will force e-book publishers to offer better terms. Given the already low margins, the response will be to simply not publish nearly as many titles. You'll be able to buy the newest book by Dan Brown, just not anything by the next Dan Brown.
Your appearance at the Amazon warehouse in Chattanooga sends a clear signal to small independent businesses that our value as job creators and community linchpins is not as important as an arrogant chain behemoth's contributions to states' monetary shortfalls and creation of thousands more minimum wage, benefit-poor jobs.
We will continue to do what we do best as locally owned businesses--offer knowledge and service to our customers, create and support community growth and activity, make every effort to provide employees with fair wages and conducive working conditions. And some of us will continue to grow and employ new workers, as small business has always done, even with the Amazons of the world being excused for past transgressions and rewarded for predatory business practices.
We are disappointed that you feel Amazon deserves your attention and endorsement (even if implied). We hope you will carefully consider the message you are sending with such an appearance and perhaps re-think that message in the future.
Sharon Hoshida, co-owner of Granada Books, Santa Barbara, Calif., wrote:
Dear President Obama,
As a voter who cast her vote for you twice, and attended your first inauguration in 2009, I am writing to express my concern about your example of Amazon as a job creator. You should know that their undercutting price tactics and ability to conduct business without the tax responsibilities of all other small businesses has done irreparable damage to independent retailers across the land.
For you to stand in front of their warehouse that is responsible for the loss of jobs and income is truly unconscionable. I am a small business owner, and just opened an independent community bookstore in downtown Santa Barbara, Calif. We are job creators, giving nine people employment. Our money stays in the community, we pay local, state and federal taxes, we serve our community. Amazon does NOT.
Never one to keep his opinions to ourselves, JB sent the following message to The White House yesterday as well:
At a time when small independent booksellers are hurting due to scorched earth policies by Amazon, that you'd appear at one of their facilities to talk about the economy is infuriating. They're the enemy of small businesses like mine and so many others. What you need to do is champion a way to get more discretionary income into the greatest number of hands. Too much money is locked up in the top percentage of the population and they can't buy enough to keep our consumer-driven economy going. We don't need investment. We need customers! We need people who have extra money to spend! You want me to create jobs? I can't do it without more customers spending their money here and they can't do that if they don't have it. You want to support small business? Visit one and give an address from one. Showing any sort of support for Amazon is a huge mistake. But the Republicans will approve…
Finally, Seattle Times economic columnist (and mystery writer) Jon Talton wrote in today's paper about the "Amazon Effect". Well worth your time to read his take on it.
In 1939, Germany invaded Poland using a new kind of warfare - the Blitzkrieg. This translates to lightning war. It utilized the airforce and the tank corps and it moved fast and hard and it overwhelmed the Polish nation before they knew that was happening.
Friday, Amazon declared war on the entire publishing Universe. We've been blitzkrieged.
SPECTRE, as we prefer to think of them, has begun discounting many hardcovers between 50% and 65%. To put this in persepective, when we order a hardcover from a publisher, we're generally given 46% (to be clear, there are specials that might, rarely give us 50% and one distributor's top discount is 45% - the wholesalers are lower that this). That means we pay the publisher 54¢ out of each $1. As we've explained in past postings, out of the 46¢ that we make on the sale of that book, we pay the rent, payroll, supplies, media (websites, blogs and other fees) and for the occassional bag of Fritos. That 46¢ is otherwise known as 'profit'. The lower the discount, the more difficult it becomes to pay the bills. There is no way anyone outside of a megacorporation can afford to offer those steep discounts and stay in business.
"'It's an open declaration of war against the industry,' said Jack McKeown, president of Books & Books Westhampton Beach, Westhampton Beach, N.Y. Like several people familiar with Amazon's move, he speculated that Amazon has been "emboldened" by the Justice Department's victory against five major publishers in the e-book agency model case as well as Wall Street's acceptance of continued losses by Amazon for now in the expectation of retail domination--and major profits--eventually. This last point was seen most recently on Thursday, when Amazon's quarterly results included a net loss and were below Wall Street expectations but did not provoke the usual rush to sell, as is the case with most companies whose results are disappointing."
How cozy is the relationship between SPECTRE and the Obama administration? This coming Tuesday, the President is scheduled to give another of his major speeches concerning the economy, the middle class and the need for good paying jobs at the Amazon fullfillment center in Chattanooga. If you've been reading along over the last couple of years on SPECTRE's business practices, you know there have been a continual flow of articles about how badly SPECTRE has treated it workers. So first the Justice Department works to hand the publishing world over to SPECTRE and then the President visits to champion them as a business model...
John Mutter, author of the story in ShelfAware notes that "The discounts are far below the usual 40%-50% range sometimes offered by Amazon, warehouse clubs and other discounters and are more typical for remainders than frontlist hardcovers. In some cases, the hardcovers are priced below the Kindle editions." We've noted in past posts that SPECTRE's own publications are priced higher than their own electronic versions, that they're seeminly content to sacrifice their own works to sales of their e-books, now we can see that they're content to sacrifice ANYONE's works to their own designs.
One has to wonder if this is aimed at any particular location. Payback to the publishers for trying to keep Amazon from taking over all of the electronic books world by agreeing to the 'agency pricing' system, the system the Justice Department targeted? After Borders declared bankruptcy in Feb. of 2011, the publishing industry has been worried about the health of Barnes & Noble. B&N has been struggling with the failure of their Nook, the great real estate costs of their massive stores and the general problems that have plagued all booksellers the last few year. Might this be a coup de grace aimed at their last major corporate competition? After all, trying to match SPECTRE's new discounts in their precarious state would be financial suicide for B&N - or anyone else. If B&N were to finally implode, SPECTRE would have no rival of comparable size and heft.
Whatever their aims, it is something than no independent can compete with. Little places like us have no deep pockets. Wall Street may be satisfied to sit back and watch Amazon bleed money. Wall Street is so awash with money that they're indifferent to what goes on along Main Street. And let's be clear - if Amazon is giving these levels of discounts, they're losing money on each sale. What is the merit of a business policy that says let's make sales by losing money? How long can they do that?
And who will be left standing - or crawling - when they're done?
The term 'scorched earth' comes from a military practice. It is as old as time and humans have been inflicting it upon one another as long as they've been fighting. In the Civil War, Sherman's March to the sea was an example - destroy everything that can be of use to the enemy. Literally, burn it all down the the ground. The retreating Germans did this as they left the Russian Front, the Russians used it against Napolean, it was applied in the Boer War. It is so brutal and so unforgiving that it was officially outlawed by the 1977 Geneva Convention. "It is a military strategy where all of the assets that are used or can be used by the enemy are targeted, such as food sources, transportation, communications, industrial resources, and even the people in the area. The practice can be carried out by an army in enemy territory, or in its own home territory."
At the begining of July, the NYTimes noted that Amazon was lowering the discounts it was paying to self-published authors and small publishers - meaning they were paying them less, and keeping more, of the sale. In the past, they've removed buy buttons from various publishers whose actions they disliked. They've eliminated entire types of books if thought controversial. They've deleted books from customer's e-readers that were paid for. And the poor treatment of their own international work force has been written about repeatedly. You can find our posts, with embedded links to the pertanent news articles, on our blog under the heading "Bookselling these Days"
And remember, Amazon is working with the CIA to supply cloud-sourcing security.
Welcome to SPECTRE's world. We're all just spectators.
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...
Two bits of news caught our eyes recently:
Self-Published Ebook Sales Reach 20% of Genre Market In 2010, the US published 328,259 printed books, the UK 149,400. It is hard to find data on book publications in 2011 but, according to Bowker (they're the outfit that assigns the individual identifying number - the ISBN - to each book), since 2006, self-published books have risen 287%. Some 87,000 or so e-books were self-published in 2011 (some items may've been counted twice but many self-published e-books also lack ISBNs, so the number is 'fluid'). This figure is for the US only, but we can assume that the rest of the English-speaking world is holding up their end of the racket.
The Bowker article notes that in 2011, Amazon alone released 58,412 self-published works, "39% of all self-published print books." Further, "Smashwords was the largest ebook producer, accounting for 40,608 titles, or 47 percent of all self-published ebooks." Add those two figures and you get 99,021 self-published books by these two major players alone. Do the math to figure out what part they didn't produce (the 61% that Amazon didn't release equals 91,362, and the 53% that Smashwords did not produce comes to 45,792) and you get 149,774 self-published print books and 86,400 self-published e-books, or, if this math is correct, in 2011 there were 236,174 self-published titles. Give or take.
Then there was this essay by Barry Eisler, also on The Guardian's webiste: The Digital Truths Traditional Publishers Don't Want to Hear where he once again touts the advantages of e-books and self-publishing over what he calls 'legacy' publishing - meaning the system of publishing that gave him his start.
From what we hear, Eisler has done very well since he walked away from a fat contract with a legacy publisher to go on his own and with Amazon. We know of many authors for whom this route has not only become a stream of money but the only way they can continue to publish. They include nationally and internationally known writers, award winners - names you'd know, many local. The traditional NYC publishers have turned away from what is known as the 'mid-list' author (as opposed to the novice novelist or the mega-seller), no longer giving them contracts that allowed them to live on their writing and letting their older books go out of print. These backlist titles, if they have the publishing rights to them, can become a source of steady money as the books are complete and simply need to be converted to digital files. No one begrudges them this. They ought to be able to make money on their work.
We're just crabby that the major publishers are so myopic as to let these writers go so that we can no longer have their books to sell.
But here's the thing about someone like Barry Eisler: he launched himself into this digital world when he was already an established author. He didn't get to where he is by using that system from the start. Yes, he's done well selling his books on-line as digital files. Good for him. But would he be where he is had he not benefitted from the efforts of the 'legacy publishing' system he so easily dismisses?
Go back to the figure of quarter of a million self-published titles in 2011. We have to figure that the number of self-published books continues to grow each year. So maybe there were not as many in 2010, and maybe a lot more in 2012. And we're half-way through 2013, so...
What we would like to see is Barry Eisler conduct what we refer to as a 'science experiment': Publish a new work under a pseudonym and keep it a secret for a year. Tell no one that you've done it, do nothing to draw attention to it as a Barry Eisler novel, in no way promote it as Barry Eisler work, or allow it to be connected to you - hell, even lie and deny it is yours if someone asks...Do everything you can to keep it just another self-published work by an author no one has heard of. In other words, launch this as any other unknown author just starting out would have to do.
At the end of that year tell us, how did it sell?
Will readers find it among the other few hundred thousand other newly-released self-published works? Can he be successful from scratch, without the help of his reputation and name and without the publicity machinery of a 'legacy publisher'?
That would be an interesting experiment.
The following is a post by William Kent Krueger which he posted on his own blog today, April 22nd. He kindly gave us permission to repost it.
When I was a kid, every town had a bookstore. An independent bookstore. Some towns had several. They were as ubiquitous as local drugstores with soda fountains and as important as any other element to the life of a community. It’s not like that now. Our local, independently owned bookstores are an endangered species. They’re the victims of big chains and of Amazon, yes. But they’re also endangered because of our own lethargy and our insensitivity to both the necessity and the importance of these very valuable resources.
Borders has gone the way of the dodo bird. If what we hear is true, Barnes and Noble is on the ropes. And when that chain is gone, know who’s left? Amazon. The big faceless corporation for whom books are simply another commodity and each of us is simply a revenue source.
Buying from independents is in our own best interest. It assures that no one large entity will control what’s available to us as readers. Freedom—and it does come down to this—is all about choice.
Most of the signings I do are at independents. I’ll be signing on Friday at a wonderful small bookstore in Hudson, Wisconsin, called Chapter2Books. Like most independents, they walk a fine line between red ink and black. If you live in the area, I would consider it a personal favor if you came and experienced this lovely shop and began to do your book buying there. Here’s a link to a great blog about these folks and their plight.
Thanks, Kent, for your efforts on behalf of us little guys!
Tues, June 25, 1-2pm, Carl Hiaasen signs Bad Monkey (June, Knopf hc, $26.95). Well, as usual, there really is no way to succinctly note a Hiaasen plot and this one is no different: a cop on Health Inspector duties who is hoping to get hired by the Key West department, a kinky medical examiner, a human arm in the freezer and the ‘twitchy’ widow of the owner, a vivacious voodoo witch, an idiotic and greedy developer and - oh yeah - a devious, talented and troublesome monkey. Sounds like the expected and standard Hiaasenian lunacy!
[Please note: Carl will be here just one hour. We’ll have lots of reserves and we cannot guarantee that all of your older copies can all be signed. If you do want to get some signed, figure out ahead of time which ones are the most important to be signed. And, of course, you must buy the new book here in order to get any older copies signed. Amazing how many people don’t understand that courtesy…]
RESERVE YOUR SIGNED COPY NOW!
We've known for a long time that Amazon - er, um - SPECTRE is branching into other venues.
Did you know that SPECTRE got the CIA contract to construct cloud system? Yep. Let your conspiracy theories run rampant for a moment. Go ahead - we'll wait.
But that's not all they're up to.
SPECTRE buying Goodreads is another development to roil your stomach. It certainly has ours.
Back in Feb 2008, they took control of Shelfari. Remember them? It was like Goodreads in that it's a social network for readers. You don’t remember them either? It is still active but we never hear about it. Goodreads has been one of the online places – perhaps the most prominent – that allowed readers to find objective reviews. After all, as independent bookshops have been killed off around the country, readers still need some way to find new books worth reading. There’s a well documented history of monkeybusiness with Amazon’s (sorry, SPECTRE) reviews. Goodreads has become a trusted alternative, and now, within a couple of months, they’ll cease to be an independent voice and will part of SPECTRE. Will they go the way of Shelfari in a few years?
Here's a joint interview with a representative from SPECTRE and Goodreads on their view of the merger and future plans.
Here’s a quote that talks about another facet of the deal:
“Privacy of reader information is viewed as a sacred trust by booksellers and librarians.... No librarian or bookseller wants to give the government or anyone else access to your private information. It's in our DNA. We're a community center and a community resource. You want to be able to come in and talk to us about books. You don't want us to gossip about your reading habits to the next guy who comes in, whether that guy is your neighbor or from the FBI. We don't do it. We won't do it.
"When we remember what you like, it's in service of a personal relationship. It's not 'data' to 'exploit.' This is a profession with professional standards.... At your next book club meeting, picture me sitting quietly in the corner, taking notes on your preferences. Imagine the next day you get an e-mail from me trying to sell you a new grill--or a book--or accessories for your Glock. That's the Amazon/Goodreads deal. It's appalling.... That's not the world we want to live in. That's the world we're fighting against, every day we open our bookshops and libraries to the public. Join us. You are not data."
That was from Gibson’s Bookstore in Concord, NH, in their letter to their customers.
Our stand regarding SPECTRE is old news by now, so you've probably been waiting for us to blow up all over this.
We're not resigned, and we're not accepting it, but we're also not howling about it. What's the point? What we have done is to pull all our reviews from Goodreads. We don't want SPECTRE to benefit from our work. We review for our customers, to let you know about good books we've read. We sincerely hope you'll buy them from us. That way, we all win.
But we won't help SPECTRE, so we're pulling our reviews. They're all available on our website, and we're creating a new Tumblr blog (to go along with the other two we have) dedicated to nothing but our reviews, and we'll put our past reviews up there, so you'll always be able to find them if you like. But we can't continue supporting Goodreads, and we don't see anything out there with nearly their clout. Yet.
If you find something that is independent and reliable and trusted, please do let us know!
We're very lucky. We have great authors who support us, and our customer base is wonderful.
Sometimes,though, people just don't understand the realities of signings and all they entail. We've got a link on our blog, Signing Etiquette, but let us walk you through some of the issues. We've heard from a little birdie that there was a woman who took some offense at our signing with Jacqueline Winspear. We don't know this for certain because she didn't address us personally, but we're going to take what we've been told at face value. Besides, there might be others out there who have the same questions.
"I called the bookstore before Jacqueline Winspear was to appear today and asked if we needed tickets to get in to see her, as they sometimes do that at the U Bookstore for famed authors."
We don't sell tickets. It's not the way we work, and it would pose problems for us logistically. We don't have formal readings; we're a meet-and-greet sort of shop. But we do expect you to buy the book from us rather than bringing in a book you've purchased elsewhere. Here's why:
When a publisher pays the bills to send an author around the country, they're doing it to help the hosting bookshop sell their books. After the signing, the publicity department will call to ask how many copies sold. We report how many sold, how many were reserved for mail orders or later pick-up and those numbers can affect whether we get that author back in the shop in the future or any of that publisher's other authors in to sign. And why should you be able to get books that you bought somewhere else get signed in our shop? You can't buy a discount ticket for a movie in one theater and expect a different theater to accept it. University Books sells tickets because they don't want people to bring in books bought elsewhere (such as Amazon) to get signed at their author events. We'd rather not have to charge you to visit an author, especially when there's no formal reading, but in return, we do expect you to step up to the plate and do your part. Or, look at it this way: buying the new book IS your ticket to the signing.
For example, we fielded a call from a lady who had purchased the book on her Kindle and wanted to come in to meet Jackie. We understand completely, but what you've got to realize is that unless there are book sales to go along with the appearances, the appearances will stop. It's expensive to tour an author; purchasing the physical book at the signing is a show of support for us and the author - and the publisher. We thank you for your continued support!
It's especially important to buy the new one from the hosting shop if you're bringing back stock to be signed. It's only polite, after all. The author is doing you a favor by signing your older books; they don't have to. In fact, there are several authors who refuse and will only sign the current book. There are those who will sign a limited number of back stock for you, perhaps two older books for one new one. This is completely the author's prerogative and we have absolutely no say in the matter. Some authors refuse to inscribe and will only sign. Again, it's the author's choice.
Which leads us to another issue that was mentioned in the posting:
"But when I got to the store, this witch was hovering over the author and said, loudly, "It is bookstore protocol that you buy her books from us before you get any signed. And she can only sign one because her wrist is tired" There were like 4 people in the whole freakin' store, how tired could her wrist be? I mean COME ON."
Setting aside the name-calling (we can't please everyone, nor do we expect to; some people just rub others the wrong way and that's the way it is), actually, the instructions were not to ask for inscriptions. Jackie was more than willing to sign all her books. However, a half hour before she arrived, Jackie called to explain that between a recent elbow injury and previous signings, her wrist and hand were tired and sore, and that she would only be signing books, not inscribing them. During the course of the signing, she discussed her carpel tunnel issue with the fans there, and apologized for not being able to do what she normally does, but she was under doctor's orders to do less. She didn't want to make the announcements, so she asked us to, and we're more than happy to comply.
"Still, I don't know if I will ever darken their doorstep again."
It's never nice to lose a customer -- but we stand behind our practices. And our staff.
~ the Crew
This piece ran in Shelfaware. It was so well written, timely and hearfelt that we wanted to spread it as far and wide as we could. Thanks to Wendee and John and Shelfaware for their gracious permission to post it.
Wendee Wieking was a bookseller at Queen
Anne Books in Seattle, Wash., for more than four years. She writes:
The common wisdom (such as it is) in the bookselling business is "adapt or die". We're to understand that if we don't expand in some way -- sell e-readers, add a cafe, become a wi-fi hub -- we'll become as relevent as buggy-whip makers.
According to a report in The Digital Reader, "...recently polled 1,983 US consumers and asked about the gadgets they used. This filtered group of respondents consisted entirely of ereader owners, and 337 (17%) indicated that , on average, they used their ereader at least once a week. Another 575 (29%) use it at least once a week. And the not-so-surprising statistic today is that 694 (35%) of the respondents indicated that they used the device just once."
Now it's possible that the e-readers were given to people who simply don't read. Sadly, there are a lot of folks like that in the world. Being dedicated readers, we don't understand it, but we acknowledge that it's true. But that's still a huge percentage of people who try it and shrug.
And here we just got e-readers in for you!
One of the complaints about some of the other types of e-readers is that they're complicated, hard to set up. In all honesty, most of us here haven't experimented with other e-readers so we can't speak to that. We can say our Kobos are really easy to deal with, for what it's worth.
Another observation is that, while many people do have e-readers, they also have tablets, and a lot of people discovered that they'd rather do everything on one device rather than have a separate gadget for each interest, so people are reading books on their tablets while letting their e-readers gather dust. Convenience makes a lot of sense.
(Shameless plug here, Kobo will be rolling out their new tablet, the Arc, in the not-too-distant future, and we'll be able to get them for you when they do.)
But here is the breakdown of those who aren't into their e-readers: "The survey went on to ask why those 694 owners only used the ereader once, and the majority (396 respondents or 57%) indicated that they didn’t have the time to use it; they are too busy. Approximately 22% (153 respondents) said that they’d received it as a gift and didn’t have a need for it. And a sizable 174 (25%) were among the Luddite minority who preferred to read with paper books."
These are interesting times for booksellers. Well, everyone in publishing, actually. There are lots of predictions out there as to what the shape of publishing will be in the next year/month/week, but the truth is, no one really knows. We're all kind of making this up as we go, which is both exciting and terrifying.
But we've said all along that print books would always be around, and we're still pretty confident about that. They may not all be in print, but we believe that there will always be a percentage -- and we're betting on that being a fairly substantial percentage -- of people who love the feel of a book, the smell of pages, the actual turning of pages.
Still, we're adapting, and we're enjoying selling our Kobo Mini's and Glo's, just as we'll enjoy selling the Touches and Arcs. But we're reassured by the fact that there are still a fair number of you who enjoy the printed page!
We've been largely silent for the last few months on the questions about, and the actions of, Amazon. Frankly, we got tired of the fight. So few seemed to care or be willing to do anything about the dangers we see. However, there have been a few developements recently that we thought deserve attention.
In no particular order:
Journalist David Streitfeld of the NYTimes published a terrific article on Nov 4th, Booksellers Resisting Amazon’s Disruption. The article deals with Timothy Ferriss who has been writing a couple of books on how to do things swiftly. His The Four-Hour Workweek was a bestseller for him and his traditional publisher, Crown. For his latest book, The Four-Hour Chef, Mr. Ferriss has gone with Amazon as the publisher and seems honestly stunned that other booksellers will not carry the book.
Signing Mr. Ferriss was seen as a smart choice by Amazon, which wanted books that would make a splash in both the digital and physical worlds. When the seven-figure deal was announced in August 2011, Mr. Ferriss, a former nutritional supplements marketer, said this was “a chance to really show what the future of books looks like.”
The implication there is that Amazon is the only future of the book. If that was and is his attitude, he cannot be surprised that other booksellers would 1) be insulted by his attitude AND comment, and 2) would not be interested in helping him by selling his book.
When Mr. Ferriss signed with Amazon, he celebrated the new at the expense of the old. “I don’t feel like I’m giving up anything, financially or otherwise,” he said.
He has a somewhat different view these days. “By signing with Amazon, I expected this type of blowback,” he said. “I’ve been girding my loins.”
If he'd been expecting it, he cannot be shocked that it is taking place.
Now that publication is at hand, that future looks messy and angry. Barnes & Noble, struggling to remain relevant in Amazon’s shadow, has been emphatic that it will not carry its competitor’s books. Other large physical and digital stores seem to be uninterested or even opposed to the book. Many independent stores feel betrayed by Mr. Ferriss, whom they had championed. They will do nothing to help him if it involves helping a company they feel is hellbent on their destruction.
“At a certain point you have to decide how far you want to nail your own coffin shut,” said Michael Tucker, owner of the Books Inc. chain here. “Amazon wants to completely control the entire book trade. You’re crazy if you want to play that game with them.”
The irony, he [Mr. Ferriss] added, is that the $35 book was meant to be inviting to the casual browser. Amazon can do many things, but it still cannot let readers examine a book before buying. “This is the kind of book that physical booksellers would be most excited to sell,” Mr. Ferriss said.
But what Mr. Ferriss clearly does not grasp is the economics of the bookselling world. They're key. His book is $35. Amazon is selling it at a 40% discount, for $21. That is the same price that any bookseller would need to pay Amazon to stock it. If they wanted to compete directly with Amazon strickly on price and sell the book for that same amount - $21 – they would be making no money at all. If any bookseller wanted to make something on the sale (to say, oh, pay the rent or the employees or the phone
bill or for heat), they’d have to sell the book at a higher price than Amazon, thereby making their copies less competitive. Amazon is a massive, MASSIVE corporation that sells tires and tube socks in addition to books and e-files and can afford – or is willing to afford – to lose money on printed books.
And keep in mind that Amazon is perfectly willing to undercut its own printed books – the Kindle edition of his book is just $9.99, which saves the buyer 71%. How much less does Mr. Ferriss make on the sale of e-files rather than printed copies? How aware is Mr. Ferriss of the economic practices of his new publisher?
So, as we’ve written many times in the past, it is not only a matter of not wanting to enrich a corporation that is destroying our chosen and honorable profession, it also make zero financial sense. The math is clear. When Bill Petrocelli, co-owner of Book Passage, a large store in suburban Marin County, said “We don’t think it’s in our best interests to do business with Amazon,” he’s talking about the these issues.
Then, on Nov 6th, came this story:
Amazon Goes After Netflix With New Monthly Subscriptions Now that they've done their best to conquer publishing, they're going after Hollywood. Like e-books, streaming movies and TV shows really is the next logical world for them to conquer. Here they go!
On Nov 8th, it was learned that the 'buy-buttons' for the e-books from the major NYC publishing houses had vanished. You could still buy printed books and e-books from a few other publishers but not from Hachette, Random House, Penguin, Simon & Schuster, Macmillan, and HarperCollins.
Just to be clear what we're talking about (and this is not meant to be exhaustive, just a sampling) -
Hachette: Grand Central, Little Brown and Mulholland Books (authors include Marcia Muller, Michael Connelly, George Pelecanos, Margaret Maron, Michael Robotham, Michael Koryta, James Patterson, Nelson Demille, Lawrence Block)
Random House: Crown, Vintage, Bantam, Doubleday, Delacorte, Ballantine, Knopf, Titan, Hard Case Crime (authors include Mary Daheim, Lee Child, Gillian Flynn, Jo Nesbo, Rex Stout, Rita Mae Brown, Anne Perry, Peter Lovesey, Martin Limon, Cara Black, Stuart Neville, Janet Evanovich, Dean Koontz)
Penguin: Putnam, Dutton, Viking, Berkley NAL (authors include Aaron Elkins, Craig Johnson, Robert Crais, Clive Cussler, Ace Atkins, Deborah Harkness, Kat Richardson, Yasmine Galenorn, James Thompson, Susan Hill, Sara Paretsky, Jayne Ann Krentz)
Simon & Schuster: Scribner, Pocket, Atria (authors include Jan Burke, Ann Rule, John Connolly, Vince Flynn, Stephen Hunter, Jeffrey Deaver)
MacMillan: St. Martin's, FSG, Holt, Tor, Forge, Minotaur (authors include Louise Penny, Loren D. Estleman, Dana Stabenow)
HarperCollins: Harper, Avon, Morrow (authors include Dennis Lehane, Mary Daheim, JA Jance, Jess Walter, Phillip Margolin, Peter Robinson, James Rollins)
The next day the buttons were returned and working with the explanation that it had been merely a technical issue.
However, there are a few things to bear in mind:
~ Back in Feb, Amazon removed the 'buy-buttons' from IPG books over a disagreement of terms.
~ In Jan of 2010, in another dispute with a publisher, Amazon removed all 'buy-buttons' from ALL of Macmillan's books due to a disagreement of terms. MacMillan has been the victim twice.
~ And which publishers were sued by the US Department of Justice over the issue of price fixing of e-books? Hachette, Penguin, Simon & Schuster, Macmillan, and HarperCollins. They had tried a new pricing structure to attempt to stop the coming monopolization of the world of e-books by Amazon.
Coincidence? Or the opening of a new battle over the pricing of e-books?
Finally, a timely note of a sick twist: We've been referring to Amazon as SPECTRE, the outfit fought by James Bond. We see many similarities. SPECTRE is not bound by nationhood or the common rules of society, and its mission is to enrich itself at the cost of anyone and everyone and will do its best to wipe out anyone who stands in its way. With the release of the new James Bond movie, we've been puzzled that Penguin, who had been publishing all of the Ian Fleming Bond books, had let them go out of print. Seems like now would be the time to have them all available, right? Last weekend we stumbled on the reason: Amazon is now publishing them.
SPECTRE is now James Bond's publisher.
More and more frequently, we're asked by self-published authors to host signings for their books. We can't accomodate everyone, so we set up some rules, and they're not necessarily popular ones, but they're the ones we decided best help us winnow the field. And it's an impressive field!
According to Bowker , there are more than 235,000 self-published titles released every year. That's a whole lot of writing to have to narrow down! Granted, some are digital releases, so that's the immediate and first cut; obviously we can't host signings for digital books. But don't forget that there are a lot of digital books that are becoming print books, and when they do, our rules have to apply.
First, it has to be a mystery. I know, you'd think that would be obvious, but you might be surprised at how often we're contacted by self-published authors asking us to stock their books only to be hurt when we point out that we're a specialty shop and their romantic memoir of a talking badger just doesn't fit with who we are. Turn the badger into a detective and we'll talk.
But then, there are other rules, and we're serious about them. We'll only consider a self-published title if it's offered by one of the big wholesalers (Ingram is the first one folks go to, but Baker & Taylor works just as well), if it falls within industry standard discount (40% -- we have to cover our overhead to stay in business so that you'll have a place to sign), and if it's returnable (we always hope to sell through, but realisitically? It may not happen). Those three are non-negotiable. These guidlines are not meant to be mean. They're fiscal.
It's this combination that proves to be problematic. Books will be offered at the wholesalers for a reduced discount, and then authors tell us their publishers will give us a better deal, and that's great, but if we don't sell through and can return them to said publisher, that means we may have a credit with someone that we'll never use, so it's still money out of pocket. That's why we want to get the copies from a wholesaler - if we have to return some books, we can use the credit for a future order.
And remember, there's 235,000 titles out there. Every year. And that number is growing. Other stores have come up with different criteria for their handling of self-published authors, and ours may change over time, but this is where we're at.
Authors, if you're self-published and want us to carry your book and/or have you in for a signing, here's what we need from you in your very first contact email:
~ Give us your published name (if it's different from your email name), the title of your book, who the publisher is, what the price is, the binding or format, and who distributes it. Also give us a small synopsis, just a paragraph or two. You can add a link to your website, but if that's all you provide, we won't click through. You have to be willing to do a little work to promote your book. If you won't, why should we?
~ Do not, ever, tell us to read the reviews on Amazon. In fact, don't mention them at all. We're indies; we've been fighting Amazon all along. Our stance is pretty solidly on record. If you use Amazon as your selling point, you don't need or want us. A lot of our fellow indies will simply delete your enquiry email unread if you link to Amazon. We're not saying that you shouldn't sell your book through Amazon; obviously it's financially imperative for you to do so. But we're not interested in partnering with them. We're not interested in you if you're promoting Amazon as the last word and source of your book. We want to help you, but we won't help them.
~ Which brings up another point: we do not and will not stock books published by Amazon. If your book is published by Thomas & Mercer, sorry, we will not support it or agree to a signing.
~ If your book isn't carried through the wholesalers but you have an innovative way of approaching the discount and returnability criteria, we can talk. We're flexible on a lot of levels, but you have to bring the solution to the table.
~ If we come to an agreement, it's your responsibility, dear author, to make sure your friends and family know that they can buy your books from us. FYI, if you give away your book to your family and friends, you're not doing yourself a service. This is your immediate buying base. They love you, they should be willing to support you, and they should be doing that by buying at full price. You don't become a paid and successful author by undercutting yourself. So have them call us and reserve the book to be sure we have enough on hand. If they buy it somewhere else, say somewhere on-line that discounts, and think it is perfectly fine to bring it to our signing with you they are terribly wrong. If we have you in to sign books, it is to sell our books. Please be clear with your friends and family on that. Don't undercut yourself or us! The best way to be invited back for a signing for your second book is to help us sell a large number of copies at your signing. Make sense? We think so.
~ And lastly, be polite. There are 235,000 of you out there and there are four of us. We will work with you if you follow the rules, but insulting us is a certain way to insure that your book will never be stocked. Actually, that's true of any author, not just self-published ones.
Keep in mind that we've been at this for two decades. We've dealt with hundreds of authors, from rookies to Big Names. We're pleased for you that you've published a book, but then so have 234,999 other people this year, and they all want what you want. What will impress us and encourage us to work with you will be your professionalism, your serious intentions, your concern for what works for those selling your books, and your demeanor. Demanding divas are a dime a dozen. Do not for an instant believe or act as if you are owed a signing because you have self-published a book. We very well may be able to help you sell your books. But you have to believe we know what we're doing, and we're good at it. It'll be worth your time to hear what we say and work with us to our mutual benefit.
We want to be your biggest fans and ally in bookselling; help us out with that.
Tags: Amazon, author, book, flexible, indies, industry standard, non-negotiable, policy rules, returnability, returnable, self-published authors, self-published title, self-publishing, signing, standard discount, stock, synopsis, Thomas & Mercer, wholesalers