Amazon doesn’t just take orders. They are used to barking orders at publishers and getting us to salute. But bullying only goes so far, and I’m thankful that a single large publisher, Hachette, has stood up to them and that today the New York Times ran an editorial about their strong-arm tactics.
I’ve been sitting on my own Amazon story for a while, after having receiving a threatening phone call from their legal department when I refused to agree to a unilateral change of terms. But with all the publicity and debate about Hachette, I thought Berkshire Publishing’s friends, colleagues, and customers might like to know about our experience and why I believe that Amazon is destroying healthy competition in the publishing world. Some of this was included in a feature article in the Seattle Times, and Steve Wasserman wrote about Amazon in The Nation and quoted me there (links below).
I am an academic publisher as well as an environmental author (with one book published by Hachette, in fact). My company is very small. Amazon.com has a market cap of $US141 billion. “They have infinite resources,” said a friend when I told him that I had received an angry phone call from Amazon.com’s legal department. The telephone call wasn’t to discuss terms, but to threaten me for “telling lies about Amazon.” What I had written is that if we had to stop supplying Amazon I would have to write to all my customers, authors, and colleagues to tell them why.
My fight with Amazon began when they decided to go after traditional “short discount” publishers (academic presses as well as presses like Berkshire Publishing) with a unilaterally imposed change in business terms announced only within their order-processing platform. This platform is normally used to enquire about the availability of certain books and used by customer service staff. A colleague whose staff was puzzled enough to pass the “case note” along to him asked to be contacted directly by telephone or email, saying that business terms were a matter for the executive team. Amazon refused to talk – communication would only take place through the “case.”
Berkshire Publishing had sold print through Amazon.com since 2006. Although they originally demanded a 40% discount, four times our standard, I decided that we should make books available through any major platform that individual readers and libraries use. Our authors like knowing that their books are readily available worldwide. And we reach some people who would never otherwise know about our titles. In fact, I was recently at a meeting in Beijing and showed a copy of our book This Is China: The First 5,000 Years. Two of the editors started whispering and giggling and finally one spoke up, “I have that book. I ordered it from Amazon!”
Their demand in 2012 was for an additional 5%, bringing it to 45% (some academic presses had been at 25%, so the change to 45% meant a reduction of 80% in their net income from Amazon sales). Bookstores generally get a discount of 30-40%. Amazon has been getting 50-55% from the big trade presses, and the current battles are in part over further discounts Amazon is demanding to increase its marginal profit.
And it is not only publishers who are affected (who, after all, really feels sorry for publishers?). Independent bookstores cannot compete with this kind of pricing, and Amazon discounting also affect authors, because many book contracts specify a lower royalty percentage if the discount is 50% or higher. The more Amazon demands, the more authors will be hurt. And in the end it is readers – students, professionals, and readers for pleasure – who will suffer because innovative writers won’t get the chance they deserve and hard-working midlist authors won’t be able to afford the time they need to write.
And who says cut-rate pricing will continue once Amazon’s market dominance is assured? Self-published authors love the 70% Amazon pays on ebooks now, but the figure was reversed (30% to authors, 70% to publishers) until the big presses jumped in, and there’s no reason to think Amazon won’t impose changes on any group of suppliers (and that’s all we authors and publishers are).
Amazon, by the way, does not necessarily pass on those discounts to the customer. Most Berkshire books are academic reference works that sell for hundreds of dollars, and Amazon has generally sold them at full price, keeping that substantial “discount” as their profit, which is far greater than our profit on our own books.
Amazon is destroying competition and innovation because it is not letting the market determine winners and losers, but is instead making the selection itself, deciding arbitrarily where to take its pound of flesh and shore up its feeble margins. Publishers (and authors) would be fine if they were actually competing with one other for sales without Amazon’s sucking the life out of every transaction.
Finally, what happened? Are Berkshire Publishing titles available through Amazon? Dear reader, I capitulated after four months. It wasn’t fair, it wasn’t good for anyone but Amazon, but I was losing sales I needed and I gave in. Amazon made one change, too: they hired their first small-press liaison and I met her at BookExpo last year. I didn’t hear from her this year and have no idea if that department of one still exists, but I hope that in future we will be able to discuss and agree on terms that make sense. “Hurrah” for Hachette and to everyone who is now standing up to Amazon.
“Amazon’s Power Play” New York Times editorial, 3 June 2014
“The Amazon Effect” by Steve Wasserman in The Nation, 29 May 2012
“Amazon.com trying to wring deep discounts from publishers” by Amy Martinez in the Seattle Times, 1 April 2012
The Seattle Times’s article is accompanied by a slider showing two Amazon logos: the smiling Amazon and a parody with devil’s horn and tail, “Nothing speaks to the escalating tensions more plainly than a parody Amazon logo circulated among publishers. Pull the slider to the right to see Amazon’s logo, and to the left to see the parody version.” The parody logo (which I included at the top of this letter) has, as you can see, a Creative Commons license and can be used and shared freely.
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