Home>How Amazon.com is hurting readers, authors, and publishers

How Amazon.com is hurting readers, authors, and publishers

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.

Karen ChristensenBest wishes,
Karen Christensen
Karen Christensen 沈凯伦, CEO & Publisher

Berkshire Blog: www.berkshirepublishing.com/blog
Twitter: www.twitter.com/karenchristenze

Read More
“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.

Connect to Berkshire Publishing – specializing in international relations, cross-cultural communication, global business and economic information, and environmental sustainability – on Twitter, Facebook or LinkedIn.

By | 2014-06-04T12:59:34+00:00 June 4th, 2014|Uncategorized|7 Comments

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  1. Theresa M. Moore 5 June 2014 at 12:17

    Everything seemed to hit the fan in 2012, didn’t it? Well, the phone call they made to me then was to beg me to continue publishing through CreateSpace, which was a major mistake on my part. Not only did CS charge me for distribution, they restricted distribution to only a few choice retailers, Amazon, and NO libraries. I did not capitulate because I have it on record that I sold more books through Barnes & Noble than I ever did with Amazon. Now I work with Lightning Source and distribute to every book store on Ingram’s list, without limitation apart from the wholesale discount of 55%, and I sell direct from my own site and at book fairs. I don’t see any reason to capitulate to Amazon, and you should not either. Steven Colbert even lambasted Amazon for limiting sales of his books, and there are many others calling for a boycott. Even if Amazon has the greater market share, you are treading on thin ice.

  2. […] “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.” –Karen Christensen, Berkshire Publishing […]

  3. Mary W. Walters 8 June 2014 at 10:14

    You make excellent points.

    You might be interested in my blog post on this subject. Authors are being pitted against authors in this conflict situation, and our talent is the turf on which the battle is taking place. http://maryww.wordpress.com/2014/06/07/amazon-vs-hachette-and-the-erosion-of-author-solidarity/

  4. Jorgen Carling 19 June 2014 at 13:09

    Hi Karen. Thanks for sharing these thoughts. I am very sympathetic to publishers, but as a customer I must admit am very happy with Amazon’s services. I don’t like buying directly from publishers, since it means managing multiple accounts, and often dealing with mediocre technical solutions and slow or expensive shipping. So if I were to think about the future of publishing and leave Amazon, I would want another one-stop-shop online. Is there any you can recommend that would please me as a customer and you as a publisher?


  5. Karen Christensen 20 June 2014 at 18:46

    Thanks for writing, Jorgen. I feel the same way, and know that we need a system that is as easy to use as Amazon’s. There are discussions underway and I’ll keep you posted. In the immediate future, would you consider using Barnes & Noble (bn.com) for online orders? I’m not sure if that is a solution for you in Norway. Cheers, Karen.

  6. Writers Roundup | ellenbooks blog 31 July 2014 at 14:21

    […] affect you. For interesting insight from a small publishing house’s perspective, see “How Amazon.com is Hurting Readers and Publishers,” by Karen Christensen at Berkshire […]

  7. Jim Knaub 30 August 2014 at 0:00

    My wife and I have followed this in the news a little, and I saw S Colbert comment on it. We have not bought anything from Amazon recently. It does seem that some govt regulation is needed here. But then, this can be seen as part of a larger problem. The economy would not have crumbled in 2008 (or in 1929) if there weren’t such a lack of common sense regulation.

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