More thoughts on Amazon

(For those looking for the next installment of The Road to Digital Publishing, it will be posted Sunday.)

This past Saturday, I posted about how frustrated I have gotten with folks who lay all the blame for the problems of the publishing and bookselling industries at the feet of Amazon. In the course of the post, I admitted that I do agree that Amazon has had a hand in the situation both industries find themselves in, but I don’t believe it is the only reason they are there. Like so many businesses, publishing has suffered from bloat and over-confidence and a disconnect from what what the buying public wants. Worse, as technology has changed, making it easier for authors to connect with their readers and to bring out their work on their own, instead of showing their authors “the love”, publishers have tried to tie authors to them with more and more onerous contractual terms. Add in the fact that, as Dave said yesterday, a lot of the value added services publishers offered has gone by the wayside and, well, it’s no surprise authors are looking for alternatives. After all, most of us want to be able to write what we want and be paid a reasonable amount for it.

I have about as much patience for those who cry “foul” and accuse Amazon of trying to put the big box bookstores out of business as I do those for those who say Amazon is trying to put publishers out of business. These same folks stood by and watched as the big box stores came into town and put the mom and pop bookstores out of business. They loved the fact these new stores offered more selections at lower prices than the indie bookstore they’d been shopping at for years. And, wow, you could get coffee and a danish at these new stores as well. It was book buyer heaven.

And yes, the sarcasm meter is going off the chart right now.

What made these big box stores work in the beginning was the fact they were new and were able to offer lower prices because they could purchase in bulk. Also, the didn’t over-build. For those of you old enough to remember, think about it. Borders, the first of these new stores, didn’t build at every mall in town. They made sure the stores weren’t too close together. Even when Barnes & Noble moved in, you didn’t find them located too close together. But, as the economy improved and flourished, greed set in and expansion plans grew with the immediate in mind and not the long term. Instead of stores being five or ten miles apart, they were suddenly — in some instances — only a mile or two apart. Too close for long term growth, especially once the economy started taking hits.

Then along came Amazon into this mix. Without physical stores, it was able to under-sell the bookstores. Oh the cries of foul that rose. Why? Because it was doing exactly what the big box stores had done to the small locally owned stores.  But still Amazon and publishers were able to get along because Amazon was selling their books, making them money.

The end of the love affair between Amazon and the major legacy publishers came with the agency pricing model. And, guys, look, this wasn’t something Amazon did. This came from an agreement these same publishers made with Apple that they wouldn’t let their e-books be sold anywhere else for less than they were sold through Apple. For Amazon and its customers, it meant an increase in the price of many of the best selling e-books.  Amazon tried to hold out. Why? Because its customers had told it they wanted prices to remain low.

Oh, the hue and cry when the battle began. How dare Amazon remove the “buy” button from certain publishers’ e-books. Authors screamed and gnashed their teeth.  Publishers talked about how evil Amazon was. Finally, Amazon’s customers said, “Let us choose if we want to pay more than $9.99 for an e-book.” And Amazon caved.

But let’s look at this. Did Amazon do anything wrong when it removed the “buy” button? Not really. This is no different from the local grocery store removing stock from the shelves as it negotiates a new contract with its supplier, or the local clothing store doing the same thing. Amazon is a retailer. It can choose what it does and does not sell and, frankly, it should be able to choose what it sells those items for and should be able to put those items “on sale” from time to time if it wants.

Amazon still feels the fall-out from its decision to agree to the agency pricing model. Purchasers of e-books are still asking why they have to pay as much for an e-book as they do for a physical book and they often choose not to buy that e-book. They also wonder why Amazon doesn’t “give” them the e-book if they can prove they’ve purchased a hard copy of the book. They simply don’t get the fact that these are not decisions that are in Amazon’s hands. Prices and the giving away of e-books is up to the publisher.

Now there’s a new hue and cry going up about Amazon, one that’s happened since I wrote Saturday’s post. Once more, its detractors are yelling that Amazon is The Big Evil. Not only is it trying to take over the publishing world by having its own imprints for print books but, gasp, it is now planning to open its own bookstore. How dare it! This is proof it is trying to force bookstores out of business.

Sigh.

What little I’ve been able to find about this is that Amazon is planning to open a test store in Seattle to see if there is a market. This isn’t going to be a big box store. No, it is going to be a niche store that will focus on Amazon imprints, the kindle and kindle fire. In other words, it will be a store that will promote its own brand. Can anyone say Apple Store?

Now, before anyone starts going on about how this just shows why we shouldn’t trust Amazon, let me reiterate, I don’t trust them, at least not completely. However, as an author and as an editor for a small press, Amazon has been a friend. It has opened up an avenue of sales I wouldn’t have had.  It is easy to get titles up on Amazon for sale, much easier than with Apple where you have to have certain hardware to be able to directly upload to the Apple store. Otherwise, you have to use a re-packager of some sort.

And, unlike some who say the new KDP Select program is just one more way to rip off authors, at least in these early days of the program I have to disagree. First of all, no matter what anyone says, the program is optional. You don’t have to take part. However, if you do, you are committing to an exclusive 90 period where you will only sell that title on Amazon. That’s the downside. It means you aren’t getting your title out in as many markets as possible.

The upside is that you can choose to take your title for free on Amazon for five days during that 90 day period. Yes, free. Yes, I encourage doing that sort of promotion. Why? Because it will get people to try your book or short story who might not otherwise. Let’s face it, folks like to get something for nothing. Much as I hate losing a sale, I have seen that this will drive sales. Without going into exact numbers — simply because I don’t have permission from the author to do so — Naked Reader Press took Wedding Bell Blues for free for five days the end of December/first of January. Free downloads for the book were in the four-to-five digit range. Unit sales for the book last month after it came off the free list are in the mid-four digit range. “Loans” of the book were in the 500 – 600 range. We’re waiting to see how many dollars that will translate into. But let’s just say the bump in sales, the fact the book hit the top 10 in multiple categories while it was free and was in the top hundred paid books for awhile once it went off being free helped propel sales as well.

Another benefit of the enrolling Wedding Bell Blues in the program is that Ellie’s short story sales have also increased. That helps Ellie because it means more money in her pocket and it encourages her to write more. Let’s face it, we all like knowing people are buying what we write.

Another or NRP’s books went free today. B. Quick, a mystery by C. S. Laurel, was one of the first e-books NRP published. The sequel, Quick Sand, and a short story featuring the same characters, Quick Change Artist, went on sale in most major e-book markets last week. All three titles have sold well, but we think they will sell better after B. Quick‘s free promotion on Amazon. So far, downloads for B. Quick are in the triple digit area and we have seen an increase in sales for the other two titles. That means word of mouth, even through the “printed” form of linking the books on Amazon, works.

Will this work, or work as well, for everyone? No. Genre, day of the week, pricing after something comes off free and any number of other factors will all play a part. However, this is a program that can benefit indie writers and small presses. Yet Amazon is being demonized for this program as well because they are “blackmailing” authors to use the program. No, they are giving us an option. It is up to use to choose whether to take part or not.

Do I trust Amazon to always look out for my interests? Hell, no. But, for now, they offer me more options and more control of my work than does B&N through PubIt and its reporting program is so much easier to follow and deal with than Smashwords. It is also the bull in the china shop in that it is where the vast majority of my sales occur. So I’d rather work with it, keeping my eyes open and always watching the fine print, than go out crying about how it is trying to ruin the industry.

Sorry, but the industry has done its best to ruin itself. It’s time for publishers, booksellers and authors to all pull on their big boy pants and re-evaluate their own business plans and customer service departments/experience and decide whether to try to maintain the status quo or move forward, adapting to new demands and new technology.

28 comments

  1. First, no business can be expected to look for its customer’s best interests. A business has to look for its own best interests. Fortunately, for the business to survive, its best interest has to include good customer service. Unfortunately, it does appear that many book sellers have taken actions “not in its best interests.

    Second, I’ve heard this “thing” before about how so-and-so was destroying its competetion. At first, it was the “big book stores” destroying small/independent book sellers. While the big book stores had several advantages (which you mentioned), there are always other factors involved. One small book store where I was living at the time went under and the owner blamed the big book stores. Unfortunately, I shopped his store once and never went back. Reasons: hard to get to, poor parking and poor selection. So I can’t see the big book stores a major factor in that store going under. In another case, there were three big book stores, two chains and an independent, thirty miles for where I live. The independent had good selection and had good parking but it was my third choice when shopping for books. Why? I could take the interstate to the other two and to get to it, I had to drive some distance through a town from the interstate. The independent recently closed its down because (I suspect) it was everybody else’s “third choice” and why go there if you had already spent your book buying money at one of the other stores.

  2. Paul, thank you. You’ve just illustrated my point. There are a number of factors that lead to the success or failure of a business and you can rarely point to just one thing as being the cause of a business’ decline.

    1. You’re welcome. That’s what I intended to say. [Smile]

      I liked “Pages For All Ages” (the big book independent I mentioned) but the other two were closer to me.

      One was our “friend” Borders and it’s gone of course.

      1. Yeah. It’s like the independent mystery bookstore in town. I used to drive to Denver for the store there, because the one here, I once went in with my VERY WELL BEHAVED three year old who had been around books his whole life, and got told I couldn’t come in with a child. He’d damage her books. Sorry, got YELLED at to come without children. I never went back. Store in town went out.

  3. Yeah Sarah, that was an idiot. I can understand the “no children unattended” sign that I’ve seen some places but yelled at for the “crime” of bringing a child (even a three year old) into a bookstore? Idiot.

  4. Let’s pretend that Amazon and other bookstores and publishers are… authors.

    New author on the block Fred Nozama is outselling me six way to breakfast. If I was to behave like a publisher or B&N… I’d 1)moan about how evil and greedy Fred is for daring to write books, 2)Try and get laws passed to stop Fred writing. 3)Campaign furiously to badmouth Fred’s books. 4)Reduce my writing time. All makes perfect sense doesn’t it?

    The reaction of a sensible author (like military intelligence, I know) would be to study Fred’s methods, buy his books and learn from them. Then I would try to write better (or more appealing) books based on what I’d learned. And I’d try harder and give more.

    So can someone explain WHY the hell publishers and bookstores aren’t 1)reporting immediately, 2) paying faster, 3)getting their own online sales up, 4) offering as good or better terms as Amazon 5)getting rid of deadwood (like the legal department coming up with those lovely contracts) and expenses they can’t afford (like premises in NY city)?

    1. Let’s see, if they reported immediately, they couldn’t do as much “creative” accounting as I think they, at least some of them, do. If they paid faster, they wouldn’t get to collect as much interest on it. They don’t get online sales up because those are the product of the devil. Terms as good as Amazon would mean actually paying authors something somewhat close to what is fair and they can’t do that. And they haven’t figured out that deadwood makes such wonderful bonfire fuel. Have I covered it all? (snark meter now off the charts)

  5. Amanda,

    You don’t understand the problem with Amazon. I come at this from a different point of view. Before my body gave out on my I used to be The Major Accounts Sales Rep for our firm. My job was to go after the big companies. Odds are that you’ve bought stuff made by those companies, they are big names.

    Part of my routine was to evaluate the company. I’d read their Securities and Exchange Commission filing to determine the financial health of the firm, after all, it isn’t a good idea to sell to a company that’s likely to go bankrupt on you.

    When I look at Amazon’s Year End Financial Report I noticed something.

    Total Net Sales – $48,077,000,000
    Total Expenses – $47,215,000,000
    Gross Profits – $862,000.000

    These numbers are reported in the document under “Effect of Exchange Rates,” and what they indicated is that Amazon is making a 1.79% Gross Profit Margin BEFORE TAXES.

    Stockholders tend to get upset when profits are that low, and push the company to make more money. One easy way to do this would be to change the writer’s royalty from 70% to 50%. After all, what are the writers going to do, pull their books?

    That’s why I’m concerned about Amazon. They hold too large a portion of the market, and no company really wants to compete on an even field, they would far prefer to be the only company in existence so they could set prices however they wished.

    Wayne

    1. Wayne, sorry, but you don’t understand. At no point have I said Amazon is a saint. At no point have I said they are blameless in anything. In fact, I have said repeatedly that I do not trust them any more than I do any other company. However, what I did say is I am tired of certain groups putting the blame for all the industry’s ills at the feet of Amazon.

      As for changing the royalty rates, sure, they can do it. But let’s face facts. If they do, it is still a larger percentage than authors get from traditional publishers. Would I like it, either as an author or as the editor of a small press? Hell no. Do I think they need competition? Hell yeah.

      I will also put something else out to you. Amazon has never been a company that has made huge profits quarter in and quarter out. Part of the reason is their business plan. They do invest heavily in tech like the kindles and the kindle fire and don’t pass on all the costs like many other companies do. What Amazon has done is take a long view, something a lot of investors and critics have not always understood. Will this approach continue working for them? Who knows. But it has worked so far and it seems to be the stance Bezos is happy to continue taking — at least for the time being.

      And, since you like numbers, I’ll put something else out to you. Without taking into account the “sales” for B. Quick that went free today for Naked Reader Press, our sales for Amazon are outstripping our sales from Barnes & Noble something by something like 100 Amazon sales to every 1 sale from B&N. The ratio with regard to our web store isn’t much better. It is more like 100 sales from Amazon to every 5 sales from our web store.

      Am I going to ask my bosses to pull out of Amazon because they are the bull in the china shop? No way. Not only would I not be doing my duty to our authors to get the most sales for them as I possibly can, but I’d be failing my employers as well. Plus, they do offer the best terms, especially when it comes to promotions, of any of the other stores out there. So get over your “what if” scenarios and decide what is best for your authors and yourself now and then plan for what to do in the future.

      1. Amanda,

        Never said Amazon was evil. But I’m a veteran of the Microsoft Wars, and I have a severe allergic reaction to monopolies.

        1) I do not run ANY Microsoft software, including Windows.
        2) I do not buy from Getty images,
        3) I am planning for the day I have to avoid Amazon.

        By the way, I know people who are making a third of their sales through Smashwords (B&N, Sony, Apple, etc.), it seems to depend on the book, and whether one of the alternate stores serves a country that Amazon doesn’t.

        As to sales from my own site, that’s for the future. Near future, as soon as I get a couple of tigers tamed.

        Wayne

        1. Microsoft was NEVER a monopoly. Sigh, Wayne, the only true monopolies are the ones governments aid and abet. Without that there are ONLY temporary “kings” in fields. So far Amazon has done everything right.

          And if you know people who are making a third of their sales through smashwords, you don’t know the people I do. (shrug.)

          Look, this is all nonsense. Amazon is the pioneer in the field. It will eventually take a huge hit. All pioneers do. When it does the competition WILL be there, and obvious. And as much as I regret to say this, I doubt you or I or anyone in this blog will be instrumental in that competition.

          1. Sarah,

            Have you read the legal filings from the Microsoft Anti-Trust case? If you haven’t, you really should, and see what sort of business practices Microsoft was using to prevent competition from getting a foothold in the operating system market. You can find copies here.

            Yes, a company can be a monopoly. And as to governments aiding and abetting, take a look at how far Washington has leaned over backwards to support Microsoft.

            Wayne

            1. Wayne, I’ve read them. Guess what. They aren’t that much different from what Apple has and still does use. Same with any number of other companies. But that’s not what the post was about, so let’s get back to topic.

        2. Wayne, sorry, but that was the impact of your statement, in my opinion. And, frankly, what you’ve just posted doesn’t sway me much. Right now, Amazon isn’t a monopoly. Would it like to be one? Probably. What company doesn’t? But that doesn’t make it inherently bad or one you shouldn’t work with.

          I’ll take your Microsoft example. I don’t like them and don’t like many of their policies. However, I don’t like Apple even more than I don’t like Microsoft. Why? Because the agency pricing debacle can be laid directly at the feet of Apple, in my opinion. There are other issues, like their EULA that made the news last week. Talk about something that could lead to a misuse of power.

          All that said, I use Microsoft products for some things, in particular for word processing because it is the industry standard and because I’ve had to clean up the junk code that comes from switching between programs and operating systems. I prefer Apple computers for graphics work. I own the Microsoft products and operating systems and, when the money is there, will buy a Macbook or Macbook Air for the graphics. Why, if I hate the companies so much? Because they have done nothing that is MORALLY wrong, something I have to draw the line in the sand about and the possibility that they might do something that bad in the future is nothing but speculation. After all, my neighbor — or yours — might do something bad some time in the future. Is that reason enough not to get to know them now?

          1. As to the morally wrong, go to the link I gave Sarah, and read the documentation. In my opinion, Microsoft has done thing that are morally wrong, so they don’t get my support.

            Apple I treat with suspicion. Personally I prefer Linux, and most of my systems use it, but my writing/editing computer is a MacBook Pro.

            Amazon hasn’t done anything. Yet.

            When you are dealing with a company that could accidentally squash you without noticing, it pays to be careful. None of these companies have our best interests in mind. So I look carefully at them, and what they do.

            Apple, I think has shot themselves in the foot with the iBooks thing. A lot of us older Geeks remember when Microsoft tried the same thing back in the 80’s with programming languages, and handed Borland control of the market (I used to work as a programmer at one point in my long and checkered career).

            Wayne

            1. Wayne, as I noted earlier, if you don’t work with anyone you don’t trust, you’ll never work with anyone. As for linux, well, there can come a time when it is no longer open source and we have to pay for it. Does that mean I’ll quit using it now? No. I could go on and give even more drastic examples about companies — or countries — that have done things I don’t like in the past that were morally reprehensible and how, under your definition, that means we shouldn’t deal with them now. But this thread has already drifted so far from the purpose of the post that it’s ridiculous. I’ll simply say that, like it or not, Amazon is the main player for self-published authors and small presses right now. It is up to us to keep our eyes and ears open. After all, it is offering us much, much more than traditional publishers ever will — at least in their current iteration. That said, as quickly as this industry is changing, someone or something newer and better may and probably will come around to replace Amazon, making this whole thing moot.

              1. Amanda,

                We are getting way off-topic here. I’ll make this quick.

                1) Linux isn’t Open Source, it is Free Software (Free as in Speech)
                2) There is nothing wrong with charging for copies of Linux, and never has been.
                3) Linux can’t be taken Closed Source without breaking Copyright Law.

                I could explain in detail, but it would take about a thousand words.

                Wayne

                1. Wayne, you gotta have the last word, right? Sorry, I’m in a lousy mood and your attempts to keep proving how much more you know than the rest of us poor schmoes is wearing on me today. I know that about linux and was trying to make a point. But, since you want to be literal, so will I. Until and unless you return to topic, there will be no more discussion in this thread unless I am overruled by the other members of MGC. Period.

            2. Wayne,

              This is reflex anti-Amazon. Sensible people know the company isn’t staffed by angels. They know any big corporation has done and will do some morally questionable things because sometimes that’s how businesses survive.

              That said, Amazon is not a monopoly organization. It is an organization with segments competing in so many different markets it’s effectively transformed its brand into a platform. There is no other online organization that does this – not because Amazon is too big to compete with, but because most of them don’t see “online portal for sales and services” as a business model. They see their specific niche as the business model.

              I’m also not at all concerned about Amazon’s relatively low profitability: they have a long history of being willing to carry a loss for years if need be, in order to grow long-term. I’d guarantee you that a huge amount of that expenses budget is investment into their infrastructure and services.

              None of which changes the basic fact that right now Amazon offers the best mix of services, distribution (in the form of potential eyeballs), and services that independent authors can get. That may change. If it does, indie authors re-evaluate.

              Meanwhile, you’re welcome to go and rant about monopolistic trends and the evils of Amazon, but you might prefer to do so somewhere where people won’t suggest you pull your head out and get on with life. There’s a difference between sensible caution and obsessive paranoia.

              1. Kate,

                I’ve spent most of my life working for some rather large firms. I cold called and sold to companies bigger than Amazon, which is a scary experience.

                Right now Jeff Bezos is doing all of the right things.

                What happens if he gets run over by a truck tomorrow? Who takes over, and what will their policies be?

                We don’t know. We don’t know how the shareholders will react to the succession plan that Amazon has in place. I hope that Amazon has a succession plan, that’s something that a lot of first generation companies ignore. It can really hurt the company when the founder suddenly dies, takes ill, suffers psychological issues, or hits his or her midlife crisis.

                All I’m saying is that you’d be wise not to put all of your eggs in one basket. Think ahead. What can you do to future proof yourself and your career.

                Wayne

                1. Wayne,

                  Kindly do not lecture me about uncertain futures. I’m a bloody writer and software tester. Now, unless you have something relevant to the actual topic, you can leave your head buried in your intestines somewhere and let the rest of the universe rotate without your assistance.

  6. I should have done this at the start instead of coming in half-way into the conversation. Let’s take it from the top.

    This past Saturday, I posted about how frustrated I have gotten with folks who lay all the blame for the problems of the publishing and bookselling industries at the feet of Amazon. In the course of the post, I admitted that I do agree that Amazon has had a hand in the situation both industries find themselves in, but I don’t believe it is the only reason they are there. Like so many businesses, publishing has suffered from bloat and over-confidence and a disconnect from what what the buying public wants. Worse, as technology has changed, making it easier for authors to connect with their readers and to bring out their work on their own, instead of showing their authors “the love”, publishers have tried to tie authors to them with more and more onerous contractual terms. Add in the fact that, as Dave said yesterday, a lot of the value added services publishers offered has gone by the wayside and, well, it’s no surprise authors are looking for alternatives. After all, most of us want to be able to write what we want and be paid a reasonable amount for it.

    This may seem chaotic, but there is a point.

    1) Book stores are in trouble – remember record stores anyone?
    2) Book publishers are in trouble – remember record labels anyone?
    3) Book Publisher Services – Music Publisher Services

    Everything that Amazon has and is doing, iTunes did ten years ago, with many if the same impacts. I also own a small recording studio, I do some indepedent recording work, and I know a lot of musicians. Those few who still have Major Label contracts are counting the days until they are <bFREE.

    Amazon isn’t the only company in book distribution, they were just the first company to try the online route. Several other companies have followed Amazon, they just tend to be not as well known, and are usually arms of Brick & Mortar retailers. I really like dealing with Indigo Books myself, they do a great job.

    I have about as much patience for those who cry “foul” and accuse Amazon of trying to put the big box bookstores out of business as I do those for those who say Amazon is trying to put publishers out of business. These same folks stood by and watched as the big box stores came into town and put the mom and pop bookstores out of business. They loved the fact these new stores offered more selections at lower prices than the indie bookstore they’d been shopping at for years. And, wow, you could get coffee and a danish at these new stores as well. It was book buyer heaven.

    Amazon doesn’t have to try to put the “big box bookstores” out of business, it’s a natual progression. As sales move from hard copy books to ebooks less shelf space is needed. There are two competing predictions for when total ebook sales will surpass total hard copy sales:

    October 2012 – my prediction
    October 2013 – Mike Shatzkin’s prediction

    I’ve talked to Mike via email about how he came up with his date. The difference between his prediction and mine is that Mike is applying linear thinking to a non-linear problem. There is a feedback effect, causing a faster uptake of ebooks as hard copy books become harder to find, which of course means that less people buy hard copy books, driving shelf space decreases.

    Exactly when the feedback effect will become noticeable we don’t know. I made a guess, which is how I came up with the October 2012 date. Mike came up with October 2013.

    Mike has 50 years of experience in the publishing business. Between the two of us we came up with predictions that were only one year apart.

    Barnes and Noble had better expand their housewares section. Fast.

    And yes, the sarcasm meter is going off the chart right now.

    What made these big box stores work in the beginning was the fact they were new and were able to offer lower prices because they could purchase in bulk. Also, the didn’t over-build. For those of you old enough to remember, think about it. Borders, the first of these new stores, didn’t build at every mall in town. They made sure the stores weren’t too close together. Even when Barnes & Noble moved in, you didn’t find them located too close together. But, as the economy improved and flourished, greed set in and expansion plans grew with the immediate in mind and not the long term. Instead of stores being five or ten miles apart, they were suddenly — in some instances — only a mile or two apart. Too close for long term growth, especially once the economy started taking hits.

    We didn’t have that problem in Canada, for the simple reason that we only have one chain of bookstores. Indigo got rid of the need to compete by buying the competition.

    But why wouldn’t you open a competing store? If there’s a market, and there was, until the Depression started, why would you leave a market solely to your competitor?

    Then along came Amazon into this mix. Without physical stores, it was able to under-sell the bookstores. Oh the cries of foul that rose. Why? Because it was doing exactly what the big box stores had done to the small locally owned stores. But still Amazon and publishers were able to get along because Amazon was selling their books, making them money.

    The end of the love affair between Amazon and the major legacy publishers came with the agency pricing model. And, guys, look, this wasn’t something Amazon did. This came from an agreement these same publishers made with Apple that they wouldn’t let their e-books be sold anywhere else for less than they were sold through Apple. For Amazon and its customers, it meant an increase in the price of many of the best selling e-books. Amazon tried to hold out. Why? Because its customers had told it they wanted prices to remain low.

    And here I’ll agree with Amazon. The pricing of ebooks from the major publishers is a joke. Only Baen has got it right.

    Oh, the hue and cry when the battle began. How dare Amazon remove the “buy” button from certain publishers’ e-books. Authors screamed and gnashed their teeth. Publishers talked about how evil Amazon was. Finally, Amazon’s customers said, “Let us choose if we want to pay more than $9.99 for an e-book.” And Amazon caved.

    But let’s look at this. Did Amazon do anything wrong when it removed the “buy” button? Not really. This is no different from the local grocery store removing stock from the shelves as it negotiates a new contract with its supplier, or the local clothing store doing the same thing. Amazon is a retailer. It can choose what it does and does not sell and, frankly, it should be able to choose what it sells those items for and should be able to put those items “on sale” from time to time if it wants.

    Amazon still feels the fall-out from its decision to agree to the agency pricing model. Purchasers of e-books are still asking why they have to pay as much for an e-book as they do for a physical book and they often choose not to buy that e-book. They also wonder why Amazon doesn’t “give” them the e-book if they can prove they’ve purchased a hard copy of the book. They simply don’t get the fact that these are not decisions that are in Amazon’s hands. Prices and the giving away of e-books is up to the publisher.

    Now there’s a new hue and cry going up about Amazon, one that’s happened since I wrote Saturday’s post. Once more, its detractors are yelling that Amazon is The Big Evil. Not only is it trying to take over the publishing world by having its own imprints for print books but, gasp, it is now planning to open its own bookstore. How dare it! This is proof it is trying to force bookstores out of business.

    The bookstores going out of business is a natural phenomenon. You don’t need bookstores to sell ebooks.

    That said, all of the bookstores will not disappear. Specialty stores will remain. Used bookstores will remain, especially those dealing in antiquities.

    But the book store is going the way of the record store. All of your books will be ordered online, and delivered to your computer or ereader in seconds. The future is here, it’s just some people haven’t figured it out yet. FYI, I haven’t bought a hard copy book in over a year.

    As I tried to explain earlier, Amazon holds a very significant portion of the market.

    Sigh.

    What little I’ve been able to find about this is that Amazon is planning to open a test store in Seattle to see if there is a market. This isn’t going to be a big box store. No, it is going to be a niche store that will focus on Amazon imprints, the kindle and kindle fire. In other words, it will be a store that will promote its own brand. Can anyone say Apple Store?

    It is possible, but I can’t see how Amazon would make it work. I’ve studied the various “company stores” including Disney, Sony, Apple, Dell, Gateway, and Microsoft. Making a company store work is a massive achievement. I’m still surprised that Apple managed.

    Now, before anyone starts going on about how this just shows why we shouldn’t trust Amazon, let me reiterate, I don’t trust them, at least not completely. However, as an author and as an editor for a small press, Amazon has been a friend. It has opened up an avenue of sales I wouldn’t have had. It is easy to get titles up on Amazon for sale, much easier than with Apple where you have to have certain hardware to be able to directly upload to the Apple store. Otherwise, you have to use a re-packager of some sort.

    And, unlike some who say the new KDP Select program is just one more way to rip off authors, at least in these early days of the program I have to disagree. First of all, no matter what anyone says, the program is optional. You don’t have to take part. However, if you do, you are committing to an exclusive 90 period where you will only sell that title on Amazon. That’s the downside. It means you aren’t getting your title out in as many markets as possible.

    The upside is that you can choose to take your title for free on Amazon for five days during that 90 day period. Yes, free. Yes, I encourage doing that sort of promotion. Why? Because it will get people to try your book or short story who might not otherwise. Let’s face it, folks like to get something for nothing. Much as I hate losing a sale, I have seen that this will drive sales. Without going into exact numbers — simply because I don’t have permission from the author to do so — Naked Reader Press took Wedding Bell Blues for free for five days the end of December/first of January. Free downloads for the book were in the four-to-five digit range. Unit sales for the book last month after it came off the free list are in the mid-four digit range. “Loans” of the book were in the 500 – 600 range. We’re waiting to see how many dollars that will translate into. But let’s just say the bump in sales, the fact the book hit the top 10 in multiple categories while it was free and was in the top hundred paid books for awhile once it went off being free helped propel sales as well.

    Another benefit of the enrolling Wedding Bell Blues in the program is that Ellie’s short story sales have also increased. That helps Ellie because it means more money in her pocket and it encourages her to write more. Let’s face it, we all like knowing people are buying what we write.

    Another or NRP’s books went free today. B. Quick, a mystery by C. S. Laurel, was one of the first e-books NRP published. The sequel, Quick Sand, and a short story featuring the same characters, Quick Change Artist, went on sale in most major e-book markets last week. All three titles have sold well, but we think they will sell better after B. Quick‘s free promotion on Amazon. So far, downloads for B. Quick are in the triple digit area and we have seen an increase in sales for the other two titles. That means word of mouth, even through the “printed” form of linking the books on Amazon, works.

    Will this work, or work as well, for everyone? No. Genre, day of the week, pricing after something comes off free and any number of other factors will all play a part. However, this is a program that can benefit indie writers and small presses. Yet Amazon is being demonized for this program as well because they are “blackmailing” authors to use the program. No, they are giving us an option. It is up to use to choose whether to take part or not.

    Do I trust Amazon to always look out for my interests? Hell, no. But, for now, they offer me more options and more control of my work than does B&N through PubIt and its reporting program is so much easier to follow and deal with than Smashwords. It is also the bull in the china shop in that it is where the vast majority of my sales occur. So I’d rather work with it, keeping my eyes open and always watching the fine print, than go out crying about how it is trying to ruin the industry.

    Sorry, but the industry has done its best to ruin itself. It’s time for publishers, booksellers and authors to all pull on their big boy pants and re-evaluate their own business plans and customer service departments/experience and decide whether to try to maintain the status quo or move forward, adapting to new demands and new technology.

    Currently Amazon is where most of the sales are. Currently.

    At one time the Big Six publishers were where most of the sales were.

    Guess you’ve heard of iTunes. I also own a small recording studio. When Apple first opened up iTunes to musicians, the was that Amazon has opened up it’s store to writers, iTunes was great. It gave musicians a way to work free of the Big Four music publishers.

    Then came the first of the restrictions. Then the second. Then the third. Over a period of years it got harder and harder for the independents to work with iTunes. Thank God for eMusic and BandCamp. They kept us going.

    So yes, I’m really skeptical of Amazon. I’ll use them, no doubt about it. But I’m planning for the day that I won’t be using them. I’m not going to get caught like some of the bands who found that their uploading accounts on iTunes were frozen, and they couldn’t upload their latest Compact Disc, that they HAD ALREADY PRE-ANNOUNCED! Someone working at iTunes changed the rules on them, and it wasn’t at all well communicated, and they got screwed over.

    Paranoia is a perfectly valid business practice.

    Wayne

    1. Hi, Wayne,

      Thanks for coming back to topic and clarifying where you’re coming from. Here’s my perspective.

      You’re touching on the hidden side of the Amazon equation without ever really addressing it: record stores, record labels etc did an awful lot to hasten their own downfall. When the labels engage in abusive contracts, doctoring the money and generally treating the source of their income like something you’d scrape off your shoe, word gets around and people get the hell out at the first opportunity. The core problem is actually identical. One song by Musician X is not the same as Another song by Musician X. Applying the interchangeable widget model of store management will fail – much like all those label-created bands that got their engineered one hit (if they were lucky) then sank into well-deserved obscurity.

      You say: “We didn’t have that problem in Canada, for the simple reason that we only have one chain of bookstores. Indigo got rid of the need to compete by buying the competition.

      But why wouldn’t you open a competing store? If there’s a market, and there was, until the Depression started, why would you leave a market solely to your competitor?”

      Here’s the thing: it doesn’t matter what the product is, there’s a limit to how much of it you can sell. Books have become a luxury item (priced way above impulse buy for most people), so there’s a limit to how many you can sell in a given area even if you match your stock perfectly to your demographic. With big chains buying on a state or multi-state level, there’s no way they can support multiple stores within a few miles of each other – because all of them are carrying the same stock.

      As for not having a competitor, that’s probably even worse. You’re stuck with exactly one set of views on what “should” be stocked, regardless of the tastes of the region or the buying habits of the locals. That’s where Amazon started to make gains. In Australia, it’s become quite common for people to buy enough books in a session to make the shipping costs low enough that the overall amount paid per book is less than buying the thing locally – if it’s available in Australian stores at all. That’s without factoring in ebooks.

      Amazon’s brick and mortar experiment is something I hope works out for them. I actually think it could work – they could sell ebook “packages” in the form of gift cards with a code that unlocks downloads (since kindles don’t have expansions slots) as well as their books. If the range of books they offer isn’t more of the same pap that’s been flooding the chain stores, they have a chance of success. I’ll be interested to see how it pans out.

      Amazon is where most of the sales are in part because they have been smart enough to open their store to independents, and to work to turn their kindle line into the commodity, just as they’re turning their online storefront into a platform rather than a store. The fact that they’re mostly doing it right is good for them, but it’s not why the Big Six are bleeding sales. The Big Six are bleeding sales because they’re producing crap. Amazon isn’t.

      As for iTunes, and the potential analogy there, the biggest flaw is the same one that we’re fighting today, and the war is not Amazon. Amazon is actually on the right side in this one – the real battle and the real war is being fought in various legislatures and courts (take a look at what Canada is trying to do with copyright, and compare it to SOPA/PIPA in the US): the Big Six, the record labels, Hollywood are teaming up to try to lock everyone else out. The music labels could lean on Apple and force a deal by withdrawing – or threatening to withdraw – services. Equally, eMusic’s subscriptions have offered less value with each new major label they’ve brought in, because they’ve had to make concessions to get that label. If the legacy industry could, it would force all artists back to the plantation with no choices about who buys our work.

      I might be skeptical of Amazon, but right now they’re on the side of light in the bigger battle – and the people screaming how Amazon is teh ebil are deep in the pockets of the legacy industry. Always look first at who is going to gain power from any move. Thus far, the big power grabs are all from the legacy industry. Until Amazon starts with that, I’m happy to have them on the same side of the argument I’m on.

      1. I written about 200,000 words on Copyright in the last 3-4 years, much to the regret of the Canadian Recording Industry Association. Their President, Graham Henderson has me on his hit list. Their chief lobbyist wishes I would just go away.

        I know too much about Copyright.

        It’s been rather fun having people come up to me and say, “Did you hear about ACTA,” and look at the shock on their faces when I tell them I started writing about it three years ago. Everybody thinks it’s something new.

        As to Amazon, will they remain smart enough to remain open to independents? Apple has been tightening up, supposedly because some artists were posting things that they shouldn’t. We know that Amazon is having copyright problems. Unlike Smashwords, they don’t seem able to police their uploads.

        And then there’s the scammers like Hephaestus Books. Smashwords can keep them out, why can’t Amazon?

        Then there’s the Autopilot Kindle Cash Scam otherwise known as selling Private Label Rights Ebooks. I wrote a private report on this a while back, I can release it now, and will in the next few days. Again, Smashwords is able to handle the problem. Amazon can’t.

        Add all that up, and I have little confidence in Amazon’s ability to operate. They remind me of Sergeant Bilko. As a result when we order books here, Amazon is our retailer of last resort. We’d prefer to order from someone who operates their business in a competent manner.

        That said, the real danger is in Ottawa, Canberra, and Washington. The politicians have been sold a bill of goods by the old line distributors (Big Six in book publishing, Big Four in music publishing). I’ve sent a ton of letters to Ottawa in the last several years, documenting my complaints. Even if Bill C-11 does pass, there are ways of fighting it, if previous complaints are documented. The Minister knows what I’m doing of course, and he is less than happy with me.

        The so called problem of Piracy has never really been an issue from the artists point of view. The artists problem has always been getting the distributors to pay them. Anything. There’s a guy whose music is up in iTunes. He didn’t authorize it. Apple refuses to take it down. He isn’t getting any money out of it. What is he supposed to do?

        As Courtney Love said, the real Pirates are the Distributors.

        Wayne

  7. Wayne, I appreciate you getting back to topic. I’ll point out again, I’ve never said I fully trust Amazon and am always on the lookout for alternatives that work — not just for me, but for the authors I edit as well. The whole point of the post, and my earlier post as well, was to say that the ails of the publishing and bookselling world don’t all begin and end at Amazon’s feet. And, while a little paranoia is good, assuming a company will do something bad in the future and hamstring yourself because of that assumption is not. The best thing any of us can do right now is use the tools we have and plan for the future by keeping our eyes and ears open. But most of all, we have to keep our minds open or we will find ourselves facing the same sort of crisis much of the publishing industry is now — extinction as writers/editors/publishers.

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