In the last few days, bookselling giant Amazon.com Inc (NASDAQ: AMZN) has made a few more enemies in the publishing world by forcing the little-known group of print-on-demand (POD) publishers to either submit to using its POD subsidiary, Booksurge, or risk being prohibited from selling on its industry-leading website. No matter the cost and complications of breaking off relationships with other vendors, reformatting books and a host of other problems, Amazon laid down the law, saying convert -- and do it quickly -- or face the consequences.
What's more disconcerting is that an official press release was made public only after smaller publishers like Angela Hoy of Booklocker.com started writing publicly about blackmail-type phone calls from Booksurge representatives. Fearful of losing their businesses literally overnight, many POD publishers such as iUniverse and Lulu have capitulated while strong willed publisher PublishAmerica refused to give in -- and was quickly made an example of when Amazon disabled the buy buttons on their book titles!
As an author selling my own critically-acclaimed POD book An American Hedge Fund on Amazon, outrage has compelled me to write about how unethical and more importantly, monopolistic this all is.
In a short-term business sense, Amazon is right to use its massive size to gain marketshare for Booksurge and squeeze out the smaller players, but the problem is this goes against what made it great -- offering the lowest prices and widest selection, basically like an online Wal-Mart Stores Inc (NYSE: WMT). To authors and publishers, Booksurge is known for its poor product quality and high cost structure, supremely inferior on both fronts to rival Lightning Source (LS) -- trust me, I did the research and that's why I chose LS -- the POD subsidiary of Ingram Industries, the leading book wholesaler and the company on which Amazon has clearly declared war.
So, by making Booksurge the only POD option, relegating quality-loving publishers and authors to much smaller websites of Borders Group (NYSE: BGP) and Barnes & Noble Inc (NYSE: BKS), Amazon proves it no longer cares about its customers getting the widest selection at the cheapest prices -- oh yes, even publishers that give into Amazon's demands will be forced to raise their prices -- it cares more about its own profits.
Until this latest development, I believed Amazon was the future of bookselling. It was making money, as were the publishers and customers who received the cost/quality benefits, but when a company happily alienates its suppliers whose hardships will inevitably be felt by the company's customers, I cry foul.
Authors, readers, consumers and businesspeople unite! Sign THIS petition and let Amazon know what it is doing is wrong. That it is only a retail giant because we, the consumers, say so. We, not it, have the power here. While POD publishing is just a tiny niche, it's a slippery slope; if you let Amazon get away with this, it might be your business and industry it comes after next.
Timothy Sykes writes the blog timothysykes.com, is a former hedge fund manager, star of the TV show Wall Street Warriors and author of the book, An American Hedge Fund: How I Made $2 Million as a Stock Operator & Created a Hedge Fund
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Reader Comments (Page 1 of 1)
4-02-2008 @ 5:30PM
Chris Work said...
Timothy, Great post on the Amazon Booksurge monopoly concern. As independent writers we're very concerned and have created a blog to track the story. We just added a form that directly emails the washington state attorney general's office. It's available here - http://www.amazontroopsurge.com
4-03-2008 @ 12:19PM
Pete said...
I think it's great that more and more people are starting to report this story, and hope that readers make the right choice in going directly to the publisher or author to purchase their books instead. Thousands of authors and publishers have already come together on bookhitch.com to connect with readers, many bypassing the old distribution model for books, especially as bookhitch supports the rights of publishers and authors to main control of their books!
Chris: I will definately take a look at your site.
4-03-2008 @ 12:32PM
Author said...
We need to cool down and think strategically about this. Not everyone has the stubbornness to hold out against the pressure Amazon can exert. We can't depend on some government agency intervening this time. Those agencies are staffed by politically inclined lawyers. Ethics doesn't move them. It'll take time, probably years of pressure, before what happened to Microsoft happens to Amazon.
We must take charge of this debate. We must dictate the terms. Amazon wants to enrich themselves by screwing everyone else. We all know that. But we also know that they can't look bad to their customers. That's their fatal weaknesses.
We need to develop a statement that legally binds Amazon to behave in ways that they don't want to do and insist that they agree or we don't sign. They claim to want to ship to customers faster. This agreement would bind them to shipping quickly by ordering from Lightning, paying an expedite fee if necessary, to ship quickly when BookSurge can't meet the demand. And remember, if we don't do something to push the accountability for print quality on Amazon, when a customer gets a poorly printed book (BookSurge's trademarks seems to be pages that fall out), they'll blame us and not Amazon.
Even more important, we need to keep in mind something that Amazon can easily do if they control the entire production and sale of our books. They can print and sell 1000 books, but pay us for 750. Amazon must provide POD publishers will full accounting of each and every sale: order date, shipping date, city and zip code. Will they want to do that? Of course not. And if they do that for us, how can they deny other publishers the same data.
Attempt to hang in there individually, and enough of us will fall in line for Amazon to claim a victory. Make this painful enough by setting conditions we can rally around that don't fit with Amazon's plans to maximize their profit, and they will drop this like a hot potato.
Think of this like the American Revolution. Would the Revolution have succeeded if there'd been no Declaration of Independence to rally around? Probably not. Amazon is behaving like King George III. We need the equivalent of a Declaration of Independence, something that lays down the conditions under which we will do business with them.
Greed is their motivation. We need to target that greed by insisting that they provide quality service to our customers and insisting that they display proper accountability in their dealings with us.