# Mark Coker's latest Blog post - you should all read this.



## John Van Stry (May 25, 2011)

I don't know if anyone else has linked / posted this. But it is something every author here should read and be aware of.

http://blog.smashwords.com/2014/05/amazons-hachette-dispute-foreshadows.html

This will have an effect on all of us, regardless of how it plays out.


----------



## Andie (Jan 24, 2014)

Very interesting. Thank you for posting.


----------



## Wansit (Sep 27, 2012)

The rebuttal to that is here and makes a lot more sense -

http://www.hughhowey.com/more-thoughts-on-hachette-amazon/


----------



## RockyGrede (Apr 19, 2013)

Can't see anyone pulling their books from there. Too profitable sales channel.


----------



## 鬼 (Sep 30, 2012)

Wansit said:


> The rebuttal to that is here and makes a lot more sense -
> 
> http://www.hughhowey.com/more-thoughts-on-hachette-amazon/


Agreed.


----------



## Ronny K (Aug 2, 2011)

I'm no market expert, but I can say that Mark's post _reads_ as extremely biased.


----------



## 41413 (Apr 4, 2011)

Another interesting blog on the subject: http://davidgaughran.wordpress.com/2014/05/26/amazon-v-hachette-dont-believe-the-spin/


----------



## Quiss (Aug 21, 2012)

One flaw in Hugh's speculation is that, should the sky fall and Amazon reduces everyone's "royalty" to 30%, the other vendors will follow suit. Perhaps offer us 35% or something. There will be no mass exodus from Amazon to them.


----------



## Vivi_Anna (Feb 12, 2011)

As usual...Hugh is smart.


----------



## PhoenixS (Apr 5, 2011)

Wait. Wasn't the IPG dispute the one that was going to be industry-changing? No, sorry, it was the Macmillan dispute before that, right? Or was it the DOJ's decision about price-fixing? And yet, what has changed? Are any of these companies' titles *not* being sold on Amazon? Has Amazon reduced the royalty rate for indies? Did the sky fall? Are we going to go through this fear-mongering every time Amazon and one of its vendors get into a negotiation standoff? This is gonna get old quick, if so...


----------



## DTW (Apr 13, 2014)

Coker's post is massively biased.  Massively.Based on how much he's tooted the indie horn previously, I'm surprised he'd trot out something this clearly full of propaganda.  I knew he was as self-centered as any businessman is, but I assumed he was smarter than that blog post makes him.

Though it sounds like it's worked on some people.

As usual, Hugh has clear words.  Gaughran's piece is also intelligent.  Listen to them.  Check their numbers and their logic.  You'll find it computes without any needing to jump through hoops, unlike a LOT of the PR pieces (including Coker's) being blasted into the ether the last couple of weeks.


----------



## Amy Corwin (Jan 3, 2011)

AdamGeen said:


> Agreed.


I agree, too. And frankly, most publishers set their books (both paperback and ebooks) at such a high price already that I'm forced to use either used book stores or the library to read them. And the bottom line is that I'm reading more and more indie books these days because they are priced reasonably and are pretty much equal to what you get from publishers like Hatchette.

The truth is: I'm not worried. I'm not worried as a reader and I'm not worried as an author.
Really worse case scenario a few years from now: I just download classics that are free from places like Project Gutenberg. But I doubt it will ever come to that. I don't believe Amazon will go nuts and drastically cut what it pays its authors. I'm hoping publishers will "get over it" and start setting more reasonable prices on ebooks. Do I think they will? Not sure, but I've seen some books put out by publishers that are under $6.00 and I consider that pretty reasonable (although I generally stick to books under $4.00).

I don't know what the future brings and frankly, no one really does. It's all speculation. So I don't worry. Whatever happens, we'll grow and thrive regardless, even if authors wind up selling books direct to readers from their websites.

There will always be readers. There will always be books in some form or other, from one venue or another.

Don't worry, be happy.


----------



## Micah Ackerman (Feb 16, 2014)

Hugh's point about changing prices as a reactionary (to any "penalty" Amazon would charge self-publishers) move doesn't work because of Amazon's price matching policy. That being said Amazon ain't shutting out indies anytime soon, they are cashing in on the goldrush. Hugh is right about so much with that, the indie situation isn't comparable to Hatchette, and the blog post read like "come to Smashwords instead."

Micah

(^^^)


----------



## Joe_Nobody (Oct 23, 2012)

Maybe you folks can clear up a point of confusion and befuzzlement on my part. 

I get 70% between $2.99 and $9.99. Above or below that, I'm at 35%.

So why would anyone price their ebook at $14.99 and take the 35%? 
That's less than what they would make pricing it at $9.99.
Why would Hatchette be fighting for the agency model? 
Why not take the same deal we all have and make more per title at a lower price?

On the other hand, why have a cap at the top, Amazon? Who cares? If someone wants to price their masterpiece at $14.99, why not give them the 70%? Amazon will make more per copy sold. I understand why this was necessary a few years ago, but there is no shortage of ebooks anymore. Competition will keep prices low now. Why have a cap?

I'm missing something here... somebody please school me.


----------



## Usedtoposthere (Nov 19, 2013)

I'm exclusive because *right now,* it works for me. When it stops working for me? I'll change. I do think that's all any of us can do--figure out what our best bet is right now, and do that. And when something changes, don't be afraid to change with it. This marketplace is moving FAST. We have the advantage that we can be nimble and move with it. It's a lot easier to turn a little power boat than an ocean liner.


----------



## Herc- The Reluctant Geek (Feb 10, 2010)

Quiss said:


> One flaw in Hugh's speculation is that, should the sky fall and Amazon reduces everyone's "royalty" to 30%, the other vendors will follow suit. Perhaps offer us 35% or something. There will be no mass exodus from Amazon to them.


IIRC, Amazon raised their royalty to 70% in response to Apple's entry into the ebook market, who offered 70% across the board. The mighty Zon know they are only mighty because they work hard at it, and there are far too many newbies in the ebook market to start playing hardball with indie authors.


----------



## Jim Johnson (Jan 4, 2011)

Extensive discussion over at TPV as well.

http://www.thepassivevoice.com/05/2014/amazons-hachette-dispute-foreshadows-whats-next-for-indie-authors/#comments


----------



## A.A (Mar 30, 2012)

> If Hachette doesn't have the power to maintain 70% earnings, how will million-copy-selling New York Times bestselling indie authors have any power when Amazon decides to put the squeeze on them? And how about the rest of the indie community which has even less leverage over Amazon? http://blog.smashwords.com/2014/05/amazons-hachette-dispute-foreshadows.html


Million copy-selling New York Times selling indie authors actually have quite a lot of power. They can sell their own books, if they choose to. If Amazon were to do something nuts and reduce royalties to 30% or something like that, those indies have the choice of keeping a select few titles on Amazon (to retain visibility) and sell the rest on their own websites, or have the first two books in a serial on Amazon and sell the rest of the books of that serial on their own websites.

Many indie authors have built up huge platforms - on Facebook, newsletters, twitter, their websites etc. Even if they're not 'best-selling'. They have a lot of leverage.

I'm a tiny non-best-selling indie author. I have a tiny platform. The first book in my series went off-sale over 2 months ago, with the other 3 books in the series going off-sale this month. I placed a gumroad.com sale link on my website as a courtesy to any reader who'd taken months to read the first book and now wanted to read the rest. I'm amazed that the box set is selling. It's really so damned simple to sell books yourself, I'm gobsmacked.

So, while Amazon and other distributors are the best option for indie authors, if something brutal were to happen, there are options.
And something tells me they're smart enough to know that.


----------



## zoe tate (Dec 18, 2013)

Ronny K said:


> I can say that Mark's post _reads_ as extremely biased.


And that's putting it mildly. 

If I were Mr Coker, I'd be spending a lot* less* time writing stuff like that and a lot *more* time attending to the reasons behind all the comments in this forum (and elsewhere) about his own company's apparent concept of the words "customer service".


----------



## Chrissy (Mar 31, 2014)




----------



## B&amp;H (Apr 6, 2014)




----------



## Evan J (Feb 3, 2014)

Wansit said:


> The rebuttal to that is here and makes a lot more sense -
> 
> http://www.hughhowey.com/more-thoughts-on-hachette-amazon/


I actually find Hugh's response muddled. First, he confuses "monopoly" with "monopsony." If Amazon ever becomes the sole distributor of e-books, then it might develop a "monopoly" relationship with book buyers but, as a distributor, it will have created a "monopsony" with its suppliers (i.e., authors). Thus it's really irrelevant if the "barriers of entry" are low. Any new entrant to e-book retail will have to compete with Amazon on price in order to get consumers. That price will have to be as low as Amazon's if not lower. The only way to get the price down is to either deliver books more efficiently than Amazon (unlikely), pay suppliers (i.e., authors) less, or make no profit.

The low barriers to book SELLING will help prevent Amazon from creating a monopoly and bilking consumers. It will not prevent them from lowering the royalty to authors. Once Amazon creates a true "monopsony" (it's the only distributor) it can lower royalties until it reaches the point where it is more cost effective for authors to market/sell directly to consumers themselves.


----------



## Deke (May 18, 2013)

I keep having to get my brain around whether Amazon is a store capable of pricing products as it sees fit (even at a loss), or if it is merely a sell-through mechanism that merely takes a cut of what the real "seller" (us for self-pubbers) decides to price their books.

And I have no idea what a monospony is.


----------



## Colin (Aug 6, 2011)

Rosalind James said:


> ....And when something changes, don't be afraid to change with it. This marketplace is moving FAST. We have the advantage that we can be nimble and move with it....


Absolutely this!


----------



## John Van Stry (May 25, 2011)

I think several of the people here are missing the overall point, whatever comes out of this Hatchett affair, we will see an effect on us because of it. That effect might be positive, it might be negative, I don't know, but there will be one.

Yes Mark's comments do reflect Mark's point of view, and his goals, and do contain a certain amount of sales pitch. That is to be expected because of who he is, what he does, and that he's one of Amazon's biggest competitors. Part of the reason I support Mark (and B&N) is to help keep Amazon honest. Competition between book sellers is good for us authors.

Now someone else mentioned a bunch of previous events and seemed to indicate that while everyone said those would have an effect on us, that none of those events did. I can only surmise that they have not been paying attention. As mentioned earlier, Amazon raised royalty rates in response to competition. Amazon also put a huge push behind us indies in response to the entire 'agency pricing' model that is now working its way through the courts as a violation of the fair trade act. Since that made it's way to the courts Amazon has STOPPED pushing indies as hard as they were prior to it. Haven't you noticed? Remember keywords? There were other changes as well.

Amazon is trying VERY HARD to lure authors away from their publishers and get them to publish directly on Amazon. I know of at least one main stream author who is experimenting with this (more money in their pocket), I'm sure others are as well. Traditional publishers are in trouble, if they realize it or not, and will have to alter their business model if they wish to compete successfully. Remember the record companies? The movie industry? Yeah, now it's the publisher's turn in the barrel.

I don't know what will happen, no one really knows for sure. Amazon could very well decide to cut royalties in the future, they could even decided to set prices for us, anything could happen. If they cut prices will their competitors follow? Hard to say. Apple is a hardware company, they don't care if they make much money on the content because they're selling platform. So they'll probably keep royalties high to keep content and attract platform buyers.

Smashwords, Kobo, and B&N could go either way.

But remember this, Amazon CAN NOT AFFORD to put too many of it's competitors out of business. Remember when Microsoft bailed out Apple? That was because they didn't want to become a monopoly. Amazon isn't stupid, they don't want to be a monopoly because then the government gets involved. Yes they want the biggest slice of the pie the government will allow, but you can bet that they don't want anymore than that. Heck, they probably don't even want to get too close to that limit.

Depending on what happens with this current affair, there will be a shift in the industry and it will effect us. How much, as I said above is anybody's guess. Good or bad it will make changes to the market place. So it's only wise to keep an eye on it. I'd love to hear comments from the people running B&N and Kobo on this affair as well, because I'm sure they're watching it very closely.


----------



## Bob Stewart (Mar 19, 2014)

What you have is a lot of people looking out for their businesses self-interest. There's nothing wrong with that, that's what they should be doing. How anyone turned this into a bad-guy/good-guy thing is really mystifying. Walmart, Target, etc, all deal with their suppliers in the exact same. Should we all shed a tear for Levi-Strauss?

When I brought my self-published book to my local independent bookstore (good-guy) they said they'd stock it IF I paid them a fee that was essentially equal to the profit they would make from that shelf space if it had been given to a book from a major publisher. Then if my book sold, they'd take another cut. 

I'm not blaming them for dictating terms, they're a business that needs to look after themselves. But being small doesn't make them good.


----------



## Wansit (Sep 27, 2012)

EelKat said:


> My worry is more will Disney drop Hachette over this or will Disney defend Hachette and take Amazon out at the jugular? Disney dumping Hachette as a result of this is my worry more than anything else.


I'm a little lost... Could you explain?

I know Hachette bought the adult Hyperion imprint outright. Does that include the comics? And Amazon is worth more than Disney according to Forbes.

Disney = $142.93B; Amazon = $157.52B


----------



## Herc- The Reluctant Geek (Feb 10, 2010)

Hachette is part of the Lagardere Group, which is not a bit player on the world stage but is still small fry compared to Amazon (market cap of 5 billion compared to Amazon 150 billion).


----------



## chris56 (Jun 8, 2013)

vanstry said:


> Yes Mark's comments do reflect Mark's point of view, and his goals, and do contain a certain amount of sales pitch. That is to be expected because of who he is, what he does, and that he's one of Amazon's biggest competitors.


I don't see Smashwords as Amazon's competitor at all, let alone of of their biggest competitors. Smashwords was once a viable option for indie authors but the company has not evolved with the industry. Their policies are still restrictive and rather antiqued, which may explain why authors are leaving them in droves.


----------



## nobody_important (Jul 9, 2010)

chris56 said:


> I don't see Smashwords as Amazon's competitor at all, let alone of of their biggest competitors. Smashwords was once a viable option for indie authors but the company has not evolved with the industry. Their policies are still restrictive and rather antiqued, which may explain why authors are leaving them in droves.


I agree with this. I abandoned SW for D2D because of auto opt-in nonsense. They shipped my book to places I opted out of anyway. (And I opted out as soon as I got their message about "exciting new channels".)


----------



## Scragga (May 22, 2014)

As a long time lurker, I don't understand the anti-smashwords sentiments on these boards, especially when it drives good discussion threads off topic. That being said, I think Mark Cocker's blog was alarmist and obviously colored by his business interests.

The stoush between Amazon and Hachette is not unusual in the business world where players jockey for the best returns possible, but the ensuing bun-fight between the pundits and spectators most certainly is. It's almost as if some of them are waiting, word-processors cocked, looking for a reason to metaphorically blow their opponent's arguments to smithereens with a well placed blog post.


----------



## Christa Wick (Nov 1, 2012)

Quiss said:


> One flaw in Hugh's speculation is that, should the sky fall and Amazon reduces everyone's "royalty" to 30%, the other vendors will follow suit. Perhaps offer us 35% or something. There will be no mass exodus from Amazon to them.


In case it hasn't been noted a couple dozen times in this thread already -- Apple has a long history of giving creators 70% in its download stores long before Amazon increased the royalty from 35% to 70% on qualifying works. I'm not worried about other vendors lowering their percentages if Amazon decides to do it. And I'm not worried about Amazon doing it to begin with.


----------



## Betsy the Quilter (Oct 27, 2008)

Hey, folks,

a couple things...

One, I agree with Scragga--let's keep this on topic and not turn this thread into yet another dump on Smashwords thread. Lets keep it on topic and civil.  For the new folk, Mark Coker is a member of the forum and often drops by threads like these.

Secondly, a reminder that starting secondary accounts is against the rules unless you ask us about setting up a pen name account.  If you can't express something without setting up a secondary account, perhaps it's better not said or said a different way; or, if you think a thread is going off the rails, you can always report it and let us handle it.  I don't know for sure that there are any secondary accounts here, but I have some suspicions. 

Best,

Betsy
KB Mod


----------



## DocAggie (Jun 29, 2013)

The fact is that the DOJ lawsuit settlement laid out that the agency model was dead as a doornail for a cooling off period of two years.
Hard as it is to believe, September will mark two years.  The publishers need to negotiate how things are going to work moving forward after the timer dings 24 months, and the settlement specifically states that they can't negotiate together.  So, they've all got to get in line for a negotiation and Hatchette is first to the table.  These two companies are negotiating over what pricing model they'll be working under for the near future.

Someone will blink.  If it's Hatchette, things will remain as they are.  If it's Amazon (which I highly doubt... books are about 1/5 of their bottom line, spread amongst the Big 5 publishers and indies - Hatchette needs Amazon far more than the other way around) expect each publisher that follows to try to negotiate the same deal.  

Now, where it gets interesting will be when Penguin Random comes to the table.  They're so much bigger than the other four, their negotiation will likely take on a different tenor altogether.


----------



## Wansit (Sep 27, 2012)

Amazon released a reply 

http://www.amazon.com/forum/kindle/ref=cm_cd_tfp_ef_tft_tp?_encoding=UTF8&cdForum=Fx1D7SY3BVSESG&cdThread=Tx1UO5T446WM5YY

We are currently buying less (print) inventory and "safety stock" on titles from the publisher, Hachette, than we ordinarily do, and are no longer taking pre-orders on titles whose publication dates are in the future. Instead, customers can order new titles when their publication date arrives. For titles with no stock on hand, customers can still place an order at which time we order the inventory from Hachette -- availability on those titles is dependent on how long it takes Hachette to fill the orders we place. Once the inventory arrives, we ship it to the customer promptly. These changes are related to the contract and terms between Hachette and Amazon.

At Amazon, we do business with more than 70,000 suppliers, including thousands of publishers. One of our important suppliers is Hachette, which is part of a $10 billion media conglomerate. Unfortunately, despite much work from both sides, we have been unable to reach mutually-acceptable agreement on terms. Hachette has operated in good faith and we admire the company and its executives. Nevertheless, the two companies have so far failed to find a solution. Even more unfortunate, though we remain hopeful and are working hard to come to a resolution as soon as possible, *we are not optimistic that this will be resolved soon.*

Negotiating with suppliers for equitable terms and making stocking and assortment decisions based on those terms is one of a bookseller's, or any retailer's, most important jobs. Suppliers get to decide the terms under which they are willing to sell to a retailer. It's reciprocally the right of a retailer to determine whether the terms on offer are acceptable and to stock items accordingly. A retailer can feature a supplier's items in its advertising and promotional circulars, "stack it high" in the front of the store, keep small quantities on hand in the back aisle, or not carry the item at all, and bookstores and other retailers do these every day. When we negotiate with suppliers, we are doing so on behalf of customers. Negotiating for acceptable terms is an essential business practice that is critical to keeping service and value high for customers in the medium and long term.

A word about proportion: this business interruption affects a small percentage of Amazon's demand-weighted units. *If you order 1,000 items from Amazon, 989 will be unaffected by this interruption.* If you do need one of the affected titles quickly, we regret the inconvenience and encourage you to purchase a new or used version from one of our third-party sellers or from one of our competitors.

We also take seriously the impact it has when, however infrequently, such a business interruption affects authors. *We've offered to Hachette to fund 50% of an author pool - to be allocated by Hachette - to mitigate the impact of this dispute on author royalties, if Hachette funds the other 50%.* We did this with the publisher Macmillan some years ago. We hope Hachette takes us up on it.

This topic has generated a variety of coverage, presumably in part because the negotiation is with a book publisher instead of a supplier of a different type of product. Some of the coverage has expressed a relatively narrow point of view. Here is one post that offers a wider perspective.

http://www.thecockeyedpessimist.blogspot.com/2014/05/whos-afraid-of-amazoncom.html

Thank you.


----------



## Gator (Sep 28, 2012)

Wansit said:


> Amazon released a reply
> 
> http://www.amazon.com/forum/kindle/ref=cm_cd_tfp_ef_tft_tp?_encoding=UTF8&cdForum=Fx1D7SY3BVSESG&cdThread=Tx1UO5T446WM5YY


Wow! Amazon has a long history of staying mum on things like this. Not this time. Someone has stirred up a hornet's nest at Amazon HQ. This could get very interesting.


----------



## AshRonin (May 5, 2013)

Ronny K said:


> I'm no market expert, but I can say that Mark's post _reads_ as extremely biased.


Felt the same way reading it.


----------



## John Van Stry (May 25, 2011)

chris56 said:


> I don't see Smashwords as Amazon's competitor at all, let alone of of their biggest competitors. Smashwords was once a viable option for indie authors but the company has not evolved with the industry. Their policies are still restrictive and rather antiqued, which may explain why authors are leaving them in droves.


They sell ebooks, that makes them a competitor.

I don't see how you can call their policies 'restrictive' when they are far less restrictive than Amazon or Kobo.

I have sold thousands of copies via Smashwords. Four times a year I get a nice check from them. Yes the Kobo affair did hurt for a while, but now that Kobo is back to selling ebooks my numbers with them are going right back up. The fact that Smashwords deals with a lot of vendors saves me the trouble of doing it, and I appreciate that quite a bit. I appreciated their efforts with Kobo on the behalf of the many authors who publish there via Smashwords. Because of Smashwords, I got my books back up and selling there.

Authors are not 'leaving Smashwords in droves' if anything I would say the reverse is true.

Last of all I have found the people there to be very helpful, and I have always gotten a response to my questions, and they have always taken the time to deal politely with me, even when the questions were dumb ones. IMHO Smashwords' customer service is superior to Amazon's, where it took me contacting Jeff Bezos to get a answer to a simple question - and even then it still took a month. But even with that I don't slag Amazon because of occasional screw-ups.


----------



## jimkukral (Oct 31, 2011)

The best/real answer to this is to just go direct. Build your readership/fans and you don’t need anyone in the middle.


----------



## MarkCoker (Feb 15, 2009)

I work for Smashwords, so that makes me biased, but to view everything I write through that lens is to miss some of my bigger messages.

You would think that working at Smashwords, I would relish the possibility of the publishers getting their butts kicked by Amazon, going out of business and losing their authors.  That's more self-published authors coming our way.  But no, that's not what I want.  I often advocate for things that are not in Smashwords' best interest.  For the last six years, I've been telling every author I meet they should sell at Amazon.  How's that for bias?  

I want what's best for authors, and what's best for the future of books.  I think the future of books is best served by a diverse ecosystem of publishing options, and a diverse ecosystem of retailing options.

An indie ebook future dominated by one or two retailers is not a future in which indies keep their independence.

The piece asks authors to consider what would happen if Amazon succeeds at undermining agency pricing, and where does that lead.  Bias or not, it's a fair questions, and for the publishers it's really a life or death question, especially if ebooks continue to take market share from print books.


----------



## jimkukral (Oct 31, 2011)

MarkCoker said:


> The piece asks authors to consider what would happen if Amazon succeeds at undermining agency pricing, and where does that lead. Bias or not, it's a fair questions, and for the publishers it's really a life or death question, especially if ebooks continue to take market share from print books.


"If ebooks continue to take market share from print books?" I'm looking in my crystal ball and I see the future. It's happening already actually. I think the Author Earnings reports are pretty much proving it.

As much as I dislike the fact that print will be diminished; the writing is on the wall. The outdated models and gatekeepers are falling. It's not a question of "if" anymore. It's a question of "when?"


----------



## 75814 (Mar 12, 2014)

kurzon said:


> Trade Publishers don't have the same pricing restrictions as users of KDP. They can price over $9.99 without dropping what they earn.
> 
> Unless I hear from someone actually involved in the negotiations what either side's asking for, I can't truly know who is being unreasonable here. But I do agree with the "don't put all your eggs in one basket" argument. Amazon has been doing a lot the last couple of years to try and push self-publishers to be Amazon-only. It wouldn't surprise me greatly if it kept pushing that line, making it less and less advantageous for non-exclusive authors.
> 
> And I really don't think being exclusive to one marketplace - any marketplace - is good for anyone except that marketplace.


I think this is the best post in this thread. I've got no lost love for traditional publishers, but I'm also very wary of Amazon. Hell, I'm very wary of any extremely large corporation.


----------



## A.R. Williams (Jan 9, 2011)

Joe_Nobody said:


> Maybe you folks can clear up a point of confusion and befuzzlement on my part.
> 
> I get 70% between $2.99 and $9.99. Above or below that, I'm at 35%.
> 
> ...


First, I'm not sure that the trad. pub model works exactly the same way as the indie model, but traditional publishers are still trying to protect the print industry. By "protecting" print they protect all of the book stores they sell paper books through and they protect their hardbacks which they make large profits on.

When McMillan forced the agency model on Amazon, they accepted less in the bargain. Authors also made less in the bargain.



> Why would Hatchette be fighting for the agency model?
> Why not take the same deal we all have and make more per title at a lower price?


Hatchette wants to control the price to protect their other interests--mainly paper books.



> On the other hand, why have a cap at the top, Amazon? Who cares? If someone wants to price their masterpiece at $14.99, why not give them the 70%? Amazon will make more per copy sold. I understand why this was necessary a few years ago, but there is no shortage of ebooks anymore. Competition will keep prices low now. Why have a cap?
> 
> I'm missing something here... somebody please school me.


Amazon has a different focus than Hatchette. They want to keep costs low (at first to help get people to buy Kindles) and they want to be able to point at the lower prices that eBooks offer. Their interest isn't just to sell the paper version of books (or to protect it), but to sell eBooks and Kindles. Those shoppers would then buy more eBooks from Amazon.

If readers have to buy a Kindle and then buy $15 dollar eBooks, they might not buy the Kindle to begin with because the eBooks are so expensive.


----------



## deedawning (Aug 31, 2013)

Yeah, I've been worried about this. Even blogged about it. Things are bad enough for authors with Amazon;s give away policies, we don't need to be the fodder in a turf war! Right now I average 25% of what I did 2 years ago with double the books. 

I think eventually authors will be forced to form or join a union to get some clout. Thanks for the heads up.


----------



## Mark E. Cooper (May 29, 2011)

deedawning said:


> Yeah, I've been worried about this. Even blogged about it. Things are bad enough for authors with Amazon;s give away policies, we don't need to be the fodder in a turf war! Right now I average 25% of what I did 2 years ago with double the books.
> 
> I think eventually authors will be forced to form or join a union to get some clout. Thanks for the heads up.


Could you explain Amazon giveaways a little more. please? Thanks.


----------



## Hugh Howey (Feb 11, 2012)

MarkCoker said:


> The piece asks authors to consider what would happen if Amazon succeeds at undermining agency pricing, and where does that lead. Bias or not, it's a fair questions, and for the publishers it's really a life or death question, especially if ebooks continue to take market share from print books.


Agency pricing is awful for readers, authors, retailers, and e-book distributors. The only party who benefits is bookstores. Manufacturers should not be allowed to set fixed prices for their goods at retail unless they want to act as retailers. Dictating business practices to another is ludicrous. It's coercion. You sell your good to the retailer at the price that covers your end, and what happens next no longer concerns you.

The reason publishers hate Amazon's discounting is because they hate Amazon. It's all psychological and delusional. Publishers should be working closely with Amazon to increase the share of people reading. They should embrace low prices, the move to digital, the reduction of returns Amazon has wrought, the great sales and recommendation engine, etc. Instead, people in publishing bemoan the decline of bookstores; they blame Amazon; and they just want the company to suffer.

Indies should worry about a world dominated by Amazon? I WELCOME THAT WORLD. Publishers are horrible to authors. They treat them like crap. They pay them like crap. Authors have been complaining about their publishers for over two thousand years. Where do you ever see an outpouring of love for one's publisher? It doesn't happen. But look at the outpouring of love toward Amazon from so many readers and writers whose lives have been changed by the company. Lives. Changed.

I met another writer last night who is making 5 figures a month and whose husband has quit his job to be her assistant. You can't go to a reading or book event without running into this story. An author that I've never heard of is making a lawyer's salary writing. These miracles, not to mention the simple miracle of having the freedom to express ourselves without a gate in front of us, has me willing to fight for the company who most made this possible. So instead of worrying about what Amazon MIGHT do in the future, I'm going to consider what publishers are doing today, and it ain't pretty. I'm also going to concentrate on what Amazon is doing today, and it's absolutely brilliant. The day they decide to go off in another direction, I won't even be angry. I'll be disappointed. And I'll take my wares elsewhere.

Which leads us to...



MarkCoker said:


> An indie ebook future dominated by one or two retailers is not a future in which indies keep their independence.


This is the fear-mongering that I just don't get. The old world is gone, Mark. I'm leaving my apartment in an hour to go check out my booth at BEA. The eleven or so authors who got the booth together have sold 20 million or more books between us. And we're just one small gathering of authors. Every trade book show we attend, two dozen entrepreneurs sit down and show us another platform they baked in their dorm rooms or garages. Many are spectacular. I saw a demo last night from a company who could step in and be the new e-book retailer. The moment Amazon pays 30% to the author (the nightmare scenario that's still BETTER than what Hachette pays today), the eleven of us will take our fans, our books, our promotional energies, all our future writing, and POUR OUR HEARTS OUT to whoever steps up with a better platform and a better model.

Forget startups, you don't think that Google Play would love to have our business? And forget the measly eleven of us, because I don't think we're so important, but imagine when eleven thousand of us writers bolt for greener pastures.

What Facebook did to MySpace? That's the threat Amazon faces. And guess what? Jeff Bezos is a lot smarter than any of the fools who think he can simply dominate his competitors and then do whatever the heck he wants. He's a LOT smarter than that.


----------



## Colin (Aug 6, 2011)

A great post, Hugh.

Apparently, the ultimate (if unstated) aim for any company is to have a monopoly of the market - to take control.  While that might be true, in the Internet age, smart bosses know that if they abuse a position of dominance, both costumers and suppliers will eventually vote with their feet. The net can make, or it can break. So 'doing the right thing' becomes important if you want to maintain market share.

But as you say, trad publishers have a history of serially abusing authors - doing the wrong thing!


----------



## zoe tate (Dec 18, 2013)

Thanks *very* much for clarifying the situation, Hugh. Your post will be helpful to many, here.


----------



## C. Gockel (Jan 28, 2014)

> For the last four years, indie ebook authors have endured similar iron-fisted policy enforcement and lost earnings with Amazon's KDP price-matching, even when Amazon knew the out-of-sync ebook prices were not the author's intention or fault. Amazon plays business like war. Overwhelming force pushes weak hands to surrender and comply.


Quotes like this make me distrust the entire article. This isn't putting the "squeeze" of an "iron-fist" on indie-authors. This is being fair to a customer. Yeah, I've had it happen by accident. Yeah, it sucks, but I don't blame Amazon at all.

Makes me wonder if Hachete wants 70% royalties on books over 9.99 or some such? Of to read the rebuttal.


----------



## ricola (Mar 3, 2014)

I'm always worried.  Eggs.  Basket.

If I were selling millions, I'd be hiring someone to develop an independent, recommendation-driven platform, like Goodreads/Netflix/Kindle/Hulu rolled into one for books.  It'd be set up so that publishers would own their "pie" and would just be using the app to share it.


----------



## S. Elliot Brandis (Dec 9, 2013)

Yeah, the language is a tad dramatic.


----------



## Speaker-To-Animals (Feb 21, 2012)

I'm very dubious about whether agency pricing really makes all that big of a difference. To me, there's not a whole lot of difference between a bookseller saying "the book shall be $15" and a bookseller knowing that the discount will be 50% and pricing it at $30. At least with agency pricing, you don't get dumping at below cost.


----------



## unkownwriter (Jun 22, 2011)

I'm more inclined to listen to what David and Hugh are saying, rather than be fed some line that agency pricing is good for me.

I don't have anything against Mr. Coker, and I really appreciate having Smashwords to sell and distribute my work, but I'm getting a little tired of being told how Amazon is seconds away from taking that 70% away from me, and how I should be grateful big publishers are looking out for me. If that day should come, I won't be too worried, because my work will be on as many viable retailers as I can find and sign up with.


----------



## Janet Michelson (Jun 20, 2012)

Hugh Howey said:


> Agency pricing is awful for readers, authors, retailers, and e-book distributors. The only party who benefits is bookstores. Manufacturers should not be allowed to set fixed prices for their goods at retail unless they want to act as retailers. Dictating business practices to another is ludicrous. It's coercion. You sell your good to the retailer at the price that covers your end, and what happens next no longer concerns you.
> 
> The reason publishers hate Amazon's discounting is because they hate Amazon. It's all psychological and delusional. Publishers should be working closely with Amazon to increase the share of people reading. They should embrace low prices, the move to digital, the reduction of returns Amazon has wrought, the great sales and recommendation engine, etc. Instead, people in publishing bemoan the decline of bookstores; they blame Amazon; and they just want the company to suffer.
> 
> ...


Thank you, Hugh, for again illustrating why the sky is not falling, and what would happen if it ever did fall. We would all be just fine, that is, those who are conducting themselves in an honest, responsible manner would be just fine. Those who have unfair business practices might suffer, but that's their choice. The beauty of publishing today is that we all have many, many choices, and the best options will win.


----------



## Michael Murray (Oct 31, 2011)

_Publishers should be working closely with Amazon to increase the share of people reading._

This. In my other life, I help make software that helps kids learn to read. Kids in some of the most challenging environments who are failing because they can't. They love it when they learn. They desperately want to read.

Publishers and anyone selling e-i-devices or content should do all they can to help kids become readers, IMO.


----------



## MarkCoker (Feb 15, 2009)

Hugh Howey said:


> Agency pricing is awful for readers, authors, retailers, and e-book distributors. The only party who benefits is bookstores. Manufacturers should not be allowed to set fixed prices for their goods at retail unless they want to act as retailers.


Hugh, we disagree here. It's a mistake to view discounting as some form of public service. The wholesale model doesn't make sense for ebooks. The retailer is not unboxing and stocking inventory, or paying for stock up front. It's dangerous to assume that wholesale pricing leads to the discounting of every title. This certainly wasn't the case in 2009 when all the retailers were operating under the wholesale model. What happened then with discounting was that a few titles get deep-discounted, and others do not. For the titles that aren't discounted, the entire 50% list price goes to the retailer, not the author or publisher. The retailer decided which titles were promoted on price, and the author/publisher had little control other than to discount their list price even more, yet only receive 35-50% of the list. Agency gives indies and publishers more control. Agency isn't perfect, but IMHO it's a much better option for indies and publishers. It makes the author/publisher 100% accountable to reader. It puts a greater percentage of the sale into the author's pocket. It forces retailers to compete on customer experience.



Hugh Howey said:


> Indies should worry about a world dominated by Amazon? I WELCOME THAT WORLD. Publishers are horrible to authors. They treat them like crap. They pay them like crap. Authors have been complaining about their publishers for over two thousand years.


Indies should worry about about any single retailer wielding too much control.



Hugh Howey said:


> This is the fear-mongering that I just don't get.


This is about risk management, not fearmongering. Are scientists who caution about the potential dangers of global warming fearmongerers? When an investment adviser tells you to avoid putting your entire retirement savings into a single investment because things could go south, is that fearmongering? This goes beyond Amazon. Any time there's consolidation in an industry, whether it's bookselling or publishing, meatpacking or cable television, there are benefits and dangers to both consumers and suppliers. Consolidation brings concentration of risk. Authors should ask themselves if they're diversified enough, and if not they might consider steps to diversify. If an author's total percentage of earnings coming from any one single retailer exceeds that retailer's market share, then the author is overexposed. So, for example, if we assume an Amazon controls 60% of the ebook market, and an author is earning 100% of their ebook earnings at Amazon, that author is overexposed. Very simple head check for any author. And it works both ways. If an author's percentage of ebook earnings are only 10% coming from Amazon, it means they're overexposed elsewhere and underexposed at Amazon. And after an author does the headcheck, and discovers they're overexposed anywhere, they may still choose to remain overexposed. My best investments in the stock market over the last 20 years have been when I was overexposed. My worst losses have come from the same over exposure. The more the author's eyes are open to understanding the implications of their risk posture, the better they can manage the risk.


----------



## Marti talbott (Apr 19, 2011)

Long long ago, there was a little company called "Mighty Words." They developed a way for authors to upload ebooks that customers could buy and download right from their site - no shipping costs. I was selling on that site, and one day it was just closed. No warning, no explanation, just gone. Later, we learned Amazon bought the company.

I've always believed Jeff has a private grudge against trad publishers. I don't know why, but if you wanted to put them out of business, what better way than to let Indie authors upload and sell their books in direct competition. Maybe it is a "looking out for the little guy," mentality instead. I have no doubt this opportunity for us hurt and is still hurting trad publishers. Considering how unfair they have been to their authors in the past, I am totally on Amazon's side. Whatever the thinking truly is behind the conflict, I will always be grateful to Amazon for letting me make enough to have a very nice retirement- should I ever retire. 

The sky is not falling for Indies. Amazon has a great deal invested in seeing us succeed.


----------



## Karl Fields (Jan 24, 2011)

MarkCoker said:


> It forces retailers to compete on customer experience.


Mark,

I'm not being snarky or disrespectful -- I'm genuinely interested in your perspective -- but why shouldn't a retailer be able to decide for itself how it wishes to compete, whether that's customer experience, price, convenience, whatnot? For that matter, what is customer experience? Won't different people define that differently?


----------



## Guest (May 28, 2014)

C. Gockel said:


> Makes me wonder if Hachete wants 70% royalties on books over 9.99 or some such? Of to read the rebuttal.


It has already been mentioned several times in this thread that major publishers are NOT subject to Amazon's "royalty" terms because they don't get "royalties" from Amazon. They have wholesale agreements. Technically, you and I don't get "royalties" from Amazon. They are gross profits on sales. But that is an argument for another thread.


----------



## Ros_Jackson (Jan 11, 2014)

vmblack said:


> If I were selling millions, I'd be hiring someone to develop an independent, recommendation-driven platform, like Goodreads/Netflix/Kindle/Hulu rolled into one for books. It'd be set up so that publishers would own their "pie" and would just be using the app to share it.


Bookish. It didn't take off. It's not terrible, but it's quite editorially-driven, so I don't think just anyone can add reviews (I may be wrong, I haven't visited in a while). It's also limited to traditionally-published titles, which means it's a decreasing slice of the overall book market.

I think you're on the right track, in that this is about eyeballs and convenience. That's Amazon's true power in these negotiations.


----------



## Guest (May 28, 2014)

Martitalbott said:


> Long long ago, there was a little company called "Mighty Words." They developed a way for authors to upload ebooks that customers could buy and download right from their site - no shipping costs. I was selling on that site, and one day it was just closed. No warning, no explanation, just gone. Later, we learned Amazon bought the company.


Amazon did the same thing with Mobipocket.

When I distributed my books through Mobipocket, I got 50% of the list price. That was under wholesale terms. Which meant if my book was listed at $5.99 and Amazon sold it at $5.99, I got $3. But it also meant if Amazon sold it at $3.99, I got $3.00. If they sold it at 99 cents, I GOT $3. And if Cyberreads put my book on sale for $4.99 (because they were buying their books through Mobipocket) and Amazon price matched, I still got $3 all around. Because that is how wholesale works. If retailers want to compete on price, they still have to pay the distributors the same way. And I made a lot of money with Mobipocket.

But Amazon HAS systematically bought out smaller retail outlets and closed them down, and then pushed everyone into KDP. Where sure, my $5.99 book technically gets 70% now. But now Amazon never puts my ebooks on sale. Nobody does. Because Amazon doesn't let anyone have sales now.

At one time, Kobo and other retailers DID put indie books on sale on their own accord (and still paid off of the list price, not the sale price. So if Kobo put my $5.99 book on sale for $3.99, I still got my normal cut. But then Amazon would price match, and blame ME, even though I didn't do anything. And their price matching resulted in less money for me. And when this happened across the board, indies blamed OTHER RETAILERS and put pressure on SW to not "allow" retailers to discount their books because Amazon didn't like it. The ability to benefit from retail-level promotional efforts was destroyed because indies didn't understand how wholesale distribution was supposed to work and pushed back on the wrong company. mark, to his credit, went back to HIS business partners and renegotiated terms so that those distributors would stop discounting. I don't consider that a win, however.

Because now the only way I can initiate a sale is with convoluted price-matching and prayer (and goat sacrifices every third Thursday). OR, I can go Select with Amazon and they will "allow" me to put a book on sale. How nice of them.

I'm just as big an Amazon user as anyone else. I use KDP and Createspace and ACX and I have an affiliate account. But I suffer zero delusions that Amazon is my friend. Amazon is not looking out for my interests. Amazon is looking out for their own interests. For now, my interests and Amazon's interests match up enough that I can continue to make money. But they have been bleeding money for years and investors are starting to ask why the stock is valued so high on a company that operates on razor-thin profit margins.

Indies are not a single, cohesive unit. We are a hundred thousand micro-distributors: individual blips on Amazon's reports. We are not business partners with Amazon. We are resources. And yes, Amazon could slash royalties if it wanted to and not lose a single bestselling author...because they could simply offer those bestsellers preferred deals. How many of them would balk at a preferred deal to stay with Amazon even as Amazon slashed royalties for everyone else? Would they fall on their swords in unity with lower sellers? Or would they take the deal? And it happens all the time in retail. Don't think Amazon won't consider it.

I'm not sounding an alarm. It isn't about good guys and bad guys. It is about corporate business practices. People should be paying attention to this issue and thinking about their own business plans working from an assumption that Amazon does NOT know who you are beyond your KDP report. You don't have a position of negotiation with Amazon. They change their terms, your options are "take it or leave it." So paying attention to how they treat large business partners is important. Don't assume Amazon won't change your terms. Don't assume Amazon's business interest will always align with yours. Don't assume Amazon is the "good guy" all the time because business is not about good and bad guys.


----------



## MarkCoker (Feb 15, 2009)

Karl Fields said:


> Mark,
> 
> I'm not being snarky or disrespectful -- I'm genuinely interested in your perspective -- but why shouldn't a retailer be able to decide for itself how it wishes to compete, whether that's customer experience, price, convenience, whatnot? For that matter, what is customer experience? Won't different people define that differently?


Hi Karl, in general, I think a retailer should have the freedom to compete however it wants. I'm a free market capitalist at heart. But even free markets need checks and balances, whether the checks and balances come from government regulation or other policies or self-regulation. I'd prefer self-regulation over government regulation. Agency would provide that.

The challenge on one hand is that we've got major pure-play retailers that live and die based on their ability to sell books at a profit (B&N and Kobo for example). None of them are well-capitalized enough to suffer massive losses on books for years on end. Yes, one could say, "that's their problem," and the person would be correct. But if they go out of business, it becomes everyone's problem. On the other hand you have well-diversified businesses such as Amazon, Google and Apple for which books are merely one of many hundreds of layers of icing on their cake. A, G and A can tolerate hundreds of millions of dollars of losses on books without denting their balance sheet or income statement. And then we have one retailer, Amazon, that is known as a fierce price-cutter that understands that price is one of the most powerful levers for customer acquisition and retention. They know how to use it to crush competition. Think Walmart. Yes, price cutting is legal, and it's a smart business strategy. But it's a game other pure-play retailers cannot play. If one retailer has the power to strip the profitability out of bookselling, it not only sucks the oxygen out of the air for the established pure-plays, it also salts the earth for potential startups that also want to get into bookselling. Look at how B&N and Borders eliminated indie booksellers, how Walmart eliminated so many small town businesses, and how Amazon is now eliminating the remaining booksellers. It's easy to say that's life, business is business. These old dinosaurs should have had the smarts to sell lawnmowers and clothing years ago. Consolidated market control is difficult to overcome. It makes it difficult for new innovators to take root. As Hugh mentioned earlier, there are a lot of exciting startups out there with innovative ideas. The ones that want to build a business selling books will face the most challenge. Most will go out of business, as most startups do anyway. My position is that agency provides a good sustainable model that will enable more booksellers, greater value for readers, more profits for writers, and more innovation opportunity for entrepreneurs.

Customer experience by my definition would entail things like discoverability, the strength of recommendations (automated, human, social), e-reading tools, community tools, etc. Retailers that provide readers with the best reading experience will do well.


----------



## Quiss (Aug 21, 2012)

Christa Wick said:


> In case it hasn't been noted a couple dozen times in this thread already -- Apple has a long history of giving creators 70% in its download stores long before Amazon increased the royalty from 35% to 70% on qualifying works. I'm not worried about other vendors lowering their percentages if Amazon decides to do it.


It's been noted once and it's a very soothing thing to say to those who feel the sky is falling.

How long ago did Amazon increase their royalty? Was that before the Big 5 realized that they need to publish their eBooks via Amazon? When Amazon still needed as many indies as possible and wanted to make sure to be the go-to distributor for them? (This is not a rhetorical question - I wasn't around then)

Have times changed since then? Will they continue to change? (That, however, _is_ rhetorical)

What incentive does B&N or Kobo have to keep their royalties high when the biggest game in town has dropped theirs?

Not saying that it will happen but, as it's also been said a few times here, the market is changing at an exponential rate and that includes how distributors work with their suppliers.


----------



## JRTomlin (Jan 18, 2011)

Phoenix Sullivan said:


> Wait. Wasn't the IPG dispute the one that was going to be industry-changing? No, sorry, it was the Macmillan dispute before that, right? Or was it the DOJ's decision about price-fixing? And yet, what has changed? Are any of these companies' titles *not* being sold on Amazon? Has Amazon reduced the royalty rate for indies? Did the sky fall? Are we going to go through this fear-mongering every time Amazon and one of its vendors get into a negotiation standoff? This is gonna get old quick, if so...


Uh... *looks out window*

Nope, the sky hasn't fallen in my neck of the industry. About Mark Coker, it is wise to always remember that he is amongst the fairly rabid anti-Amazon group. I can understand why, for business reason, but we have to always take into consideration someone's 'default position' when analyzing their comments.


----------



## JRTomlin (Jan 18, 2011)

Quiss said:


> It's been noted once and it's a very soothing thing to say to those who feel the sky is falling.
> 
> How long ago did Amazon increase their royalty? Was that before the Big 5 realized that they need to publish their eBooks via Amazon? When Amazon still needed as many indies as possible and wanted to make sure to be the go-to distributor for them? (This is not a rhetorical question - I wasn't around then)
> 
> ...


The changes (and I am not so sure they are exponential any more though they were a few years ago) have not included royalty rates. Those have been extremely stable for several years now. And for those people who feel that they sky is falling, I have to ask if they feel that because something has actually happened or because someone did some scaremongering and they bought it?

ETA: Yes some traditional authors got caught with some side effects of the Amazon/Hatchette negotiations (and I am extremely skeptical that Hatchette is nearly as innocent as they say they are. They are a huge international corporation quite capable of playing dirty in negotiations as is-admittedly-Amazon). Authors always get caught in the middle as the did last year when B&N was negotiating. Unfortunately, but when you sign a contract that is part of the risk.


----------



## Gone To Croatan (Jun 24, 2011)

JRTomlin said:


> The changes (and I am not so sure they are exponential any more though they were a few years ago) have not included royalty rates. Those have been extremely stable for several years now.


The big change is that you only get 35% from new stores unless you go into Select. Which isn't much of an advantage if you never sell any books in India anyway.

The other retailers have usually offered better royalties than Amazon for a long time, at least for my short story sales through Smashwords. But that doesn't matter much when my best month of Amazon sales was about 50x as much as my best month of sales through everyone else.


----------



## MarkCoker (Feb 15, 2009)

JRTomlin said:


> About Mark Coker, it is wise to always remember that he is amongst the fairly rabid anti-Amazon group. I can understand why, for business reason, but we have to always take into consideration someone's 'default position' when analyzing their comments.


You know, JR, that simply is not true. I have always been an opponent to KDP Select, and if that makes me rabid anti-Amazon in your eyes, I'm afraid you're missing the bigger picture. It's not a label I accept. I have always advised every author to have every book at Amazon. I have always publicly and privately praised their store and the smarts of Bezos and team. I admire them. I don't have to agree with everything they do, but I'm not anti-Amazon. In the last few days I've had Smashwords authors ask if they should leave Amazon, and my answer is the same. Everyone should be there until and unless it doesn't make sense to be there. A lot of people here think they're my competitor, but the truth of the matter is that's only at the margin. We distribute a few books to Amazon, so from that perspective they're a partner. From the standpoint of KDP Select causing authors to opt out of Smashwords, that's competition. But beyond that, they're really more of a competitor to our distribution partners which is where we derive most of our revenue.


----------



## Lummox JR (Jul 1, 2012)

Hugh's right on this: The agency pricing model is terrible.

Konrath's posts on the subject of the Hatchette dispute have been quite brilliant, and I might add he has debunked the notion that the AAR defends authors rather than the status quo; their hysteria here is a joke.

Just go read Konrath's take on all this and make some popcorn. There's no reason to worry unless you're one of the big publishers (read: parasites) whose bread and butter involves screwing over authors, readers, and distributors alike. Or unless you're a trad-pub author who already signed one of those horrendous contracts, in which case you've been screwed already and this won't make enough of a difference. Whether Amazon wins this battle or not, they'll win the war, and the agency pricing model will die one way or another. Good riddance.


----------



## Marti talbott (Apr 19, 2011)

Julie, I guess it's a question of seeing the glass half-empty or half-full. For me, everything they do works in my favor. I can discount my books any time I want, I have three that are permafree and I see nothing wrong with price matching. They just want to remain competitive, and I like having that kind of control over my prices.

Actually, Amazon does know who I am. They even sent me an email asking for an interview and congratulating me when I reached 50k in sales. (They couldn't use the interview because I did everything wrong in the beginning. ) My feelings are not hurt.) It's all about the numbers, and people without the sales do feel ignored. Amazon doesn't have the resources to be equally attentive to millions of authors, but they do recognize those that are working hard and doing well. We make them money too, you know.


----------



## Jay Allan (Aug 20, 2012)

Mark,

I understand that you see things from the perspectives of running your own business, one that is in the unenviable position of competing against Amazon.  That said, Agency pricing, at least as it has been applied, serves one purpose...to force the retailer to maintain higher prices.  That is NOT the purpose of anti-trust laws.  Perhaps, maybe, possibly (as we have so often been warned) once Amazon destroys everyone else in the business, they will raise the prices of ebooks to $50 and slash KDP royalties to 1%.  But they have done nothing of the sort to date.  Make on mistake, and accept no deliberate obfuscation...if Amazon wins this battle, customers will pay less for books; if they lose, customers will pay more.

I understand that Amazon's weaker competitors would like to see customers forced to pay more for their books, but isn't this a little sleazy and ethically questionable?  Not everyone can afford $30 for a hardcover.  Do we discourage reading because we need to maintain high prices to support bloated, inefficient publishers or alternative retailers that can't compete with Amazon?  Is that a burden the reader should have to pay?

Business is business.  If you want to compete against Amazon (your choice, not mine) then you have to compete against them, not try to impose an effective tax on the reading world to make it easier.

I understand publishers trying to pull something like this so they can forestall the inevitable need to actually address their ludicrous cost structures.  God forbid we move people out of midtown Manhattan and cut the expense accounts.  Far better for readers to be forced to pay ludicrous amounts for e-books that have no production cost after the initial setup.  

Publishers should feel something familiar about being under the heel of a stronger, bigger company.  I can't imagine the howling if Amazon ever treated publishers as shabbily as those publishers treated their authors for decades.


----------



## Guest (May 28, 2014)

Martitalbott said:


> Amazon doesn't have the resources to be equally attentive to millions of authors,


You just reinforced my point. Amazon DOES respond in an equally attentive fashion to its CUSTOMERS. It doesn't matter if you buy one item a year or a thousand, Amazon's customer service is impeccable regardless of the size of your account. But you seem to think it is perfectly fine for Amazon to have a multi-tier system where their best sellers get preferred treatment? Would you be OK with Amazon lowering everyone else's royalty who sold less than you so long as yours remained the same, under the assumption that they can't be equally attentive to millions of authors?

Let me be clear. The fact that Amazon only pays attention to the bestsellers is completely the point. And I don't begrudge them that. That is what businesses are supposed to do. But that also means that Amazon doesn't care about "indies" as a group. They care about select bestsellers. And that means indies need to look at the situation objectively and not from a position of Amazon as a benevolent friend fighting against "parasites". Some people are so gleeful at the thought of a major publisher being hurt that they are blind to the realities of the situation (and frankly, methinks that says something about their own insecurities as well, but I digress). No, the sky is not falling. But neither is this a "nothing to see here. Move along" issue. The truth is, as in most cases, somewhere in between. Hatchette sells more books than you. Hatchette makes them money too, you know. How Amazon treats them portents how they can treat anyone at any time. So we should pay attention to the tactics Amazon uses when negotiating with vendors. Because they can impact us at some point.

If Amazon did to you what it did to Hatchette, how long could you continue to make money selling books? How quickly could you revise your business to compensate for the loss of Amazon as your retailer? Don't believe Amazon would do such a thing? They have. Ask erotica authors what happens to their sales when they lose visibility on Amazon and end up in the dungeon. Ask any author that has gotten a "you have five days to respond" email and had their books pulled for some perceived slight of the TOS. Amazon has never been shy about reducing visibility and removing products regardless of the vendor's size. Folks who have followed Amazon's behavior beyond the confines of ebooks have seen this time and time again. They have a very similar pattern of behavior to Walmart.

They always start very accommodating. They encourage you to drive more and more of your business to them with more and more promotional opportunities. But as your business becomes more dependent on Amazon for the majority of your revenue, then they start to put the squeeze on. They start changing terms in their favor. And again, I don't begrudge them that. Every company does similar stuff. My only point is that Amazon WILL eventually turn its attention to indies as it looks for more revenue. Which is why each author should consider how dependent they are on Amazon for their individual survival. The more dependent you are on Amazon, the more vulnerable you are when Amazon starts to make changes.


----------



## Jan Hurst-Nicholson (Aug 25, 2010)

Deke said:


> And I have no idea what a monospony is.


monopsony 
n	noun (plural monopsonies) Economics a market situation in which there is only one buyer.

ORIGIN
1930s: from mono- + Greek opsonein 'buy provisions' + -y3.


----------



## JRTomlin (Jan 18, 2011)

MarkCoker said:


> You know, JR, that simply is not true. I have always been an opponent to KDP Select, and if that makes me rabid anti-Amazon in your eyes, I'm afraid you're missing the bigger picture. It's not a label I accept. I have always advised every author to have every book at Amazon. I have always publicly and privately praised their store and the smarts of Bezos and team. I admire them. I don't have to agree with everything they do, but I'm not anti-Amazon. In the last few days I've had Smashwords authors ask if they should leave Amazon, and my answer is the same. Everyone should be there until and unless it doesn't make sense to be there. A lot of people here think they're my competitor, but the truth of the matter is that's only at the margin. We distribute a few books to Amazon, so from that perspective they're a partner. From the standpoint of KDP Select causing authors to opt out of Smashwords, that's competition. But beyond that, they're really more of a competitor to our distribution partners which is where we derive most of our revenue.


Your being anti-Amazon is from my analysis of your comments, but I am certainly willing to concede that you don't see it that way. I suspect this is an agree to disagree situation. By the way, I consider that you have every right to be anti-Amazon, just as I have every right to be pro-Amazon, which doesn't mean that I think that they are my BFF, only that they have always treated me and many of my fellow authors relatively fairly, especially compared to how we are treated by large publishing companies. However, at the end of the day for large corporations, it is all about corporate goals (which myths aside is not always profits). And of course, I am influenced by the simple fact that I make a living by selling novels through Amazon. It works both ways.

ETA: My reaction were someone to ask me whether they should leave Amazon because another huge multinational corporation accused them of being big meanies would be, "Are you out of your mind?"


----------



## Marti talbott (Apr 19, 2011)

"If Amazon did to you what it did to Hatchette, how long could you continue to make money selling books?"

Julie, your talking apples and oranges. I've tried selling paperbacks through Amazon's (I've forgotten what that program used to be called and I don't see it listed anymore on the site.) Anyway, they required the normal 60% on their end just like bookstores, which meant I had to sell at around $20.00 each to cover costs and make a profit. Indies don't deal with the cost of shipping to Amazon's warehouse and all the other expenses incurred when selling as a vendor through Amazon. CreateSpace eliminated that problem for us. Can we not give credit where credit is due?

Is Hatchett asking for the same deal Indies are getting while still using their own printers and making Amazon warehouse their books? It seems to me that might be the problem.


----------



## Leanne King (Oct 2, 2012)

I love how people keep writing "Hatchette". Best Freudian slip ever


----------



## Guest (May 28, 2014)

Martitalbott said:


> "If Amazon did to you what it did to Hatchette, how long could you continue to make money selling books?"
> 
> *****, your talking apples and oranges.


No, I asked you a very specific question. Regardless of the scope of the negotiation, if Amazon removed the buy buttons from your books, how long could you continue to make money?



> I've tried selling paperbacks through Amazon's (I've forgotten what that program used to be called and I don't see it listed anymore on the site.) Anyway, they required the normal 60% on their end just like bookstores, which meant I had to sell at around $20.00 each to cover costs and make a profit. Indies don't deal with the cost of shipping to Amazon's warehouse and all the other expenses incurred when selling as a vendor through Amazon. CreateSpace eliminated that problem for us. Can we not give credit where credit is due?
> 
> Is Hatchett asking for the same deal Indies are getting while still using their own printers and making Amazon warehouse their books? It seems to me that might be the problem.


I'm not sure what you are getting at here. Trade publishers don't use POD. They can print hardcovers in bulk for less than you and I can print trade paperbacks POD. And Amazon is a RETAILER not a DISTRIBUTOR. Their warehousing costs are THEIR costs for doing business. Nobody makes them warehouse a book. They warehouse inventory based on demand and storage is their responsibility. Just like any other retail outlet. So I don't understand your point about the publisher "making" them warehouse books?

I also don't understand your point about shipping. Your costs per unit to ship are MUCH higher because you are shipping small quantities. Major publishers aren't shipping one box of books Fed Ex. They are shipping 16 pallets via common carrier. I work in contract packaging. The per unit costs large companies pay are minuscule compared to what you pay because they work in volume. So the shipping argument has no bearing on anything.

And I think this is part of the problem. Indies look at these situations as if large companies are working under the same set of rules as they are. They aren't. I've been involved in RFT bids (request for tender, the formal name for these sort of vendor negotiations). It isn't about who is "right or wrong" in the negotiation. It is about punitive behavior during the negotiation. Amazon has engaged in punitive behavior during the RFT negotiations. The publisher did not refuse to provide inventory to Amazon. Amazon took a private RFT negotiation and made it public by being punitive. It doesn't matter really whether or not the publishers demands were reasonable or not (because Amazon could just decline). As soon as Amazon decided to remove that "buy" button and stop accepting pre-orders and force customers to wait weeks for books, they made a private business negotiation a public spectacle. Amazon did not act in good faith by removing the buy buttons and engaging in public, punitive behavior while actively negotiating the terms of the new contract.


----------



## Vaalingrade (Feb 19, 2013)

What should happen: We all see what _could_ happen and be ready for it, not just by being prepared to go to other sales channels, but to collectively point out to Amazon that _we're_ the ones that do the busking that drives traffic to them, _we're_ the ones who generate a ton of content for them and while we aren't integral to the company's well-being, we can at least put a cut on their pretty faces by leaving in mass if they stab us in the back (more).

What will happen: Probably 60% of us will lick up whatever mess they toss in our slop trough, claim that it _must_ be okay because Amazon is rich and smart and sparkles in sunlight, then slur something about business and the free market while they screw us horribly while we're drunk on the Kool-Aid.


----------



## Courtney Milan (Feb 27, 2011)

Bards and Sages (Julie) said:


> No, I asked you a very specific question. Regardless of the scope of the negotiation, if Amazon removed the buy buttons from your books, how long could you continue to make money?


But that isn't what Amazon did to Hachette. They removed pre-order buttons. Which most indies don't get anyway.

They also ordered less print stock--and since our books are POD, same thing applies, they're not ordering a huge number of those, either.

So how many of us could make a living if they did those things? Probably all of us who are making a living now.


----------



## Guest (May 28, 2014)

Courtney Milan said:


> But that isn't what Amazon did to Hachette. They removed pre-order buttons. Which most indies don't get anyway.


When this first broke, the buy buttons were in fact removed and book pages had a "two to three week" notice of when inventory would be available.That is what actually started the whole mess in the media, because authors with impacted books were freaking out.


----------



## Marti talbott (Apr 19, 2011)

"No, I asked you a very specific question. Regardless of the scope of the negotiation, if Amazon removed the buy buttons from your books, how long could you continue to make money?"

Julie, if Amazon suddenly stopped selling my books, my customers would get free apps to read Kobo, Apple or B&N books on their Kindle. I can sell a lot cheaper than books published by traditional publishers, so I am not at all worried. Besides, that will never happen to Indie authors. Amazon would lose in the long run.

You're right, I am not communicating well. Let's say I have one book. I get 500 copies printed and Amazon orders five. As a small publisher, the cost of shipping to Amazon's warehouse will be very high. CreateSpace prints, has no need of warehousing and ships to my customers direct. I don't have to lift a finger and I save a fortune in shipping costs. They also allow me to keep costs down. I see that as Amazon helping me as well as their customers. 

As for Amazon's actions in this case? I bet there are a lot of publishers who are taking a long hard look at what is happening. Amazon has the right to put anything they want in their contract. If the supplier doesn't sign, Amazon stops selling. Isn't that the way most companies work?


----------



## Guest (May 28, 2014)

Martitalbott said:


> *****, if Amazon suddenly stopped selling my books, my customers would get free apps to read Kobo, Apple or B&N books on their Kindle.


Care to take a challenge? Pull your books off of Amazon for two weeks and tell your customers to shop elsewhere. Are you curious what would happen? Would they follow you to other retailers? Or would they just buy other books on Amazon?



> I am not at all worried. Besides, that will never happen to Indie authors.


On what do you base that confidence? Again, ask erotica authors how much confidence they have in Amazon every time their books get thrown in the adult dungeon and they can't get a straight answer out of Amazon explaining why? Amazon HAS DONE IT to individual authors. They have done it dozens of times that I personally know of. That is just the incidents I know about through various channels. And I'll admit that from what I know of the situations, some of those were legitimate TOS violations. Some of them, however, were not. Would they every block ALL INDIES at once? I wasn't arguing that point. But YOU or ME or any of us individually? Sure, they have done it. They are doing it right now. They will continue to do so. It is silly to believe otherwise.



> You're right, I am not communicating well. Let's say I have one book. I get 500 copies printed and Amazon orders five. As a small publisher, the cost of shipping to Amazon's warehouse will be very high. CreateSpace prints, has no need of warehousing and ships to my customers direct. I don't have to lift a finger and I save a fortune in shipping costs. They also allow me to keep costs down. I see that as Amazon helping me as well as their customers.


But my point was that none of this has anything to do with the actual issue at hand.



> As for Amazon's actions in this case? I bet there are a lot of publishers who are taking a long hard look at what is happening. Amazon has the right to put anything they want in their contract. If the supplier doesn't sign, Amazon stops selling. Isn't that the way most companies work?


Again, I never argued otherwise. My point was that when Amazon made took punitive action DURING contract negotiations, they overstepped. I work in contract packaging. I've been involved in these large-scale negotiations on various levels. You just don't take punitive actions like that and expect suppliers not pay attention. It is negotiating in bad faith to do this sort of stuff during the negotiation process.


----------



## Marti talbott (Apr 19, 2011)

Julie, I guess we'll just have to wait and see which of us is right. I don't see the gloom and doom of a traditional publisher having anything to do with Indies. It just doesn't match up. It's apples and oranges, just like I said. My examples were when I tried to go the same route as Traditional Publishers. Now I'm an Indie and it's a whole different ball game. I like this ball game better. I'm sorry you don't.

By the way, I used to be a buyer/expediter for the government. I know more than you think I do.


----------



## Vaalingrade (Feb 19, 2013)

Martitalbott said:


> if Amazon suddenly stopped selling my books, my customers would get free apps to read Kobo, Apple or B&N books on their Kindle. I can sell a lot cheaper than books published by traditional publishers, so I am not at all worried. Besides, that will never happen to Indie authors. Amazon would lose in the long run.


What makes you think your customers will go through the hassle of getting a new app just for you?

Because I know for a fact that a lot of my readers just flat out didn't buy my stuff when I was only on Amazon and they were using iPads/Kobos.


----------



## Marti talbott (Apr 19, 2011)

Vaalingrade said:


> What makes you think your customers will go through the hassle of getting a new app just for you?
> 
> Because I know for a fact that a lot of my readers just flat out didn't buy my stuff when I was only on Amazon and they were using iPads/Kobos.


I give up. I'm not that arrogant, but it sounds that way. Sorry, I didn't mean it to be. I should have said "our customers." It's a non-issue anyway. Amazon isn't going to cut us off,


----------



## Gone To Croatan (Jun 24, 2011)

Vaalingrade said:


> What makes you think your customers will go through the hassle of getting a new app just for you?


I almost exclusively buy ebooks from Amazon, but if all the indie writers left so the only ebooks available were trade-published $19.99 DRM-fests, I'd start buying elsewhere in an instant.


----------



## Davout73 (Feb 20, 2014)

At the end of the day, does Hachette need Amazon to stay in business, or does Amazon need Hachette?

Dav


----------



## Vaalingrade (Feb 19, 2013)

Edward M. Grant said:


> I almost exclusively buy ebooks from Amazon, but if all the indie writers left so the only ebooks available were trade-published $19.99 DRM-fests, I'd start buying elsewhere in an instant.


It'd be nice, but as a general rule, I see an aversion among indie writers to working together to lobby like this.


----------



## Betsy the Quilter (Oct 27, 2008)

Edward M. Grant said:


> I almost exclusively buy ebooks from Amazon, but if all the indie writers left so the only ebooks available were trade-published $19.99 DRM-fests, I'd start buying elsewhere in an instant.


As a reader, I don't much care about DRM as long as I can read on my Kindle; if Kindles stop being available, I'm sure there will be a way to read them on other devices . And I don't for a minute believe that books will only be available at $19.99; New releases, perhaps, but I never bought hardcover paperbooks; I waited for the paperback. And can do the same thing with trade books (and in fact do now). I would probably not follow indies wherever they go, with the exception of a few authors I already am a fan of. Sorry. *shrug.*

Betsy


----------



## Herc- The Reluctant Geek (Feb 10, 2010)

Davout73 said:


> At the end of the day, does Hachette need Amazon to stay in business, or does Amazon need Hachette?
> 
> Dav


And neither operate in a vacuum.

There is Scribd and Oyster that have both launched using a business model that completely changed the way video and audio files were distributed on the net. There is a giant Chinese e-retailer about to go public that could make some serious waves in Amazon's pond, and there is already Flipkart which is a sleeping giant on the global scene but dominates the online retail sphere in a nation of over one billion people. Throw in the fact that public libraries will eventually cotton on to the huge and cheap sea of content that is indie publishing, and what we have is a great, big, roiling mess that spans the globe.

The industry is in such a state of flux that the bickering between a couple of the players is just another wave in an ocean of change.


----------



## Ann in Arlington (Oct 27, 2008)

Betsy the Quilter said:


> As a reader, I don't much care about DRM as long as I can read on my Kindle; if Kindles stop being available, I'm sure there will be a way to read them on other devices . And I don't for a minute believe that books will only be available at $19.99; New releases, perhaps, but I never bought hardcover paperbooks; I waited for the paperback. And can do the same thing with trade books (and in fact do now). I would probably not follow indies wherever they go, with the exception of a few authors I already am a fan of. Sorry. *shrug.*
> 
> Betsy


This is me, too. Content on my kindle is pretty much exclusively from Amazon. Honestly, if an author I read fairly consistently stop selling on Amazon, I'd probably not follow them elsewhere. Or, at least not until I'd caught up on everything currently on my TBR. But I doubt that will happen any time soon. Now, if Amazon were to switch to only selling sappy romance and gory vampire/zombie fiction, then I'll find someplace else to get reading material.


----------



## jimkukral (Oct 31, 2011)

Here's quite possibly the worst reaction to all of this, from a respected writer.

http://blogs.reuters.com/jackshafer/2014/05/27/why-im-ditching-my-amazon-account/

Really? Sigh.


----------



## ricola (Mar 3, 2014)

I'm completely with Julie here.  I don't understand why all the Amazon love is here.  They are a huge company with a history of ruthlessness.  Do you really think we're their special snowflakes who won't ever have the squeeze put on us?  Because each of us, individually, is so weak, our position is FAR worse than Hachette's.

For the moment, I see Amazon doing things like pushing down free books and using royalty levels to encourage certain price points.  For the moment.  It's all lovely here RIGHT NOW, but when there's an extra zero coming on my checks from one place versus all others--I'm nervous.  You should be, too.


----------



## Andrew Ashling (Nov 15, 2010)

If an author I like decides, for whatever reason, to stop distributing his books through Amazon, I will buy them wherever I can get them. What I absolutely won't do is buy some random book that Amazon presents to me as similar. I find even the suggestion that I would think books are interchangeable like that ridiculous and naive. Not to mention that the continuous stream of emails from Amazon suggesting books I might like is at best laughable, and at worst annoying.

Amazon is a business and it must do what it thinks best, but I will shop wherever I can get the books I want. I own several ereaders (which in total have cost me a fraction of what I paid for my bookcases) and I'm not enamored with whichever vendor's ecosphere.

Most authors I like have already diversified and their books are available at several retailers.

I may be a minority, but not a minority of one.


----------



## Guest (May 29, 2014)

jimkukral said:


> Here's quite possibly the worst reaction to all of this, from a respected writer.
> 
> http://blogs.reuters.com/jackshafer/2014/05/27/why-im-ditching-my-amazon-account/
> 
> Really? Sigh.


Authors and writers gripe about Amazon just as much as they gripe about PayPal, for example.

As for me, both companies make my life easier. So, to each his or her own. I'm not leaving either one of them.

(Or maybe I'm just used to the doom and gloom and all the conspiracy theories from article writers. It's actually fairly tame with authors compared to article writers.)


----------



## Davout73 (Feb 20, 2014)

vmblack said:


> I'm completely with Julie here. I don't understand why all the Amazon love is here. They are a huge company with a history of ruthlessness. Do you really think we're their special snowflakes who won't ever have the squeeze put on us? Because each of us, individually, is so weak, our position is FAR worse than Hachette's.


Amazon has made how much money of indie publishers since 2008?



> For the moment, I see Amazon doing things like pushing down free books and using royalty levels to encourage certain price points. For the moment. It's all lovely here RIGHT NOW, but when there's an extra zero coming on my checks from one place versus all others--I'm nervous. You should be, too.


Why are you nervous about something that _might_ happen? Why such projection? Why is this such a popular windmill to tilt at?

Dav


----------



## Briteka (Mar 5, 2012)

vmblack said:


> I'm completely with Julie here. I don't understand why all the Amazon love is here. They are a huge company with a history of ruthlessness. Do you really think we're their special snowflakes who won't ever have the squeeze put on us? Because each of us, individually, is so weak, our position is FAR worse than Hachette's.
> 
> For the moment, I see Amazon doing things like pushing down free books and using royalty levels to encourage certain price points. For the moment. It's all lovely here RIGHT NOW, but when there's an extra zero coming on my checks from one place versus all others--I'm nervous. You should be, too.


I agree with you 100 percent. Amazon is willing to lose money to eliminate competition, and all of their negotiations revolve around this fact. Once all the competition has been eliminated, Amazon will be looking to make more money, and that's not possible with their current model.


----------



## Wansit (Sep 27, 2012)

vmblack said:


> I'm completely with Julie here. I don't understand why all the Amazon love is here. They are a huge company with a history of ruthlessness. Do you really think we're their special snowflakes who won't ever have the squeeze put on us? Because each of us, individually, is so weak, our position is FAR worse than Hachette's.
> 
> For the moment, I see Amazon doing things like pushing down free books and using royalty levels to encourage certain price points. For the moment. It's all lovely here RIGHT NOW, but when there's an extra zero coming on my checks from one place versus all others--I'm nervous. You should be, too.


I'm just going to say the same thing I told a group of friends. Amazon made 75 Billion in 2013. With a B. Their second biggest market is books at 20%. So roughly they made 14 billion from all the books last year.

Amazon has admitted that Hachette, one of largest book suppliers in the world, is only 1.1% of their book market. So where does that leave the other Big 4 and the numerous small presses? We don't know, but it certainly begs the case that Indies are an extremely large portion of that 14 billion market.

So why bite the hand that feeds you that money so easily?

1. http://www.huffingtonpost.com/2014/05/27/why-amazon-can-toy-with-publishers_n_5381181.html
2. http://www.amazon.com/forum/kindle/ref=cm_cd_tfp_ef_tft_tp?_encoding=UTF8&cdForum=Fx1D7SY3BVSESG&cdThread=Tx1UO5T446WM5YY
3. http://www.thepassivevoice.com/05/2014/announcement-hachetteamazon-business-interruption/#comment-211129


----------



## Cherise (May 13, 2012)

Joliedupre said:


> (Or maybe I'm just used to the doom and gloom and all the conspiracy theories from article writers. It's actually fairly tame with authors compared to article writers.)


I know, right? 

*looking for a popcorn emoticon*


----------



## ricola (Mar 3, 2014)

Davout73 said:


> Amazon has made how much money of indie publishers since 2008?
> 
> Why are you nervous about something that _might_ happen? Why such projection? Why is this such a popular windmill to tilt at?


And how much MORE would Amazon make if they cut their highest percentage to 40%?

Why such "projection"? One word. Audible.

But I guess that didn't happen.

Amazon is NOT YOUR FRIEND.


----------



## Nope (Jun 25, 2012)

.


----------



## JRTomlin (Jan 18, 2011)

Pelagios said:


> I love how people keep writing "Hatchette". Best Freudian slip ever


Oh how funny. I think I have done that without even realising. Hilarious.


----------



## Davout73 (Feb 20, 2014)

vmblack said:


> And how much MORE would Amazon make if they cut their highest percentage to 40%?


And yet thats still about 15% higher than what Trad pub pays out now, isn't it?



> Why such "projection"? One word. Audible.
> 
> But I guess that didn't happen.
> 
> Amazon is NOT YOUR FRIEND.


Right, and noone here has complained about that, have they.

If anything Audible is proof Amazons capable of screwing things up.

Then again, if Audible is the only thing you can point to, thats an awful tiny windmill.

Dav


----------



## JRTomlin (Jan 18, 2011)

vmblack said:


> I'm completely with Julie here. I don't understand why all the Amazon love is here. They are a huge company with a history of ruthlessness. Do you really think we're their special snowflakes who won't ever have the squeeze put on us? Because each of us, individually, is so weak, our position is FAR worse than Hachette's.
> 
> For the moment, I see Amazon doing things like pushing down free books and using royalty levels to encourage certain price points. For the moment. It's all lovely here RIGHT NOW, but when there's an extra zero coming on my checks from one place versus all others--I'm nervous. You should be, too.


The so-called 'Amazon love' (nice job trying to demean other people's arguments) is because most of us make our money from sales through Amazon. Do I particularly feel like 'biting the hand that feeds me'? Not particularly. As I mentioned in an earlier post Amazon is not my BFF. We have a business relationship in which I am a supplier and they are a retailer. Any time a supplier depends mainly on one retailer, they need to be concerned because they are vulnerable. However, as far as I believe 'concern' should be keeping a close eye on market conditions rather than having 'the sky is falling' hysterics.

The situation with Hachette is so radically different from that with indies and the business relatioships are so radically different that I see no reason to be conserned about it. Nor do I think that Amazon overstepped some unwritten line. Sometimes negotiations become public. Big deal. Amazon is playing hardball but Hachette is a very large multinational corporation which has been playing hardball too delaying shipments, etc. As far as I'm concerned they are both 'big boys' that can fight it out. The idea of authors getting all excited that for some reason they should come to Hachette's defence (as though Hachette would return the favour) is absurd in my view.


----------



## nobody_important (Jul 9, 2010)

Wansit said:


> I'm just going to say the same thing I told a group of friends. Amazon made 75 Billion in 2013. With a B. Their second biggest market is books at 20%. So roughly they made 14 billion from all the books last year.
> 
> Amazon has admitted that Hachette, one of largest book suppliers in the world, is only 1.1% of their book market. So where does that leave the other Big 4 and the numerous small presses? We don't know, but it certainly begs the case that Indies are an extremely large portion of that 14 billion market. iness-interruption/#comment-211129


No. Amazon said Hachette is only 1.1% of their total retail business, not 1.1% of their book business.

I'm sure Amazon's more than 1.1% for Hachette's annual sales.


----------



## deedawning (Aug 31, 2013)

Mark E. Cooper said:


> Could you explain Amazon giveaways a little more. please? Thanks.


Surely you are aware with 'Amazon Select' authors give Amazon 90 days of exclusivity for the dubious' privilege' of being able to price their books for FREE for 5 of those days. Last time I checked authors made 4400 new books FREE per day to elevate their books ratings. Admittedly it works, but it's a Pyrrhic victory having given away hundreds if not thousands of books for what is usually a short term bump in the ratings. Why? because other authors are doing the same thing 4400 times a day.

This now so pervasive that a cottage industry of free and 99cent book notifiers has sprung up around this practice.

I'd like to see Amazon and the other vendors come up with something like heavily discounted, revolving Oldies but Goodies lists by gender


----------



## John Van Stry (May 25, 2011)

I find the attitude of many of the people here to be rather strange. We are, all of us, in a business agreement with Amazon. They are not our friend, they are not our enemy, they're just a company we are doing business with.

Mark Coker put up a post commenting on what Amazon is doing with one of the other companies that they have a business agreement with. I thought it was worth reading because it will have an effect on us, whether you think so or not. As to if that effect is good or bad, or even noticeable right now I have no idea. But it is best to be aware of these things if you are going to treat writing like a business.

A little story here: Many years ago I was hired by a large company (that everyone here has heard of) to do a job for them. They paid me a lot of money to do this job. They also hired a number of other experts to do other parts of this job. Over the many months I worked their I created some very nice work, of course none of it was any good, because it was all based on assumptions. I had been told to do the work anyway, using my best guess, and that they would have the data I needed 'eventually'. 
Eventually I discovered that the company was using me and the other contractors as part of a contract negotiation. They needed the appearance of a product so they could point to us and say 'we have a team working to make the product in-house that we are contracting with you for. If you don't give us a better deal we'll dump you and do it ourselves!'
But the fact was the team wasn't really making anything, we were just window dressing. Window dressing that cost millions of dollars, but window dressing all the same. Needless to say they were successful in their negotiations.
Now I figured out what was going on in advance, so when things suddenly ended I was fine. But the others who thought everything was fine and dandy and that they had a nice little gold mine going - well they got a very rude awakening.

The moral of the story is: None of you have any idea what Amazon will do tomorrow. Amazon doesn't care about you. Yes Amazon is making money off of you, but for all you know they might make more by getting rid of you. So it pays to pay attention when Amazon goes into negotiations with one of the big six. 

When Amazon went on it's anti-erotica kick I lost a lot of sales and a lot of money. But because I was paying attention I was able to steer that business to another venue where I'm making all that money and more now.

This is a business, treat it like one. Amazon has been good to us, but tomorrow that could change.
(FYI: I write PNR Erotica under a pen name. The books in my sig are NOT erotica)


----------



## Mark E. Cooper (May 29, 2011)

deedawning said:


> Surely you are aware with 'Amazon Select' authors give Amazon 90 days of exclusivity for the dubious' privilege' of being able to price their books for FREE for 5 of those days. Last time I checked authors made 4400 new books FREE per day to elevate their books ratings. Admittedly it works, but it's a Pyrrhic victory having given away hundreds if not thousands of books for what is usually a short term bump in the ratings. Why? because other authors are doing the same thing 4400 times a day.
> 
> This now so pervasive that a cottage industry of free and 99cent book notifiers has sprung up around this practice.
> 
> I'd like to see Amazon and the other vendors come up with something like heavily discounted, revolving Oldies but Goodies lists by gender


I see, I thought that was where you would be coming from, but wanted to be certain. Permafree isn't in any way short term, bump or otherwise.

You realise of course that Amazon isn't the real driver of free? The select days are minuscule to the permafree crowd like myself. My entire career was built, and is currently maintained by, my permafree space opera book 1. I have tested extensively with and without it, lots of different price models, different titles chosen etc. There is no longer ANY doubt, that without my permafree I would need to sign on for welfare benefits. WITH it, I am earning more than any time in my life and I'm able to make this writing thing my career.

Do I want higher prices or lower prices? I don't give a crap. What I want is CONTROL, which I currently have. Ok, so I have to watch all my channels and coordinated things to keep prices where I know they will support me. Big deal. I like it that Amazon price matches, because it's my own setting of those prices elsewhere they are matching.

I don't do Select. Not because I hate Amazon. I love them for what they have done for my career. I don't do Select because I never got many borrows back in the day, and it didn't make business sense to stay exclusive for 5/90 free days when I could have 90 free days if I wanted. The egg and basket thing has been discussed here already. I definitely think more competition is a good thing. I want more Google Plays and Amazons, but I don't want them telling me how much or little I can sell for.


----------



## JRTomlin (Jan 18, 2011)

vanstry said:


> Mark Coker put up a post commenting on what Amazon is doing with one of the other companies that they have a business agreement with. I thought it was worth reading because it will have an effect on us, whether you think so or not. As to if that effect is good or bad, or even noticeable right now I have no idea. But it is best to be aware of these things if you are going to treat writing like a business.


Of course, it is best to be aware of these things. And yes, Mark Coker commented. A number of people ave commented not only on what Amazon is doing but also on what Hachette is doing. That doesn't mean that one necessarily has to agree with Mr. Coker. He is a very nice man in my opinion but he may or may not be correct in his opinion of the situation. It is very possible that someone else's comments, god knows there have been plenty of them in this stushie, are more correct.

As for Amazon being our friend, maybe you could point to the post that said that it is. I am rather puzzled since I have seen no such comment.


----------



## Zelah Meyer (Jun 15, 2011)

I work on the assumption that royalty rates will drop from what they currently are.  For that reason, I will diversify, even if that means a vastly lower royalty.  If someone slashes what they're willing to offer me and says, "But, we'll slash the offer slightly less if you only sell through us!" - Let's just say that I won't be falling over myself to put the future of my business solely in their hands!  

We're in business, they're in business.  Everyone is going to do what's best for them & offer as little as they can get away with.  It's not personal or a crusade against anyone, it's just business.


----------



## Betsy the Quilter (Oct 27, 2008)

JRTomlin said:


> It is very possible that someone else's comments, god knows there have been plenty of them in this stushie, are more correct.


Stushie?



Betsy


----------



## Colin (Aug 6, 2011)

Betsy the Quilter said:


> Stushie?
> 
> 
> 
> Betsy


A Scottish raw fish dish rolled in oatmeal - maybe?


----------



## 68564 (Mar 17, 2013)

Cherise Kelley said:


> *looking for a popcorn emoticon*


----------



## ricola (Mar 3, 2014)

Davout73 said:


> And yet thats still about 15% higher than what Trad pub pays out now, isn't it?
> 
> Right, and noone here has complained about that, have they.
> 
> ...


The first question is a red herring. With traditional pub, you're guaranteed a certain level of exposure and distribution. Amazon guarantees none of those things. I sold at least 150k copies of one of my books through various trad outlets because of the system that's in place.

Are you being serious or sarcastic with the second? If you're serious and you're just new, then there was a HUGE explosion over Audible some time ago on the kboards and elsewhere. Some authors are taking dramatic pay cuts--and a huge number of voice artists are, too.

How is Amazon "making a mistake" on Audible? They're got that market stitched up, and now that they seduced tons of people into making them the only game in town, the hammer fell.

Audible is the PERFECT comparison because only indies and authors who own their audio rights got hit by the change because they're the only ones using ACX. Amazon made millions and millions on them--and then yanked the royalties down to less than HALF of what some people were getting before.

What makes you think ebooks are special?


----------



## Andrew Ashling (Nov 15, 2010)

Betsy the Quilter said:


> Stushie?
> 
> 
> 
> Betsy


Just another word for stooshie.


----------



## Guest (May 29, 2014)

VydorScope said:


>


As much as I love popcorn, I've had enough bags of it now. Time to go.


----------



## Guest (May 29, 2014)

Wansit said:


> I'm just going to say the same thing I told a group of friends. Amazon made 75 Billion in 2013.


Those are gross revenues on ALL products. That is not their profit.

http://www.nytimes.com/2014/04/26/business/amazons-shrinking-profit-sets-off-a-seismic-shock-to-its-shares.html?_r=0



> Although Amazon reported revenue of nearly $20 billion, it said its operating income fell 19 percent, to $146 million. Net income was a modest $108 million. Perhaps more unnerving was the company's forecast for next quarter: flat revenue and a loss that might be as big as $455 million.


Amazon is bleeding money. And they have been bleeding money for a long time. Eventually, they will have to figure out how to make an actual profit. Investors are starting to get very nervous. And they cannot make a profit with the current status quo. The status quo gains market share, but once they control the market share they will be expected to make money with it.


----------



## chris56 (Jun 8, 2013)

At the end of the day, everyone is responsible for their own successes and failures. As indie authors, we opted into an industry that is continually evolving and where change is inevitable. The traditional publishing industry plodded along for many years in full control of which authors were published and what books we would all get to read. Technology, in the form of eReaders and eBooks, turned their world completely upside down and forever changed the landscape of the publishing industry. Traditional publishers faced the change with great resistance while indie authors took advantage of it and exploded onto the scene.

Along with all the opportunities self-publishing offers also comes the necessity to wear more hats than just that of an author. Publishing your own books is a business and as such, you have to slap on the business manger hat to ensure your own success. You also have to be able to go with the flow and adjust to the changes that take place as this industry continues to evolve. Publishing with Amazon, B&N, Kobo or any other retailer is just the beginning. To be successful, you need to take advantage of all the tools available and maximize them to their fullest potential. And while keeping your finger on the pulse of the industry is a must, you cannot operate your business on "what ifs" or allow fear of what may happen down the road to dictate what you do now.

Right now Amazon is a great marketing machine that you can use to your advantage, so do it. At the same time diversify so you don't have all your eggs in one basket. Publish across multiple platforms and build your readership base. Connect with your readers through social media and make sure you have your own website so people can easily find you and your books. It's very smart to have a contingency plan in place should Amazon make changes somewhere down the line that are not favorable to indie authors, but if you focus 100% of your energy on what may happen later, you're not taking advantage of the opportunities you have right now.

You can't predict the future, but you can control what you do now in the present. Focus on success and use Amazon and anyone else for all it's worth. Make the most of every tool you have in your arsenal _right now_ so if and when things do eventually change, you're not sitting on the sidelines wondering what happened.


----------



## Amy Corwin (Jan 3, 2011)

The thing is this: you can really only deal with the now.
Everyone can throw out a prediction. Some seem more well thought out than others. Some taste of sour grapes, some of sunshine and rainbows. The thing is: no one can predict the future exactly, no matter how many claim, "I told you so" after the fact.

The fact is, some predictions may be close to what *might* happen, but what I've found is that while some people predict some *aspects* correctly, it's never exactly what anyone says. It's always "similar" but with a twist.. And it's usually the twist that makes the difference.

So my advice is this:
* Keep abreast of changes because you never know when some tidbit of info will work for YOUR business in some way.
* Don't panic unnecessarily. (For example, there's no real reason to think that Amazon is going to decide to drastically cut down on the percentage of sales it pays an author/publisher. And remember, if you're indie, you're both the author and the publisher.)
* Pursue whatever opportunities come your way. Be ready to move/respond as the industry changes. Be agile. Be adept at recognizing new/other opportunities.

For me - I've long been a pessimist and always seemed to find disasters ready to happen. And then I realized that when a "disaster" did happen, it was never quite as bad as I expected and there was always some way around it. I realized there is no point in being a pessimist or an alarmist because you tend to focus on the negative and never see other opportunities just waiting for you.

So...don't go looking for disasters. Go looking for more opportunities. This is an exciting time. I'm not sure if Amazon will even be around in 20 years, and if they are, what percentage they will pay authors/publishers. But I intend to make use of them for now as well as other opportunities.

Good luck to everyone. And don't worry--be happy.
Because what you're worrying about now may come to pass but in such as way as to bring new opportunities (and money) instead of less if you keep your eyes open and feet agile.


----------



## Usedtoposthere (Nov 19, 2013)

chris56 said:


> At the end of the day, everyone is responsible for their own successes and failures. As indie authors, we opted into an industry that is continually evolving and where change is inevitable. The traditional publishing industry plodded along for many years in full control of which authors were published and what books we would all get to read. Technology, in the form of eReaders and eBooks, turned their world completely upside down and forever changed the landscape of the publishing industry. Traditional publishers faced the change with great resistance while indie authors took advantage of it and exploded onto the scene.
> 
> Along with all the opportunities self-publishing offers also comes the necessity to wear more hats than just that of an author. Publishing your own books is a business and as such, you have to slap on the business manger hat to ensure your own success. You also have to be able to go with the flow and adjust to the changes that take place as this industry continues to evolve. Publishing with Amazon, B&N, Kobo or any other retailer is just the beginning. To be successful, you need to take advantage of all the tools available and maximize them to their fullest potential. And while keeping your finger on the pulse of the industry is a must, you cannot operate your business on "what ifs" or allow fear of what may happen down the road to dictate what you do now.
> 
> ...


This makes a lot of sense, but I'd carry it one step further. I'm not going to NOT use the best tool I've found (KDP Select) out of fear of what might happen in the future. ACX is actually the perfect comparison. Yes, they changed the royalty rate. They gave about 10 days' notice--at a point when all I had was one book up for pre-order, absolutely zero sales data. Yes, I stressed, and scrambled for a few days. But at the end of a few days, I had contracts signed on the remaining 6 books with the royalty rates locked in place at the old level.

Similarly, if Amazon changes its policies? I'll change my distribution. I'll be in a good position to do that, because Amazon helped me get to that level. My marketing strategy, and that of most marketers I know is, "Try stuff and see what works. Do more of that. The things that don't work? Don't try them again." There are no mistakes, just things you tried that didn't work and learned not to do again. That's really the only way, for me personally, to look at it and have any peace of mind in a constantly-shifting marketplace.

ETA: While I was typing, Amy said everything I had to say, and so much better! Ditto to all the above!


----------



## Cherise (May 13, 2012)

VydorScope said:


>


Thanks for passing the popcorn, Vydor!


----------



## Betsy the Quilter (Oct 27, 2008)

Please, no popcorn. The cabana boys don't have time to sweep it up, and it encourages mice.  And it's hard to have a good discussion with your mouth full.


Betsy


----------



## Colin (Aug 6, 2011)




----------



## Gone To Croatan (Jun 24, 2011)

Bards and Sages (Julie) said:


> Amazon is bleeding money. And they have been bleeding money for a long time. Eventually, they will have to figure out how to make an actual profit.


I've been saying that since, oh, probably the late 90s. Certainly for at least a decade.

Yet they seem to keep rolling along, making little to no profit, and not seeing investors run for the door. Good PR, I guess.


----------



## Mark E. Cooper (May 29, 2011)

Edward M. Grant said:


> I've been saying that since, oh, probably the late 90s. Certainly for at least a decade.
> 
> Yet they seem to keep rolling along, making little to no profit, and not seeing investors run for the door. Good PR, I guess.


Feel free to call this observation naive, but I feel there's a big difference between making no profit and reinvesting funds so that it looks like tthere's no profit for tax reasons. I'm no financial whiz, but when the zon pays only one million in taxes over here in the UK and little or none at "home" in Luxemburg, it doesn't say to me there's no money in the piggy bank. It says the zon is spending it on world domination and quite successfully too


----------



## Gone To Croatan (Jun 24, 2011)

Mark E. Cooper said:


> Feel free to call this observation naive, but I feel there's a big difference between making no profit and reinvesting funds so that it looks like tthere's no profit for tax reasons.


Sure, but most people buy shares for at least one of two reasons:

1. The share price is going up. Normally due to higher profits, but a fast growing company can sustain a high price even if profits aren't.
2. Dividends.

Amazon doesn't have much in the way of profit, and, AFAIK, doesn't pay dividends, but it has grown fast. I suspect the main question is how long it can keep growing fast enough that investors won't expect it to make a profit.


----------



## Guest (May 29, 2014)

Edward M. Grant said:


> Sure, but most people buy shares for at least one of two reasons:
> 
> 1. The share price is going up. Normally due to higher profits, but a fast growing company can sustain a high price even if profits aren't.
> 2. Dividends.
> ...


And this is the thing people don't get. Like I said, Amazon keeps focusing on market share instead of profits NOW. But eventually there comes a point where they will have to show profits for all of that market share grabbing. And that point is already happening. In fact, several financial experts are assuming this recent spat with Hatchett is ALL about trying to get their profit margins in order.


----------



## Leanne King (Oct 2, 2012)

A lot of the anti-Amazon arguments in this thread are based on flawed assumptions. Assumptions like this:



Briteka said:


> I agree with you 100 percent. Amazon is willing to lose money to eliminate competition, and all of their negotiations revolve around this fact. Once all the competition has been eliminated, Amazon will be looking to make more money, and that's not possible with their current model.


Amazon isn't trying to eliminate the competition, it can't. Even if it could, it wouldn't want to. That road leads to anti-trust cases and interfering governments breaking apart the company. Microsoft know all about that. They might _reduce_ the competition, but they'll never get rid of it entirely. Even if somehow they did and got away with it, new competitors would pop up tomorrow for the reasons Hugh has already articulated.



> Amazon is bleeding money. And they have been bleeding money for a long time. Eventually, they will have to figure out how to make an actual profit. Investors are starting to get very nervous. And they cannot make a profit with the current status quo. The status quo gains market share, but once they control the market share they will be expected to make money with it.


Individually, most of Amazon's business units _are profitable_. Most transactions that Amazon makes _are profitable_. Even if their profit margin was zero, they would still be profitable because they have a negative operating cycle (they bank payments in hours, and pay out suppliers after months, so they sit on huge sums of cash for weeks at a time). The reason that the big Amazon basket as a whole doesn't show a profit is because almost all of their revenue is, as Mark said, reinvested into expansion. They move into new business sectors, they build new distribution centres, they develop drones!

If Amazon wanted to show a bottom line profit, they wouldn't need to screw over suppliers, they wouldn't need to cut royalties, all they'd have to do is stop spending on expansion. _That's_ the switch they flip if they need to.


----------



## Vaalingrade (Feb 19, 2013)

On the argument about Amazon wanting to make thier book sales more profitable... you guys do realize that Amazon is more than just a store, right? Like, for example, how they're a major infrastructure provider for much of the internet, including huge chunks of the US government?


----------



## Guest (May 29, 2014)

http://www.bidnessetc.com/21966-in-bid-to-expand-margins-amazon-risks-reputation/



> Amazon currently charges a 30% commission on titles sold on its website, but bears the discounts given to customers by itself. In order to expand its thin margins, Amazon is pushing the publisher to bear a portion of the cost of discounts, but Hachette has made it clear that it will not accommodate its demands


As part of a history lesson, this was the thing publishers originally worried about when Amazon first launched the Kindle. Agency pricing started because Amazon was selling ebooks at a loss to build market share and promote the Kindle. Publishers were afraid that by doing this, Amazon would condition customers to expect artificially lower prices, and then eventually put pressure on publishers to lower their prices to meet the self-created price point.

As a point of comparison, a 100 oz bottle of Tide sells for an average price of $11.99. And let's assume stores pay 50% of that wholesale ($6). Now let's imagine that WalMart five years ago started to sell 100 oz bottles of Tide for $6.00. And they did this for five years, over time completely dominating the market for the product because everyone would rush to Walmart to buy Tide for $6 instead of paying $11.99 elsewhere. Not as temporary sales, remember, but the every day price. Then after five years, WalMart looks at Tide and says, "Hey, we aren't making any money on your detergent. So we want you to pay half the cost of the discount we give customers (effectively demanding that Tide sell them the product for $3 a bottle instead of $6, so they can continue to sell the product for $6.)

Now imagine that Walmart did this with every consumer commodities company that sold detergent. Willfully taking a loss on every bottle of detergent sold for five years solely to gain market share.

By the way, that ISN'T a random scenario. _It happened_ (not specifically with Tide). I work in contract packaging. WalMart has done that to dozens of companies. Some actually went out of business because they could not sustain the discounts WalMart wanted. It wasn't until companies started to push back on WalMart that the situation stopped spirally out of control. (You may also notice that WalMart no longer hyper-discounts like they once did. This industry pushback is a major reason for it).

Everyone fixates on artificial inflation of price (and don't misunderstand, that is a separate but real issue in a lot of industries). But I don't think people truly comprehend the damage artificial price DEFLATION has had in some industries. Natural deflation due to improvements in efficiency support healthy economies by increasing the buying power of consumers without harming wages. If my plant traditionally produced ten widgets a minute, but can improve efficiency to produce 20 widgets a minute, I can sell each widget for less and still maintain my profits. Artificial deflation harms economies by reducing overall buying power. If I can only produce 10 widgets a minute and suddenly I am forced to sell that widget for 50% less due to artificial price deflation, I have to compensate for that somewhere. That means I might have to move my business overseas where there are lower wages, or replace employees with low-paid temps, or freeze benefits or wage increases. Low prices at the retail level only benefit consumers if wages are not stagnant (or reduced).


----------



## Guest (May 29, 2014)

Quote:

_"We are, all of us, in a business agreement with Amazon"_

I sure don't agree with that statement.

Did you work out an agreement with Amazon? How much negotiation was there?

Or did you click a button saying you agree with Amazon's terms of service


----------



## Guest (May 29, 2014)

Quote:

_"I've tried selling paperbacks through Amazon . . . they required the normal 60% on their end just like bookstores, which meant I had to sell at around $20.00 each to cover costs and make a profit. Indies don't deal with the cost of shipping to Amazon's warehouse and all the other expenses incurred when selling as a vendor through Amazon. CreateSpace eliminated that problem for us."
_
When you sell on Amazon as a vendor, Amazon pays you about 70% and adds about $3+ since you do the shipping to the customer. And pays you in 14 DAYS.

If you go through CreateSpace, what % do you get, and how soon?


----------



## Vaalingrade (Feb 19, 2013)

The thing about ebooks though is that they cost (effectively) zero dollars to produce and store once the master is created. They're as close to pure profit as a thing can be. Getting smacked down on their phenomenally greedy ebook price points are something that needed to happen to the Big 5.

Like I've said before, ebooks scan toward one of the most expensive digital goods you can buy despite having the fewest actual humans that deserve money behind them.

The problem, is the idea that they might turn around and slash our throats to prove to the Big 5 that everyone suffers the same.


----------



## 75814 (Mar 12, 2014)

Why in the world would any indie think that Amazon is on their side? At the moment, they're aligned with us, but that doesn't mean we're on the same side. "The enemy of my enemy is my friend" is true so long as you both have a common enemy. The traditional publishing model is broken and it has its own share of exploitation, this is true. But don't think that once Amazon becomes top dog, they wouldn't turn around and be just as exploitative, if not more. Hell, they already have a reputation for exploiting their own workers. The second Amazon finds it's more profitable to exploit indies, they'll start doing it in a New York minute. 

If they become the only game in town, you can damn-well be sure they won't think twice about slashing indie royalties to 35% across the board (given that several international markets force you into the 35% category unless you go with Select, I'd say it's happening already). 

And if you think it won't happen, if you think Amazon cares too much about indies or that indies are too valuable to them, then I've got a bridge to sell you. And don't overestimate fan loyalty. Just because you go to another marketplace doesn't mean those fans will follow you.


----------



## Crime fighters (Nov 27, 2013)

Perry Constantine said:


> Why in the world would any indie think that Amazon is on their side? At the moment, they're aligned with us, but that doesn't mean we're on the same side.


I don't think the majority of us are under the illusion that Amazon is on anyone's side except their own.



> But don't think that once Amazon becomes top dog, they wouldn't turn around and be just as exploitative, if not more.


They already are the top dog.



> If they become the only game in town


Impossible.



> You can d*mn-well be sure they won't think twice about slashing indie royalties to 35% across the board (given that several international markets force you into the 35% category unless you go with Select, I'd say it's happening already).


Fear mongering isn't beneficial to anyone. I don't see any evidence that they will drop 'royalties' anytime soon.


----------



## Guest (May 30, 2014)

K.B. said:


> Fear mongering isn't beneficial to anyone. I don't see any evidence that they will drop 'royalties' anytime soon.


The problem is that it isn't "fear mongering." We have historical evidence of this sort of behavior in retail environments. It is, in fact, a very COMMON phenomena. We have recent evidence of this sort of behavior from Amazon itself (ACX). And the only thing that has ever stopped the downward spiral has been a handful of companies big enough to push back (note my WalMart story above.). The problem for indies is that we aren't big enough to push back. Because indies DO NOT function as a single group. We aren't a voting bloc. We are a hundred thousand individual, tiny businesses. And the only people with any real influence are people like Hugh Howey and a handful of others. And as much as I love Hugh, I don't expect him to fall on his sword and hurt his own business if Amazon offers him a sweet deal while slashing everyone else's throat.

And insofar as the people who think their readers will follow them elsewhere, I have to ask: if you can't sell volume on sites other than Amazon NOW, how are you going to do it later? As an experiment spend one month focusing your marketing efforts on other sites. You don't even have to pull your books off Amazon. Just don't promote Amazon. Run a Bookbub ad without linking to Amazon and see how many people buy elsewhere instead. Have you actually figured out how to sell books to people who AREN'T Amazon's customers?

It isn't fear-mongering to point out things that have already happened and make competent plans for the possibility in the future.


----------



## 75845 (Jan 1, 1970)

Bards and Sages (Julie) said:


> And this is the thing people don't get. Like I said, Amazon keeps focusing on market share instead of profits NOW. But eventually there comes a point where they will have to show profits for all of that market share grabbing. And that point is already happening. In fact, several financial experts are assuming this recent spat with Hatchett is ALL about trying to get their profit margins in order.


The big fear for Amazon's investors and employees is that by the time Jeff Bezos stops re-investing some surprise rival will have knocked them into 2nd or 3rd place. Amazon employees know from their Seattle mates who commute to Redmond just how tough things are for Microsoft and wonder if Apple's stock-piling of profit cash to invest in the markets is the smarter way to go. Don't think it can't happen Google was once just a search engine and Apple was once a niche for graphic artists and on the verge of bankruptcy.


----------



## Crime fighters (Nov 27, 2013)

Bards and Sages (Julie) said:


> The problem is that it isn't "fear mongering." We have historical evidence of this sort of behavior in retail environments. It is, in fact, a very COMMON phenomena. We have recent evidence of this sort of behavior from Amazon itself (ACX). And the only thing that has ever stopped the downward spiral has been a handful of companies big enough to push back (note my WalMart story above.). The problem for indies is that we aren't big enough to push back. Because indies DO NOT function as a single group. We aren't a voting bloc. We are a hundred thousand individual, tiny businesses. And the only people with any real influence are people like Hugh Howey and a handful of others. And as much as I love Hugh, I don't expect him to fall on his sword and hurt his own business if Amazon offers him a sweet deal while slashing everyone else's throat.
> 
> And insofar as the people who think their readers will follow them elsewhere, I have to ask: if you can't sell volume on sites other than Amazon NOW, how are you going to do it later? As an experiment spend one month focusing your marketing efforts on other sites. You don't even have to pull your books off Amazon. Just don't promote Amazon. Run a Bookbub ad without linking to Amazon and see how many people buy elsewhere instead. Have you actually figured out how to sell books to people who AREN'T Amazon's customers?
> 
> It isn't fear-mongering to point out things that have already happened and make competent plans for the possibility in the future.


I'm not naive enough to believe Amazon will never change their structure in regards to indies. They will. I just don't think it's anytime soon, and I definitely don't think it'll be cut to 35%. Fear mongering might have been a poor choice of words. Currently, with my pen name shorts, my percentages are as follows; Amazon 45%. Nook 25%, Apple 20%, Kobo 10%. I think it's important to diversify and that's why I'll probably never enter a title into select. Amazon needs competition, and right now they have it. My numbers for Amazon sales is lower than most, though. As long as their is decent competition, I think we'll be spared from a roylaty-pocalypse.


----------



## GP Hudson (Sep 16, 2013)

kward said:


> Those predicting a future scorched earth of low Amazon "royalties" forget just how closed off the trad pub market was to all but a tiny percentage of authors. Low royalties or not you'd still be afforded the opportunity to show the world your stories which is amazing in and of itself never mind the idea that you could make a living doing it


The problem is that many people have tasted the living they can make at 70%. For many it has been life changing. There are regular posts here about people going full time because they are making enough from their book sales. Some of these people wouldn't go full time if they were capped at 35%. The trad pub doors may have been closed to a lot of people before this, but at least nobody was seduced into thinking their dream of being a full time writer had finally come true. If commissions are changed back to 35% a lot of people will have the rug pulled out from under them, of that I am sure.


----------



## Gator (Sep 28, 2012)

Bards and Sages (Julie) said:


> And the only thing that has ever stopped the downward spiral has been a handful of companies big enough to push back (note my WalMart story above.). The problem for indies is that we aren't big enough to push back. Because indies DO NOT function as a single group. We aren't a voting bloc. We are a hundred thousand individual, tiny businesses. And the only people with any real influence are people like Hugh Howey and a handful of others. And as much as I love Hugh, I don't expect him to fall on his sword and hurt his own business if Amazon offers him a sweet deal while slashing everyone else's throat.


IIRC, Hugh has been offered sweet deals by a BPH. He stood his ground and said, "Not unless the rest of the authors get a ride on this gravy train, too." What happened? That train blew right past the station and off into the sunset.

The reality is that for every Hugh who has the courage to stand by his convictions, there are 20 authors who would've jumped on that train, even knowing that the rest of the authors left behind would starve. And big publishers know this. They've seen it time and time, again.



Bards and Sages (Julie) said:


> And insofar as the people who think their readers will follow them elsewhere, I have to ask: if you can't sell volume on sites other than Amazon NOW, how are you going to do it later? As an experiment spend one month focusing your marketing efforts on other sites. You don't even have to pull your books off Amazon. Just don't promote Amazon. Run a Bookbub ad without linking to Amazon and see how many people buy elsewhere instead. Have you actually figured out how to sell books to people who AREN'T Amazon's customers?


With any author exodus from Amazon, we'd have to figure out how to take Amazon's customers with us to the new book Mecca. Good luck with that.


----------



## BillSmithBooksDotCom (Nov 4, 2012)

I think Mark's post is dead on for all of the reasons Julie has outlined -- Amazon has a documented history of squeezing suppliers into very unfavorable terms once Amazon knew it had them in a "you can't afford not to do business with us" position.

By encouraging and supporting alternative ebook vendors -- Smashwords, B&N, Kobo, Apple, DriveThru, Weightless, Robot Trading, Feedbooks, BookViewCafe, direct sales through Gumroad and PayHip and similar services -- and by offering our books in as many venues as possible and actively encouraging readers to shop around, indie authors can diversify their business and be in a position to combat the distinct possibility that Amazon does to indies what it has done to its other business partners when they felt they had enough power to do so.


----------



## John Van Stry (May 25, 2011)

Okey Dokey said:


> Quote:
> 
> _"We are, all of us, in a business agreement with Amazon"_
> 
> ...


When you signed on to sell books with KDP you signed a business agreement. If you don't believe me, go ask a lawyer.


----------



## Cherise (May 13, 2012)

Mercia McMahon said:


> The big fear for Amazon's investors and employees is that by the time Jeff Bezos stops re-investing some surprise rival will have knocked them into 2nd or 3rd place. Amazon employees know from their Seattle mates who commute to Redmond just how tough things are for Microsoft and wonder if Apple's stock-piling of profit cash to invest in the markets is the smarter way to go. Don't think it can't happen Google was once just a search engine and Apple was once a niche for graphic artists and on the verge of bankruptcy.


And IBM was once a name everyone knew!

While it is important to keep up with what's going on and what may happen, it is also important to take advantage of the opportunities we have right now, while they still exist.

I agree with the person up thread who said something like "Come on in, the water's fine! Jump in and have a nice swim before the tide passes by and you are still on shore, wondering what you missed."


----------

