Amazon’s Predatory Business Moves: Object While You Still Can

Amazon continues its bid to become the evil overlord of the world this week with KDP Select and the breathtakingly cutthroat move of paying bookbuyers not to buy from local stores.

Kindle Direct Publishing Select is a lending library of e-books. In exchange for a cut of the proceeds, authors must be exclusive to Amazon and take down their books from competitors’ sites. Smashwords weighs in on the subject.

A promotion for the Price Check App rewards bookbuyers with $5 for going into local stores, scanning the prices and then buying the book on Amazon. Nate Hoffelder gives his thoughts on eBookNewser.

Cynics, capitalists and libertarians will no doubt say; that’s business. Too bad for the weak if they can’t compete.

But is it? Is the bloodthirsty dismembering of your competition really the best way, the only way, to conduct business?

Running a good business vs. operating only to undercut the competition
Like many Denverites, I associate bookselling with The Tattered Cover Book Store, one of the largest independents in the country. Famous for terrific customer service, the store also has a tremendous commitment to conducting business in an ethical, sustainable way.

Take returns. In bookselling, it’s been the practice of publishers to allow bookstores to return books that don’t sell. The returns policy is criticized by some, but it’s the only way some bookstores have survived. Best practice; a healthy returns rate of 10-12%. This allows everyone to make a profit without placing undue strain on publishers and authors.

When the superstore model of bookselling swept the nation, the focus was on building as many stores as possible to drive the existing stores out of business. The superstores took advantage of the returns policy, stocking up on books to fill all that shelf space and never run out of anything. Returns rates regularly ran at 35-40%, causing big problems for publishers and authors, putting some small presses out of business. Like independent stores, superstores are currently suffering greatly because of Amazon and other online retailers. But the superstore model was never designed to build sustainable, ethical community businesses, but to target those who did.

Short-term gain vs. long-term costs
One of the hidden costs of Amazon’s latest move is that they’re paying you to undermine your own local economy in favor of supporting their virtual one. Buying online already takes money out of communities and gives it to somebody out there who doesn’t pay taxes to support your town, who doesn’t employ your friends and neighbors, who adds nothing to the local economy.

Okay, but so what? Buying online is easy, cheap and everyone does it.

True, but Amazon’s relentless pursuit of cornering the book market goes a step further than healthy competition. If they had their way, there would be no brick-and-mortar bookstores left standing, no place else online to buy books and no other place to e-publish them. The kind of total dominance they’re going for is never a good thing in the end, no matter how attractive the short-term payoffs might seem.

A business vs. a corporation
The Tattered Cover is a business. Amazon is a corporation. The movie The Corporation (watch here) examines the culture that evolves when the bottom line overrides all other considerations. The filmakers conclude that if a corporation were really a person, as the Supreme Court has declared, it would be a sociopath.

But isn’t that just human nature? Why shouldn’t I get in on the advantages Amazon is offering?

Humans are naturally competitive right down to our DNA. But we’re also naturally social and naturally altruistic. We can choose to feed whichever side of our nature we want. After the USS Indianapolis went down in shark-infested waters, 1100 men went into the water, just like Quint said in Jaws. After 4 days, 300 men emerged alive. The stories they told of their ordeal varied wildly. Some were a part of groups that put the injured men on the outside, sacrificing them to the sharks. But some chose to draw their bleeding fellows into the center, to protect them from the predators even at the risk of their own lives.

The best and worst of human nature, all in the same group of American servicemen. What determines which way we’ll go? It’s a tough question with no easy answer. But I know that I don’t want a corporation that behaves the way Amazon has to be the only entity in charge of what I read and what I might publish someday.

Like a lot of Americans, I’m as poor as can be at the moment. But I’m not going to sell out ethical businesses and my belief in the devastating consequences of ruthless monopolies for $5 a pop. Jeff Bezos and company have already shown their stripes, and there’s no price high enough to make me willing to open my throat to them.

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12 Responses to Amazon’s Predatory Business Moves: Object While You Still Can

  1. Karen Lin says:

    Chris,
    Thoughtful post. Feeling like the world is turning us into Cyborgs? I feel that way often. Like when I see someone with the thingy in their ears as they go about their day… The thing I want, as a writer who believes my words are worth something, is for the Amazon library to give me a cut from the income it gets from my work. Only fair. Our product is still a product.

    Let’s remember the power of the Amazonians. Those women were a force to behold. What led to their downfall?…Could be instructive, no?

    Like

    • Chris Devlin says:

      Karen,
      I’m not sure what lead to the Amazonian downfall? Did they ‘downfall’ or just fade away?

      I believe, with KDP select program, they do pay the authors in the program something. I guess it’s a cut of the money people who subscribe to the program pay. I don’t know whether it’s based on how many times your book is ‘borrowed’? So it’s not that you don’t get rewarded with something for signing on. It’s just that you have to take your work down from every other e-publisher, losing rank with them, making yourself and your work unavailable to their customers.

      Everything Amazon is doing is so monopolistic. It’s frightening.

      Thanks for stopping by!

      Like

  2. I like the idea of a lending library for those e-book authors who want to participate, but the demand to cut other booksellers out of the picture will be a deal breaker for many (I hope for most). It’s just as unfair as it would be if your local library refused to carry your book unless you removed it from the shelves of all the bookstores in town. Bad business.

    Like

    • Chris Devlin says:

      Pat,
      Yeah, the lending library idea isn’t a bad one. But that exclusivity is worrisome. One of the bennies of self-publishing is that you have control over where your book is sold. For Amazon to ask you to curtail that in exchange for unknown profits is definitely part of their monopolistic bent lately. (I’m so nervous about monopolies, I haven’t even bundled my phone, internet and cable with Comcast. When I get frustrated with my Comcast internet and cable service, at least I can take comfort in not having to give up my phone number that I’ve had for 20 years if I ever decide to cut Comcast loose. Businesses just behave better when you’re not completely dependent on them.)

      I’ve heard some Amazon-published authors say they’re unhappy with the terms and aren’t going along. But some are giving it a try, I think authors whose books sell best on Amazon or are only published on Amazon anyway. I’m afraid if the program is successful enough, Amazon might start to make it mandatory rather than optional if you want to e-publish with them.

      Like

  3. My latest blog post, The Mill River Recluse, explains why this is happening. Amazon is hammering the traditional industry right at their weakest point, by accepting works the traditional industry rejects.
    A dozen publishers and more than 100 literary agents rejected The Mill River Recluse. It has sold more than 400,000 copies and landed on the best-seller lists.
    The traditional industry had more than 112 chances to get this title, and missed them all. Is this Amazon’s fault? No. The traditional industry is stumbling about like an elephant hit by a tranquilizer dart, while Amazon moves in like a cheetah. Don’t forget, it was Amazon that gave Darcie Chan the chance to get her work out in the world, not the traditional industry. The process of natural selection, once again.

    I further speculated that the next watershed event will occur when an e-book that was never submitted to the traditional industry becomes a best-seller. Amazon may be a predator (I agree with you about the Price Check App, in particular), but as it stands right now, the traditional industry is literally begging to be slaughtered when they reject books like Darcie Chan’s and let Amazon collect all the money. And it’s the independent book stores that will suffer the most for the traditional industry’s inability to change with the times. The Tattered Cover’s recent purchase of a print-on-demand machine may hold the key to the independents’ long-term survival.

    Like

    • Chris Devlin says:

      Daven,
      On the other hand, Amazon had to invest exactly zero in getting Darcie Chan’s book out there, whereas a traditional publisher would have had to invest quite a bit in getting the book ready for publication. It’s not like Amazon championed the book, or anything. There are thousands of self-published e-books on Amazon that aren’t making much money. In fact, the vast majority don’t. Amazon isn’t doing anything to help those authors either. Darcie Chan had a good day job and was able to invest her own money to purchase ads and that helped her sales a lot.

      In other words, I don’t think the traditional publishing industry can be blamed for Amazon’s predatory practices. Smashwords and Apple and Google books are not behaving this way. Most booksellers don’t behave this way. It’s the mark of a monopolistic mentality, and it shouldn’t be trusted.

      (Note: Amanda Hocking’s e-books weren’t submitted to traditional publishers and they became runaway bestsellers. And she decided to sign on with a traditional publisher because she was tired of doing all the work herself and she just wanted to write. It’s not like traditional publishing offers nothing to authors.)

      But I completely agree that it’s brick-and-mortar stores and other online publishers that are bearing the brunt of Amazon’s cutthroat ways.

      Thanks for your thoughts.

      Like

      • According to this article in the Toronto Star, about Amanda Hocking:
        She kept writing, kept sending query letters to publishers, and kept getting nothing but rejection letters back.
        After “Switch” was turned down (which has become her best-selling book, she says), Hocking looked into self-publishing.

        I, for one, would say sending query letters to publishers is “submitting the work to the traditional publishing industry”. 😉

        The traditional publishing industry is not to blame for Amazon’s practices, but their being mired in their old business model is the “tiger in Amazon’s tank” (to paraphrase the classic Exxon/Esso advertising slogan) .

        Most intriguing is the possibility of the industry acting as a distributor for popular DIY authors such as J.A. Konrath, who don’t feel the need for the traditional editing services that Amanda Hocking wanted. 😉

        Like

      • Chris Devlin says:

        Sorry, Daven, I had thought Hocking hadn’t tried the traditional route. Should have checked my facts. Bad blogger!

        Thanks for the correction. 😉

        Like

  4. Excellent post. I think Amazon will get into trouble if they continue. There are laws such as the monopoly law that brought down Ma Bell.
    Nancy

    Like

    • Chris Devlin says:

      Hi Nancy, good to see you. Hope you’re feeling better.

      It’ll be interesting to see if anti-trust laws will be applied to the internet. The business models are so new, it’s hard to tell how that might play out. I’d really like to see online retailers be subject to the same taxes that neighborhood retailers pay. That seems to bestow a huge advantage on businesses like Amazon.

      Thanks for coming by, good to hear from you.

      Like

  5. As an aspiring author, reading this freaks me out. I think if Amazon is the only book seller left that it will hurt the great majority of us writers. Without having a big, known name it may be much harder for people to find you amidst the millions and millions of books, especially considering that Amazon Corp. will do little, if any, to help a reader find you.

    Corporate greed sickens me, and as it escalates, there are only one of two options: the end of corporations or the end of society as we know it.

    Like

    • Chris Devlin says:

      Eldridge,
      It sickens me, too, and I only hope Amazon isn’t successful with the kind of dominance it’s trying to achieve. I think it’s a bad time for unrestrained corporate greed, so that gives me hope. (I almost titled this post Occupy Amazon. 😉 ) And many people are beginning to see the very real effects of not supporting their local economy.

      Thanks for stopping by.

      Like

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