Update on Amazon Strong-arm tactics

Wondering why you should care about Amazon's bullying? Please read a previous post: Why readers should care what Amazon is doing

Here's an article by Angela Hoy about the Amazon Bullying

Sent: Friday, April 04, 2008 3:15 PM
Subject: Amazon Tightens Grip on Long Tail; Info Requested

Last week Amazon announced that it would be requiring that all books that it sells that are produced through on-demand means be printed by BookSurge, their in-house on-demand printer/publisher. Amazon pitched this as a customer service matter, a means for more speedily delivering print-on-demand books and allowing for the bundling of shipments with other items purchased at the same time from Amazon. It also put a bit of an environmental spin on the move -- claiming less transportation fuel is used (this is unlikely, but that's another story) when all items are shipped directly from Amazon.

We, and many others, think something else is afoot. Ingram Industries' Lightning Source is currently the dominant printer for on-demand titles, and they appear to be quite efficient at their task. They ship on-demand titles shortly after they are ordered through Amazon directly to the customer. It's a nice business for Ingram, since they get a percentage of the sales and a printing fee for every on-demand book they ship. Amazon would be foolish not to covet that business.

What's the rub? Once Amazon owns the supply chain, it has effective control of much of the "long tail" of publishing -- the enormous number of titles that sell in low volumes but which, in aggregate, make a lot of money for the aggregator. Since Amazon has a firm grip on the retailing of these books (it's uneconomic for physical book stores to stock many of these titles), owning the supply chain would allow it to easily increase its profit margins on these books: it need only insist on buying at a deeper discount -- or it can choose to charge more for its printing of the books -- to increase its profits. Most publishers could do little but grumble and comply.

We suspect this maneuver by Amazon is far more about profit margin than it is about customer service or fossil fuels. The potential big losers (other than Ingram) if Amazon does impose greater discounts on the industry, are authors -- since many are paid for on-demand sales based on the publisher's gross revenues -- and publishers.

We're reviewing the antitrust and other legal implications of Amazon's bold move. If you have any information on this matter that you think could be helpful to us, please call us at (212) 563-5904 and ask for the legal services department, or send an e-mail to staff@authorsguild.org.

Feel free to post or forward this message in its entirety.

Copyright 2008, The Authors Guild. The Authors Guild (http://www.authorsguild.org) is the nation's largest society of published book authors.

If you're interested in signing a petition with a complaint to the attorney general in Washington, Helen Gallagher has a link on her blog at http://releaseyourwriting.blogspot.com/2008/03/amazongolliath-takes-on-little-guys.html

jb

Essential marketing secrets that Amazon forgot

Here's a detailed article from http://attractionbiz.com/2008/03/30/the-essential-marketing-secrets-that-amazon-forgot/

March 30, 2008

The Essential Marketing Secrets that Amazon Forgot

Amazon has made a SERIOUS mistake in the way they conduct business and may be the mother of all Branding Boo Boos!
First, you need to understand a term to understand the gravity of the situation for Amazon.

POD stands for Print On Demand. Instead of printing thousands of copies of a book and hoping they sell, these publishers can print only the number of books that actually are sold. That’s a great business model, however Amazon has decided that the only POD books they want to sell on their site are the ones printed by their own POD service: Book Surge.

Angela Hoy is the publisher of the Writer’s Weekly which she uses to promote her POD publishing business, Booklocker.com. Last Friday, Angela launched a firestorm when she reported that Amazon is putting the squeeze on POD publishers.

FIRST MARKETING SECRET THAT AMAZON FORGOT: Customers are the life blood of any business.

Angela Hoy reports spending over $1500 with Amazon last year. Sure, that’s just a tiny drop of income in the Olympic sized pool of profits generated by Amazon… but she’s a customer none the less and their bullying tactics really rubbed her the wrong way. They’ve lost her as a customer… but wait … that brings us to Marketing Secret Number 2.

SECOND MARKETING SECRET THAT AMAZON FORGOT: A satisfied customer will tell 3 friends… a dissatisfied customer will tell 16.

In Angela’s case, she’s the editor of the largest ezine publication for freelance writers in the world, so instead of telling 16 friends she’s using her newsletter to tell over a hundred thousand. She’s ignited quite a firestorm.

THIRD MARKETING SECRET THAT AMAZON FORGOT: People hate doing business with a bully...

There's more:

In the spirit of Web 2.0, I’ve included a list of sites reporting this story. Feel free to grab the list below and add it to your own blog. If you want to add your post to the “cause”… the post a comment to this post. The more links to these posts… the more “traction” this cause will get.

• A New Amazon Mandate? Say it ain’t so, Jeff by Morris Rosenthal
• Amazon Forcing POD Publishers to Make a Hard Decision, Virtualbookworm
• Amazon Tightens Grip on Printing by Jeffrey A. Trachtenberg, Wall Street Journal
• Amazon Tightens Noose on Print-On-Demand Publishers; Insists They Use Company’s Own Service by Rafat Ali, The Washington Post
• Amazon to Force POD Publishers to Use BookSurge by Jim Milliot, Publishers Weekly
• Amazon changes rules for print-on-demand publishers by Linda Rosencrance, Computerworld
• Amazon pulls a Microsoft by Robert L. Mitchell, Computerworld Blogs
• Amazon Puts the Squeeze on Publishers by Betsy Schiffman, Wired Blog Network
• Amazon Gets Demanding with Print-on-Demand Publishers, O’Reilly Radar
• Amazon.com puts the screws to small publishers, Valleywag
• Amazon’s POD monopoly, booktwo.org
• Is Amazon Getting Greedy? , open…
• Oh, REAL nice, Amazon.com, Beatlegirl’s Blog
• Market Report — In Play,MSN Money
• Amazon Muscles Print-On-Demand Services by Duncan Riley, TechCrunch
• Amazon & BookSurge, words count
• Urgent News for Authors, The Holistic Writer
• Monopoly - It’s Not A Game by Jean-Marie Hershey, Print CEO Blog
• Of oil lamps, Print on Demand, and e-book machines: Amazon’s Bezos as a would-be Rockefeller by David Rothman
• Deal Breaker? Amazon - BookSurge - POD - No Choice?, Workboxers
• Amazon.com’s POD land grab, BookFinder.com Journal
• Amazon Changes POD Tactics, Removes Velvet Gloves by Kassia Krozser, Booksquare
• Amazon The Monopoly, PersonaNonData
• Amazon Muscles Print-On-Demand Services, web2bite.com
• Use BookSurge or Die? by Victoria Strauss, Writer Beware
• Amazon/Golliath takes on the little guys by Helen Gallagher, Release Your Writing
• Amazon Bullies POD to Use Booksurge — or Else., Shadowhelm’s Journal
• Amazon Says It Will Only Sell Print-On-Demand Books That It Gets To Print, Techdirt
• Amazon deletes competition, LibraryThing
• What’s Amazon Up To Now? by Tawny Taylor
• Amazon Shaking the POD World Big Time, Juno Books
• A hearty “F$%k you!” to Amazon by Elf M. Sternberg
• A Call to Bloggers: Stop Supporting Amazon, Inhabitatio Dei
• Amazon to Force POD Publishers to Use BookSurge, Media Mensch
• Self Publishers and Amazon, Writerly Stuff
• Amazon Tightens Grip On Printing, booktrade.info
• Amazon to Block Other POD Services from Using Amazon Marketplace, Dear Author
• Amazon trying to screw small presses?, lupabitch
• Dear Amazon, What are You Thinking? by Monica Valentinelli, Words on the Water
• Will Amazon Hurt Small Pagan Publishers?, The Wild Hund
• Amazon and us by Gill Polack
• Will Amazon Become the Google of the POD Industry? by Deborah Woehr
• Down with The Zon! by Celia Kyle
• Beyond the POD grab: The IDPF should fight Amazon’s new eBabel, look for anti-trust violations, and reach out to Google by David Rothman, TeleRead
• Amazon blocking books of competitive publishers?, electronista
• We are not amused–veinglory, PODPeople
• Bully on the block?, The Pearlsong Letter
• The monopolists: You need to worry about Amazon too by Eion Purcell
• Amazon owns the marketplace: return of the distributor, Thudfactor
• Is Amazon trying to monopolize the empowering Publish-On-Demand market?, Chris Boese’s Weblog
• 500 pound gorilla, Idle musings of a bookseller
• Bye-Bye “Buy Buttons” for POD Authors?, The Backroom at Dehanna.com
• Amazon Making a Big Mistake by Cheryl Pickett
• Amazon to force POD publishers to use Booksurge, Murder by 4
• Amazon.com’s dirty little deed, pds_lit
• Amazon’s Stupid Anti-Competitive Move, Principled Profit
• Amazon Bullying POD Writers and Publishers Unfairly, A-ha
• A Call to Bloggers: Stop Supporting Amazon, Resurrection Life
• Amazon.com Is On Drugs, Thought Patterns
• Amazon launches their weapon of mass destruction, steps on the long tail of independent authors by Mark Riffey
• Amazon puts the Squeeze on POD Publishers by Easy Author Web Sites
• An Important Lesson from Amazon on How NOT to Treat Your Customers by Virtual Impax
• Amazon’s Blatant Disrespect of Their Best Customers by Beyond Niche Marketing

Amazon began by providing a superior book buying experience to their customers. Buying a book from Amazon is BETTER than buying a book in a physical book store because a reader can access other reader reviews and read excerpts online. Amazon is about to discover that hell hath no fury like a customer scorned.

Diverse readers have a vested interest in supporting the publishers who provide an avenue for the smaller voices to be heard. What can you do to help?

jb