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Amazon to Block Other POD Services from Using Amazon Marketplace

In what I like to think of as the “cock block” Amazon has said to self published authors that only those POD books that use Amazon’s POD service will be for sale through Amazon. Before, if you were a POD, you could have your books fulfilled by Lulu.com or any other POD service. Not any more.

I wonder what effect, if any, that has on epublishers who use a POD service.

Wall Street Journal
via Shelf Awareness.

Jane Litte is the founder of Dear Author, a lawyer, and a lover of pencil skirts. She spends her downtime reading romances and writing about them. Her TBR pile is much larger than the one shown in the picture and not as pretty. You can reach Jane by email at jane @ dearauthor dot com

28 Comments

  1. Angela James
    Mar 28, 2008 @ 08:27:30

    http://writersweekly.com/the_latest_from_angelahoycom/004597_03272008.html

    That’s the link I saw, if anyone is interested.

  2. Shiloh Walker
    Mar 28, 2008 @ 08:51:45

    Seems short-sighted to me.

  3. Maya Reynolds
    Mar 28, 2008 @ 10:42:11

    The fact that the ban appears to be enforced selectively (not targeting traditional New York publishers) makes me wonder about interference with trade issues that might be raised.

  4. Maya Reynolds
    Mar 28, 2008 @ 12:58:09

    Publishers Weekly reports that the ban will also apply to traditional publishers and “online pod houses.” I assume that means e-publishers who also provide print releases.

    I included a quote from today’s article here.

  5. Susan Helene Gottfried
    Mar 28, 2008 @ 14:40:56

    … and once again, the 800-pound gorilla needs to smack its chest and feel manly.

    I haven’t used Amazon for anything other than research in years. (The Tour Manager, however, fought being hosed by them today. And won.) While this new move of theirs — the publishing one, not the Tour Manager’s saga — doesn’t directly affect me, it still makes me sick for the people who ARE affected by it.

  6. DS
    Mar 28, 2008 @ 17:06:10

    There seems to be some movement in this area that I am curious about. EBay has determined that as of 3/31/08 they will no longer allow digital downloads to be listed in stores or core auctions. They can be advertised in classified ads only. I don’t know if the digital delivery system that eBay put in place will still be used. My first thought was a possible patent infringement, but I can’t find anything since they settled with Bradford’s estate.

  7. DS
    Mar 28, 2008 @ 17:44:23

    Oops, sorry, that might have seemed like a non sequitur. I just thought it odd that Amazon should go all negative on POD and eBay at about the same time goes negative on digital items. Probably no real connection other than the time it happened.

  8. veinglory
    Mar 28, 2008 @ 18:18:53

    Amazon aren’t negative about POD. The love it. They want us to be locking into doing through them exclusively, without competition, at any price they care to name. First the Mobi-monopoly, then Booksurge, then Audible I imagine… then….

  9. Shelli Stevens
    Mar 28, 2008 @ 23:44:47

    I really think their ultimate goal is world domination. I used to love Amazon, they were the local boys (I’m Seattle, they’re Seattle) now…not so much. Makes me wanna run for the Borders.

  10. stephanie feagan
    Mar 29, 2008 @ 12:50:20

    I’ve avoided Amazon for ages – ever since they began putting ‘Buy Used!’ buttons on book pages before the book had even released.
    I’m vaguely reminded of encroaching parasites – they need the host in order to survive, but will sometimes overtake and deplete the host until dead, thus killing their source of sustainable life.
    It always gets to me, this pervasive attitude that the authors are merely a pesky detail. A sidenote. An afterthought.
    I sincerely hope everyone and their granny will switch to B&N, and Amazon will lose enough of their precious business, they’ll feel it where it hurts – on their income statement. Lower earnings mean lower stock prices. Lower stock prices mean somebody’s losing money, and nothing will wake a guy up like losing money.

  11. DS
    Mar 29, 2008 @ 13:04:49

    Ok, I figured the Amazon thing out. It’s about Amazon’s free shipping if you buy over $25. If I buy from Amazon I get this perk and Amazon (I’m vague here– does the POD preses mail the books to the fulfillment center and Amazon sends them on?) Anyway, there’s no possibility of combining items for shipment (from my experience Amazon mails out what they have on hand at once) so Amazon ends up shipping the POD book separately and taking cost of shipping out of their profit on the book. And shipping includes not just postage but also supplies and wages. Postage is going up in May. Right now 1 lb (lowest weight) media mail is $2.31.

    If the POD printers or publisher is a 3rd party seller they end up either belonging to Amazon Advantage which means Amazon gets 55% (I think) of the selling price or they list as a merchant which means the buyer has to pay $3.99 or something like that postage– seller is reimbursed about $2.50 and Amazon keeps the rest. Also Amazon gets a percentage of selling price– 15 to 20%? Clearly both better deals for Amazon.

    Next option is the book is sold as a digital download through Amazon and Amazon gets to keep 35% of the price and pays no postage.

    Everything including making people use Amazon’s POD services, is a better deal for Amazon than Amazon carrying the books in their catalogue. And if B&N is offering free postage to meet Amazon’s offer then if everyone goes to B&N to buy these particular books then it is going to put financial stress on B&N.

  12. stephanie feagan
    Mar 29, 2008 @ 13:39:14

    Interesting points, DS. I think to really get down and dirty with this, one would need a great deal more information than is readily available. For instance, how many POD books are ordered per month? How many of those are ordered with books currently in stock, thus triggering a two shipment scenario? And how beneficial is it to retain the free shipping over $25 policy, if the end result is cutting the legs off of authors? There’s a push-pull at work – free shipping helps authors by encouraging additional sales, but it may hurt authors with small presses who utilize POD technology, if indeed you’re accurate in your assessment of the reasoning behind the new edict at Amazon. It makes sense to me, because a corporation is all about making money. (Have a cigar, dear boy.)

    In the end, it’s always about the money. Always.

  13. Maya Reynolds
    Mar 29, 2008 @ 13:48:52

    DS: I’m not sure your assumptions are correct. Publishers Lunch said: “Ingram and their Lightning Source operation have worked closely with Amazon in the past in a variety of ways, including packing orders with Amazon packages and labels.” That certainly implies that Lightning Source may be shipping the books as well.

    I do think that Amazon failed to anticipate this huge furor. Think about it, at the moment, POD is still mostly–although not always–used by self-published writers and by very small operations. These do not sell a lot of books, mainly because their sites on Amazon do not generate huge traffic. You have to have a mechanism to drive traffic to your book before anyone buys it.

    The fact that the company did not instantly issue a press release says to me they are scrambling and that they were taken unawares by this.

    I’m actually waiting to see how they do handle this contretemps. That should tell us a lot more about their true intentions.

  14. tasha
    Mar 29, 2008 @ 13:51:24

    To #11: It’s more than just shipping. BookSurge is owned by Amazon. Lightning Source (LSI) has a huge market share when it comes to POD printing. This isn’t just about cutting loose shipping costs, it’s about taking market share from LSI and establishing BookSurge (and thereby Amazon) as THE place for self-publishers and small presses for one-stop shopping (i.e., setup, upload, listing with wholesalers, availability through Amazon).

    Those who don’t but still want to sell directly through Amazon have the option of joining the Amazon Advantage program, for which they pay a 55% commission per sale, which as you can imagine isn’t feasible for most of them.

    The problem most people have with all of this is that Amazon, a retailer, is trying to strongarm people by acting as a wholesaler and dictating terms.

  15. Maya Reynolds
    Mar 29, 2008 @ 13:55:02

    Tasha: I suspect that someone is going to file an anti-trust suit claiming Amazon is deliberately stifling competition.

  16. DS
    Mar 29, 2008 @ 16:07:56

    I don’t think it’s ONLY about shipping but I would bet that is a lot of it. Bezos in the last two statements I read from him in fourth quarter last year mentioned both the cost of the free shipping program and the cost of the Amazon Prime. I anticipated some change in that area which is why I started thinking that way at once. When you have a hammer, everything looks like a nail.

    As is clear, I don’t know much about the POD business. I do know that some POD presses have appeared as 3rd party sellers on Amazon. The one Whiskey Creek Press uses for example. I also have read that the books sold by 3rd parties on Amazon account for 28% of their media sales.

    I also found this site: http://www.fonerbooks.com/booksale.htm although I don’t know if I can trust the numbers.

    I would be lying if I said that I hoped no one sued because this could be very interesting.

  17. veinglory
    Mar 29, 2008 @ 16:12:39

    It about disqualified from making direct sales, *all* of the implications of that. Being an Associate is harder, less profitable, more costly for the buyer and more expensive for the seller. So you pay more for fewer sales after jumping through a lot of hoops. In a great many cases is will mean the book will be available on Amazon only by resellers (i.e. second hand).

  18. Diana Castilleja
    Mar 29, 2008 @ 18:35:19

    The first buy links disappeared this morning that I caught from several friend’s books. The publisher’s printer: Pawprints.

  19. tasha
    Mar 29, 2008 @ 18:38:29

    I think the target of this tactic was the major publishing houses and the academic publishing houses, who use POD for out-of-print backlist titles. Perhaps Amazon didn’t think things through and did not expect the backlash from the smaller presses who are going to be hard hit by the new policy.

  20. Shiloh Walker
    Mar 29, 2008 @ 21:31:40

    I think the ‘world domination’ thing plays into a lot of it.

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  25. Author
    Mar 31, 2008 @ 00:13:44

    A good case can be made that what Amazon is attempting to do violates anti-trust laws. Waiting for federal anti-trust action would take many years–years to get the Justice Department to act, years of trials, years of fussing over what the court decision means. Notice how long it took to deal with Microsoft’s tactics, despite the fact that the corporations they were bullying were large and powerful. None of us can afford that long a wait.

    Action at the state level, however, could move much faster, particularly if it involves off-the-record contact and a somber warning from those who can make trouble for Amazon. Amazon is headquartered in Seattle about a ten minute drive from the office of the Antitrust division of the Washington state attorney general. Here’s the contact information:

    Office of the Attorney General

    Antitrust Division

    800 Fifth Avenue, Suite 2000

    Seattle, WA 98104-3188

    http://www.atg.wa.gov/Antitrust/default.aspx

    Telephone: 206-587-5510

    Fax: 206-464-6338

    Note the remark on that web page that “The Antitrust Division only processes complaints that involve either Washington State residents or businesses located in Washington State.” Amazon is in Washington state, so it matters not where you are. You might also want to raise the issue with your state attorney general’s antitrust office, asking them to get in touch with their colleagues in Seattle. If you’re a publisher, encourage your authors to write. If you’re an author, encourage other writers to contact them.

  26. Alessia Brio
    Mar 31, 2008 @ 05:25:22

    I started a related thread on the Amazon forums in the Romance category. Perhaps if enough discussion takes place right under Amazon’s nose it will have an impact.

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