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Amazon’s Taking Another Bite of the Publishing Pie

10 May 2017

From The Authors Guild:

The Authors Guild is deeply disturbed by Amazon’s new policy of allowing third-party book resellers to claim featured status in the “buy boxes” on Amazon. In a move that’s very likely to cut into publishing industry profits even more, Amazon will no longer automatically assign the main buy box for each hard copy, paper, audio and Kindle edition to the copies that Amazon distributes on behalf of the book’s publisher. Rather, a secret algorithm—which reportedly weighs factors such as price, availability, and delivery time, will now decide which seller (i.e., Amazon or a third party re-seller) gets the buy box. Amazon’s new policy states that “eligible sellers will be able to compete for the buy box for Books in new condition.” What this means is that second-hand book distributors—who often sell at extremely steep discounts—will be able to claim that premium real estate if they can beat out the publishers’ copies under the algorithm.

Until now, the second-hand book sellers, who offer books for as little as a penny, have been listed below the featured option, in much smaller font, as second-tier “Used” and “New” copies on a book’s product page, never as the default seller. While Amazon alone has the statistics, common sense tells us that the vast majority of purchases are made via the main buy buttons and not through the links to the other “new” and “used” copies. So, when the buy button is assigned to a third-party seller because its prices are lower and it can deliver quickly, most of the sales will be redirected to that third-party seller. In other words, those $.01 “new” or “new condition” copies that seem to be available for almost every book may well end up featured. (As a practical matter, most second-hand sellers today are slower than Amazon at fulfilling hard-copy purchases, but that could change and we do not know how Amazon weighs the factors.) The problem with this outcome from an author’s perspective is that neither the publisher nor the author gets a cent back from those third-party sales. Only Amazon and the reseller share in the profits. This has the potential to decimate authors’ and publishers’ earnings from many books, especially backlist books. (If you’ve noticed this happening on your own books’ product pages, please let us know at staff@authorsguild.org.)

One might wonder how there can be “new” copies offered by someone other than the publisher and how they can be sold for $.01 plus shipping (the high shipping costs are apparently where these sellers make their profit). The Authors Guild has spoken to several major publishers in the past year about where all these second-hand “new” copies come from, and no one seems to really know. Some surmise that they are review copies, but there are far too many cut-rate “new” copies for them all to be review copies. Could they be returns from bookstores that never made it back to the publisher? Did they fall off the back of a truck? We don’t know. What we do know is that the resellers must be acquiring them at cut-rate price and that there appear to be enough of these copies available that they could replace sales for the truly new copies—those that bring money to the publisher and royalties to the author.

. . . .

Publishers and authors report that Amazon’s justification for its new move is that every other product sold on Amazon works this “best offer” way, and that Amazon has treated books in a special way—until now, that is—by maintaining the publisher’s copy as the first listed seller. In reality, that is not the case for other copyrighted works.

Link to the rest at The Authors Guild and thanks to Jacqueline for the tip.

After everything Big Publishing and The Authors Guild have done to help Amazon over the years, how could Amazon possibly do something like this?

And, of course, Amazon invented the practice of selling books for less than their list price so more readers would buy them.

PG says this couldn’t happen to a more deserving group of people than those who inhabit the traditional publishing world and have been mistreating authors for years.

In point of fact, Amazon knows far more about pricing books to optimize sales and profits than Big Publishing does.

The biggest threat to the future of Big Publishing is the people who run Big Publishing.

Amazon, Big Publishing, PG's Thoughts (such as they are), Pricing

97 Comments to “Amazon’s Taking Another Bite of the Publishing Pie”

  1. Patricia Sierra

    Trouble is, this may well reduce the royalties authors earn.

    Last week, I wanted to send a paper book to a friend. Prime delivery was available, but the delivery date that popped up was a week or more away. I chose the same “new” book from a third-party seller, and it arrived before Amazon’s delivery date. Could this have been Amazon’s way of urging the customer toward another purchasing option?

    • Felix J. Torres

      And it’s Amazon’s fault…how?

      Amazon.com is simply surfacing the cheapest source of a new edition, even if Amazon.LLC isn’t the cheapest source.

      • Patricia Sierra

        What made you think I was assigning fault? I see nothing to dislike about what Amazon’s doing, though I sympathize with authors who won’t get royalties on third-party sales.

        I’m not so sure Amazon is “simply surfacing the cheapest source of a new edition”. In my situation, the publisher’s offer was the one featured, but the third-party sellers link was also available. It listed the title in a variety of conditions and prices. I chose “new”.

        Often when I buy an item, there’s mention that the item is available at a lower price but says it may not be with Prime shipping. In what’s described here, it sounds like Amazon is putting third parties ahead of publishers, but what about shipping charges? That may make the best deal not really the best — at least for Prime members. Even if the price is cheaper after shipping is figured into the price, I still go with a higher price if it has Prime shipping — unless, as was my experience, Prime shipping would take longer (an unusual situation on Amazon).

        I’m wondering if it’s time to negotiate contracts with publishers again and Amazon is reacting to terms they don’t like. Whatever their motivation, I have no quarrel with Amazon’s decision re this.

        • Felix J. Torres

          Uh, Amazon isn’t putting third parties ahead of publishers because traditional publishers, the only ones that should be affected, don’t sell *on* Amazon.com. Publishers sell their books *to* Amazon.LLC and *they* put them up for sale on Amazon.com.
          The resellers at issue likewise get books from publishers (or from distributors that get them from the publishers). Very few publishers today care to sully their hands with direct sales to consumers. Too nickel and dime. They prefer to deal with just a handful of distributors and large chain retailers. Everybody else has to go through distributors or retailers.

          All books come from the publishers directly or indirectly. Which is why the central question is “Where do the third party sellers get new books cheap enough to undercut Amazon?”

          In the whole “authors are losing money” argument Amazon is just a bystander.

          Again, if the AG has an issue, they should take it up with the publishers. If they dare.

          • Patricia Sierra

            I thought when Amazon puts this type of wording on a book’s product page, they were saying the publisher was selling the book — not that Amazon bought it for resale:

            Sold by:
            Random House LLC
            Price set by seller.

            • Ah, but the only type of book where the publisher is the seller and the price is set by the publisher is an ebook. And with those, thanks to the redefinition of the sales contract once agency pricing was permitted to come in, the publisher is the seller, because Amazon is (legally speaking) only acting as the sales agent.

              Paper books are still sold in the time-honored wholesale/retail model, in which retailer Amazon buys the books at wholesale cost and turns around to resell them at retail prices. This is why Amazon is able to drop the paper book price low enough to undercut the publisher-set ebook sale price.

              • Patricia Sierra

                Are you saying there are other kinds of books besides
                ebooks? 🙂 I never buy paper books (except rarely as gifts)
                so don’t pay attention to how they’re priced or sold.

                • Felix J. Torres

                  Neither does the Authors Guild, apparently.
                  But they don’t have your excuse.

  2. The screamer here and elsewhere is this bit…

    The Authors Guild has spoken to several major publishers in the past year about where all these second-hand “new” copies come from, and no one seems to really know.

    And then this (from the New Republic piece)

    Many publishers believe they’re being cheated by sellers in the third-party marketplace, which don’t acquire their books from official channels—instead they sell remaindered copies (books that did not sell in stores and were returned to the publisher)

    Basically it’s remainders rearing up and biting publishers on their butts.

    https://newrepublic.com/article/142616/amazon-steps-battle-book-industry

    • If trad-pub admits to where the second-hand “new” copies come from they’d then have to pay the author rather than claiming the book just didn’t sell well.

      Sounds like trad-pub should have shredded them if they don’t like the idea — but that’s not Amazon’s fault either.

      So Amazon offering third-party first ‘will’ hurt writers foolish enough to go trad-pub who sell their remaindered copies, making indie/self-pub look even better (which might be Amazon’s goal in the first place.;-) )

    • Felix J. Torres

      Yup.
      As I said elsewhere: I would not be surprised to hear that many if not most turn out be books bookkept as pulped. A modern hardcover version of the old “selling coverless paperbacks dirt cheap”.

      These are new books, not used ones.

      The funny thing is it’s not Amazon’s job to police publishers’s distribution system. If the AG has an issue with publisher policies, take it up with the publishers.

      This is a fun one.
      I really want to see the BPHs explain where these books come from.

      • Amazon won’t do what the BPH want them to. Most bookstores identify remainders in some way as discount books, if they sell them at all. Amazon is leaving it up to 3rd party sellers, who are quite logically saying that a remaindered book is still “new”, which it is – it’s never been sold or used. BP is irate, saying “remaindered books should be identified as something other than new and shouldn’t compete with any copies we still have for sale.” ‘zon is saying “whatever”.

        What is even moreso the case is that as bookbuyers gravitate online, they are less and less likely to even know what a remainder mark is, and, I would argue, not care.

        There’s a lot of argument about whether or not a remaindered book is new. Have at it.

        • Felix J. Torres

          If it’s not pre-owned, it is new.

          Amazon lists factory refurbished computers right alongside other new gear. They flag them as such but they don’t ghettoize them.

          Their philosophy is that B2B wholesale transfers don’t count, only B2C sales. Seems to be “industry standard” practice, too.

        • I correct myself:

          New: Just like it sounds. A brand-new, unused, unread copy in perfect condition. The dust cover and original protective wrapping, if any, are intact. All supplementary materials are included and all access codes for electronic material, if applicable, are valid and/or in working condition. Books with markings of any kind on the cover or pages, books marked as “Bargain” or “Remainder,” or with any other labels attached, may not be listed as New condition.

          Used – Like New: Dust cover is intact, with no nicks or tears. Spine has no signs of creasing. Pages are clean and not marred by notes or folds of any kind. May contain remainder marks on outside edges, which should be noted in listing comments.

          https://www.amazon.com/gp/help/customer/display.html?nodeId=1161242#books

          I would argue that almost by definition, a remainder is a new book. It’s a remainder because it wasn’t sold. The fact that it was then put on the market at a discount is irrelevant.

          • Felix J. Torres

            Exactly.
            It’s not Amazon’s fault if the publishers are feeding cut-rate books into the market. And Without a Most Favored Nation clause in their contracts, they have no say in the matter.

    • “Basically it’s remainders rearing up and biting publishers on their butts.”

      Exactly.

      The horror! Returning unsold merchandise for full credit might be a thing of the past!

      This will be fun to watch. The publishers really have brought this upon themselves by giving away dozens/hundreds of books for review, for giveaways, etc. Where else could these new books possibly come from? Thin air? Armed robbery of delivery trucks? No, they’re mostly from the piles of deeply discounted books on Costco tables. (And the author receives pennies per sale on those anyway, so it seems disingenuous to say that Amazon is the one scamming authors.)

    • A publisher only remainders unsold stock after they’ve been pulled from the shelves and the publisher has decided the book is dead and it’s time to close accounts on it. So, there wouldn’t be any instances where the publisher would be selling books to replenish Amazon’s stock at the same time that they’re remaindering it.

      • Felix J. Torres

        Well, they’re not supposed to.
        But with those guys… 🙂

      • Well, that’s true under the old model. But since Amazon came in, publishers are seeing the value to keeping older books in print for longer periods of time. Amazon’s selection isn’t limited by retail space. But that means that remaindered titles can and do end up competing with the new version—especially with the new buy button change.

    • I’m confused. Aren’t remaindered books defaced by having their covers torn off? Isn’t this how the publishers prevent this very thing from happening?

      • Smart Debut Author

        Paperbacks yes, hardcovers no.

        Hardcovers either end up on the bookstore’s deep-discount table (with no commission paid to author), or they get sold at cut-rate prices by the bookstore to “remaindering” specialists — often for bulk shipment out of the country, or for bulk charitable donation, etc.

        And even for paperbacks, which are supposed to have their covers ripped off, the publishers depend on bookstore employees (and usually the bookstore employees lowest on the totem pole, who get assigned the ****tiest jobs) to be 100% honest and scrupulous about ripping those covers off and disposing of the books.

        I’ve heard from many a bookstore employee who balked at destroying books, hating the waste, and instead found other ways to “get rid” of them… sometimes for a little side profit. 🙂

        A stupid, wasteful, ecologically disgusting system… and now those chickens are coming home to roost big time… 😀

        • Smart Debut Author

          Every year in the US, 250 million books are deliberately overprinted by publishers, shipped to stores, then pulled off the shelves unsold and “remaindered”.

          I saw the math somewhere… that’s 40+ square miles of standard-density pine forest worth of paper deliberately overprinted, then pulped and wasted every year — an area of forest equal to the size of Manhattan. Just so that publishers can attempt to influence which particular authors and books are perceived by bookstore browsers to be “best sellers” because those are the books piled high on shelves and store windows.

          That’s why I find this current situation funny as hell… 🙂

        • Felix J. Torres

          Guess where many of those penny books come from.

        • That’s why it’s wise to wait. Some people need to read the latest bestseller or whatever when it’s out and hot and they can join in booktalk about it. I don’t care about that. For 99.9% of books (the ones I’m not following a series or my absolutely must-have-authors, which are fewer every year), I can wait. If I wait a year or two, those hardcovers are cheap. Or I might catch a sale of the ebook. I don’t need it now. I just need it affordable. 😀

          Except the next Dresden book. I need that now.

    • Well, that bit about “new” used copies poses a bit of a question. My books release from my publisher (I’m hybrid) in both e- and print versions simultaneously. I know for a fact that the bulk of my sales there are e-books. On a couple of titles, I’ve sold no print copies there at all. Yet someone has a “new” used copy for sale on the cheap? Why didn’t I get a royalty on its first sale? Or is this just one of those sites that offers “used” and then if they get a request, goes to the publisher and orders the book?

  3. Wasn’t this the same group whining that Amazon had reduced the amount that Amazon had been discounting their books?

    If Amazon was actually doing anything wrong you just know AU would be FedExing the DoJ again.

    Maybe the publishers should ‘agency’ their paper books too, it helped their ebooks so much!

    @ Patricia

    Amazon may not have had it ‘in stock’ from said publisher, so they offered you a faster way to get it delivered. (And unless the third-party seller got it from the publisher under a ‘deep discount’ the royalties should get paid — barring of course the publisher’s whale math(TM). )

    • Patricia Sierra

      It was in stock. The problem might have been my gift recipient’s address. It was going to a small village in Vermont.

      • So it might have been locally for them ‘out of stock’.

        Like me going to AutoZone for something they don’t have in the back the nice salesman makes a couple of calls and then tells me they can have the part in three days or he just checked and Paul’s Car Parts has one in stock if I’m in a hurry. (And I’ll be going back to a place that was willing to lose a sale to get the customer want they really needed!)

    • I should have also mentioned that the title is wrong.

      “Amazon’s Taking Another Bite of the Publishing Pie”

      Should read:

      Amazon Opens Yet Another Trap Door and Another Old Publishing Trick is Set to Hang Publishers High

  4. Remember Crown Books? The B&M chain that sold remaindered copies? Does anybody know if the deep discount clauses were in contracts when that chain was flourishing? This is all on publishers, if they put remaindered books into the world, they should expect them to be resold. They were counting on Amazon acting in its own self-interest with respect to revenue from new book sales to keep that dirty laundry hidden. Amazon decided to prioritize customer satisfaction.

    • Felix J. Torres

      Plus avoiding antitrust action.
      After all, the AG has been urging antitrust action against Amazon. Well, Amazon took a look at theur practices and ended one that might cone back to haunt them now that they “touch” a third of all online sales and are the first stop for 55% of all online transactions.

    • Yup. Crown Books discounted books before anyone else.

  5. This is the AG and publishing industry trying to pretend that the Kirtsaeng decision and § 109 (the statutory first sale doctrine) are meaningless… unless their actual claim is that these vendors have broken into publishers’ warehouses and stolen the books.

    Once the publisher has actually sold the book to anyone (n.b. returnable shipments to stores don’t count), the publisher has fully disposed of its rights. And if the publisher chose to sell at cut-rates, or ship too darned many review copies out — and, more to the point, if one pretends that Amazon actually allows remainders and review copies to be resold as new (that’s a TOS violation; it’s not perfectly policed, but vendors get banned for single violations) — that’s the publisher’s fault. There are stories that nonhypothetically could be told about manipulating sales figures via review copies and other free publicity copies…

    And in answer to a question farther up the chain, for publishing contracts more than a decade old or so, Amazon’s normal discount for returnable copies is in the range of the older contracts’ definition of a “deep discount,” so authors would be getting screwed by publisher accounting anyway.

    Amazon is neither a saint nor a devil in this contretemps, so long as it actually is enforcing its TOS and definition of what “new condition” and “new” mean. All indications are that it is. The ire should be at the distribution system and decades-old practices… specifically including publishers’ refusal to pay anything to authors for remainders (and there are nonhypothetical stories to be told about manipulation of sales into “remainders”).

    • “Amazon is neither a saint nor a devil in this contretemps …”

      As in most of the cases where the publishers and their AU lapdogs whine, Amazon is playing the game by the rules which the publishers themselves have made up. If the publishers don’t like that they need to clean up their own houses and change their rules — and then live by them. If they don’t want remainders sold then they need to shred them instead of selling them to third parties.

  6. There is no issue for publishers with ebooks and remainders. However, The Big 5 publishers are doing their best to kill ebooks to bolster pbooks.

  7. Maybe this will be the much-needed final straw on the camel’s back to end the decades-old practice (I think it dates from the Depression) of publishers selling books essentially on consignment.

    It’s a screwed-up system that, while on the surface it appears to help bookstore owners, actually discourages them from making wise inventory decisions and managing inventory as they do other merchandise. It also hurts authors and readers.

    I’d wondered for years why publishers wouldn’t reissue an out-of-print book when I’d heard of bookstores requesting more copies, in vain. Later, I realized it was because they feared too many copies were still floating around, maybe at the wrong bookstore, and that any reprinted copies plus older ones could come flooding back. Naturally, this lack of reprinting hurt authors.

    More efficiency from publishers would provide many benefits (save the trees, anyone?). In addition, bookstores might become more willing to carry self-published books in print, such as from Createspace, which they don’t want now because they aren’t fully returnable.

    It will be interesting to see how this plays out.

  8. I’ve just posted a fairly lengthy piece going into the history of Amazon mucking about with the Buy button and other aspects of the situation.

    If Amazon’s cheaper-book buy button goes to remainder sales, that really will set the cat among the pigeons.

    • I think the two parties are talking past each other.

      The AG/BPH are saying if it didn’t come from them, or from them via Amazon, then it isn’t “New”. Only they are the “official channel” that can sell “New” books. Other people that are not bookstores can’t sell “New” books. Where could they possibly be getting those “New” books from? Do these commoners not know their place?

      Amazon is saying (passively) that “New” is up to it’s 3rd party sellers, subject to enforcement of it’s TOS. It then yawns and goes back to shoveling cash out of it’s server farms so as to keep the aisles clear.

      I am reminded of my sister, who (pre-kindle) used to buy hardcovers and then read them gently. No finger stains, no jam smears, no spine cracking. Then she would sell them, probably as like-new if not new, and recover most of her outlay. If a book has been treated carefully it would take fingerprint analysis to determine if it were new or not, and frankly, some bookstore books have been read multiple times by squatters before they are finally sold – as “New”.

      • “It then yawns and goes back to shoveling cash out of it’s server farms so as to keep the aisles clear.”

        My question is hen : how does Amazon make any money if a used/new-book reseller sells the books at floor prices and only makes money on the shippin cost ?

        I am not saying it’s wrong or false, I’m just curious. Why would AMZ implement this policiy if they make less money ? only for the love of the customer ?

        • because Amazon makes money for running the website and doesn’t have to bother with carrying the stock or shipping it.

        • Felix J. Torres

          On many products, Amazon makes *more* net money off merchant services than they would selling it themselves. (Like, slow moving pbooks.)

          Plus, there is value in being consumers’ first stop in online shopping. Think of it as a “right of first refusal”. Makes it harder for competitors to even get the proverbial “foot in the door”.

  9. Markets facilitate trade. That’s what we see.

    The POD idea is interesting. Sounds like Amazon will be offering a printed version of an eBook.

    I’m still looking for a video of the Amazon POD machines. (Not the Espresso) Anyone have one?

    • Felix J. Torres

      Video, no.
      But a photo, sort-of.
      Amazon does some of their POD in their own facilities and some at Ingram’s.

      This is one of Ingram’s.
      http://www.bookservices.org/index.php/author-services-2/print-on-demand/

      • Thanks for that link, Felix. I hadn’t seen one of those.

      • Felix, how much do you think a POD machine costs? and the supplies?

        • Felix J. Torres

          Not cheap.
          The Atlantic did a story on them a while back:

          https://www.theatlantic.com/technology/archive/2012/03/with-this-machine-you-can-print-your-own-books-at-the-local-bookstore/254431/

          They ran $150K to buy, $5000 a month to lease.
          The problem is it works off copier tech and nobody has committed enough to design a clean sheet, optimized device.

          Chicken and egg problem: publishers support is lacking so sales are low so publishers won’t support.

          The concept is a fit for bookstores but the price isn’t.

          • There’s a pretty good economic reason that POD printing in bookstores isn’t generating enough demand to lower the cost of POD machines; POD machines don’t scale efficiently.

            Most books take at least 15 minutes to be printed and bound on an Espresso machine. The book costs $8 to make and sells for $15. That’s $28 per hour in generated profit. Then you have to factor in the cost of having someone run the machine, load paper, take care of jams, etc. Lets assume $12/hr for that after paying employee taxes, FICA, etc.

            Now you’re down to $16 an hour, with the machine running 24 hours a day (it wont be, of course). 16 * 24 * 30.5 = $11712 per month. So, you can make some money, but not a lot. Its not worth the investment for most places, since they won’t actually be able to run the machine 24 hrs a day.

            Because, realistically, they can print 4 titles an hour. You’re going to have to wait two or three days to pick up your books. You don’t GO to a bookstore to wait two or three days to get the book. You go to a bookstore to walk OUT with a book. That effectively limits the sales of POD books to what can be printed ON DEMAND of the customer, during business hours. So that more than halves the sales, making the POD machine actually LOSE money.

            The only way POD is profitable is when its done at large scale. For that, you need 10-25 machines. You need a warehouse. POD machines in cafes and bookstores are just not economically realistic, because they prices won’t go down until demand goes up, and demand won’t go up for the reasons I just outlined.

            • Simple queuing theory also argues against them. Consumers want their book now.

              If the machine is idle, they don’t want to wait fifteen minutes. And when there are four customers who order at the same time, who wants to be last and wait around for an hour? Or come back later to pick up the goods?

              This is why I’d love to see a video of the Amazon machines, I suspect they spit them out very fast. Printed, packaged, and addressed.

            • I used to work for this weird scammy little publishing company (I worked in their mailroom) and then one day the owner assigned me to their POD machine.

              They had literally bought one, had it installed in a new building, then gave me the manual (which was thousands of pages) and said “figure it out”.

              It really was a neat machine but too error-prone to really use it constantly. It could print something ridiculous like 500 pages a minute… when it was working, which was for like an hour a day, just a few minutes at a time. Since it printed all on one continuous sheet of paper (then cut it into pages at the end), every time there was an error, I had to throw away several whole books worth of pages.

    • As I understand it, Amazon’s POD machines are basically just a specialized type of printer. There’s nothing really gimmicky about them; they’re just a specialized sort of smallish printing press that can economically do low-capacity runs in the dozens, hundreds, or low thousands.

      The gimmicky thing about the Espresso is that it’s an all-in-one solution for doing a single book at a time. Which is great for doing a single book, or maybe a dozen or so books, at a time, but not really efficient for going into the triple digits.

      • Amazon is able to print hundreds or even low thousands because they can dedicate multiple machines to one title, and run them 24 hrs a day.

        • Yes, and also because the machines theu use are definitely not the expresso machine, they are much faster (and much more expensive…)

  10. If they are remaindered books, that means they came either from bookstores, wholesalers, or the publisher. If from bookstores, they are copies that were sold to third parties rather than returned to publishers, and would be considered sales and be credited against the advance, no? If from wholesalers, about the same thing. If from publishers, they have made whatever they can on the transaction, and the author wasn’t going to make any money on it anyway.

    If they aren’t remainders, they are either ARCs, slightly damaged but still appearing new, or stolen. In all those cases the author wasn’t going to make a dime on them anyway.

    I don’t really see the downside to authors here. What am I missing?

    • The downside to authors is the same as the argument made against piracy: the discounted sale displaces a full-price sale.

    • Felix J. Torres

      The downside is that while the author gets the same payout, the reader spends less.
      Intolerable.

  11. I used to buy most of my large format illustrated books, like art, gardening, and cookbooks, from a discount book catalog called Edward R Hamilton. I just looked them up and they have an online store with fairly current pbook bestsellers at about half the price the big5 are charging on Amazon. They tell you where they got them, which is interesting. I saw one that said “bookclub edition”. This is just from a quick look at the front page. I’ll have to go back and see what else is there.

    • I’ve found some great stuff at Deadalus books…

      https://www.daedalusbooks.com/

    • I wonder if that’s the same company that did mail-order of remaindered books in the ’70s? My family loved that catalog and I still have birthday and Christmas present book-club quality hardbacks and Dover books my mom ordered. I guess my family were early adopters of evil bookstore killing sales models.

      • Could be. I remember ordering from them in the eighties. They have had an online store since forever, too.

  12. Could this payback to the Big-Pubs for charging so much for eBooks and undermining the Kindle? Conspiracy minds wonder.
    Or maybe the Russians are doing this.

  13. My understanding (and please correct me if I am wrong) is that books sold as remainders pay NO royalty to the author in most contracts. (Most contracts have a clause to avoid paying royalties on remainders and other deeply discounted sales … I believe I had read that on Konrath and Kris Rusch’s blog, but again, I could be wrong.)

    Just as Book Club sales (remember those?) also paid very low or no royalties in most standard contracts.

    So the authors are REALLY getting screwed…but by their publishers, not Amazon.

    • Yep.

    • Really, publishers ought to do something about the Depression-era remaindering system anyway. No other product that I know of is sold on the basis that stores can send back unsold copies, so there’s no incentive for the publisher to try to hold costs and print runs down. That ends up with a lot of wastage, which in turn gets resold at fire-sale prices to cover manufacturing costs.

      It’s not the Great Depression anymore. Maybe if publishers realize they’re taking money out of their own pockets with these remainder sales, that will give them incentive to reform the system in some way.

      (But publishers being publishers, it’ll probably just cause them to start destroying all remainders rather than reselling them, on the principle that losing money from manufacturing extra copies is better than losing profit on a salable copy.)

      • The system will last as long as it fulfils its primary purpose. It is there primarily as an artificial barrier to entry against new and small publishers. If a retail account insists on buying only returnable books, that’s a chunk of capital that any new supplier has to keep in reserve. It takes deep pockets to compete against someone who offers an unlimited money-back guarantee to retailers.

        Example: When Borders were circling the drain, many of their stores (perhaps all; I’m not privy to that level of detail) stopped using cash to buy new stock. Instead, they only ordered as many new books as they could pay for with the credit from returns. That meant publishers had to print and ship new books for nothing. Big publishers took a heavy hit in the wallet. Some small publishers went broke.

        Now that the retail market has been largely eaten by Amazon, which does not require books to be returnable, the return system’s days may finally be numbered. But I suspect it will last at least until the collapse of Barnes & Noble.

  14. If you cannot manage your own inventory, someone else will do it for you. They gain. You lose.

  15. Does anyone know what the AG means with its accusation of “tying”? What is such an arrangement and why does it violate antitrust law?
    The original article says:

    “Even if Amazon may not be directly telling the publishers they have to use its POD services, it may be forcing them to do so by implementing this new policy. That looks an awful lot like a “tying” arrangement under the antitrust law.”

    Sounds to me like another way to try to persuade the DoJ that Amazon should be stopped because their business model is too convenient with too many lower priced options and too many consumers want to buy from them. And that’s Very Bad.
    And for crying out loud, the last paragraph where the declare themselves the singular pillar of culture that will die out if not allowed to charge high book prices is just pathetic. It’s so blatantly false, it’s actually offensive on several levels.

    • A quick Google turns up this explanation:

      A tying arrangement is an agreement between a seller and a buyer under which the seller agrees to sell a product or service (the tying product) to the buyer only on the condition that the buyer also purchases a different (or tied) product from the seller or the buyer agrees not to purchase the tied product from any other seller. Tying arrangements can be used to tie together not only different products but also services, leases, franchises, licenses to intellectual property, or combinations of any of those things.

      “We’ll sell your books only if you use our POD service” is a textbook “tying” maneuver.

      Interestingly enough, it wouldn’t be the first time Amazon’s gotten in trouble for print-on-demand tying. (See following comment so more than one URL doesn’t trigger automoderation in this comment. Do wish PG would up the limit to two or three links, at least.)

  16. Smart Debut Author

    Every time we hear about some brand new nefarious plot by Amazon to destroy publishing, doesn’t it always turns out to have nearly nothing to do with Amazon, and everything to do with the publishers own brain-dead policies and idiotic business practices coming back to bite them on the backsides…?

    Geniuses.

    😀

  17. “the high shipping costs are apparently where these sellers make their profit”

    No, they don’t. All books sold by third-party sellers are required by Amazon to only charge $3.99 for shipping. That cuts out the “shipping-cost scalpers” that you can find on eBay and get burned by if you don’t pay attention.

    • Apparently there’s still room for some profit in that $3.99 charge. Otherwise you wouldn’t see so many people selling used books for a penny plus shipping.

      • Felix J. Torres

        There’s plenty of online breakdowns that show there is anywhere between $0.27 and $1.23 worth of profit in that $3.99 shipping allowance if the book is used and free. And it turns out that, at least in the UK, there is a flood of used books available for free. Some folks are even paid to take them away.

        Here’s one: https://www.theguardian.com/books/2015/apr/14/selling-used-books-on-amazon-for-a-penny

        It turns out pbooks are worthless to people who aren’t going to read them and valuable to those who are. And there is money in the middle.

    • The $3.99 shipping max has gone away as part of this Marketplace change. As posted on the Amazon seller forums:
      (Link is in the Digital Reader post)

      “Effective March 1, 2017, you will be able to set your own shipping prices for Standard delivery and set different shipping prices by region for Expedited, Two-Day, or International delivery.”

      • wo, that’s something that 3.99 ceiling for shipping is kaput. That would seem to drive people toward prime.

  18. My global conglomerate traditional publisher uses Amazon printing services, along with several other similar services to print very small runs. As my editor explained it to me, a typical print run is under a hundred copies and often twenty or thirty copies. Runs are closely tied to orders so that books are usually shipped directly from the printer to the retailer or end customer. Print runs are also regional so that books are seldom shipped more than a few hundred miles. He rattled off a long list of print sites they use in EMEA and APAC as well as North America.

    My books are technical and have small audiences, so this strategy seems to make sense. Unlike many participants here, I have no complaints about my publisher. I might be able to make more money publishing independently, but I don’t care to take on the full burden of managing what happens after my books are written. I have independently published fiction, but I make even less money at that. I suspect that has more to do with my skills than my platform. Your mileage may vary…

  19. This isn’t just about big pubs though. I’m an Indie – always have been. My first published novel, ‘Infected by Magic’ is priced at $15.95paper.$4.99ebook, is advertised new by third party sellers at a couple of bucks lower, by a few vendors. I haven’t checked any of my other books or stories.
    I’m relatively invisible on Amazon and have my work available widely, but I can see where this could become a big problem for Indies too,
    Not that any of us can control this.

    • Felix J. Torres

      And how are those vendors getting their stock?
      Are they selling below wholesale?

      If the books are advertised as new and they aren’t, all you have to do is inform Amazon and they’ll be booted off the system.

      • One of the vendors is in S.Carolina, the other in England. The rest are priced above the list price. So is Createspace in South or North Carolina? That’s who I’m going through for paper copies.

        I’m guessing that Amazon themselves may be be behind that one at least, somehow. Unless someone’s stealing the stock from Createspace and selling it, but if that was the case, I’d think they’d choose a writer who’s a better seller.

        England, I have no idea. Checked my lowest selling novel, same deal. About $2 off and the buyer pays shipping.

        I am assuming that the books are new. Guess I should probably contact Amazon and ask what’s going on.

        • Felix J. Torres

          Uh, never mind the list price: are they priced below wholesale?
          If they are, they are hurting you.
          If they aren’t, why is it an issue?

          • If they’re priced below my listed price, then my assumption is that the customer will buy from the third party seller, thus I’m losing the sale.

            I am unsure where those sellers are getting my books from. They’re not getting them direct from me.

            If they’re getting them from CS’s expanded distribution, I’m getting a lesser cut, but I can live with that.

            I guess it’s just that I don’t know where the sellers are getting the books from. But this is probably a lot like worrying whether my books are being pirated, right? Consider it good word of mouth?

            • “If they’re getting them from CS’s expanded distribution”

              Almost certainly yes.

            • Felix J. Torres

              What I don’t understand is why you would care who they get them from.

              You said you’re going wide, which is normally to give consumers more places to find you. That is the same logic behind expanded distribution. Well, they’re finding you. And apparently some of those places are willing to take less than their full margin to help the book sell. Sounds like going wide working the way it’s supposed to…

              ???

        • To answer one question, on the east coast CreateSpace is in South Carolina and Kentucky. Perhaps the South Carolina store decided to take advantage of CreateSpace’s presence there, to get POD books both cheap and fast. Since you have expanded distribution, then the seller likely got your books honestly. In which case, if these other sellers are stores then it sounds like they’re stocking your books. Congratulations.

          • They’re not stocking.
            This has been going on for ages, except they did not get the buy buttons.
            They just order the book on the CS’s expanded distribution when somebody orders from them. They don’t stock, the book is only listed on their online site.
            The problem, if remember correctly, was not only that you got a reduced royalty, but also that your sales rank is not improved when somebody buys from something other than AMZ itself.
            I’m not sure of that, I could be wrong, or the policy could have changed.

    • Smart Debut Author

      Linda,

      unless like a big traditional publisher you make a business practice of paying for the printing and distribution of 50% more copies of your books than you actually intend to sell, the way traditional publishers do, and unless you promise retailers that they don’t have to pay you anything for all the books they order and then choose to “remainder” instead of sell, the way big traditional publishers do, then… it’s pretty much impossible for this to impact you the way it impacts them.

      This is 100% due to traditional publishing’s broken, byzantine system of deliberately overprinting paper copies of their books by a factor of 50% (or, in the case of mass-market paperbacks, nearly DOUBLE). They do it just to temporarily flood store shelves with wasteful extra throwaway copies for a few weeks.

      And like dead-tree karma, it’s coming back to haunt them.

      OTOH, it hurts indies not at all. 😀

      Popcorn time, baby…

      • I’m thinking this is an accurate assessment, but I’ve had some Indies worried about their paper sales. I’m not sure how you can be undercut as an indie unless you gave away a ton of paper copies. Most do POD.

        I guess they are worried about the used copy market selling as new?

        I will remain watchful of this. I’m putting out my first paper stuff soon.

        There will probably be no issue but in complex systems I like to see it working in reality instead of in theory. There seems to be no issue for indies, in theory.

        • There are a number of authors that got their rights back, created beautiful POD versions of their books, have a great website pushing their books, and making very few sales because their books are still available in the penny market. Their website is essentially advertisement for the penny sites, even though that was not their intention.

          These authors then sit there waiting to write more books, expecting to make money on their beautiful POD books, and until they do, they see no reason to “waste” their time when there is clearly no interest for their books. We are talking authors who have a huge audience that they are completely unaware of because the do not see the turn over in their used books.

          If they would Indy publish many more books in the same world they created, then the penny sales would be the “free” book to bring people in. But they do not understand or accept what the penny sites mean.

          Look at Stephen King. There are essentially 33 million “constant readers” who buy his books new. That’s the people who buy the books “new”. There are vastly more that buy from the “paperback exchanges” or the penny sites. They buy the books, read them, send them back into the system.

          If King could get all of his books back into his control, go Indy, he would sit there making few POD sales because of all those used books cycling through the system.

          Think about it. Every day someone discovers Stephen King. They buy everything he has, yet King doesn’t see a dime of that money. I found almost all of his books in hardback used. King made almost no money from me.

          With your own POD, you can only expect to make money on that first sale. You will never make money on the used sales. That’s the reality you have to live with your whole career.

          – If you want to make money, then you have to publish more books.

          Yes, all of your books will still be available new, for decades. At some point the number of sales on the older books will drop to a trickle as people buy them used, but that “trickle” is still more than any advance paid by Trad publishing. Indy is keeping the long game in mind at all times. Don’t play games like reissuing books every ten years with new covers, just to trigger sales. That’s not worth the cost.

          Think “longterm”. Don’t play games to trigger short term sales. Just keep publishing books, build up a body of work that people want to read.

  20. “If they’re getting them from CS’s expanded distribution”

    Almost certainly yes.

  21. Smart Debut Author

    The Authors Guild is deeply disturbed by Amazon’s new policy of allowing third-party book resellers to claim featured status …

    No. Here’s what the “Authors Guild” is really disturbed by…

    https://drive.google.com/file/d/0BySsqeyVFthOektVN3VJWlhsdHc/view?usp=sharing

    That’s a picture of the Author Earnings Data Guy explaining the size of indie publishing sector to AG President Mary Rasenberger (sitting on stage behind him, looking befuddled), in front of a crowd of authors that included yours truly…

    • “AG President Mary Rasenberger (sitting on stage behind him, looking befuddled)”

      She was trying to figure out how she could spin it to keep even more of her members from jumping ship.

  22. While I agree that the tradpub industry has brought this on themselves, as a reader, this will make me much more careful of buying from Amazon. I once bought a video game using the first ‘buy’ button, on a page that showed the US version of the game. What got sent to me was the mid east version of the game. I was quite unhappy with this bait and switch and returned it. I worry that with this new thing with books, I’ll end up receiving a book that has a different cover or has some kind of ‘remainder’ marking or a store sticker that I can’t easily get off. I like to know what I’m buying when I buy it, and I’m picky about the quality of my paper books. This new system seems like it would be all too easy for my books to come and have unpleasant surprises, and especially if Amazon isn’t involved and I can’t easily return it when thus surprised… This could actually dramatically diminish the likelihood that I’ll buy paper books from Amazon. For a lot of us, price does not trump all other considerations, and it seems like Amazon either forgot that or doesn’t care. I wish they’d made this a feature that you could turn on or off in your ‘my account’ section.

    • You can filter by seller. Just select the Amazon as the only seller. And I agree with you, I want to buy from Amazon because of the easy return policy and peace of mind that goes with the purchase.

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