Your Basket is Leaking

2 December 2018

From Kristine Kathryn Rusch:

In October 2018, Sears filed for bankruptcy. The form of bankruptcy the corporate heads chose was something called Chapter 11 here in the U.S. It means that the company—once the largest retailer in the entire world—will be able to reorganize and, if they’re lucky and the folks running the company are smart, they might be able to emerge from bankruptcy with some of the business still intact.

The key here isn’t the details of Sears’ bankruptcy. It really isn’t even Sears itself which, when I was a child, fifty years ago, was a fixture in America. It’s the trajectory of the company.

. . . .

By early 1940s, Sears’ catalogue became  known as the Consumer’s Bible. In the 1950s or so, Sears started opening brick-and-mortar stores, and by the mid-1970s, the brick-and-mortar business overshadowed the mail order catalogue.

Mismanagement, a failure to keep up with the times, and a large corporate structure led to a decline starting in the 1980s, exacerbated by the rise of Wal-Mart in the 1990s. Sears still had a lot of value after the turn of the 21st century, but not in retail. The value was in its properties and its stock, and eventually that declined as well.

And now, Sears—mismanaged to pieces, its mail-order business (and famous catalogue) a distant memory—has almost thrown in the towel. They’re fighting for their existence. Very few adults alive remember the store in its heyday.

But look at that trajectory. Mail order on one item only. Then more items. Then unrelated items. Then becoming one of the biggest companies in the world. Then adding brick-and-mortar.

Does that sound familiar? Think of it this way: instead of mail order, think online. Instead of watches, think books. And then realize that Amazon shares much of Sears trajectory, only on a slightly accelerated pace—and without the name changes and the obvious added partners.

Sears to Wal-Mart to Amazon. There is a direct line. Wal-Mart is still fighting for dominance, but they’re no longer fighting Sears. They’re fighting Amazon. And Amazon is probably fighting some other company with a good idea, some company that I’m not entirely aware of.

Why is that important?

Because currently, Amazon is the biggest online retail company in the world. (Wal-Mart is still the largest retailer, but Amazon has moved up to second there as well.)  Amazon is exceedingly important to the indie writer movement. In fact, indie publishing would not be where it’s at without Amazon’s innovation with the Kindle ereader ten years ago.

In that time period, a lot of self-published authors have used Amazon’s ecosystem to make themselves, if not wealthy, then at least comfortably well off.  Many of those writers don’t even market their work outside of Amazon at all, preferring to use the tools provided by Kindle Select to promote their series and their work.

Early on, writing advice for indies (as I’m going to call writers who work outside of traditional publishing) centered on an Amazon-only strategy. If you look at my earliest blogs on the publishing industry, back in 2009/2010, you’ll see me constantly defending myself against that very argument. I learned as a young freelancer to go wide—and that was back in the early 1980s. Relying on only one source for income—no matter how large that source is—is never a good idea.

. . . .

Having been in traditional publishing, with its weird rules and limitations, meant I had learned early on how angry readers get when they can’t get a book that they want. I didn’t want to replicate that experience for them, particularly as I took back control of my publishing, so I never even considered Select.

Although, I had to admit, I was envious at times of writers who could manipulate that system to raise their profiles—at least on Amazon. It would have been nice to have access to the same tools. Eventually, I developed a few new pen names (for a variety of reasons, and no, I’m not telling you who they are), and they experimented in Select.

The Select promotion tools are good until they’re not, as everyone who plays in that ecosystem knows. Amazon changes the system, and then the indies figure out how to best use that system, and then Amazon changes it again.

There have been complaints about Amazon and its practices from the start. But savvy writers have known that Amazon started this revolution, and no matter what they’ve done, we all owe them big for that.

But…then there’s the argument I’ve been making on this blog since at least 2010. Do not put all your eggs in one basket. Even if that basket is the biggest online retailer in the world.

I still get pushback on that advice. But not as much as I used to. Because some of the big pro-Amazon indies are beginning to see cracks around the edges of Amazon. There’ve been too many changes to Select, too many broken promises, too many costly mistakes.

Some of the formerly pro Select-only gurus are now quietly going wide. A few others, trapped in the ecosystem, are using other tools to make their novels available before they put the books into Select. They’re still gaming Amazon’s system, but they’re gaming it to keep the income coming—until they can move out of the exclusivity trap that they had allowed Amazon to build around them.

For the writers, though, who continued to argue that Select was the only viable place to play, October and early November were a difficult time. Writer after writer here in the U.S. noted that their international sales had declined dramatically.

Link to the rest at Kristine Kathryn Rusch

Here’s a link to Kris Rusch’s books. If you like the thoughts Kris shares, you can show your appreciation by checking out her books.

PG says that very few, if any, large organizations are unchanging.

Since he has watched the tech world, from the inside and the outside, for a long time, he has seen a great many changes.

Microsoft is not the same organization it used to be. Neither is Apple.

WordPerfect was a wonderful product and a superb organization in its day, but it’s gone now. Ditto for Lotus 1-2-3, Novell and Netscape. In some cases, former tech giants continue as zombie caricatures of their former selves, but the spark is gone.

The personal influence of a strong executive can profoundly shape an organization. Think of Sam Walton and Walmart. When that entrepreneurial executive leaves or dies, it is quite common for such organizations to change. The Sam Waltons and Steve Jobs of the next decades aren’t working for today’s Walmart and Apple. They wouldn’t fit.

Jeff Bezos and Amazon have a similarly tight bond. Amazon has mirrored Bezos’ personality in many ways.

But Amazon has become an extremely large company and the Bezos influence travels through lots of management levels and and subordinants’ decisions before it reaches indie authors and individual consumers. Bezos simply can’t know about everything Amazon is doing today and he’ll know even less next year.

PG thinks the Amazon plan to have two headquarters locations, which later morphed into three headquarters locations is Exhibit A in demonstrating that Bezos has taken his hands off the wheel.

While widely-dispersed major “headquarters” locations may make it easier to tap into a larger geographic pool of talent to fill the entry-level and middle-management jobs, PG suspects it’s going to be a management mess with queens and kings of little Amazon kingdoms sprouting everywhere.

Bezos’ ability to effectively provide vision, leadership and shape Amazon’s corporate culture is going to be substantially diminished. Any future Jeff Bezos-type Amazon employees who might have the talent to continue the level of innovation and organizational excellence he established are not likely to rise through this type of management structure. And their chances of catching Bezos’ attention and obtaining his help in rising through Amazon by their job performance will be slim.

 

Amazon, Kristine Kathryn Rusch, PG's Thoughts (such as they are), The Business of Writing

12 Comments to “Your Basket is Leaking”

  1. But…then there’s the argument I’ve been making on this blog since at least 2010. Do not put all your eggs in one basket.

    And for eight years, lots of authors who didn’t take that advice have prospered.

    • Yup. Most of the other baskets seem to have sunk deep in the river.

      • Her point is that the Amazon Basket is just as destined as Sears was to eventually fail.

        • “Eventually” can be a !ong time: Sears lasted well over a century. IBM is over 120. Microsoft is over 40 and still growing stronger. (It never really stopped.)

          Amazon at 23 is still a baby as consortiums go.

          One of the virtues of going Indie is you can tack with the wind on a moment by moment basis; you’re not stuck with a century-long contract. When Amazon goes, there will be plenty of harbinger signs. There will be time for the alert to adapt.

          “Amazon could kill KU/KDP/Kindle/get out of books” is the same kind of “could” as “Amazon could raise prices after they kill all competitors”.

          Which is on the same level as “Russia/China/Iran” could start WWIII next month”. Anything is possible. Probable? Likely? Different proposition.

          Worrying about “could” when “will” is staring you in the face is a fit…unfocused, shall we say?

          There are more imminent dangers to consider and prepare for.
          B&N going away and leaving a world of newsstands and small bookstores is far more likely yet even that is not a sure thing. Somebody might yet step in to save B&N despite Riggio’s best efforts. Maybe Patterson… 😉

          Keeping an eye on future possibilities is a good thing. So is preparing for a potential disaster…up to a point. It is possible to be too focused on the future at the expense of the near term.

          • “It is possible to be too focused on the future at the expense of the near term.”

            A hundred years from now the seas will rise! Or maybe they won’t – or maybe not as high as the scare mongers want you to believe. Far too often someone’s making money off the fears they’re pushing.

            And if you don’t survive the ‘now’ you won’t have to worry about what might happen in the future.

            MYMV

          • “Patterson books” selling only James Patterson co-authored stories… actually seems like a logical inevitability, if you stop and really think about it.

            • And if the only thing you read is by Patterson then you might shop there, though if you don’t care for him then you won’t.

              (I say ‘might’ because I don’t think even the mighty Patterson can afford to not offer his books on Amazon … 😉 )

              MYMV

  2. Richard Hershberger

    “WordPerfect was a wonderful product and a superb organization in its day, but it’s gone now.”

    I’m not sure what calling WordPerfect an “organization” means, but WordPerfect the software package is still updated and available. And yes, it still has the reveal codes function. I frequently see lawyers lamenting that they can’t use WordPerfect anymore. This always bemuses me. Sure, if they are part of a large firm with an IT department issuing dicta, then they really don’t have a choice. But I have seen the same lament from solo practitioners. If you mostly work with straightforward text documents, you are perfectly free to use WordPerfect. This might create the added step of converting formats of documents to email to people mired in the slough of Word, but this is a trivial step.

    • WordPerfect corporation was the owner of Word Perfect and other software packages.

      And they are actually a good example for this discussion because they stopped being the main Word Processing tool in corporations (and thus the main reason most consumers bought it) because, in the name of diversification, they put corporate strategy above customer need/behavior and they pursued every computing platform of 1990 except the one where MS-DOS users, the bulk of the market, migrated to. They supported mainframes, minicomputers, a dozen UNIX flavors, NextStep, OS/2, even Atari and Amiga.

      But not Windows.
      “The DOS version runs fine under Windows.”

      At the time, a usability survey publicly available noted that where DOS users relied on an average of 1.5 applications (which is why a lot of people did their memos and other documents in Lotus or calculations in Word Perfect) because of the steep learning curve of those environments and because learning a new application required learning an entire new set of commands, MACINTOSH users relied on an average of three major applications. Windows users relied on five. GUIs brought consistency to the user environment which made learning new applications less painful. Users became more productive quicker with GUIs.

      And where moving to the Mac required entirely new hardware, moving to Windows required only software and a 1M memory stick. (OS2 required 4Mb of memory. And this was at the height of the DRAM price fixing conspiracy.)

      WordPerfect, Lotus, WingZ, dBase, Ashton-Tate, and a whole bunch of other productivity software companies zigged while the market zagged. Some of them were more concerned with undercutting Microsoft, than in “following the money”.

      Well, Gates literally begged them in person to support Windows and they all refused. So Gates had his people do quickie ports of Word and Excel from the Mac (they wrote them in a mutant form of MSBasic to get them out fast) along with an obscure graphics program they’d recently bought. To goose sales, they did a *temporary* bundle called MS OFFICE.
      Twenty years later, the promotion is still going strong. 😉

      Moral of the story?
      The market tells you where to go, ignore it at your peril: It’s a double edged sword.

      • Richard Hershberger

        So far as I know, there is not and never has been a “WordPerfect corporation.” WordPerfect was developed by some guys at BYU, who formed Satellite Systems International to market it. The eventually sold it to Novel, who eventually sold it to Corel. It is possible that there are some additional steps in there that I don’t know about.

        But you want to talk about marketing, there are innumerable people out there who (a) think that it no longer exists, (b) lament this, extolling its superiority over Word, and yet (c) upon being informed that it indeed still exists, is still superior to Word, and is a perfectly viable option, reject out of hand the idea of actually using it.

        It may be that (b) is simply performative nostalgia, not actually believed even by its practitioners, but I think that it actually is a marketing triumph by Microsoft, convincing people that the idea of using anything other than Word is sheer fantasy.

        In related news, for the vast majority of users, Office Libre has every functionality you will ever need and is free. Why then does anyone pay for Word? See the preceding paragraph.

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