Amazon’s Taking Another Bite of the Publishing Pie

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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.

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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.