Why Pagans/Spiritual People Should Be Concerned about Amazon.com’s Monopoly (part 2)

Photo by Mark Strozier

Part 1 (Where we stand)  Part 2  (What Amazon is doing)   Part 3 (Why Amazon is doing this)   Part 4  (The effect on YOU)

(This will be a multi-post article so that I can adequately explain why Amazon.com’s latest manuevers could keep pagan/spiritual readers from finding the reading material they’ve come to love and put small spiritual publishers out of business.)

If you’re not a publisher, editor, or author, there’s a good chance you haven’t heard the story that broke a week ago (thanks to Angela Hoy at writersweekly.com). As a reader or book buyer, you’re probably used to buying those strange little spiritual books– that you can’t find in a store near you–from an online store, and by virtue of their mammoth size, that online store is probably Amazon.  Not only that, but in some small towns, you’re still worried that the villagers will appear with torches and pitchforks if they find out what your true reading taste is so you don’t dare ask the local librarian or bookstore owner to special order something for you, especially because they know your mother or used to date your Aunt Mary.  Buying from Amazon has been a great alternative for you, but Amazon has suddenly become the biggest bully on the block for 4300 publishers, including the publishers of the books you love.  Over 400,000 books are at risk.

What is Amazon doing that is (I believe) unethical and possibly illegal?  To start with, they are telling publishers that the publishers must print their books through Amazon’s own print-on-demand company, Booksurge. That’s right–ditch your current printer and current inventory and come with us at a higher cost…or come with us at a higher cost and keep your regular printer for sales to other bookstores via Ingram (the major wholesaler).  Then they tell the publishers (held off the ground by their ankles and shaken so that their measly lunch money falls out their pockets) that if they refuse, the “buy buttons” on their books will be “turned off” at Amazon. The profit margin for publishers is very, very thin these days and Amazon is looking to claim what is left.  This means Amazon will make their profits not only on sales (they already get as high as 55% of the cover price from some publishers) but also through printing fees, set-up costs, and higher discounts that will allow them to out-compete the average bookstore.

Amazingly, several large publishers have already caved in.  They feel they have no choice.  And to stay in business, someone will have to make up their profit margin, and that someone will be authors and readers.

Amazon’s printer, Booksurge, is a print-on-demand (POD) company that also prints self-published books for authors (set up fees of $1000 and more) for sale on Amazon.  So Amazon also competes with publishers for authors.  The dominant POD printer is Lightning Source, which we at Spilled Candy have used as our printer since 2000, when we stopped using the environmentally wasteful off-set print-runs of the past and started printing small quantities for our inventory and resupplying when the quantities ran low.  The quality of POD books (through Lightning Source, that is, NOT through Booksurge) has improved beautifully over the years, the covers are gorgeous now, the print quality looks good, and we’re very happy with them.  In fact, many major publishing houses are using Lightning Source to print their backlists and the customer can no longer tell the difference in a book printed one at a time and a book printed 25,000 at a time. 

Although Amazon has declared war on its printer’s chief rival, Lightning Source, and had been approaching Lightning Source customers over the past week or two with these threats of being eliminated from Amazon, the threat isn’t just to POD printers and the publishers and authors who use them.  At least one University press that publishes through traditional print-runs rather than POD, has been approached to do all their printing through Booksurge.  One might think that Amazon wants to print every book that’s published!

Even more insane (to us), Amazon has also told some publishers that they can’t offer discounts on their publisher websites if they sell on Amazon, and if they do, then Amazon will conclude that the discounted price is the recommended retail price (instead of what’s on the cover) and will pay accordingly.  We at Spilled Candy have not been approached yet on this, but here’s how it would play out:

We publish a series of books, Lauren Hartford’s The Priestess Diaries,  that focus on various spiritual lessons within the framework of fiction.  Readers purchase them out of order or just the book they’re interested in, so some book buyers never read anything but our Law of Attraction book, Fire Burning in Water.  The trade paperback cover price, mainly because of the heavy non-fiction content, is (I’ll round off) $20.  We’re fortunate enough to be able to offer our website customers a special price because of a local spiritual group that subsidizes the price of our books on occasion.  We’ve worked out a deal with them so that they pay the difference between the special price at our website and the cover price.  Great, huh? 

If Amazon visited our online bookstore and saw that Fire Burning in Water  is selling for $10 instead of $20–it’s our benefactor’s factorite–Amazon would declare the retail price to be $10.  Since our cut to them is, say, normally 50% of the cover price. Amazon would unilaterally decide that regardless of our contract, the new price is $10 and for every book they sell, they’ll send me $5…which wouldn’t cover printing and shipping.  So to keep from going broke on Amazon, we’d have to eliminate any special offers to our regular websites visitors who don’t generally buy our books elsewhere, in effect running them off because we’ve built out business on special offers.

Imagine the same effect on a larger scale–publisher catalogs and websites not offering sales or specials or pre-sale prices for fear of Amazon re-interpreting the selling price.  If the price for the book is the same everywhere and Amazon has the best discount, over both publisher and other bookstores–where will book buyers go to buy the book…assuming the publisher can afford to continue to sell it?

So why is Amazon doing this?  What do they hope to achieve? 

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