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Amazon moves against publishers

07.04.08

Amazon is angry that Penguin, Bloomsbury and others are discounting titles on their websites, encouraging customers to buy direct instead of using the online retailer, reports the Times following up on a Publishing News story. There are fears that Amazon may retaliate by regarding a publisher’s online price as the recommended retail price and applying its trading terms to that. Others accused Amazon of having become particularly aggressive lately. One source claimed that the online seller recently removed the “buy buttons” from a book on its website to prevent users from being able to purchase it.

Another publisher told the newspaper: “It’s very serious. I can’t believe they’d be allowed to get away with it under competition law. Forcing people to increase prices seems to me entirely wrong.” And Simon Juden, chief executive of the Publishers Association, which represents up to 140 publishers, added that Amazon was on shaky legal ground. He said: “Terms of trade will have been set up upfront when contracts were signed. Neither side can unilaterally change those. In my view, Amazon would be in breach of contract if they tried to do this.”

An Amazon spokesman said: “It is speculation. We never talk about discussions with suppliers.” He declined to comment further.




The Times

publishers amazon publishers association Simon Juden

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By im a tree

I'm not normally one to support Amazon and their bullying tactics, but in this case I think it appropriate. Publishers should stick to publishing and if this action stops publishers stupidly trying to undercut retailers to make a quick few quid, then that's good news for them all from the mighty amazon to the humble indie. Publishers should support and work with retailers, not cut corners and cut them out

07 Apr 08 08:30

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By JULIAN RIVERS

Amazon are just like any other trader who realises that their supplier is their competitor as well . Something that is unusual outside of the booktrade . I think Amazon are powerful enough to get the publishers to act in a manner that does not disadvantage them as customers . They are completely correct in assuming that the new RRP is the price that the publisher is seeking to sell the book to the public . How else could they judge it ? I personally think that all the big players should follow suit, and the small ones too for that matter . The publishers need to respect their trade customers large and small , and thank goodness that Amazon are now strong enough to take the publishers on . All the retail trade needs to follow their lead

07 Apr 08 18:26

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By June Austin

I can't believe that anyone on here could actually support this policy - a retailer has no right whatsoever to dictate at what price anyone sells goods that they produce. The only one who has the right to do this is the manufacturer - in this case the publisher. Where as well does the author come into this - they after all are the ones who potentially stand to lose the most from this - a lower selling price means less royalties, less money coming back into publishing means less chance of being published (assuming you are not some mindless celebrity or married to one that is). Let's not forget that without the authors who write books there would be no amazon, and no book industry full stop.

07 Apr 08 19:12

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By JULIAN RIVERS

June Austin , obviously comes from the pre 1995 NBA Jurassic period .More Jane Austin. She is 100% incorrect . It is entirely the retailer's perogative to choose a price . How can the market work if the manufacturer chooses to undercut the retailer on a whim ? The author royalty argument is a red herring , most are paid on a percentage of published price for such trading not net receipts .

08 Apr 08 14:51

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By Nick Harvey

Poor June -- rudeness as well as stupidity from Julian Rivers. Of course manufacturers/publishers should be able to (1) determine the price at which they sell to the public and (2) determine the price at which they sell to suppliers. If Amazon are indeed following the alleged policy in the Bookseller article, they are trying to reduce the price at which they buy from publishers as well as the price at which they sell on (otherwise any fool can see they would lose money by reducing their price!). Amazon are getting too big for their boots and it's about time publishers stood up to them before small publishers follow in the path of small booksellers in succumbing to Amazon's aggressive policy of world domination of the e- and printed book market.

08 Apr 08 20:11

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By June Austin

Well said Nick and thanks for the support. I was composing a suitable reply when you were writing this and our replies must have crossed. I beg to differ though with what Julian writes and yes, could have done without the sarcasm, which erallty doesn't get you anywhere. For the record, I was born in 1965 not 1865, and although I have been tempted to use Jane's name would never so, as I have my own identity and prefer to succeed on my own terms. Julioan though is assuming that everyone is published via a mainstream publisher. As we all know, to assume anything makes an ASS out of U and ME. While it is true that mainstream publishers do indeed pay royalties based on cover price, print on demand providers pay on net receipts after print costs are taken off. As for undercutting on a whim, from where I am sitting Amazon is the one who is guilty of this. When it comes to self publishing the publisher and the retailer are very often the same thing. I will be damned if anyone is going to dictate to me at what price I choose to sell something that I spent five years writing and creating.

08 Apr 08 20:28

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By down by the beach

June, there seems to be a misunderstanding here regarding the chain of things. The publisher can set the rrp or cover price, and that is the price it is sold to the bookshop at, less thier discount. What price the retailer then sells it at is up to the retailer, but does not affect the price paid to the publisher (which is the net price), or the royalty if it is a net royalty. Very few publishers pay a royalty on cover price as a result, as it is just too variable to be simply accounted for. When a net royalty is being paid though, it is just the cover price, less the discount, not less the printing costs. It's really a fair system as long as the net royalty to the author is high enough.

09 Apr 08 11:12

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By down by the beach

apologies, I meant, of course, that the net royalty was a percentage of the cover price less the discount given to the retailer, not that the royalty was the actual cover price less the discount, though I'm sure authors might approve of such a system!

09 Apr 08 11:34

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By June Austin

I would definately approve of this, and thanks for taking the time to explain. Speaking to writing friends, both on and off the Internet, they do seem to tell me different things, so it is easy to get confused. I can only say though how my publisher works - and that is that the author sets the cover price, after working out how much (or ltitle) they can afford to sell their books for. Royalties are as you say paid as a percentage after print costs and discounts are taken off, and so will vary according to how and where the books are sold. Gardners for example stock my book, and so they buy them for a higher discount of 55 percent (15 percent to them and 40 percent to the retailer). Bertrams on the other hand do not stock it, and so buy it at 40 percent (again 15 percent to them but 25 percent to the store). Most reatilers then for obvious reasons then buy through Gardners. What Amazon though are proposing is that if for example my publisher decided to sell the book for £10.99 instead of £14.99 which is the cover price, then instead of buying the book for say 50 percent of £14.99 they would buy it for 50 percent of £10.99 (£5.49 instead of £7.49). This would leave both myself and the publisher with a problem, as print costs alone are just over £4. Factor in the cost of shipping, and the return risk factor and it would not be viable to sell through Amazon at all. I would end up with just 84 pence per book for give years work! Larger publishers may be in a position where they can afford this extra discount, because the volume of books they publish is that much greater and they have the means to promote them much more effectively, but small and self publishers cannot do this. It would bankrupt us. It just seems very unfair and also incredibly bad business practise to put those who have helped make your business succesful in the first place out of business because of greed and in order to stay one step ahead. It is what I call cutting off your nose to spite your face and from where I am sitting does not equal good customer service at all. Amazon's customer don't just want cheap books, they also want a large range of books and remember that a high percentage of their sales come from independently published books which most retailers don't stock. If these publishers are driven out of business because of this, then everyone will suffer.

09 Apr 08 18:02

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