The Latest re Amazon.com

Breaking news from the Writers Weekly website regarding the Amazon debacle shows that the three largest print on demand providers within the United States have all bowed down and submitted to Amazons demands. In other words, all three Authorhouse, I-Universe and Lulu) have moved their printing for Amazon at least, from Lightning Source to Booksurge, in a move that will cost Lightning Source thousands of dollars in lost revenue. I cannot believe that they allowed themselves to be blackmailed in this way without even bothering to consult their authors, who as a result have lost valuable distribution through Ingrams, and in one fell swoop their best chance of becoming stocked in book stores throughout the United States.

This will have catastrophic consequences I feel for all involved in this dreadful situation, where one of America's largest corporations is effectively holding both authors and publishers to ransom. What a choice - book stores or Amazon. I know which I would prefer when I look at my sales figures, and thank goodness I live where I do and don't have to make that choice. I was hoping there may have been an email from Richard when I got home tonight, but no, there is still no official news as to how this will impact authors outside the US. At the time of writing my book is still on both sites, but for how long remains to be seen.

Amazon in the meantime, have released an official statement, which to untrained eyes, and those who do not understand how publishing works, will not mean very much, so I will explain here, in hopefully easy to understand terms that will help.

I copy the statement here in its entirety, with my own statements in bold throughout the text:

Open letter to interested parties:

We wanted to make sure those who are interested have an opportunity to understand what we're changing with print on demand and why we're doing so.

One question that we've seen is a simple one. Is Amazon requiring that print-on-demand books be printed inside Amazon's own fulfillment centers, and if so why?

Yes. Modern POD printing machines can print and bind a book in less than two hours. If the POD printing machines reside inside our own fulfillment centers, we can more quickly ship the POD book to customers - including in those cases where the POD book needs to be married together with another item. If a customer orders a POD item together with an item that we're holding in inventory - a common case - we can quickly print and bind the POD item, pick the inventoried item, and ship the two together in one box, and we can do so quickly. If the POD item were to be printed at a third party, we'd have to wait for it to be transhipped to our fulfillment center before it could be married together with the inventoried item.

Speed of shipping is a key customer experience focus for us and it has been for many years. Amazon Prime is an example of a successful and growing program that is driving up our speed of shipment with customers. POD items printed inside our own fulfillment centers can make our Amazon Prime cutoff times. POD items printed outside cannot.

Simply put, we can provide a better, more timely customer experience if the POD titles are printed inside our own fulfillment centers. In addition, printing these titles in our own fulfillment centers saves transportation costs and transportation fuel.

This is complete and utter rubbish. The truth is that Amazon have, according to Wikipedia, 10 distribution centers in North America alone; and 14 more abroad (one of which is based in Milton Keynes, the same town where Lightning Source are based - Lightning Source being the largest print on demand printer in both territories). Amazon though, for all their grand statements about saving time, money and fuel, do not print books at all ten of these sites. The majority of books printed by Amazon will then still have to be shipped back to the warehouse for distribution, which will cost just as much as if they had come from Lightning Source in the first place. This money saving rationale then is full of glaring great big holes and totally meaningless.

Another question we've seen: Do I need to switch completely to having my POD titles printed at Amazon?

No, there is no request for exclusivity. Any publisher can use Amazon's POD service just for those units that ship from Amazon and continue to use a different POD service provider for distribution through other channels.

Why though should the author and/or publisher be forced to do this? It effectively means that they will be forced to publish two different editions of the same book, one through Lightning Source and another just for Amazon using their own printer, Booksurge, thus incurring two sets of printing and publishing costs (the average Booksurge package costs $1000). Since Booksurge, Amazon's own printer do not offer distribution through Ingrams, the wholesaler through which 99 percent of US book stores source their titles, authors are being given a stark choice between online sales or sales through book stores. This is no choice and authors should not be placed in this position.

Furthermore, since Booksurge are based only in the United States (unlike Lightning Source), they are unable to offer distribution in the UK, so US authors choosing to print with Booksurge will not be able to access the UK market and vice versa. UK authors using Booksurge will be the mercy of fluctuating exchange rates and high shipping costs in order to buy their own books.

Alternatively, you can use a different POD service provider for all your units. In that case, we ask that you pre-produce a small number of copies of each title (typically five copies), and send those to us in advance (Amazon Advantage Program - successfully used by thousands of big and small publishers). We will inventory those copies. That small cache of inventory allows us to provide the same rapid fulfillment capability to our customers that we would have if we were printing the titles ourselves on POD printing machines located inside our fulfillment centers. Unlike POD, this alternative is not completely "inventory less." However, as a practical matter, five copies is a small enough quantity that it is economically close to an inventory less model.

What they don't tell you, and what the average book reader also doesn't know, is that in order to be accepted on to the Advantage Program, you have to offer Amazon terms of 55 percent discount (in other words, they buy books from you at 45 percent of the cover price). These are terms more usually offered to wholesalers, such as Ingrams, or Gardners in the UK, but Amazon are not a wholesaler - they are a retailer. You also have to join the Search Inside programme, whereby your book is scanned so that buyers can browse inside and see if it is indeed suitable for their needs. This violates the authors copyright and may result in lost sales rather than more sales as you are effectively giving your work away for free.

If this were not bad enough, publishers/authors also have to pay a set fee of $29.95 per year, PLUS shipping costs to get the books to Amazon, in addition to the 55 percent discount. Why though should Amazon be worried about that when they don't have to pay? To add the icing to the cake, I bet that like the wholesalers, they also reserve the right to send back books that they can't sell at any time within one year - guess who has to pay for these - yes, you got it, the author! They wrote the thing while Amazon get all the money !

Might Amazon reconsider this new policy?

Only if we can find an even better way to serve our customers faster. Over the years we've made many improvements to our service level for consumers. Some of these changes have caused consternation at times, but we have always stuck with the change when we believe it's good for customers. An early example: many years ago we started offering customer reviews on our website. This was a pioneering thing to do at the time. The fact that we allowed *negative* customer reviews confounded many publishers - some were downright angry. One publisher wrote to us asking if we understood our business: "You make money when you sell things! Take down these negative reviews!" Our point of view was that our job was to help customers make purchase decisions. It made sense to us to stick with the customer-centric position of embracing customer reviews, even negative ones.

Another example: a few years ago, we made the decision to offer used books, and to make those used copies available directly alongside the new editions. This caused significant consternation, but we stood by the decision because we were convinced it was right for customers. Sometimes a used book will do and it can sometimes be had at a significant cost savings relative to a new book. We stuck with the customer-friendly decision.

Our decision with POD is the same. Once a book is in digital format, it can be quickly printed on modern POD printing equipment. It isn't logical or efficient to print a POD book in a third place, and then physically ship the book to our fulfillment centers. It makes more sense to produce the books on site, saving transportation costs and transportation fuel, and significantly speeding the shipment to our customers and Amazon Prime members.

Only of course that isn't what these changes will mean - as like I said, Amazon have 10 distribution centres throughout the US, but just the one printing plant. It will not then make the blindest bit of difference to their service, transportation costs, or anything else for that matter. Even if by some fluke, they open another 9 print centres, surely this will cost a lot more than had they stuck with their current system in the first place. It does not make economic sense no matter how you look at it.

We hope this helps those who are interested understand what we're working to do and why. We believe our customer-focused approach helps the entire industry in the long term by selling more books.

If they really think this then they are seriously deluded. Those three publishers may have bowed down, but this is far from over. How many Authorhouse/I-Universe/Lulu authors I wonder will change publishers because of this, choosing book stores over Amazon. The author should not have to make this choice. Internet book sales may be rising, but Amazon and print on demand authors would be wise to remember than 90 percent of book sales are still made through book stores - the Internet market is a drop in the ocean compared to this.

Furthermore, I fail to understand how this is better for the customer either; if the majority of print on demand companies refuse to give in to Amazon's demands, then this will mean that their customers have access to less books. This is not better service but worse, as it means less choice.

Sincerely,

The Amazon.com Books Team

My parting shot then is a request that all readers of this blog boycott Amazon until further notice or until they see sense (whichever is the sooner) and that you also add your names to the online petition which can be found here.

Amazon.com tries to force out the POD competition

A disturbing rumour has been circulating around the Internet regarding amazon.com that I first read about on The Bookseller. It was one of those small snippets hidden within plain site that you could have almost blinked and missed, but one that nevertheless has disturbing implications for the publishing industry as a whole, not just within America either.

The article which was posted on Friday 28th March, and picked up from no less than the Wall Street Journal, states that amazon.com in the United States have notified publishers who offer print books on demand that they will have to use their own on demand printing facilities (Booksurge) if they want their books to be sold directly on Amazon's website. According to the newspaper (The Wall Street Journal), this move signals that Amazon is intent on using its position as the premier online bookseller to strengthen its presence in other phases of book selling and manufacturing. In other words (this is my words), they are prepared to use bully boy tactics in order to destroy the competition, thus strengthening their own position.

When I first read this I wondered whether the Wall Street Journal had got the date wrong and printed this a few days ahead of April 1st, but sadly it seems that this is no hoax. Within hours of me reading this article, concerned authors began to post on the various networking sites, on both sides of the Atlantic, that I am a member of. A link on one of these, the Book Marketing Site led me to Writers Weekly which is one the largest and best known sites for reporting publishing news within the United States.

Here I found an article written by one Angela Hoy, co-owner of POD services company BookLocker.com and publisher of WritersWeekly.com. Like many others, Angela states that when she first read this news she did not believe it either, but it is in fact very real.

Angela states that she emailed an Amazon/BookSurge representative who had been trying to get in touch with her by phone. John Clifford of Amazon/BookSurge called her back at 12.30 pm on Wednesday, March 26, 2008 at which point Angela relayed the rumours to him. Initially he tried to deny the rumours, but was forced to recant when he realised that Angela already knew too much for it to be denied.

As expected, print on demand authors and publishers across the length and breadth of America are up in arms at these heavy handed tactics, which are designed to force such companies to do business on Amazon's terms. Of course what they don't tell you is that their own printers, Booksurge, offer a far inferior service to anything offered by Lightning Source, the largest print on demand printer in both the US and the UK. If you type their name into Google you will find a myriad of author complaints about this company. This is not to mention the cost and inconvenience of converting files and changing publisher. After all, not all print on demand providers work with Booksurge, who are an entity in their own right.

Furthermore, since Amazon/BookSurge do not offer Ingram distribution (Ingrams being the US equivalent of Gardners), which is considered essential in order to stand any chance of being stocked in book stores, any company or individual who accepts the Amazon/BookSurge deal and wishes to maintain Ingram distribution will need to maintain two separate files - one for Ingram and one just for Amazon, and in effect, two ISBN's. This incurs certain costs, as the author is effectively forced to publish twice, maintaining two different versions of the same book.

This is to say nothing of course of the way in which their competitors will be affected. The knock on effect will be tremendous and not just for self published authors, since in the US like the UK, print on demand is becoming more and more mainstream, being utilised even by the large publishers to maintain their own back lists.

It seems to me then that in line with the recent debate re celebrity books that I talked about on here last week, this is all part of the divine plan, as there are clearly more things at work than at first it seems. There are two things happening here - firstly, print on demand is being debated openly in the general press as opposed to just the publishing press, thus opening up a discussion and dialogue on these issues that the reading public can see and respond to. The other thing which is perhaps more important, is that the large publishers who had previously dismissed print on demand as vanity press are seeing their chickens coming home to roost, as for the first time they are seeing and experiencing these issues and the prejudice that print on demand authors have to face through their own eyes. They therefore realise that both mainstream and self published authors are facing the same issues and the same battle. It is ironic in many ways that this had to happen before they could clearly see the consequences of their actions - that for every action there is an equal yet opposite reaction.

It is unclear at the moment as to how this will affect non-American authors and whether Amazon plan to use the same strategy on their other sites - of which co.uk is by far the largest. Bear in mind as I write this that they could easily try and do this, as Lightning Source also have a printing plant in Milton Keynes.

As Clive Keeble points out, on the Writers Weekly site, "As an opinionated independent UK book dealer I tend to follow the ongoing manner in which Amazon is enforcing terms and conditions on their suppliers. Thankfully I have had the good sense never to list, either directly or indirectly, on Amazon: and thankfully have never purchased anything from them.

I think that your readers should be aware that amazon.co.uk has in recent months withdrawn the 'Buy New' button here on "hard print" titles, the best documented case was with independent publishers Bloomsbury. It was several days before the 'Buy New' button was reinstated: neither publisher nor Amazon gave a printable quote to the trade press stating why the 'Buy New' button was withdrawn or re-instated.

At the time Benazir Bhutto's "Reconciliation" was published the 'Buy New' button mysteriously disappeared on Amazon, only to be re-instated two days later with the Amazon discount increased to 50 percent. I am unaware of any direct press comments - on the book world grapevine it was referred to a "just a little technical glitch" (believe that if you want). In my opinion, Aamazon is a dangerous predator and needs to be treated as such."

I am thoroughly confused I must say though and at a loss to understand what Amazon think they are playing at, as to my mind this is commercial suicide. Yes, Amazon are the largest online retailer and Internet sales are going through the roof at the moment, increasing year on year, but Lightning Source have printed over 33 million titles in the UK alone in the few short years since they started their operations here. Can Amazon really afford to lose this amount of business - somehow I think not. They need to realise that they are not the only Internet retailer out there, in the US or the UK - and there will always be someone willing and able to fill their shoes. They would be wise to remember the old adage, the bigger you are the harder you fall ...