28 March 2008

Is Amazon Getting Greedy?

I'm a big fan of Amazon - actually, make that a big addict. But when it starts throwing its weight around, I can't help thinking it is starting to act like a certain other large company that wants it all:

Reports have been trickling in from the POD underground that Amazon/BookSurge representatives have been approaching some Lightning Source customers, first by email introduction and then by phone (nobody at BookSurge seems to want to put anything in writing). When Lightning Source customers speak with the BookSurge representative, the reports say, they are basically told they can either have BookSurge start printing their books or the "buy" button on their Amazon.com book pages will be "turned off."

"POD" is Print on Demand, an exciting and increasingly popular way to publish books, especially those with small runs (most of them); Lightning Source is a big POD publisher, while BookSurge is Amazon's rival version.

Come on, Amazon, you don't need to do this: you can become the central point where people buy books, without insisting you print the bloody things too....


Anonymous said...

It's gone beyond rumor: here's a Wall Street Journal article on the topic.

As Aaron Shepard reports from the corresponding TechCrunch piece, the issue isn't strictly one of printing costs — BookSurge is in the ballpark with LightningSource and others. However, Amazon's actions lead to two problems:

1. Tactically, they're demanding a much higher percentage of the list price as their "discount" (read: gross profit margin) in addition to printing costs. Rather than 20% for online only distribution through LightningSource or even 40% to try to get the books into bookstores, they want 48%.

2. Strategically, while they have distribution outside of Amazon today, one has to wonder if that might be discontinued if Amazon's market share continues to climb.

Anonymous said...

Sounds like a classic case of not seeing the forest for the trees. Someone at Amazon is likely bonused on that metric, so off they go trying to get as many POD transactions as possible regardless of the impact on the business as a whole. The things typically work themselves out at well managed companies.

Glyn Moody said...

Apologies for the late posting - Google is eating most of my comments.

Yi Ping said...

You are absolutely right. I have just been putting CDs in my cart on Amazon. At the check-out, I found all the items had attract a shipping fee of $4.99 each to Australia(fee for books),instead of $.99 each (fee for CDs as enlistd in their own shipping cost schedule). And there is nothing on their website to assist me getting a clarification/rectification. I used to enjoy buying books from Amazon, but now I am feeling very disgusted by their dirty tacts to overcharge customers. Luckily I discovered the overcharged items, and deleted everything in our cart. So no order from me tonight for Amazon.