Amazon Does Damage Control On Its Print-On-Demand Demands

35 Comments

Amazon.com (NSDQ: AMZN) is now doing some damage control over its plans to control its print-on-demand value chain, and has issued an open letter to the industry, posted here. It has recently issued a policy telling such publishers that they will have to use its on-demand printing facilities if they want their books directly sold on Amazon

35 Comments

Mary

Eric wrote: "I think it might all settle out as a market monopoly/antittrust issue arising from vertical integration of the means of production with the means of sales to the disadvantage of one or more players held hostage to the scheme. This is what forced oil companies to disaggregate from their selling arms, though the case there was made on the merits of price fixing and gouging at the pump, which is a consumer issue. (If Amazon/BookSurge tells a publisher what price to put on a book, it’s a slam-dunk price-fixing violation.) "

Well, it's my understanding that BookSurge has a "threshold" price depending on size of books. The publisher can price it lower, but then BS/Amazon raises the price to their threshold. So there is your price fixing.

Sidney Allinson

It is puzzling to see repeated comments here that CreateSpace refuses PDF submissions.

In fact, CS *insists* that author/publishers submit their book materials in PDF form. See their specific requirements for this in CreateSpace instructions on their web site:

"The interior pages of your book are commonly referred to as your book block and should be formatted to the exact final trim size of your book. It should also be submitted as a single PDF file with one text page per PDF page."

What is the basis of the impression that PDFs are refused by CreateSpace?

— Sidney.

Jacqueline L. Jones

It looks like Borders my be giving up. National Public Radio reported last month that the chain was looking for a buyer. I just found the article today on the NPR website.

Editoress

Question:
Has anyone heard whether Amazon's new policy will apply on the Borders website as well? They are, after all, teamed.

Eric Hammel

I think it might all settle out as a market monopoly/antittrust issue arising from vertical integration of the means of production with the means of sales to the disadvantage of one or more players held hostage to the scheme. This is what forced oil companies to disaggregate from their selling arms, though the case there was made on the merits of price fixing and gouging at the pump, which is a consumer issue. (If Amazon/BookSurge tells a publisher what price to put on a book, it's a slam-dunk price-fixing violation.)

Authors who publish via POD, or POD publishers, are in the supply chain, and each of us is free to leave the Amazon/BookSurge orbit.

The question that will drive a Federal suit will be impact on end-users, not as a matter of their convenience or our profit margin, but as a factor of pricing. Amazon/BookSurge is on a slippery slope with respect to an antitrust violation, but they don't appear to have crossed the line yet. And they are pissing off a bunch of eloquent, connected players and setting up conditions that might militate toward a competitive marketing strategy. It all depends on how many POD publishers cave to their demands.

There is a complicated way to beat Amazon and make this an issue for Amazon customers: put a higher list price on books that BookSurge prints under a new ISBN and the price you really want to charge on POD books you get from another supplier under the old/another ISBN. This is a way to say, "Amazon is screwing you by screwing us. Buy elsewhere for less." But that would require a tidal wave of active support from POD publishers.

One other thing: Most POD titles I see on Amazon are sold by third-party suppliers who undercut Amazon's full-list offering by a few percent. If POD publishers all move to BookSurge, these folks will be cut out of the market loop. And that does raise an antitrust issue because it affects an entire class of stakeholders. But they need to get into the discussion.

Glenn Fleishman

michael jahn wrote:
"I feel that Glenn was awfully rude to Julie – and almost hope this was some April fools joke, not some bile filled flame. Glenn, if you have a better distribution modle that is somehow ‘more fair’ to authors and musicians that what is offered by Amazon or Apple iTunes, lets hear it."

I don't believe ripping apart someone's statements is rude, unless it constitutes a personal attack. Julie was parroting a corporate line, and I wouldn't be surprised if she's still an Amazon employee. The statements she made were either factually incorrect or specious. I'm sorry, however, if it appears as if this were a personal attack. I don't know her. I do suspect her honesty, partly because of the party line, and the relative anonymity in which she posted her note.

I don't have a better distribution model, and that's not what this is about. If you followed the discussion so far, the issue is about Amazon requiring POD publishers to use an Amazon POD publisher for reasons that are full of nonsense.

If Amazon had simply stated (in writing, no less), "We've decided it's not in the best interests of our firm, our customers, and our shareholders to list books as directly for sale that use print-on-demand technology that aren't printed by our subsidiary BookSurge. You may continue to sell books through Amazon Marketplace, use Amazon Advantage to pre-stock books in our warehouses, or choose to no longer sell books through Amazon. We don't require that you work exclusively with BookSurge, but you must use BookSurge for your POD titles to be listed as works sold by Amazon."

Instead, the statements are fairly ridiculous, unclear, and being made over the phone and in the form of that letter that was full of errors, as I noted above. This is all about revenue, and they should simply be adults and state that instead of acting like children.

"I think Apple gets like 34 cents of that 99 cents, and the musicians get 11 cents, and the record companies the rest (or something like that)"

That's what analysts say, and it's not directly comparable. Print (POD) books v digital files aren't a reasonable comparison.

In any case, what Amazon is saying is that for publishers who don't want to incur the cost of conversion, and don't want to work with BookSurge, that they are denying the best forum at Amazon for sales. That may be their legal right to do so; I am not a lawyer; I don't know if there are methods of recourse.

However, bluntly, this will reduce earnings by publishers who choose not to work with BookSurge, and by authors as well. The Amazon Advantage solution isn't worthwhile for most authors and publishers because Amazon sets the price they pay a publisher (not the publisher), and has annual fees and other fees.

Glenn Fleishman

Victoria wrote:
"No, it’s not–because that’s what fueled the “consternation” Amazon’s statement (about used book sales) refers to. The Authors Guild went head to head with Amazon over this issue and couldn’t get it to budge. There was a lot of anger in the author and publisher community, and a lot of people took Amazon links off their websites and blogs and vowed never to shop there again."

I'm a member of the Author's Guild, and what was asked for eventually was that Amazon not list used copies for sale within, if I recall right, about six weeks of publication. That mostly meant review copies, reader's copies, advance galleys. I thought the AG's position on copies released *before* a book was published was reasonable, but truly used copies are a marketplace decision.

bowerbird

editoress said:
> there are several thousand digital printing
> companies around the country who could be
> organized into a psuedo print network using
> a common database of book files. After all,
> the equipment is standard and there is
> little operator intervention so product consistency
> is no problem. Do I hear Kinkos anyone?
at one time, i was trying to get kinko's interested
in precisely such a plan. a book-buyer would pay
for a book at their local store, and pick it up there.
(or even pay extra to have it delivered to their door.)
talk about delivery-speed! and customer convenience!

but the book industry — just like the music industry —
is so out of touch and disrespectful of their customers
that i'm afraid these days such a "common database"
of books would serve as an entry point for piracy and
suddenly people would be swapping hard-disks full of
books, just like they swap hard-disks full of music…

(which, coincidentally, wouldn't really be a bad thing
for books, or for authors, just like it hasn't really been
a bad thing for music, or for musicians, not really…
bad for record-companies, sure. but for _music_, great!
in the world of the future, it'll be better to be copied than
to be not-copied, because not-copied means forgotten,
and there's no way you can make money being forgotten.)

-bowerbird

Ian Smith

Amazon's statement is nonsense on several levels. To follow their logic, they should require every publisher to start using their inhouse system because all conventional publishing is much slower than their inhouse system.

This is a landgrab. Period. Amazon is big enough that series restraint of trade issues are at stake. Oh wouldn't it be nice if a non-Republican government was actually in control of the FTC.

Gene Warner

After I decided to become a self-publishing author as a retirement project, making sense out the POD publishing/marketing maze was possibly the biggest challenge, even though I'd been a businessman all my life. In the end, I concluded that Lulu was a great resource for quickly and inexpensively proofing a new book, and that the conventional Bowker/LightningSource route made the most sense for ultimately publishing and marketing it.

Within that initial process, I very seriously considered BookSurge, and my BookSurge representative was very engaged, helpful and nice. I probably would have went that route, except that my first book was set up in the thesis size (8-1/2" x 11"). BookSurge didn't manufacture that trim size then and still doesn't. I would have had to reformat the whole thing. But there were also other issues that didn't strike me as favorable, including their very aggressive discouraging of PDF submissions. The alternative manuscript submission rules put them in control of the book's final look and feel, while also giving them the excuse to charge a submission fee amounting to $10 or more per image, which would have amounted to upwards of $950 (and which smelled like a scam to me).

Since then (a year or two) I've remained distantly mindful of BookSurge, and I still receive email news and solicitations from them from time to time. My impression is that they have not exactly set the world on fire, and I have had no reason to revisit the publishing/marketing choices I finally made.

The POD field abounds with great ways for an aspiring author to get royally screwed. When it comes to self-publishing, BookSurge is by no means the worst deal in town. On the other hand, the Bowker/LightningSource route is not inexpensive or easy, and when guys like me turn away from BookSurge and go that route, which many evidently have done and are still doing, BookSurge would do well to find out why and change what needs to be changed in order to compete more successfully.

And so, what of my case regarding the first book I ever wrote and published? It's still 8-1/2" x 11", and BookSurge still doesn't do thesis-size books. In order to have it remain on Amazon.com will I have to reformat it? That'll mean a different ISBN for the Amazon version. Am I still going to get all the pushy objections to PDF submissions, so that I can get soaked for the whopping submission fees for illustrated texts? Looking over the BookSurge website, it doesn't appear that much has changed.

In business, you "win" customers, you don't capture customers by beating them over the head. Business works when the deal is good for all parties to it – customers, vendors, employees and interested third parties. Using "customer service" as an excuse to get pushy with vendors is a mistake I too made, but that was way back when, at a time when as a fresh young executive I thought I was pretty hot stuff. As we have recently seen, bigness does not guarantee power and longevity. As old timers used to say, "The bigger they are, the harder they fall." Pissing people off because you feel you can, never works, ultimately succeeding only in opening opportunities for others who will treat your former business partners better. These are lessons young management people are evidently no longer taught.

Editoress

More than two months ago, we brought it to LSI's attention that Amazon was requiring print quality files, including full cover with front, back, spine and a separate file with the entire content of the book, for their Search Inside program. LSI replied they would "look into it" and get back with us, which they never did. Amazon's rationale was that 300 dpi files would produce a crisper online viewing. Another example of their arrogance in assuming the public is stupid and that makes their lies acceptable.

Is there any proof that Amazon has not already been printing books digitally to fill their orders? Is there any proof that publishers have been compensated? They do not even have our contact information, so my guess is there's more to this beneath the surface. Amazon also has the attitude of someone who has been "getting away with it" for some time, and therefore their behavior seemed internally normal and they were surprised at the provoked response. We repeatedly hear from authors who swear to purchases by friends and family of their book through Amazon, yet LSI figures never agree. Could Amazon be performing these same services for the other booksellers they brand sites for?

In the late '90s, we used Amazon's new Advantage program to offer E-books on CDs. Amazon's payment was slow and they "conveniently" lost several shipments of product, despite UPS shipping logs as proof. Since they paid only on the sale of a CD Book, and not those simply received in their warehouse, we were essentially shipping product to no man's land and had no recourse. Even then, they were calling the shots.

Naturally, this is all very contemplative at this point, but it does bear some input from others.

Probably the most suspicious response has been that of Ingram directly. Unless I have missed it, there has been none. LSI represents a very healthy chunk of income to a company whose primary endeavor of distributing books is in the decline. Almost every book entered into their system through LSI is good for at least 100 copies and they're raking in not only their percentage, but the print profit as well. Are they worried that Amazon may demand to print traditionally published books as well or is there a reason for their silence? Could Ingram's LSI be on the auction block?

One must also consider the fact that publishers and authors alike have been quite content to play ball with the monopolistic terms set by Ingram. Is Amazon not just copying Ingram's play book?

Anyone with some programming skills and a moderately deep pocket should be giving thought to starting an on-demand fulfillment company about now. While the big boys are fighting, the little guy can scoop up the debris. It wouldn't take much to accomplish and there are several thousand digital printing companies around the country who could be organized into a psuedo print network using a common database of book files. After all, the equipment is standard and there is little operator intervention so product consistency is no problem. Do I hear Kinkos anyone? Competition forces down pricing and would raise the profit margins of the authors – after all, it is THEIR product we're buying, isn't it?

And does it stop here? Music CDs are next; duplication equipment for those can be purchased for less than $20k, you can buy it online.

I believe this is yet another case of operating legitimately until you are big enough to make your own rules. There is no accountability and it seems all the discussion has been with Amazon's hand out; no one seems concerned with getting paid for compliance. Have we all lost our perspective?

Aunt B.

As others have pointed out, Ingram (which owns Lightning) sends out books right now with Amazon labels on them. Right now, if you order a POD book, Lightning prints it and ships it out–with an Amazon label–in 24 hours or less. So, if this is already happening, why would Amazon need to print on demand themselves?

To me, and this is just someone sitting on the outside looking in, this looks to me like a shot across the bow at Ingram, actually.

That's what I find interesting about it. Right now, Amazon does not hold all the book stock it needs; it's basically using Ingram to do a ton of their fulfillment (both of POD books and of regular books). Is Amazon really going to put up enough warehouses that it can hold the kind of volume Ingram has?

Because, to me, it seems like a really big gamble Amazon is taking. What do they do if Ingram says "You want your own POD capabilities instead of using our LSI folks? Fine. Do without us all together and see how your customer service goes."

It may be that they're both big enough that neither one can do without the other's business, but it seems like we're seeing the start of a huge game of chicken.

bowerbird

even if they don't have p.o.d. machines
in all their distribution points right now,
i'd imagine they plan on doing that, so
why wouldn't they try to "channel" as
much business as they possibly can to
those machines, to keep them busy?

"because we can" might not feel like a
very "friendly" reason to you right now,
or ever, but it's often the _actual_ reason
in the business world… lock-in is a bitch.

you can bellow. but then what do you do?

-bowerbird

Tom Jayne

I've got the inside track guys, I hear Amazon not only has POD machines at all their distribution centers (especially that new one they're putting in Indiana), BUT they also have them over at your mom's house! Watchout!

The only reason I know this is because I worked at Amazon over ten years ago for 3 months. I keep in contact with the company primarily through my Prime account these days.

michael jahn

I feel that Glenn was awfully rude to Julie – and almost hope this was some April fools joke, not some bile filled flame. Glenn, if you have a better distribution modle that is somehow 'more fair' to authors and musicians that what is offered by Amazon or Apple iTunes, lets hear it.

I think Apple gets like 34 cents of that 99 cents, and the musicians get 11 cents, and the record companies the rest (or something like that)

Hey, would an author settle for that – 11 cents a book ? Perhaps they will have to one day.

Tony Burton

Another point here: Amazon is asking for the "industry standard" discount of 55%. Now, while I may grind my teeth at such a thing as an industry standard discount, here it seems they are trying to gain an unfair competitive advantage.

When Ingram or Baker & Taylor wholesale a book to a bookseller, they do NOT give the full discount. (I verified all this with my local bookseller, BTW.) If a book retails for $10, and the publisher sets it up with a 55% discount, Ingram takes a part of the discount (so does B&T;) as a part of their fee for wholesaling. Twenty-five percent is the figure I got from my bookseller friend, because I knew the discount set on my books and I asked him to check and see how much of a discount he received from Ingram.

So, given that Ingram retains part of the price, here's what happens: $10 retail price, sold to Ingram for $4.50. Ingram sells it in turn to the bookseller for a 30% discount, or $7, keeping $2.50 as a price for doing business with them.

Amazon orders directly from LSI, not through Ingram, so they don't have to pay the cut to Ingram. Yet they want to have the full 55% discount so they can undercut brick-and-mortar stores. If Amazon were willing to accept a straight 30% (as the normal bookseller would get after Ingram's cut), I wouldn't be complaining too much. Heck, I'd even be willing to give them a 35% or 40% discount, which would STILL be more than the average bookseller gets when they order through Ingram or B&T;. But no, they want to have the full 55% so they can deep-discount and hammer their competitors.

Greed. It's a terrible thing.

Jacqueline L. Jones

Maybe this is a desperate move to improve the company's profit margins. I watch the Nightly Business Report on PBS, and the company's stock has been down almost every day for weeks.

michael jahn

One thought to chew on.

Ingram owns Lightning source.

Think of Ingram as the owner of the physical warehouses for many books (Amazon, Borders included). Think of Lightning Source in the simplest form, as a digital warehouser.

Thats all there is to this, really. If I am a distributor (books, digital books, music, digital music, whatever) than I either do it myself (spend a lot on infrastructure) outsource (contact Lighting Source or the Apple iTunes store) – or apparently, whine like a baby.

Hey, the rules of distribution are changing as fast as wildfire. Perhaps we all hate the RIAA but at least they have lawyers. Who is negotiating with anyone? Who can sue anyone here – is there a "group' with any teeth?

Never mind that less people are buying books in the first place – not unlike the fact that less people are BUYING physical CDs – many people are LISTENING to music, but I don't think this can be said about reading – the last 10 books I purchased were at airports just prior to jumping on a plane, BTW.

I guess my thought here is get everyone needs to get their book ready for this new distribution paradigm, or get ignored.

Tony Burton

I'm a small-press publisher with two imprints, as well as an author, and the whole thing has me gobsmacked. It's hard to believe that anyone at Amazon (other than some bean-counter) thought this whole thing through.

Someone asked me this afternoon "Why, Tony, is stocking five copies of your books too much of a burden?" Well, let's see… five copies of ALL titles I publish… a mandated 55% discount… a $29.95 annual fee for the privilege of having Amazon's hand in my pocket… gee. YEAH, that's too much of a burden.

I've made it a practice of pricing my TPB books lower than most of their POD competitors that run the same size/page count, simply because I think a lot of TPB books are overpriced. (I know, but it's my opinion.) I typically give a 40% or 45% discount on books. Moving my discount to 55% across the board will mean I have to increase the price of titles by from $2 to $4 each, just to be able to pay royalties and cover expenses. I suppose I could make Amazon's copies higher in price than anyone else's, but that wouldn't help anything… hmmm. Then again, maybe it would just push people over to B&N;.com and that's not entirely a bad thing.

I'm trying to be pragmatic and philosophical about the whole thing, but I'm also going through and moving all my links to B&N;.com, although at this time most of my titles are still up with BUY IT NOW buttons at Amazon.

I'm not in any position to slam Amazon with a lawsuit, but I wonder if anyone is considering a class action suit?

I'd buy a tie to go with that suit.

Eric Hammel

I'm an author of forty books and have a small publishing company that makes about a dozen otherwise out-of-print titles available via POD. I assume, but do not know, that most are sold on Amazon or Amazon UK. I receive $300 to $600 per month, all profit. All my titles are printed by Lightning Source/Ingram. I keep no inventory; it's cheaper to drop-ship books out of the Lightning plant in Tennessee.

I assume there is a built-in demand for my books that can be handled by B&N;, or that, if pushed hard enough, Lightning or Ingram will drop-ship single books via an online operation they'll find a reason to start up. Hell, =I= can offer to ship single books out of Lightning at a very low premium I can add to an invoice-or just eat, because drop-shipping about doubles my margin. Until right now, it was easier to refer customers to Amazon, but I just realized I even have a PayPal merchant account from which I can email invoices.

My wife and I purchase about $100 worth of books on Amazon each month.

I have no intention at this point in my life of having twerps at Amazon telling me how to run my life. I cut them off already when I was printing books via offset. I'm willing to walk away from them. They'll absolutely lose =any= margin on my books plus my purchase of other books plus profits from used books I sell as an Amazon merchant. They'll lose links I was about to place on two new websites.

I think, in the end, they'll find out the hard way what "restraint of trade" and "interstate commerce" laws really mean in the context of forcing buying decisions on a subservient public–small POD operations like mine, for example. I won't bring suit in Federal court, but I bet a player on the order of Random House will. Or Big Publishing will find a way to ignore Amazon in favor of a firm that shows respect. Believe me, people who tell authors how to live and how much to earn are not going to stand around taking crap from Amazon.

Sooner or later, one way or another, the cosmos is all about teaching manners to MBAs. Go cosmos!

Victoria Strauss

"There’s an entirely separate issue of selling “used” copies of books that haven’t yet been published, allowing the resale of review copies and even advance bound galleys. That’s an unrelated issue."

No, it's not–because that's what fueled the "consternation" Amazon's statement (about used book sales) refers to. The Authors Guild went head to head with Amazon over this issue and couldn't get it to budge. There was a lot of anger in the author and publisher community, and a lot of people took Amazon links off their websites and blogs and vowed never to shop there again.

The current furore over the POD decision seems very similar to me. I'm betting it will have the same outcome–i.e., a year later, Amazon will be doing exactly what it's doing, and most people will barely remember a time when it didn't.

Mrs. G

I too don't think that Amazon has thought this out. The excuses they're coming up with the justify this are just plain loopy (they'll be able to do it faster? Several people ordered copies of my POD novel; the copies arrived in 4 or 5 days. with regular shipping).

Their secrecy actually screams WE KNOW THIS IS WRONG! I believe that Angela Hoy at Writer's Weekly heard about it from POD publishers who had gotten phone calls from Amazon. They didn't even have the decency, or the guts, to put out a big press release.

Glenn Fleishman

Excellent, a sock puppet or a facsimile weighs in.

Julie writes: "There are two or three main ones that have everything including the POD equipment."

Which is contrary to Amazon's statement on how they're using POD. They're implying that all of the warehouses in which they stock stuff can produce a POD book in under 2 hours.

"..presumably if you order a POD book with other stuff, it can ship out of there in one box from that fulfillment center."

Presumably is a long stretch. Amazon isn't making that claim. They're saying that they have POD equipment close to where they stock a lot of stuff, which reduces time to the customer.

"And shipping stuff in one box is much cheaper for all involved (the publisher, Amazon, the environment) even if the cost of multiple boxes aren’t passed on to customers directly."

As someone who has already noted how Amazon optimizes shipments to me by providing multiple boxes with wasted cardboard and space, please don't lecture on the environment. It's not cheaper for the publisher, because the publisher doesn't reap as much margin after BookSurge costs are considered, and much less with the Amazon stocking program for pre-printed books.

"And if using the Amazon POD service is unbearable, stocking five copies—what $200 tops?—hardly seems like an undue burden. And believe me, the items from orders do get picked within minutes of you pressing that finish order button.:"

Here's the apologist part coming in. The point of POD is to have no books printed until they are needed. And it's not just $200, it's unsold inventory, a lower margin, and other hassles.

The picking issue is fine, but that's not the issue here.

"And Amazon doesn’t actually sell used books directly to you, so whatever the margin is, Amazon doesn’t get it. Instead, Amazon acts as a broker for used book sellers (even individuals—this turns out to be ridiculously easy) and takes some small fee for doing this."

Oh, good gracious, do you not understand Amazon's business model? I'm trying to avoid being offensive to someone who appears to still be employed by Amazon and is acting as a sock puppet (you don't say you're former, just that you formed at a center last Christmas).

However, this grossly misrepresents Amazon's margins. Amazon pays publishers of new books as little as 55% off cover price. They then sell many of those books at a slight margin, and handle returns from customers. For used books, they take a percentage of the sale, never have to touch the book, and have, essentially, a higher margin.

"Some small fee"? It's a significant percentage of the margin of Amazon's media (books, CDs, DVDs) business, even if they don't want to break this number out separately.

Please don't be disingenuous.

"And even if the the motivating factor was to increase the “catalog” of items available and not lower costs, this still is a great thing for customers. Bigger selection."

It's not a bigger selection when existing POD books are listed in the catalog, and Amazon will remove them because it's inconsistent with their desire to control the POD marketplace. That is not helpful to consumers, readers of books, or Amazon customers.

Julie

I worked at an Amazon fulfillment center last Christmas. There are two or three main ones that have everything including the POD equipment. All the rest are "foward deployment" centers which just have the most popular items in stock just outside major cities. So presumably if you order a POD book with other stuff, it can ship out of there in one box from that fulfillment center. And shipping stuff in one box is much cheaper for all involved (the publisher, Amazon, the environment) even if the cost of multiple boxes aren't passed on to customers directly.

And if using the Amazon POD service is unbearable, stocking five copies — what $200 tops? — hardly seems like an undue burden. And believe me, the items from orders do get picked within minutes of you pressing that finish order button.

And Amazon doesn't actually sell used books directly to you, so whatever the margin is, Amazon doesn't get it. Instead, Amazon acts as a broker for used book sellers (even individuals — this turns out to be ridiculously easy) and takes some small fee for doing this. And even if the the motivating factor was to increase the "catalog" of items available and not lower costs, this still is a great thing for customers. Bigger selection.

Tim

As a book author who has sold many thousands of POD books through Amazon, I'm appalled that they are taking such a heavy-handed, "screw you" attitude toward the publishers that have helped them achieve "the long tail." My own POD publisher is telling all its authors to take down their Amazon Associate links and put up B&N;ones. I run six different travel sites with all kinds of Associate links on them. If I do that, and hundreds of people like me do that, is it worth it just to squeeze a bit more margin on POD books and give the Booksurge people something to do?

As others have stated, they can't even seem to marry a simple books and CDs order with things they do have in stock–I too get three boxes with three items sometimes. So it's an outright lie to say they're doing it so customers can be served faster. Ingram already drop ships orders (with an Amazon return label even) from their Lightning Press facility.

Amazon, you are going to get an incredible amount of bad press over this when it gets out to a wider readership. Authors are WRITERS remember? Most of them are bloggers too, as are some of the publishers affected by this.

Glenn Fleishman

Angie, your logic on this is impeccable. Despite Amazon's remarkable logistics system, I can still place an order for three items at the same time using Amazon Prime, and receive three boxes from three different shippers with three return addresses, in which one box will be about 3 cubic feet and contain an item that is about 10 cubic inches.

So when I read their grandiose item that states "all chairs in Bananaland are green, and all chairs are not green," I have trouble keeping myself from laughing. Amazon is remarkably good at aggregation, shipping, and logistics, to judge by how they can give so much shipping away and yet turn a profit.

Their statement that they would only allow POD to happen using their own POD (which can't yet be ubiquitously colocated as you note) in two hours, which is impossible given the volume needed to make that promise, is just silly. Because in the next moment, they're willing to let POD publishers pre-print and stock books. But POD publishers don't provide enough copies to be in every D.C. (distribution center), which means that Amazon is perfectly happy to let their customers wait for a book.

This is clearly bubbled up from one division of the firm without being aligned sensibly with the company's overall mission, in which publishers are not merely vendors, and the Long Tail is a driving part of their profit, because books that sell fewer copies are sold at full price, which leads to higher profit margins for all concerned.

I expect this to rescinded.

fonerbooks

Glenn,

I'm still patting myself on the back for predicting that they would use Prime for the excuse three days before they came out and said it. Of course, maybe the borrowed the idea from me.

But I'd be surprised if they back down without a court order at this point, even if they choose to try to smooth things over with a slower transition or nicer phone calls. I think they see Booksurge as a vital part of their strategy for a vertically integrated media company, along with Kindle ebooks and Audible spoken books. They are making big bets, which I don't think they'd bother with if they hadn't identified books in all their forms as the one Internet market they can hope to dominate. They only other thing that's worked for them at all is electronics, but they just have a so-so share of a very tough market there.

An Amazon that already sells more media world-wide than Borders and Barnes&Noble;put together is in a great position to start dictating to publishers. I don't doubt that in a few years, they'll be standing on the major trade publishers necks making them provide their "content" to Amazon for distribution as Amazon's best sees fit to "serve their customers", who they invoke like a great silent majority. What will be tough for the trades is having to rejigger their entire economic approach to allow for much smaller offset runs, and Amazon dictated profit margins.

But I won't be surprised if Amazon stumbles, they seem to be showing their age with this impatience. And maybe Ingram will buy Borders and finally do something with that silly website of theirs:-)

Morris Rosenthal
Foner Books

Angela Hoy

It never ceases to amaze me why some companies put some things in writing…especially when the world is already reading and dissecting what they're doing.

I had several issues with their official statement today, but one glaring problem is this.

They said, "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 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.”

First, notice they said "IF" the machines reside in their fulfillment CENTERS (plural). Hmm… Let's look at that more closely.

According to Wikipedia, Amazon has 10 distribution centers in North America alone; and 14 more abroad.

Do they have POD printing machines at those 24 distribution centers yet? Or even just the 10 in North America? Or even more than just one?

Are they currently printing print-on-demand books in each of those centers and able to "marry" those books with the other products they're shipping?

I don't think so. So, they're "save money/time by packaging POD books with other products" rationale appears to have glaring holes in it.

If Amazon can't currently print POD books at all its distribution warehouses, why are they implying they can in their statement today, and why are they telling POD publishers to sign that contract RIGHT NOW?

Also, IF they are not currently printing the books at all their CENTERS, there is no way they can beat Lightning Source's current ability to print and ship those books in 24 hours.

Glenn? Can you comment on this?

-Angela Hoy
WritersWeekly.com
Booklocker.com

Glenn Fleishman

This letter obscures lots of issues. They're saying because POD books may be produced immediately, only POD books that Amazon produces immediately make any sense. Unless you want to use POD books to print books *ahead of demand*, agree to a worse payment, and warehouse those books with Amazon under a different program. The logic is pretty specious.

Then there's this paragraph:

"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."

No, no, no. I worked at Amazon from 1996 to 1997, and I started the used book program within the company at Jeff Bezos's request. I was not ultimately the person who put it into operational form. But I designed it at Jeff's request, and spent months pulling elements together.

The only "consternation" that emerged was that we had to develop a new availability code that explained how long a book might take to deliver. Some variation on the text I composed with input from Jeff and the firm's VPs is still used today, 11 years later.

We did not start selling used books because of pricing. We did it for depth. We wanted to increase the size of the catalog, which we did overnight from over 1.1 million to 2.5 million. We wanted to have a leg up on BN.com, which was in its infancy, and far behind Amazon in special orders and other basic factors. We wanted to have the higher margins that we thought were achievable from selling used books.

There's an entirely separate issue of selling "used" copies of books that haven't yet been published, allowing the resale of review copies and even advance bound galleys. That's an unrelated issue.

This whole POD scheme stinks to me of MBA-ism. Because we can do something, we will try it, and we are the big player, so we get to make the rules. We'll see how this plays out. I suspect it's going to result in a top-down management decision from higher in the Amazon food chain, some apologies, and some more black eyes for the firm.

(Disclosure: I left after 6 months, and received no stock nor stock options. I left on good terms, and was in regular touch for years after with colleagues at all levels of the company. It was a very entertaining place to work.)

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