made a small change to the way it sells books. Publishers are terrified.:
Very recently, Amazon made a small, barely noticeable
tweak to the way it sells books. And that little tweak has publishers
very, very worried.
The change has to do with what Amazon calls the “Buy
Box.” That’s the little box on the right-hand side of Amazon product
pages that lets you buy stuff through the company’s massive retail
enterprise. It looks like this:
It used to be that when you were shopping for a new copy
of a book and clicked “Add to Cart,” you were buying the book from
Amazon itself. Amazon, in turn, had bought the book from its publisher
or its publisher’s wholesalers, just like if you went to any other
bookstore selling new copies of books. There was a clear supply chain
that sent your money directly into the pockets of the people who wrote
and published the book you were buying.
But now, reports the Huffington Post, that’s no longer the default scenario. Now you might
be buying the book from Amazon, or you might be buying it from a
third-party seller. And there’s no guarantee that if the latter is true,
said third-party seller bought the book from the publisher. In fact,
it’s most likely they didn’t.
Which means the publisher might not be getting paid. And, by extension, neither is the author.
Understandably, both publishers and authors are deeply unhappy about this change.
Who gets to be the default seller in the Buy Box?
Amazon calls the default seller in the Buy Box — the one
who gets the business when a customer clicks “Add to Cart” without
looking for more options — the “Buy Box winner.” It uses an algorithm
to choose a Buy Box winner for each product it sells, prioritizing
sellers who offer low prices, use Amazon Prime, have good customer
feedback, and keep their items in stock. It also requires that items
sold by its Buy Box winners be new, not used, and only approved sellers
may compete for the Buy Box. Sometimes Amazon itself wins the Box, and
sometimes third-party sellers do.
When I asked Amazon about winning the Buy Box with regard
to books, a company spokesperson sent me this statement and requested
it be printed in full:
We have listed and sold books, both new and used, from third party
sellers for many years. The recent changes allow sellers of new books to
be the “featured offer” on a book’s detail page, which means that our
bookstore now works like the rest of Amazon, where third party sellers
compete with Amazon for the sale of new items. Only offers for new books
are eligible to be featured.
However, the Authors Guild points out
that “Amazon does not sell or stream copies of movies and television
programs that are distributed by anyone other than the authorized
distributor,” so the bookstore isn’t working exactly like the rest of Amazon. Update: After
this story was first published, an Amazon spokesperson contacted Vox to
refute the Authors Guild’s statement, noting that Amazon does allow
third-party sellers to win the Buy Box for “other physical media
categories such as DVD’s and CD’s, as well as all other categories on
Amazon” but allowing that “digital content, including ebooks, video, and
music are all licensed directly from the rights holder.”
If the author and publisher aren’t making money from book sales on Amazon, who is?
Here’s what happens to your money when you buy a book
from Amazon itself: A certain percentage of the cost goes to the
publisher. (Amazon’s terms vary from publisher to publisher, but that
share is usually around 60 percent.) The publisher uses that money to pay the author, cover its expenses, and contribute to its profit margins. Amazon pockets the remaining 40 percent for its own purposes.
Here’s what happens to your money when you buy a book through Amazon but from a third-party seller: Amazon gets
15 percent of the total sales price, including shipping, plus a flat
rate of $1.85 per item. The rest goes to the third-party seller. Not a
single cent goes to the publisher, which means nothing goes to the
author — but Amazon has made a profit either way, and without having to
shoulder the expense of shipping and warehousing.
Why aren’t third-party sellers paying publishers?
Amazon’s third-party sellers have to offer new books, not used ones, but in many cases they don’t seem to have bought their books from publishers.
No one is quite sure where their books come from, including, it seems,
Amazon itself. The industry publication Publishers Lunch reports that
Amazon third-party sellers who worry about breaking the rules have reassured one another
that they’re not doing anything wrong by citing the fact that Amazon’s
guidelines “as always, [say] nothing about provenance, nothing about
purchasing through distribution.” It doesn’t matter, in other words,
where the books come from, so long as they are new, unmarked, and sold
A representative I spoke to from one of the big five
publishers theorized that third-party sellers might be selling some of
the free promotional copies that publishers routinely send out to
critics and bloggers just before a book is published — not the galleys,
which are clearly marked “not for resale,” but the free promotional
copies of the finished book, which have no such marking on their covers
and often end up sold to bookstores like the Strand. Others have suggested
that they might be buying books with minor cosmetic damage from
warehouses, just damaged enough to be discounted but not so damaged that
Amazon stops considering them “new.”
Penguin Random House has confirmed on more than one
occasion that it sent a series of emails to third-party sellers
inquiring as to where and how they acquired the Penguin Random House
books they’re selling, and says it shared the results with Amazon.
Amazon, for its part, has assured the industry that it is committed to “removing bad actors.“
Hey, all I see here is that I get easy and convenient access to cheap books. How is this hurting me as a customer?
For Amazon’s customers, this policy change has a few downsides:
1. If the Buy Box winner for a book is out of
stock, it will look to most customers as though the book is out of stock
everywhere. You’ll have to click through several buttons to get to a list of all the sellers
on Amazon that carry the book and find one that’s still stocking it.
Amazon’s algorithm is weighted toward sellers that are known to keep
their books in stock, ostensibly to avoid this very inconvenience — but
judging from the frantic state of Book Twitter, a number of books appear
to have already fallen into this trap, particularly debuts.
Contrary to appearances, new copies of @AdriAnneMS and @begemotike’s SHADOW RUN are still in stock on Amazon!
— Kirsten Carleton (@kirstencarleton) May 5, 2017
In many cases, Amazon has eventually updated the Buy Box winner to
replace the out-of-stock third-party sellers, but it often takes days
for change to go through.
Just so you know, you guys, SECRETS, LIES, AND SCANDALS is NOT out of print. THIS is happening. :( https://t.co/16lYFocPkB
— Amanda K. Morgan (@AmandaKMorgan) May 6, 2017
2. This policy makes it harder for publishers to make money. That makes them less likely to publish risky books. As Authors Guild president Mary Rasenberger told the New Republic,
“The connection that people fail to make is that if publishers have
less money, then they have less to invest. That means they can’t afford
to take risks on the kinds of challenging books they’ve published for
Exciting, artistically interesting new books are not
guaranteed moneymakers. Well-respected middlebrow books are also not
guaranteed moneymakers. Man Booker Prize nominees routinely sell as few
as 3,000 copies.
Right now publishers can afford to subsidize a few prestige titles
every year with the profits they make on the types of books that
generally do sell well — erotica that made a big splash when it was self-published, pulpy thrillers from established authors, and so on.
When publishers make less money, they have less money to
spend on interesting, valuable books that are unlikely to make a profit.
That means those books are exponentially less likely to ever make their
way to you, the reader.
3. This policy is part of Amazon’s ongoing, years-long quest to drive down the price of books. If
Amazon succeeds, fewer people will be able to make their living as
writers. That means fewer and worse books will make it to the
Amazon routinely takes a loss on its book sales,
often charging customers less per book than it pays publishers and
swallowing the difference. It’s a priority for the company to be your
preferred bookseller, even if it has to take a hit; its business model
can accommodate the loss, because it generally makes up the extra
dollars on the last-minute impulse buys customers toss into their
shopping carts. Meanwhile, on the e-book side of things, Amazon’s low
prices help drive sales of its Kindle. But that also means it has set
certain customer expectations: Many Amazon customers now believe that
books should be cheap — cheaper to buy than they are to make.
It is already punishingly rare for writers to make a living wage from their books.
As Amazon drives down the cost of books, it will become ever more rare.
That means fewer people will be able to invest the time and effort it
takes into becoming a writer, which means a lot of talented writers —
especially working-class writers and writers of color — will go unheard.
All of which means that you, the reader, will be missing out on some
excellent potential books.
If you want to make sure, then click on the button below the book. You will then see all of the potential sellers.
Weighing in as a long-time seller on Amazon: We sell electronic goods, new and used– cameras, and accessories– some through Fulfillment by Amazon, which means we send them to Amazon’s warehouses and you can get them with Prime shipping, and some we ship ourselves.
I can confirm that there are a number of items we have sold for decades (we’ve been a camera seller since 1952), including entire product lines, that we’ve dropped, because gray-market sellers have taken over on Amazon and are not policed. In some cases it’s just one product, in some cases it’s everything that manufacturer makes.“Gray-Market” means illegally imported– ex. Nikon cameras made for sale in some other country, like Thailand or Germany or something, imported and sold in the US without paying duties and without adhering to the manufacturer’s stated price guidelines. [We have been a dealer for Nikon since the 50s, and our agreement with them dictates the price we can charge for any item they sell. If we advertise it below that price, they will no longer sell to us. A gray-market dealer does not have this restriction.] This means the item won’t be warranty-repaired by the original manufacturer, but you’d have to read a lot of fine print to find that out, and meanwhile, you got what looks like a fantastic deal.
This last Christmas season, our online department went from selling hundreds of Nikon point-and-shoot cameras, our usual for a solid 15 years now (we sold on eBay before Amazon, so we’ve been in the online biz a while too now), to selling exactly 0, because Amazon themselves had the buy box on every camera, and they were selling below that authorized price that we’re not allowed to charge less than, lest we lose our 65-year relationship with Nikon.
We’re still in business when every other camera shop in town has gone under, in large part because of Amazon. But they sure don’t feel themselves constrained by much.
So it’s not a surprise they’re doing this to book publishers– but just like the rest of their business practices, they’re absolutely not really considering what it means that they’re irrevocably changing the market they’re in.
Keep in mind, the way the listings on Amazon work, as a seller, is that every item is listed one time, and if you’re a seller, you go to that item and click, basically “me too!” and just hit +1. Even if what you’re selling isn’t quite that same thing. The photo is a stock photo, uploaded by the first seller to list that item. Yours might not look exactly like that thing. It’s effortlessly easy to +1 to an existing listing– even if you’re selling a used item, it doesn’t make you upload your own pictures, you can just pick a condition from the drop-down and you get about 20 words to describe it. (“No charger included. Lens doesn’t focus. Deep scratches on viewscreen. Fair condition.”) Easy return policy, so you don’t want to lie on there, but you don’t have to include photos of the damage. And if your item is new, there’s no room for you to even include a description. If the first seller listed it wrong, you can’t fix it. Even a scrupulous and careful dealer is going to have inaccurate listings because it’s out of their control. That’s the nature of the beast.
I shop a lot on Amazon, but I look every time to see who I’m really buying from. Prime doesn’t mean you’re buying direct from Amazon, just from their warehouse. This applies to literally every product. Don’t not use them, I wouldn’t say that, but every time you want to buy something, before you add it to your cart, scroll down on the right and look for “Other Sellers On Amazon” or “See All Offers” box.
Because you might not be buying what’s actually in the picture. You might not be buying it straight from the manufacturer.
I have nothing really to add about the book issue, but this is just a weighing-in on what it’s like to sell on Amazon. It’s like this. It seems so effortless, but caveat emptor; their business model is just easy returns, to make up for the fact that there’s literally no way of actually knowing what you’re getting.