The Latest from Amazon

Josie Leavitt -- July 29th, 2013

Amazon has done it again. As Shelf Awareness pointed out this past Saturday, Amazon has pretty much decided to see if they can crush a little more spirit out of bricks and mortar stores by increasing the discounts offered on bestsellers to be upwards of 70%. But as the owner of an independent bookstore, I cannot help but feel ill will towards this company.

No one can compete with these discounts. This ridiculousness started because Overstock began an anti-Amazon campaign that it says “will last indefinitely… by slashing prices on bestsellers.”  While these savings are a boon to book buyers on a budget, it will have a horrible ripple-down effect for indies.  No indie I know can afford to sell a book at a 20-40% loss. There is just no way that math works. And honestly, how can it really work for them? For that matter, how can a company operate at a loss for so often and stay remain a major player in the industry?

I have no idea. I do know that last week in my Ingram shipment I received an invoice meant for the Amazon distribution center in Lexington, Ky.  This was a fascinating read. There was absolutely no discount information on the paper. None. I’m not sure how they receive books in Lexington, but at most stores the invoice total and what’s in your computer have to match. That’s pretty hard to without any information. The blank discount fields highlighted to me the difference between us and them.

I pay a certain amount for each book, usually getting about a 40-45% discount from the publishers. I sell the book for list price, or 20% off if they’re bestsellers. I can’t give more away. This is something customers don’t always understand. I can hear this week’s conversations at the register. “How much is Inferno?” “With the 20% off it’s $23.96 plus tax. So it comes to $25.39.” The customer will look sheepish. He shops at Amazon and knows it’s cheaper there. He might say, “You know, it’s $11.65 at Amazon and I don’t have to pay sales tax.”

There is nothing you can say in the face of that. Nothing.

Really, why would someone spend almost $14 more for the exact same book? And while savings this steep will not be found on the vast majority of books that Amazon sells, the perception will be that they do. Customers will wonder why my books are so expensive. Again, there is nothing I can do about that.

It will be a hard week at the brick and mortar stores.

9 thoughts on “The Latest from Amazon

  1. Sue D.

    We’re taking advantage of those super-deep discounts and using Amazon like a wholesaler. Happily helping them lose even more on their loss-leaders!

    We certainly can’t begrudge a customer for wanting to save THAT much. We tell them to go ahead and save money and then come back and spend their savings with us.

    Needless to say, we are totally ticked off at Obama.

  2. Kathy Hudson

    I’m wondering how much independent bookstore profit actually comes from “best sellers”. Certainly every store has books that just sell really well for them, but how many of these are on the NYTimes list, or Amazon’s deep discount? As has been said, nobody will be able to keep up those steep discounts forever. Admittedly Amazon keeps behaving like the biggest bully on the block, and we can’t just knuckle under. But let’s play to our strengths. Most of our customers come to our stores for good books that we recommend, not something from a distant list. I believe in karma. Let’s keep giving our customers what they really want: good books and good conversations about books. “The bigger they come, the harder they fall.”

  3. Joanne Fritz

    Nothing you can say in the face of that? Well, I agree, you can’t argue about the price, but surely you must remind your customers of the “Why Shop Indie” reasons from Indiebound (or print it up and hand it to them when they squawk):

    — Spend $100 at a local and $68 of that stays in your community. Spend the same $100 at a national chain, and your community only sees $43.

    — Local businesses create higher-paying jobs for our neighbors.

    — More of your taxes are reinvested in your community–where they belong.

    And those are just the economic benefits. You can also wow them with the environmental and community reasons to shop indie.

  4. Theresa M. Moore

    When you receive an invoice from Ingram, you are paying the wholesale price on the book, aren’t you? so the discounting involves the retail price of the book. Amazon is definitely not going to go below that. But what rankles me is that Amazon continues to engage in a money-losing practice which the stockholders are not going to stand for long. This price war between Overstock and Amazon sets a new low, if you’ll pardon the pun, on the book selling industry, and you should see what happens when an ebook is discounted. The author/publisher receives far less in royalties than was agreed to. Amazon even discounts ebooks down to nothing in order to sell more Kindles. It is not interested in a good faith arrangement between itself and the suppliers of content, which is the basis of its staying on top as a seller. This is why I no longer deal with Amazon, and the only reason my books are still there in print form is that Amazon must buy them from Ingram. I have no control over that. But I closed my Amazon account last year, thanks to what happens every day.

    1. Ellen Scott

      And that’s what will finally stop Amazon — when enough customers, authors and publishers get fed up enough to close THEIR Amazon accounts. I try to especially support publishers, other vendors, and authors who have chosen not to deal with Amazon.

  5. Christine Holbert

    I am a small press publisher of poetry books, and I know how Amazon can give the deep discounts: they demand a 55% to 65% discount from publishers! The smaller the publisher, the deeper the discount they demand. And, if a publisher’s books don’t sell as well as they expect, they drop the publisher altogether!

  6. ChristineTB

    Here’s the other issue that no one talks about – as Amazon continues driving down the price of books, and continues the predatory nature of its e-book pricing (look at the contract to see what “cut” they want for books priced below $2.99 and above $9.99) we’ll see the already low income for authors drop to an unsustainable level as well. Perhaps it is time for authors and indie booksellers to create a sustained alliance.

    I’m one of those wondering if the Obama admin is just that insensitive, or clueless, that they are holding their meeting at an Amazon warehouse.

  7. Carol Chittenden

    We never expected anything different from Amazon, and we always tell customers we can’t compete on price but we offer many other advantages. Like having a real bookstore in town, for instance.

    But what pulls hard at the short hairs is Obama’s endorsement today with his visit to the Amazon warehouse. Watch that Obama bumper sticker come off my car! Some of his cabinet members shop here, and I’ll try to be tactful, but like all of us, I have to say something. Something fairly harsh.

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