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AuctionBytes Blog
Covering auctions, collectibles and marketplace selling.

AuctionBytes Blog The AuctionBytes Blog has been giving a voice to online merchants since its launch in 2005. Named one of the world's top 30 blogs in 2008 by "Blogging Heroes." Weigh in with your thoughts on the joys and pitfalls of selling online.
Sun June 8 2014 14:56:47

Could Sellers Benefit from the Amazon - Hachette Standoff?

By: Julia Wilkinson
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You've probably heard about the battle between Amazon.com and Hachette; it's been all over the media, and EcommerceBytes covered it recently. In many reports, Amazon is made out to be the big bad wolf, and Hachette, a large company which includes book imprints Grand Central; Orbit; Hyperion and Little, Brown; is Little Red Riding Hood, while the two companies renegotiate terms.

However, I'm not sure all media reports have laid out all the facts and their context. In one summary of it in the LA Times, "the specific argument is understood to be about e-book pricing, both retail and wholesale," and "...the larger conflict is about the publishing ecosystem and Amazon's role in it."

So if it's about e-book pricing, the background of the dispute goes back to the Apple e-book case brought by the Department of Justice, where publishers who "were accused of colluding over e-book prices; all settled," according to the Times piece. "The judge's final order in the case, issued in 2013, laid out a schedule for the various publishers involved to renegotiate e-book prices with retailers, Apple and Amazon both. Hachette is up first."

So what's going on is a renegotiation, per a judge's order, and it seems to be largely about e-book prices and not the prices of physical books, although evidently some of Hachette's paper copy books which are not yet released are showing up as unavailable on Amazon. But, as Amazon pointed out, consumers do have other options for getting books which are affected by the situation, including to buy from Amazon's third-party booksellers:

"If you do need one of the affected titles quickly, we regret the inconvenience and encourage you to purchase a new or used version from one of our third-party sellers or from one of our competitors," Amazon said.

So some third-party sellers who can produce the titles affected, say by walking over to a physical bookstore once they are in stock, buying them, and sending them to Amazon's FBA program at a higher price, might benefit.

However, if it's the profit breakdown of ebooks which is being haggled over, one must remember that third-party sellers can't sell ebooks on Amazon. But what's happening is a renegotiation of terms in a free market; is that so evil? In its Kindle forum post, Amazon pointed to this blog post by "The Cockeyed Pessimist" Martin Shepard, who is - surprise! a small publisher. (His bio says he is co-publisher, The Permanent Press, Sag Harbor,  NY).



Shepard cites a New York Times piece, "As Publishers Fight Amazon, Books Vanish" which said "The literary community is fearful and outraged - and practically begging for government intervention."

"They then cite three publishers, none of which I would consider great examples of the “literary" community - or even the larger community of book publishers to prove their thesis," wrote Shepard.

"As far as this literary publisher is concerned this article is poppycock," he goes on. "It starts with the assumption that Amazon is bad and gathers meagre material to prove its point. The last time I checked, Literary Market Place listed over 2,000 book publishers in the United States. Yet Streitfeld and Eddy (authors of the Times piece) quote only one independent publisher in paragraph three (Dennis Loy Johnson of Melville House) saying, about Amazon, "How is this not extortion? You know, the thing that is illegal when the Mafia does it?""

He adds, "From my point of view, Amazon is the very best thing any small independent press could ask for," and says, "In truth, everyone wants more of the pie." He says his small literary fiction outfit has been publishing "for 35 years, and in the past found that the chain bookstores took few if any of our titles, that distributors like Ingram demanded bigger discounts from us than they charged the conglomerates, or that despite winning more literary awards per title than any other publisher in America we could not match the print review coverage afforded to authors of the five big conglomerates."

What about the evil Kindle? He writes:

"Earnings from Kindle sales are excellent as both publisher and author find more profit (especially when we, as publishers, split eBook income on a 50:50 basis with our writers) with virtually no production costs. I've heard that most of the bigger houses don’t do this, writing contracts giving most authors only 25% of electronic income. Perhaps some of the authors complaining about Amazon on social media, would be better served if they complained to their publishers, like Melville or Hachette, if they are not getting 50% of this pie.


So, actually, the bigger picture here is probably not that Amazon and Hachette are having a (I expect temporary) dispute, but that the literary world is going largely electronic. As that happens, I expect third-party sellers will look more to the obscure and the out-of-print books, or the not-available-in-e-format books, or the collectible signed pieces.

That is, if they're not too busy writing and selling their own ebooks.

Sellers on the forums I checked today didn't seem too concerned about this situation. What do you think about it, as an online seller? Are you more sympathetic to Amazon, Hachette or neither? If you sell books, do you worry about the impact of the literary world going more electronic? Post a comment here!



Comments (8) | Permalink
Readers Comments

Could Sellers Benefit from the Amazon - Hachette Standoff?   Could Sellers Benefit from the Amazon - Hachette Standoff?
This user has validated their user name. by: Basset
       
Mon Jun 9 08:06:04 2014
Well, I don't sell books but have enjoyed the headline potential as I follow this story:

''Amazon tries to Bury Hachette''
''Amazon not ready to Bury Hachette''
''Amazon says its not Burying Hachette'' (on ecommercebytes)
Could Sellers Benefit from the Amazon - Hachette Standoff?   Could Sellers Benefit from the Amazon - Hachette Standoff?
This user has validated their user name. by: juliawww
       
Mon Jun 9 11:26:45 2014
LOL Basset. And going back to the Greeks, ''I come not to bury Hachette, but to Praise it.''
Could Sellers Benefit from the Amazon - Hachette Standoff?   Could Sellers Benefit from the Amazon - Hachette Standoff?
This user has validated their user name. by: Ming the Merciless
       
Mon Jun 9 17:29:20 2014
Julia, Julia, Julia!

That line is from Shakespeare's play, "Julius Caesar," spoken I believe by Mark Antony.

"I come to bury Caesar, not to praise him."

The same sentiment I hope to express soon about ebafia wannabe Caesar.

Could Sellers Benefit from the Amazon - Hachette Standoff?   Could Sellers Benefit from the Amazon - Hachette Standoff?
This user has validated their user name. by: Ming the Merciless
       
Mon Jun 9 19:54:37 2014
Perhaps Julia was alluding to another equally appropriate line from Shakespeare warning about Greeks bearing gifts.

Only in this case it might be Geeks bearing gifts.
Could Sellers Benefit from the Amazon - Hachette Standoff?   Could Sellers Benefit from the Amazon - Hachette Standoff?
This user has validated their user name. by: juliawww
       
Mon Jun 9 20:17:13 2014
Hey Ming,

Agh...Shakespeare..how could I have forgotten? I can feel my English teachers from high school chiding me now.. ;)
Could Sellers Benefit from the Amazon - Hachette Standoff?   Could Sellers Benefit from the Amazon - Hachette Standoff?
This user has validated their user name. by: Al G
       
Tue Jun 10 07:47:31 2014
All's well that ends well.
Could Sellers Benefit from the Amazon - Hachette Standoff?   Could Sellers Benefit from the Amazon - Hachette Standoff?
by: mindelec This user has validated their user name.
       
Tue Jun 10 17:26:11 2014
unless a seller knows where to get the titles at under distributor cost or thinks that they can sell the book for more than cover price (the chances of either of these happening is Very low), they won't benefit.

the problem as i see it is that amazon wants to sell everything cheap, while publishers want to sell ebooks for very close to the same price as a physical copy.  just take a look at the new greg iles book $16.79 for the hardcover or $12.95 for the ebook, in my opinion the ebook is priced way to high for a format that you don't physically *get* anything.  

what publishers seems to have failed to realize is that after the set-up costs, there are NO additional costs to keeping ebooks in print other than royalties, no printing, no warehousing, the book is "in print" forever and can continue to bring revenue forever.  the drop in price really *can* be made up in volume of sales.  this does not mean amazon should dictate price though, this is a very slippery slope as many manufacturers have found out in dealing with walmart.

as a book seller i worry about the taking over of ebooks all the time.  there will always be people who collect books, but will they collect enough for someone like me to make a living?  i know i have seen a huge drop in sales on all the sites i sell on, to the point where i may be looking for another job soon.  :(
Could Sellers Benefit from the Amazon - Hachette Standoff?   Could Sellers Benefit from the Amazon - Hachette Standoff?
by: Mr. Me This user has validated their user name.
       
Thu Jun 12 11:27:17 2014
Amazon just loves to offer "low prices"  "quick service" and ez returns"a-z guaranty" on SELLERS dime! No sweat for Amazon .....


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