I have a love-hate relationship with Amazon. I love the way they keep rising to every new challenge that the internet throws out — and, yes, like almost every other book lover on the planet, I love their low prices.
But I also hate what they’re doing to this trade of ours, drawing suppliers and customers alike down, down, down in ever decreasing circles: will the time come, I wonder, when, like a black hole sucking in everything in its orbit, the whole thing implodes? Not a pot of gold at the end of the rainbow but a singularity at the end of ecommerce? Or more prosaically, like used bathwater down the plughole to the ocean’s oblivion…
Amazon Offer - House Rules reduced from £7.99 to £4.99
This week, they sucked me in again: an irresistible offer of Jodi Picoult’s House Rules at half-price — except, as you can see from the screenshot, it wasn’t half the current £16.99 hardback price, it was almost half the forthcoming £7.99 paperback price. I clicked through… only to find — as you too will find if you succumb — the actual offer was £8.38, just under half the hardback price.
“What’s going on?” I asked them. “You’ve offered it to me for £4.99, but the online price is £8.38.”
Their first response came within 24 hours and was simply a stock reply as if mine were a generic stock enquiry, explaining that they sometimes run out of special offer items due to high levels of demand, yadda yadda yadda…
Being the awkward customer that I am, I contacted them again with a request to read and respond to my specific enquiry; and they did — again within 24 hours — with an apology and instructions on how to obtain the book at the emailed offer price. But then they went one better: rather than take off the difference, £3.39, they took off the £4.99, leaving me with only £3.39 to pay. That’s what I call customer service!!
As for what this has to do with us as booksellers and as Christian traders in particular: are not we the ones who should be setting the standards that other businesses aspire to? What, I find myself wondering, has gone so badly wrong with our trade — with, dare I say, the Church of which we are assuredly a part — that so often it’s the world that sets the standards that we must aspire to?
Our price £11.99 - RRP £14.99
What has gone so badly wrong with a company like Kingsway — a company that excels in so many other ways, whose employees are all, as Melanie has rightly pointed out, “wonderful people … friendly, polite, considerate and try[ing] to do the best they can…” — that its leaders/marketers seem to regard comparing their own so-called RRPs to their own actual selling prices as a reasonable business practice? In the case of brand new albums, such as the Very Best of Kendrick album, the so-called RRPs are prices that have never been charged anywhere, let alone by themselves — with nothing even to suggest that this is an introductory price: it is, quite simply, Kingsway’s “Our price” v/s Kingsway’s RRP.
STL say 'Tell Us What You Think!'
On a more hopeful note, however, the new STL seem determined not only to offer us the best possible customer service but have also invited us to help them work out exactly what standards they should be aspiring to. If you haven’t taken their Customer Service Survey, please do consider it. It will probably take a good half an hour or more to work through the 30 questions, but if enough of us do it and STL take our feedback on board, it will surely be time well spent.
May 20, 2010 at 11:16 am
The phrase level playing field comes to mind. Speaking to Christian Booksellers, I regularly get the comment “Someone from the Church asked for huge discounts because they’d checked with Amazon etc”; “The Amazon price was less than we paid trade”; then the final blow “A Christian publisher told me they give Amazon 90% discount”! All the Booksellers I speak to try their hardest to help customers, often paring down their own margins to achieve this, but I know of one bookseller due to close shortly partly through the “Amazon effect” and others on the brink right now. As one said, the Church wants us to be around when they want to buy a couple of baptism candles, but we can’t be if they’re making their bulk purchases elsewhere.
May 20, 2010 at 7:40 pm
I’m not sure this will every be resolved. Amazon have the power to be able to say to a publisher ‘we will not sell your product unless you give us xx’ – this has happened in both the US and the UK to publishers I am aware of. They are also willing to make a loss to keep a customer. Books are now only part of the mix for them, which makes them even more aggressive as they are not as dependant on that product line. All this adds up to a reality that even the biggest publishers have to do business on their terms, at least to a degree.
What is a publisher to do? For many it would completely rewrite their business model to offer everyone the same as Amazon – it is one thing to offer that for 15% of your business that comes through one supplir, it is another thing to offer it to everyone. Also, to standardize the discount would probably do away with bulk order discounts – the price often given to Amazon is based upon the same rationale.
This is cold comfort to the bookseller, I know, but what the answer is I just don’t know. Perhaps a buying cooperative with a single point of delivery that can negotiate discounts for independents? it was tried before I think wasn’t it, but failed as the members all wanted separate deliveries.
May 25, 2010 at 9:48 am
That may be right… however my experience is that amazon will stock an item regardless of the discount available to them. It is suppliers fear that they MAY stop selling a product, and their desire to wholesale huge quantities of product up front which keeps them offering Amazon (and others) huge discounts.
Any of you who have delved into the often muddy waters of “Print-On-Demand” publishing (a service we at the hub now offer, in a much more ethical fashion, by the way) will know that the minimum discount amazon will accept is as low as 25% (10% lower than the base discount you and I would normally accept) the problem, of course, is they aren’t going to keep large numbers in stock at that discount, but still, amazon are not going to bit stock a bestselling book like The Shack just because they are ONLY getting 70% discount on it… it’s just that if the publisher only offers them 50%, they will be expected to hold more stock themselves, rather than at amazon.
I’m not saying that their shouldn’t be more discount available for people who buy more (we all love our 10+1 offers on books, for example) but suppliers like o-books and Lion Hudson have proved that it is entirely possible to increase the base discount we receive, lower what you offer the “big boys” and still remain competitive in the marketplace… Other publishers take note, nearly 40% of our book sales are Lion Hudson books… why? They offer us more discount, and better SOR terms than the rest of you do, so we are able to stock a higher proportion of their stock.
May 26, 2010 at 12:25 pm
Luke
There was a major US publisher and a major UK publisher that Amazon turned off the ‘buy’ button and disabled their relationship software (that links all the ‘you may also like’ items as they were not getting the discount they wanted.
Now that books are a minority of Amazon’s business, the individual prices are lower than other products ranges, and the margins are not as good as on some other items, they see books as only good when they are getting the right prices. Small publisher fly under the radar a bit so don’t get the same pressure – it is just sold on the basis of the ONIX feed.
May 26, 2010 at 4:53 pm
While it is true Amazon did switch off the buy button for certain Macmillan titles (and maybe others) ultimately, Amazon Lost this particular battle, and within a few days, re-enabled sales on terms even more favourable to them.
Secondly, surely this highlights the bigger issues with Amazon. Why should publishers be so desperate to bow and bend every which way to a company who doesn’t view their product with enough value to affect them whether they sell it or not.
I’m not saying Amazon is terrible, just that publishers shouldn’t be so worried about Amazon ‘pulling the plug’ on them that they alienate the remainder of the market. If i was a publisher (and i guess now i kind of am) I would be less worried about selling huge quantities of product to amazon (which is going to show up on their website, through the ONIX feed, whether they have 10,000 copies or 1 in stock) and more focussed on getting my product onto the shelves of real stores where it won’t be seen unless the shops fork over their hard earned cash for it.
Logically (at least to me) a company like amazon who views books as a minority product, and will sell whatever their is demand for, and list my book regardless, is less important to me, a publisher, than bricks-and-mortar shops, who’s primary product is books, and will not list my book unless i make my terms attractive enough for them to dedicate real, physical space to it… but maybe that’s just me.
The fact remains, the company who gives me the best terms (at present, Lion Hudson) also commands the largest (SQ FT) area of my store and commands the Lion share (Pun intended) of my sales and are having orders on a near daily basis, while those who give me the least favourable terms (sorry Kingsway) in spite of remaining popular are selling less and less, because I am primarily only ordering when customers order something or when Gardners have promotional offers on their products.
May 21, 2010 at 12:08 am
There are a number of responses to this whole issue (and if I listed all of them I’d be writing a treatise!).
They are seperate and different for the Amazon style issue’s raised by Carole and the Amazon/publisher issue raised by Ian, and the Kingsway/whole issue in all it’s facets raised by Phil :0)
First off let’s address Amazon – there is a simple response to the Carole type Amazon issues and especially in relation to the bulk ordering but it’s not a comfortable one: http://unicorntreebooks.blogspot.com/2010/03/think-local-not-amazon-but-to-help-well.html
Also use them where you can, turn the disadvantage to an advantage where you can – and not just Amazon but all the big internet dealers, bookdepository.co.uk, possibly even Eden or Wesley Owen.co.uk!
These places can make for great wholesalers as stated by Carole above!
Okay and here is where the one bleeds into the other, where Carole meets Ian and it all meets Phil sort of:0)
Amazon etc are also great for getting in items quickly when meeting a publishers minimum would be hard, yes the discount is lower but the goodwill surely can cover this to a degree – and then tell the publisher what you have had to do and explain why they need to drop the minimum or give free or much lower priced carriage – point out if some can then they can surely!!
Of course you can always take the issues of price/discounting etc up with the publishers directly as well – in the instance of O Books they are now willing to give 50% to Indies that trade on the same terms as Amazon ie firm sale only basis and you can take just singles as you want/need them. take these offers up and then show them it can increase the trade in shop – firm sale is nothing to be afraid of if you know your customer base, have agreed single copy/no mimimum order terms and have the margin to discount without serious loss in the end.
Price Match where and when you can, even if it’s only on a few key top 10 lines, and be bold about it!
better 10% or even 5% of a sale than nothing at all surely!
Secondhand search and find etc are all ways you can use Amazon’s advantage to your advantage.
Sure it’s not as good as doing it direct would be with fair terms but it’s better than nothing and every little bit helps!
Oh and if any publishers moan about this then may I point out that if they want devalue, oops sorry I mean to sell their books/product at less than the wholesale trade prices over the internet or at least at the same as the wholesale & publishers/distributors standard terms trade price then you can hardly be faulted for assuming Amazon, Tesco, Asda etc are actaully wholesale distributors for them and therefore choosing to do your buying from the most price conscious prime wholesaler available to you!!
Now there’s the next point – publishers do have a choice as do booksellers!
If Amazon was/is such the good option for publishers then why are they struggling so much in the light of the loss of SPCK and the shrinking of WO & other indies??
What would the real picture look like if the booksellers decided to do a one week mass boycott of publishers that give Amazon etc such stonking discount to the detriment of these shops?
Even just one week of no indie bookshop sales I think would be an ouch moment, not a massive one maybe but certainly not one unfelt.
This would really show why we are stronger together and weaker apart and why Online sellers and selling is not the almighty golden calf some foolishly shortsighted breathren seem to think they are/it is.
Publishers can say no to Amazon it has been done and in the end Amazon have recanted and taken the lesser in some notable cases.
However it is a situation where, as the man Shakespeare has Madame Macbeth put so eloquently,’We fail! But screw your courage to the sticking-place, and we’ll not fail.’
My question is why do publishers want to devalue their product? and if they can afford the 55/60% and more to Amazon et al then there is surely no excuse for anything less than 40-45% to indies, because sorry the margin is obviously there to give given they don’t care about the devalued price of their product.
Add to that given we are talking our trade and not the big general fiction publishers mostly – it’s not true to say they are carrying massive stocks directly at Amazon, so the single invoicing arguement holds little to absolutely no weight at all!
Oli Proctor from Kingsway made a good point when I complained about the Kingsway situation and that is that the only option might be that they could just have a set price they sell the stuff at to everyone and it’s then up to every shop/retailer to decide what they sell it out at.
you know I think that’s a great idea, but it does have to be with the proviso that it is a set price they sell it at across the board, no extra to anyone based on size or threat, a one price this is what we the publisher need to cover our costs and their little bit on top as standard, this is what it sells at – you all decide what to make on it, so if amazon sell it buy it at 7.00 and sell it at 7.99 their choice and we can’t moan because they are doing that given we got it at 7.00 and want to sell it at 9.99 etc because thats our choice and a fair playing field!
So there’s an option, everyone makes what they need, no one really looses out, job done.
Cool one Oli :0) Transparency, honesty and ethically fair trade that serves everyones needs equally – book & music utopia methinks – probably why it won’t happen :0(
By the way I did feel for Oli having to put up with me and my full see safe and extra terms mantra on everything I purchased, which was not as much as usual for some reason! As I have said before he is doing a good job in trying circumstances (as much because I am very trying at times indeed:0) So I would like to take this time to Thank Oli and the telesales team again for all their work indeed.
The reps have, as much as us booksellers, an intense interest in wanting a fair playing field.
In the Kingsway situation (though they are not alone with the spouting of this absolute gubbins) it is as ever the argument they are competing against the Online biggies not us physical shops/indies on the prices.
I have a simple response here – well in that case don’t give them the discounts that allow the discounting – make them stick to the same puny discounts as us B&M small indies!! – or of course there is the even more germane argument of ‘dear publisher stop trying to compete with shops and do their job and just sell to them be that in shop or online!! you publish/produce we retail it’s an easy equation and one that worked for an awfully long time quite successfuly and could again if you wanted it to!
In the end the truth is there are solutions, but they are not comfortable solutions for any party really because they fly in the face of our understanding of commerce, trade and business ethics, and the root of the problem? …
Probably differs given where you stand I guess but for me at heart of this problem it seems like that would be greed I guess, and until we are all willing to acknowledge this and stop playing the game in it’s full glory of plausible deniality and actively decide to rise above it, to be Christian in the full sense of the word, to be Ethical and Just in the real way and to choose to be part of a community that works together fairly and honestly, openly and with accountability and to apply the principles of fair trade in all our dealings, here as much as abroad etc, well until we do that then the truth is that probably Ian is right and there is no real solution.
May 21, 2010 at 1:39 pm
I’m simply amazed that the whole trade isn’t in an uproar on an issue as blatantly immoral as the Kingsway thing, ie faking discounts by marketing Kingsway Price against Kingsway RRP.
Surely it’s issues like this that the ‘Stronger Together, Weaker Apart’ alliance/consortium/network/partnership (or whatever we want to call it) ought to be addressing?
May 23, 2010 at 9:56 am
kingsway are looking for any cash they can get at the moment and their values are taking a back seat. when i saw johnathan brown’s comments in christian marketplace i thought – he thinks we all idiots and cant see whats happening.
kingsways rrp only serves one purpose, to fool us retailers into thinking theyre really getting 35% off the RRP, when the kingsway shop website shows that christian cds are actually coming down in real selling prices but its us retailers paying the price for it. the powers that be at kingsway don’t like the fact that you shed light on their practices, so keep it up, theyll bully the rest of us into shutting up
May 23, 2010 at 11:16 am
The silence from Kingsway speaks volumes, methinks…
If you haven’t already done so, I suggest you follow up your comment here with a letter to Christian Marketplace: you can always ask for your identity to be withheld if you’re afraid of bullying — but I sincerely hope that Kingsway have not yet sunken that low.
May 26, 2010 at 9:08 pm
Luke
I had to reply down here – I am not saying I disagree with you, but I do think it is helpful to get inside the mind of the major publishers.
“While it is true Amazon did switch off the buy button for certain Macmillan titles (and maybe others) ultimately, Amazon Lost this particular battle, and within a few days, re-enabled sales on terms even more favourable to them.”
Actually I didn’t know about Macmillan. It was a different publisher – went on for about three months and at the end of it the publisher had lost several million $.
“Logically (at least to me) a company like amazon who views books as a minority product, and will sell whatever their is demand for, and list my book regardless, is less important to me, a publisher, than bricks-and-mortar shops, who’s primary product is books, and will not list my book unless i make my terms attractive enough for them to dedicate real, physical space to it… but maybe that’s just me.”
You are probably right, but getting Amazon rights gives a publisher an easy chunk of the market, and not other retailer can offer the level of marketing and exposure of Amazon – emails to millions of people, recommendations and top-level directory promotions can be very seductive. Kindle sales are affecting it again – in the US now some books are selling as many Kindle editions as physical ones – with the launch of the iPad (with the Kindle app) as well as the device itself this will come to the UK as well.
“The fact remains, the company who gives me the best terms (at present, Lion Hudson) also commands the largest (SQ FT) area of my store and commands the Lion share (Pun intended) of my sales and are having orders on a near daily basis, while those who give me the least favourable terms (sorry Kingsway) in spite of remaining popular are selling less and less”
So what you are saying is that you’re ignoring customer demand in preference to margin – surely selling 10 of product x at 40% and 15 of product y at 35% means that you earn more from product y? Are you saying that you don’t do that, but base your shelf allocation on the basis of top-line margin rather than popularity, stock turn etc?
May 27, 2010 at 12:30 am
Ian,
In regards to the last paragraph why is that you seem to be criticizing Luke for doing exactly in his shop what you are defending publishers/Amazon doing with regards to publishers books based on terms?
Also can we get back and make the point that Amazon are not the largest seller of any major publishers books except for POD/Authorhouse type publishers and of course their own Kindle editions and possibly ebooks – however on the ebook front sorry but we are still currently looking at only 8% at most of books published being purchased as ebooks!!
Amazon still accounts for less than 20% of the book sale market, internet sales still only account for approx 1 in 5 of all books sold!
So B&M shops are still the largest market for any publisher – not Amazon the almightly bookseller.
Yes I agree 20% to one venue is great for the publishers and worthy of accord – unless of course it is that venue that is then doing the work of dismantling the publishing industry in spades and devaluing the book completely.
In regards to any publisher and their Amazon battles well the truth is no publisher ever lost all their buy buttons and potential to sell their books on Amazon as the marketplace buttons all still worked!! it was only direct buy from Amazon that was lost in so far as I am aware – feel free to point me to the material that states differently.
Amazon makes too much money from Marketplace sellers to cut them off too much – though they are moving the right way to see many of them leave and not return, play is making great inroads into the marketplace as it were!
These days the backlash against Amazon doing this tactic is not inconsiderable and has done great wonders for both play and bookdepository in recent years. So publishers can choose not to play the game with Amazon and take back their authority if they want to.
Also can I again return to the point that we are not here arguing about the major publishers on the whole (although they are major to our bit of the trade!) but we are discussing the Christian and Religious publishers whose works are not carried at the level of the major players, this is something we should be bearing in mind.
In terms of marketing email lists – well Ian you and I both know that though the sign up rate is high the open rate is low, less than 3% was a figure quoted at one point I believe in regards to take up rate. But yes 3% of 10000 is still a good figure, but then lets face it they could always just buy into those mails on an adhoc basis if they wanted and it still be more cost efficient when all is said and done.
Don’t get me wrong Ian, I get what you are saying and believe me I know what publishers are thinking and where they are coming from, a great percentage of my best friends are in publishing, but we all need to face the realiites and to my mind we all need to remember the serenity prayer, short or long version ;0)
May 27, 2010 at 11:18 am
HI Melanie. I agree it is crazy for Amazon to do it as well. But it has more of an impact for a small retailer than it does for them.
Drop off between product page and the marketplace is (I think – if I remember correctly) 85%. That means that only 3 in 20 of those who viewed the product page would then go on to view the marketplace page if the buy button was disabled.
The problem is that if I made a product (say, dining chairs), and I two customers. One customer said they wanted 20 chairs and another said they wanted 2, I would give a better price to the person buying 20. Every retailer knows this, and expects publishers to offer an incentive for bulk purchases. Surely it is the same when dealing with Amazon?
May 28, 2010 at 12:42 am
Hi Ian,
It was my understanding that the approx 3 in 20 is the stated position when active Amazon stock is held – when no Amazon stock held, or showing a wait time of 3-6 weeks the marketplace rate rises accordingly if New available.
I also understand that play and bookdepository sales rose/rise when Amazon get snitty or show no stocks as was discovered with the Amazon/Macmillan showdown I believe.
On the dining chair front – though personally I prefer to sell books, crafts and jigsaws but if you want to sell Dining Chairs instead… ;o)
Well if your customer for 20 chairs was then going to sell your chairs on that you rrp’ed at 17.99 for only 6.79 would you really give them a much better discount based on that price?? – that’s the real crux of the argument, they can only undersell the item because of the discount you allow them – thus you undervalue your own product and make the one that wanted the 2 feel ripped off and not want to use you at all because they then can’t sell them on.
Thus you sell your product at a lower gpm and make only 20 sales when you could be making 22 sales with a more even scale of discount given and with a better profit margin for yourself as well, indeed if you offered a more matched discount you may even see your customer that initially only wanted 2 take more given he can then afford to buy more and to sell them with more ease!
After all why should the one paying more subsidise you giving the greater discount to the other at a much greater cost to themselves – and don’t think we don’t see this as what we are being asked to do.
This in the end is what is being bargained on to get the gpm of the product up to sustainable levels for you the producer.
It’s not that a higher discount is given that’s actaully the problem – it’s the disparity of the scale that’s the problem and the knock on effect this has on the ‘real’ value of the item.
Somehow we have ended up with a bizarre reverse method of remaindered books – it’s just the publishers are now remaindering the books before they have even started to sell them at full price and they call this method of remaindering selling to Amazon or Internet Sales!
This is the reality of the situation and Luke is not alone in his feelings and decisions on this – indeed many other indies both secular and christian and indeed even the chain stores have made and are making the understandable decision to decrease their stock holding of low margin & uncompetitive items. Hence this whole discussion and many more going on around the globe currently :0)
Actaully Ian, holding non-selling stock, and/or being perceived as over charging just for having to sell at or near the RRP, is much more detrimental to a small retailer than to choose not to hold the stock but to offer suitable alternatives and offer good keen service and a speedy special ordering service with that extra panache of personal service and style ;0)
May 31, 2010 at 7:32 am
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