Thursday, October 07, 2010

Amazon, Mend Your Ways

I promised a second post about Amazon. This one is darker than yesterday's.

Publishers Marketplace pointed me to an article here in Quill & Quire (Q&Q), the Canadian magazine.

The Association of Canadian Publishers (ACP) has prepared an "informal report" on the activities of Amazon Canada with respect to its co-op program.

I did a post back in November, 2006 here to explain the cooperative advertising allowances that publishers offer bookstores. In essence, these are rebates offered to bookstores of between 1% and 4% of the NET purchases made by the store. These rebates are not offered in cash. Instead, they are used to promote the publisher's books in that store. Co-op money often pays for those tables or stand-alone displays you see at the front of a store. This is both a powerful incentive for bookstores as well as a promotional opportunity for authors.

The Q&Q article states:
In imitation of the company’s U.S. arm, is increasingly pushing publishing houses to spend a minimum of 3–4% of annual sales generated through the website on various co-op initiatives. Though not an official requirement for selling via Amazon, publishers say it is strongly encouraged. [Note: Bolded word is mine, not Q&Q's].
Publishers are complaining to the ACP that Amazon Canada is pushing them to participate in the co-op program. Some publishers seem to believe that if they do invest the money, they'll receive "a different level of service and the ability to update website information (such as title availability) faster."

When contacted, Amazon Canada refused to discuss the program.

I wrote a post in March, 2009 here, where I talked about Amazon's bullying of British publishers: is offering publishers participating in its Advantage scheme an "early payment" option of 15 days, in exchange for an extra 2% on top of the current discount given by publishers.

The catch is that publishers who do not offer the extra discount will see their payments made on Amazon's "standard terms"--effectively 60 days. This means a publisher who sells a book through Amazon in April would not be paid until the end of June. Under the revised terms, a publisher would be paid on 15th May--a full 45 days earlier . . .
I'll confess. I'm enormously conflicted about Amazon. I stopped including links to it on this blog long ago because I dislike their bullying tactics. While I greatly admire the company's emphasis on giving consumers the lowest price and the greatest convenience, their strategies are too much like another company at which I also refuse to shop: Walmart.

Back in 2006, I read "The Wal-Mart Effect" by Charles Fishman and did a series of four posts on the company. Go here to read about "The Man Who Said No to Wal-Mart."

I no longer give my dollars to either Walmart or Amazon because I believe they fail to consistently act in a conscientious manner toward their partners and/or employees. As Spiderman says, "With great power comes great responsibility."

In the long term, I believe both Amazon and Walmart's single-minded focus on price-cutting is dangerous for their vendors, their employees, the environment and the global economy. My personal belief is that consumers have failed to recognize (or have ignored) the dangers such enormous conglomerates pose when they use their power in a destructive fashion.

In June, 2008, I quoted a post from Publishers Marketplace here:
In a blog post, Tim O'Reilly expresses his own larger concern: "As Amazon's market power increases, it needs to be mindful of whether its moves, even those that may be good for the company in the short term, are ultimately destructive of the ecosystem on which they depend. I believe that they are heading in that direction, and if they succeed with some of their initiatives, they will wake up one day to discover that they've sown the seeds of their own destruction, just as Microsoft did in the 1990s."

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