It’s a Business– Is Amazon an Enemy? Or A Potential Ally?

Expert publishing blog opinions are solely those of the blogger and not necessarily endorsed by DBW.

One thing I advise writers to do is to understand they are entering the publishing business when they become authors.  They will be self-employed in that world.

Whether they self-publish, go with a small publisher or go the traditional route, there are numerous career decisions they are going to have to make.  More than ever before, because there are more options for authors than ever before.  Since my first novel came out in 1991, I believe the current environment is the best ever for writers.

A key to making smart decisions is to remember it’s a business and while emotion has a role to play, it shouldn’t be the bottom line.  In the current publishing environment there’s a lot of passion and a lot of circling of the wagons.  One of the most sensitive topics, sure to set off a debate if you put any two people in publishing in the same room is to mention the word Amazon.

Eric Hellman posted an interesting blog at Go To Hellman where he discusses Amazon.

Here is an excerpt, which he’s graciously allowed me to use, but I recommend you read the entire thing:

Amazon is fundamentally a company about scale. The common thread between AWS and the internet book seller of 1995 is the identification of markets with large inefficiencies that could be eliminated by using the internet to amass scale. Amazon has alway been willing to lose money to achieve that scale. But this isn’t predatory in the sense that having achieved market dominance, they raise prices. Instead, it’s ruthless in that once scale is achieved, the resulting efficiencies can’t be matched by anyone else.

It seems clear that Amazon has identified the publishing industry as a target ripe for further forcible efficiency improvements. But the nightmare narrative being spun by the publishing echo chamber is tragically unaware of how Amazon works. Maybe it’s because publishers imagine that Amazon will do what they would do if they had Amazon’s market power. But Amazon won’t extort huge sums of money from powerless consumers. Instead, they will ruthlessly bring efficiency to every process involved in publishing. And then they’ll invite everyone to use their ruthlessly efficient services.

What I pick up from many in publishing is that Amazon has nothing better to do but destroy publishing.  I went to a sales force meeting in Seattle where Amazon was recruiting Military Academy graduates to work for them.  The words book or publishing were never mentioned.  China was.  Often.  As in building shipping centers there.

What has happened in publishing is that the business model is being turned around from distribution (which Amazon excels at) to discoverability (which Amazon also excels at).

The consignment model with bookstores was the best possible compromise that could be made given the realities of the times.  Those times are fading.  Because of that, the desperate need to hit a home run with a bestseller by buying placement is being replaced with unlimited shelf space.  It would seem a more fundamental publishing model is not to put most resources into new titles and trying for the next big thing, but rather curating what’s already been bought, edited and is gathering dust.  My company, Cool Gus Publishing, went from zero to seven figures in 18 months, primarily based on my backlist.  I’m just one author.  Some of the Big 6 have thousands of authors whose books they still own the rights to.  In my next blog post I will describe the process by which that potential pot of gold can be mined.  And they can do it using Amazon, rather than fighting Amazon.

5 thoughts on “It’s a Business– Is Amazon an Enemy? Or A Potential Ally?

  1. Anna DeStefano

    A year ago, I was one of the traditionally published authors concerned about Amazon taking advantage of writers and readers–because that’s what I was hearing all over the industry, mostly from the direction of those in the business of protecting traditional publishing. Fast forward 12 months, and I’m negotiating a potential (and lucrative) contract with Montlake for a three-book, single title contemporary romance series. So, I’d add to your post above that you don’t have to have an extensive backlist to appreciate or take advantage of what Amazon is offering to the writing and reading public.

    I’ve published sixteen novels and have a following, but I haven’t reverted rights on any of those projects. So the next book is what I have to sell–and Amazon is looking like a better and better business partner to me, as well as many other best-selling romance authors. They offer sizable advances, more than competitive royalties, and exciting promotion and sales potential, when the traditional publishers are only now beginning to figure out a digital model that might appeal to authors experienced in publishing.

    What’s being written and published next by an author is just as important as relisting old titles that readers would otherwise never find. For the newly published or midlist author without a backlist gathering dust, I’d recommend Amazon’s digital imprints as a place to research and potential do savvy business with.

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  2. Peter Turner

    Great post, Bob. One statement I’d quibble with, however, is that Amazon “excels at discovery.” The surveys of customer behavior I’ve seen report 30%-40% of book buyers first discovered the books they purchased in a physical bookstore (though they didn’t necessarily buy them there). While I’m often a bit skeptical of self-reported customer behavior surveys, I would guess if anything the percentage would be higher as some folks wouldn’t want to admit they went to their local bookstore only to buy the books they found online. Also, while it’s anecdotal, there’s a reason why Amazon’s app has a barcode reader as it’s opening screen.

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    1. Shannon Donnelly

      Amazon does excel at discoverability. I’ve had books in bookstores (no endcaps, spines out, not covers out, no reorders once stock is sold, and staff not interested in helping an author sell). I have books on Amazon, where I can offer free promotional days, and Amazon’s programs have helped me push books up high on their lists where they can be found. I do hope B&N stays around, but these days I’m thinking of taking more of my books over to Amazon just because the promotion tools do make a difference in sales. (And I’ve made more money from online sales than ever I did from traditional publishing and bookstores.)

      Reply
  3. Delle Jacobs

    Looking forward to seeing you there, Anna!

    Bob, thanks yet again for a post that provides insight to clear the fog of hysteria. I’m going to post the link on Face Book and on my blog.

    I definitely agree that Amazon excels in discoverability. I called it being innovative as well as making excellent and efficient use of their massive accumulation of data. Their innovative approach to finding new authors for their publishing endeavors is what has brought me into the Montlake fold. Who knew an editor might read one of my self-published books and call ME up? And every time I interact with them, I find other innovations that will have a part in changing publishing everywhere for the better. Yet I’m supposed to think this is bad?

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