Is Amazon the Lion That Will Eat You?

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

Is Amazon the Lion That Will Eat You?Recently, I’ve been talking to people in the book industry about a new program my company is launching that allows individuals and organizations to retail ebooks and audiobooks like the big three do: Amazon, Apple and Barnes & Noble. One of the most common questions I get asked, though, is, “How can anyone compete against Amazon?”

As you likely know, Amazon has made a number of forays beyond bookselling and into book publishing. The company currently lists a baker’s dozen of imprints, is responsible for 85 percent of self-published titles, and has long been bragging about its bestselling authors, including Hugh Howey and Barry Eisler. Add to this the fact that, with its 185-million customer base—47 million of whom are fee-paying members—Amazon controls a reported 65 percent of the retail book market.

How, then, could anyone in the industry not be concerned by the influence such a company wields?

Is it just time to throw in the towel?

No, not yet. Publishers can compete with Amazon and even compete effectively.

Here are 10 practices publishers can employ to tamper down Amazon’s growing impact:

1. Do your best not to nourish Amazon. Short-term gains may be realized by surrendering to Amazon’s requests for exclusivity and deep discounts (reports tag 53 percent as the average discount the Big Five publishers yield to Amazon) but, in the long term, it’s possible you’re feeding the lion that is going to eat you.

Another way to nourish Amazon is to give it the most prominent position in the ways you reach out to your buying publics. How often have you visited a publisher’s website and found Amazon at the top of the links a consumer may use to order a title? How about when publishers tout the number of 5-star reviews a title has garnered on Amazon? Both of these practices help to establish Amazon as the benchmark of the industry. Can you hear the lion roaring?

2. Don’t compete on price. Competing on price is a race to the bottom—one that Amazon is bound to win. You’re not going to thrive paupering yourself. Instead of sacrificing profits to attract sales, use your profits to build your business on the unique ingredients in your pie.

3. Help the pendulum to swing. For many, some of the luster has come off Amazon. In the same way that not everyone loves Wal-Mart or Apple, not everyone loves Amazon. There is a popular, growing movement to shop locally, to buy directly from someone they know and trust, and to patronize smaller, product-focused online stores. Push this idea along. Develop programs that offer something special or unique to local retailers. Find online stores that sell non-book products that align with your readers’ lives and lifestyles. Offer to pair one of your books for twofer pricing with one of the items they already sell.

4. Get niche. As Sly and the Family Stone pointed out years ago, there are different strokes for different folks. Some people like to wear designer clothing; others are into camo and boots. Exploit these distinctions in your outreach to both readers and resellers. Design your promotions to target groups of readers underserved by Amazon.

5. Take it off their field. With one recent exception—a brick-and-mortar bookstore in Seattle—Amazon is Internet-based. So put energy into the physical world. Conferences, seminars, independent bookstores, chain retailers, boutique shops and tourist attractions—anywhere people gather or frequent provides potential markets. Remember, a book is an ad for itself. A conference or a boutique shop may not move a ton of copies, but many are likely going into the hands of people who will mention the title to others.

6. Be everywhere. Broad distribution used to be thought of as the key to book sales. And it still is. Water down Amazon’s impact by getting your books into every nook and cranny. Think outside the box. Car washes, independent coffee houses, hospital gift shops, furniture stores, print catalogs for baby boomers, “Buy Now” links on popular bloggers’ websites.

7. Partner with others. Publish business books? Partner with a company that offers seminars for business people. Do you have particularly famous or articulate authors? Partner with local and national nonprofits—author appearances often draw a paying crowd to annual dinners or other events. Our parent company, American West Books, frequently partners with publishers in producing proprietary products to match retailers’ needs. None of these products see the inside of an Amazon warehouse.

8. Get personal. Lean on your authors for much of this. Ask them to Skype with book clubs, do book signings at Costco, teach workshops at Michaels, or, perhaps, present self-awareness classes at upscale spas. Make sure your authors pass around a signup sheet to collect email addresses that they can share with you.

9. Build your own tribe. You’ve heard this advocated before. Collect email addresses relentlessly. Then reach out with more than just blatant advertisements. Think curated news, handy hints and tips, recipes, perhaps reviews of products related to the subjects you publish. Offer freebies. Do surveys and share the results. Encourage your tribe members to interact by posting their own reviews, writing guest blog posts and posting and tweeting to their followers.

10. Get exclusive. Offer one-of-a-kind items, such as autographed books or leather-bound editions. Do you publish children’s titles? Offer limited edition print runs of your artists’ illustrations—suitable for framing—with each book bought directly from you, or include a bounce-back coupon at the back of each copy. Sell limited items directly to your tribe or via boutique gift shops or other non-Amazon outlets. You might even take a page from the playbook of beauty products manufacturers that offer a line of products only sold in beauty parlors. Consider developing an imprint that is only available in, say, clothing stores.

9 thoughts on “Is Amazon the Lion That Will Eat You?

  1. Rudy

    I’m a customer. I buy a LOT of books. My number one would be: Abandon DRM in e-books. It effectively locks me into amazon for most publishers’ books. You haven’t a hope of luring me away from it; I’m too invested now. Or adopt a watermarking model (see Pottermore) that allows the customer to read the book on various devices. I won’t buy e-books direct that require me to install a proprietary app, so forget about it. And, okay, if you fear massive pirating of the huge blockbuster bestseller that makes 90 percent of your profit for the year, fine, DRM it; I don’t buy those books anyway.

    Reply
  2. Chris Syme

    Stephen- Well written and well spoken. I don’t necessarily agree w/everything but I do agree strongly on #2. I had this same conundrum when I started consulting. Do I discount my fees to get business ($$) or set my fees where they should be to compete, but reflect expertise. I have to say I feel their pain–authors who need to sell books to survive or keep writing. Amazon has trained both authors and readers to be cheap. I am sorry it has happened, but I still coach authors not to give in to the frenzy of cheap unless it’s associated with a short term promotion.

    Reply
  3. Michael W. Perry

    Great list and practical too. I’d add more. Go to Congress. Pass laws that require book retailers above a certain market share to meet certain requirements. Those laws would definitely apply to first-place Amazon.

    1. Ban \most favored\ clauses. This would let authors tilt against Amazon’s dominance by making their ebooks cheaper elsewhere, including through charities they support.

    2. Ban exclusivity. Amazon’s playing a nasty game with publishers and authors right now. They demand exclusivity and other perks or they will bury you books and puff books by competitors who do comply with their demands. That’s a monopoly-like abuse of power. Stop it.

    3. Require openness about sales. Ponder a moment what a less than scrupulous ebook and POD retailer could do. You’re not supplying them with copies through third-party printers and wholesalers such as Lightning Source and Ingram. That could be tracked. No, every bit of the creation and distribution takes place in-house. In the case of Amazon, that is through Createspace and Kindle. The only data supplied to publishers and authors is raw sales. How do you know that Amazon isn’t selling a 1,000 copies and only paying you for 600? You don’t. In fact, you can’t know.

    Fix that by requiring that the larger ebook and POD retailers quickly supply data about all sales. It wouldn’t be everything, but it would be enough to provide a check on deception and aid book marketing. That data would include the book sold, the time sold, the quantity sold, and the location of the buyer down to the Zip code. Publishers could make straw purchases. If that sale isn’t reflected in the retailer supplied data, it would trigger an automatic, legally required audit of all that publishers sales by that retailer along with massive, ten-fold damages for any sales unreported.End that ability to conceal real sales. If Amazon complains, ask what they have to hide.

    Keep in mind that Amazon is uniquely placed to benefit from that deception. Assume they don’t report 5% of the sales. That’s no just 5% less income for a particular publisher. That’s 5% more income that Amazon, who is also a publisher, could use to grow the marketshare of its books. It’s getting away with giving itself an illegal but untracable 10% advantage over its competitors.

    There’s a long legal history of our legal system placing extra restrictions on corporations that control a large vertical section of a market, so they can’t use their dominance of one part of that market to weaken competitors and take over another.

    ——

    All those requirements are reasonable and necessary. They would help distribute market power more broadly, and they would keep book retailing diverse and healthy.

    Reply
  4. John

    Not sure it makes sense to try to “beat Amazon” if you are a publisher. Amazon as a retailer serves a purpose for publishers and customers that want what Amazon offers (low prices, great customer service, wide distribution). Rather than beat Amazon, suggest publishers would benefit from establishing alternatives to what Amazon offers customers. For example, a retail solution that is not a “walled garden” where consumers are tied to proprietary formats by the retailer and publishers do not have access to data about how their content is being used by consumers.

    Reply
  5. Ellen Violette

    I don’t agree with ignoring Amazon. First, you don’t have to give them exclusivity and even if you want to use KDP or Countdown promotions it’s only for 90 days. And KDP promotions are so effective that I would never want to stop doing them. They allow me to get the word out on my books, build my subscriber list, and make money on the backend, all while making them best-sellers. I don’t rely on Amazon to make money on books. But, having said that the more books you have in Amazon the easier it is to make money because Amazon will cross promote them for you. The bottom line though is as an author never rely on one marketing tactics to do everything for you. By diversifying and using the suggestions in this article, you’ll do better than if you just stick to a single tactic. Well done!

    Reply
  6. Steven Hutson

    #1: Smart. But most writers need the exposure more than they need the money.

    #2: Good point. But most writers need the exposure more than they need the money.

    #3: Good, but it could take a while. Like, years.

    #4: Target audience: Is this not a normal part of any book marketing plan?

    #5: This might work, but I’m not eager to punish myself, just to stick it to the lion.

    #6: Good advice. But it’s not useful unless you tell us how.

    #7: Same as #6

    #8: Same as #6

    #9: Good.

    #10: Good.

    Reply
  7. Theresa M. Moore

    A somewhat cogent article, but you stress too much offline promotion in place of online promotion. Amazon customers are already locked in. Getting new customers who have not been hooked is the problem. I offer my ebooks in ePub and PDF formats with email delivery, and without DRM. And yet, no one wants to buy them. Why? Because their friends are locked into Amazon and pushing them to join. I don’t drink that Cool-Aid.. My ebooks are not on Amazon. If they want to read my ebooks or buy my print books, they are going to have to visit my site. That’s what it’s there for; so if you want me to go offline to sell my books, instead of competing with Amazon, you are crazy. I already do that. I want to sell online.

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  8. Rebekah

    This is quite possibly the stupidest thing I’ve read about publishing in a very long time. So, I should stop making tens of thousands of dollars every month from Amazon and make no money by going wide? Why on earth would I do that? Guess what – I put in a link to my mailing list at the back of my books so that if Amazon ever does start trying to eat me, I will sell my books directly on my own website. Know how I can do that? I keep the rights and can take my books off Amazon anytime I want.

    A good author, one that is career-minded, goes where the money is. They take advantage of the system to sell their books. And if something stops working, then they go somewhere else. If you want someone to compete with Amazon, tell the companies to actually try competing. Steve Jobs said nobody reads books, so the iTunes bookstore is ridiculous (because why spend money and try to make it better – nobody reads!).

    I’m wondering whether you take your horse and buggy to indie stores, or one of those newfangled bicycles to pound the pavement, wasting precious writing time begging people to buy your books. Digital is the future, whether you like it or not. You hand-selling your books at your local car wash or swap meet will never make you a living. I’m writing down your name and making sure that I never, even inadvertently, buy one of you books. It is people like you that keep your fellow authors shackled from taking control of their careers and their livelihoods.

    Reply
    1. Sam

      Rebekah- to play devil’s advocate, few authors make ten grand a year, let alone ten grand a month from selling books. It’s a matter of whether newbies or unknowns like myself would ever benefit from Amazon’s system. I don’t think the government should be involved, and I agree Amazon has the right to do what they do, but that doesn’t mean Amazon isn’t doing things that could hurt aspiring authors like me who haven’t yet published and may be hurt if Kindle Unlimited kills or weakens single copy e-book sales.

      Reply

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