Amazon the Extortionist: Part N+1

Brad Stone'samazon frown tell-all book about Amazon the evil giant retailer is still making waves, and some juicy new dirt has come to light.Harper's Magazine has posted a review of the book, and they happened to mention this nugget:

Stone, who maintains his reportorial neutrality throughout most of The Everything Store, drops the ball here. After dutifully cataloguing Amazon’s venal behavior, he falls back on what is literally the company line — that these extorted dollars “create the foundation on which everyday low prices become possible.” This should be a real comfort to publishers now contending with Amazon’s newest shakedown. A former employee, who asked not to be identified, recently told me that some publishers are now being pressured to pay the equivalent of 1 percent of their annual net sales to Amazon — levied on top of any existing fees — simply for the privilege of presenting their lists to the marketing team and buyers. In the case of the larger houses, this sum could run between $500,000 and $1 million — and failure to pay will make it awfully hard to get an Amazon buyer on the phone.

Shocking, isn't it?

Well, no. For one thing, these kind of tactics are more common than you think; many retailers push for similar questionable kickbacks. Even Barnes & Noble, best friend to the publishing industry and second largest customer after Amazon, has engaged in similar tactics. What do you think the retailer had a 6 month long spat with Simon & Schuster?

Admittedly, B&N was probably pushing for a contract with terms less extreme than a 1% vig, but I would bet donuts to dollars that the difference was merely a matter of degree.

This latest revelation about Amazon also fails to surprise me because I can recall their past skulduggery.

In 2008 Amazon was caught blackmailing small publishers into using CreateSpace (then known as BookSurge), The publishers who defied Amazon had their buy buttons turned off. And in 2011 M-Edge filed a lawsuit alleging that Amazon bullied the case maker into signing a new contract more favorable to Amazon.

So Amazon now stands accused of extorting a 1% vig from publishers? That is so unsurprising that it hardly qualifies as a news story.

On the other hand, AMAZON! EVIL! EVIL! AMAZON! is an example of what passes for journalism these days, so this latest story of Amazon's misdeeds is probably going to get a lot of press.

About Nate Hoffelder (11579 Articles)
Nate Hoffelder is the founder and editor of The Digital Reader:"I've been into reading ebooks since forever, but I only got my first ereader in July 2007. Everything quickly spiraled out of control from there. Before I started this blog in January 2010 I covered ebooks, ebook readers, and digital publishing for about 2 years as a part of MobileRead Forums. It's a great community, and being a member is a joy. But I thought I could make something out of how I covered the news for MobileRead, so I started this blog."

11 Comments on Amazon the Extortionist: Part N+1

  1. It’s called negotiation, dickering, horse trading…
    But in the cozy, incestuous world of manhattan corporate publishing it is a crime against nature.
    Kinda like Oliver Twist asking for “more”.

    • Likening Amazon to Oliver Twist is stretching it a bit.

      • Exageration for effect is new to you?
        The publishing apologists act as if asking for more were abnormal.
        In business, typical and expected behavior is to ask for more until the other guy says no and means it. Along the way both sides bluster and posture. Nothing to hyperventilate over, it is literally business as usual.
        Except when eeee-vile Amazon is involved.

        • What giant money-grubbing multinationals do to each other is good spectator sport but nothing worth getting worked over. Not unless they, you know, gang up and conspire to screw the consumer. But the saintly publishers would never do that, would they?

  2. It may be a negotiating tactic but Amazon is such a big player in the market now that it could distort negotiations going on with other vendors.

    I still find it fascinating how hard it still is to find new interesting stuff in Amazon (basically I’ve given up).

  3. Why don’t the publishers have their own online store? Sell the books exclusively on their site for the first week, then let Amazon, BN, and the others have at it. The movie studios have been doing timed releases (albeit buy vs. rent) for years, so why can’t the publishers have first crack at their products’ revenue?

    • Movie studios have long been in the habit of pitching their product to the public. The same cannot be said for the major publishers.

    • Harlequin does this. They sell many of their books a month ahead of release through their own site. Some small pubs also do this. I think the big NY pubs are too used to thinking of their customers as Amazon, B&N, WalMart, etc. instead of thinking as the end consumer as their customer.

      • Also, the major retailers of physical books would have thrown fits if the publishers had tried to make their own ebook stores a few years ago. By the time they realized how big a part of their business digital would be, Amazon had a lock on the market.

    • Having one’s own store is going to become more important and eventually the norm. But visibility is everything and right now Amazon controls a great deal of that eyeball.

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