Stop Blaming Amazon for the Actions of Consumers

It is always fashionable to hate the winner. In 2017, in bookselling, that is Amazon.

I was reminded of that truism this week when I read a piece on Book Riot concerning Amazon Books. Leah Rachel van Essen read that bogus clickbait PW piece about Amazon Books being the fifth largest bookstore (it's not), and after getting suitably enraged at Amazon, van Essen proceeded to blame Amazon for killing off indie bookstores and chain bookstores.

Stop Blaming Amazon for the Actions of Consumers Amazon DeBunking

Excerpt:

Why should you be angry? Independent bookstores have survived in spite of the risk of Amazon over the last few decades, squeezing through hard times thanks to their more personal, localized experience.

...

This is about the physical bookstore movement. Even the book chains had to struggle against Amazon. My local bookstore has had rapid declines in employee hours over the years, and it has been in danger of closing more than once.

...

Just like independent bookstores, some book chains have survived in spite of Amazon’s takeover of the book selling industry, and now they are cautiously growing again.

...

But the truth remains that Amazon Books would not have a space to grow into without the vacancy left by the slow death of book chains and independent bookstores between 1991 and 2011. Bookstores and book chains have persisted despite what Amazon has done with the book industry in the last few decades, and now Amazon wants to capitalize on what booksellers and book-lovers have fought so fiercely for: the improbable survival of the in-person bookstore.

There are any number of problems with this piece. There's the unreliable source van Essen used, or the fact she did not credit that source, or that she is blaming Amazon for events that occurred when Amazon was still a tiny website (or worse, before it even existed).

It's also worth noting that van Essen fiercely protects chain bookstores from Amazon, when 20 years ago she would have been railing against those same chains for forcing indie booksellers to close. (As I said, it is always fashionable to blame the winner.)

I was going to vivisect van Essen's argument on those flaws, but as I got halfway through that effort I realized that there is a more fundamental flaw.

The real problem with van Essen's piece is that she is angry about "what Amazon has done with the book industry in the last few decades".

The only thing Amazon has done to bookselling is be a better retailer than its competition. Amazon hasn't taken nefarious or villainous action against its competitors; instead it has merely offered better prices and better service and then let customers vote with their wallets.

If a bookstore chain dies because customers decide they don't want to shop there any more, is it really the fault of Amazon?

About Nate Hoffelder (10940 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."

30 Comments on Stop Blaming Amazon for the Actions of Consumers

  1. You’re right — and yet . . .

    Amazon is good for consumers, and that’s great. No one argues with that. However, Amazon is extremely dangerous to self-publishing authors.

    Yes, it seems like the opposite is true, because online book retailing allows authors access to readers. And online retailers can keep books on their shelves regardless of sales turnover. That’s great.

    But when we have only one retailer through which indie authors can reach readers, that’s NOT great. There’s worse: Amazon is 90% or more of the sales volume for most indie authors. But books as a whole, including all traditionally published authors, are only about 10% of Amazon’s sales.

    Authors need Amazon, desperately.

    Amazon doesn’t need authors at all.

    There’s worse yet. Amazon is a publicly held company. Therefore, its managers have an ethical and legal obligation to extract all possible profit from its sales.

    Combine that obligation with the disparity in how much dependence authors have on Amazon and vice versa? Amazon has an obligation to push the terms, gradually, but consistently, so that authors get a smaller and smaller share, and it gets a larger and larger portion of the available profit.

    Yes, publishing houses will fail. So what? Indie authors will continue. And Amazon doesn’t need many/any books to be profitable.

    Then many pros will quit. So what? Amazon doesn’t need them.

    The authors who don’t care if they make a dime will continue. And readers will buy fewer books, but that still doesn’t matter to Amazon.

    They don’t need books at all. Books are rounding error on their profits. Even if all the folks who need to make a living from their writing and/or their publishing efforts leave, they’ll be perfectly fine.

    But authors won’t.

    That’s why we should try to defend the other retailers, and keep more channels alive. And that’s what your post is missing, and what the other post you despised probably missed too.

    Big publishers are all too well aware that they’re first on the hit list. But don’t make the mistake of thinking that the micro-publishers (aka indie authors) won’t take their turn.

    Any monopoly or monopsony is dangerous.

    • Before Amazon made self-publishing nearly barrier free by introducing the Kindle and Kindle Direct Publishing, self-publishing was a costly dead end for most writers. When was the last time an indie bookstore or Barnes&Noble published anyone’s book?

      • Publishers put a minimum of $20k into a trade title, and the contribution to overhead and profit that the publisher gets for that money? It’s usually smaller than the author’s royalty.

        No one argues that publishing your own book will gain you a larger chunk of the money. But that’s not the same as saying that publishers ripped off authors before.

        Retailers aren’t publishers. Publishers aren’t retailers. Different functions, different skill sets.

        I know that authors are thrilled that they no longer have to be chosen for investment by the publishers. That’s perfectly reasonable.

        But don’t let that mislead you into feeling grateful to Amazon. It’s a corporation that is looking out for its own benefit, not yours, just as publishing companies are.

        Even if you do feel grateful for the change, don’t overlook the fact that Amazon has a duty to take your profits.

        No one is suggesting that you should do anything against your own interests, nor in the interest of other, larger publishers. (You ARE a publisher, after all.)

        Just look to your future, and find alternative distribution channels. It’s the smart thing to do.

        • My two books were both traditionally published. I’m neither grateful or not that Amazon made ebooks a commercially viable product and also made self-publishing much easier and far less costly for authors. I don’t have a dog in this fight.

          I assumed that you self-publish, and was addressing your complaints about Amazon.

    • Your argument is flawed because Amazon didn’t create a market where they keep 90 percent of authors trapped. Authors did that.

      Quote:
      But when we have only one retailer through which indie authors can reach readers, that’s NOT great. There’s worse: Amazon is 90% or more of the sales volume for most indie authors. But books as a whole, including all traditionally published authors, are only about 10% of Amazon’s sales. End quote.

      Indie authors can join other retailers and market their books via those avenues AT ANY TIME. And yes, it’s profitable. And yes, it’s a lot of work. Amazon may make it easy to be lazy–and I’ve heard countless authors say, “well, it’s easier to just publish to Amazon and I make most of my sales there anyway” but there is nothing stopping authors from promoting other retailers. There are many opportunities elsewhere. Kobo has a great program for promoting books–better than Amazon’s ads. B&N has fewer opportunities–maybe one or two a year–but if you hunt them out, you might get lucky. Authors doing cross promotion efforts are becoming one of the best sales tools out there and it’s far cheaper than ads. I’m nearing the end of one such promo at my blog:

      http://www.bearmountainbooks.com/july2017newreleases/

      Several of us worked our tails off to make it a success. And when I was putting it together I worked very, very hard to find authors who were “wide.” Did books sell on those other channels? You bet they did. Could I have sold even more on B&N if I included more links (yes, from the clicks I saw). Did most of the sales come from Amazon? Yes. But look at the ratio of authors who are wide. That is not Amazon’s doing.

      Part of the reason most authors make the bulk of their money on Amazon is because the bulk of authors are ONLY on Amazon. (Depending on promo ops, I often make just as much at another retailer and sometimes more than at Amazon.)

      Amazon may entice authors with their programs, but indie authors are the ones making the decisions. Amazon is smart, but authors need to be smarter.

      • Her argument was not flawed. She raised the point that we should be concerned on that issue, but did not say that Amazon was at fault.

        I am still thinking about how to address her arguments.

        • True, but the line that is wrong is this one:
          But when we have only one retailer through which indie authors can reach readers, that’s NOT great.

          That’s simply not true YET. It may become true because authors are relying heavily on Amazon and NOT going wide. They do many of their email drives using Amazon products (Kindle giveaways, Amazon gift certs). They are helping create the lopsided picture (and Amazon makes it easy. They have gift certificates. They have the most popular reader and the most affordable one.)

          Each retailer upload process is different and time consuming. Going the extra mile and advertising or promoting other venues is also time consuming, but that lure of sticking with just Amazon can’t end well. Eventually Amazon will be able to cut author commissions or change the payouts–or any number of actions that will benefit Amazon.

          • I should have phrased that sentence differently, you’re right. But Amazon owns 75% of the audience, for trade ebooks. That still gives them power — until all authors start following your path.

        • I think the major flaw comes when people start throwing around fancy-sounding economic words like “monopoly” and “monopsony” when they’re not quite true. A monopoly is a market wherein there’s only one supplier; a monopsony is one in which there’s only one buyer.

          Amazon may be growing into a monopsony for corporate publishers (who, let’s not forget, formed a cartel to collude with Apple to fix the price of ebooks), but they can’t be one for indie authors because they’re not buying indie authors’ books; they’re providing indie authors access to the market where consumers might purchase indie authors’ books.

          The further flaw of the argument is that it hinges entirely on what Amazon *might* do. “They’re growing! They have an obligation to their shareholders to grow profits! So they’ll continue to squeeze authors to give them less and less!”

          The first two statements are demonstrably true. The third is demonstrably not. I’m not saying Amazon is all sunshine, mind you, and I’ll be the first to note that I’m not a fan of the way the KU fund is set up, but on the other hand, while the fund frequently fluctuates and Amazon only announces its amount after the fact, those fluctuations’ effect on author payouts seem negligible.

          As for wider channels and the usual argument against exclusivity, that might be more convincing if Amazon weren’t the only one consistently bettering the market. It’s like Amazon is LeBron in the championships and every other retailer is the promising high school talent. Apple seems pissed the publishers settled rather than fighting the collusion charges, and iBooks seems to be an afterthought for them (note how they push Apple Music and App Store numbers, and note how they don’t push iBookstore numbers). You can’t just say “We have to defend other retailers and keep other channels alive.” That’s like the bookstores who’ve been turning to crowdsourcing and charity because their business models have been failing.

          • My problem with her arguments is that it assumes the current number of players is static, that Amazon cannot be disrupted.

            We do not know if that is true, but if Amazon starts acting like the epitome of a monopoly then it almost certainly is not true. Remember, Bezos has famously said “your margin is my opportunity”. If Amazon expands its margin then it will be someone else’s opportunity.

          • You are right, of course, that the true monopsony is a buyer, and that Amazon is only a distribution channel. But when it controls access to buyers, it functions the same way.

            Amazon owns that access to customers because it does a great job for them. That is rather my point.

            As for collusion — I’m not sure I see how it’s relevant to whether or not Amazon controls access to customers. Yes, they kept selling Hachette books during the negotiations. Does this mean that they won’t gradually pull out more and more of publishers’ profit margin?

            Does it say anything about whether Amazon will do the same to author-publishers?

            Amazon may decide to push that margin on toward customers, in order to prevent the rise of effective competition (as was implied in Nate Hoffelder’s comment below) but whether it keeps the profits, or passes them through to readers, the publishers (author-publishers or bigger ones) still won’t have the money.

            I’m not saying we should treat failing businesses and business models as charities.

            I’m saying that author-publishers need to think about getting alternative ways to reach their readers, if they can find any.

            It never hurts to have more ways to sell your books, and the more of them that most publishers have, the less incentive Amazon will have to start pushing to take more of the money that (self- and traditional) publishers need.

          • Amazon has also changed how and when they show indie books–they now pretty much suggest you buy ads if you want your books to be seen. That’s a cut in commissions–it’s just done by requiring authors to take out Amazon ads if they want to be seen. If an authors sells ENOUGH copies (no one knows what that number is) and gets enough reviews, Amazon still includes those authors in their algos. But it’s harder and harder to get in those algos and keep rankings high (and we are assuming for the moment that rankings still matter to how often a book is shown). Amazon has changed its search engine algos over the years too. When I first started as an indie, my name in the search would result in several of my books. It still does–but only after the singer, Maria Schneider’s music is shown. She existed back then too– but the algos are different. They change things all the time and it can change in a costly way for indies at any time, which is why I don’t want all my books in one store. These things might not be a direct cut in commissions, but to play the game costs more–which is a cut.

            It should also be said that publishers are now selling direct and are supplying free books to generate traffic and loyalty. They supply discount prices too. They may not have made huge inroads yet, but they might gradually build a return and buying audience. As an author, that’s what I try to do to–keep the audience interested and returning. I can’t provide a book written by me a week, but I can provide other book deals, reviews and giveaways. I can also try to retain that loyal audience by making sure my books are at various retailers.

            And if a publisher contacts me and is willing to pay me 4 percent or more to link to their site/books, I’ll be happy to do it.

  2. Peter Winkler> When was the last time an indie bookstore or Barnes&Noble published anyone’s book?

    It does happen, just very rarely.

  3. Indies didn’t have Walmart, [email protected], Borders or even Apple publishing their stuff, and local book sellers weren’t publishing them either. Indie books were still treated like they weren’t real books back then. Granted there is a lot of garbage that can be published but Amazon lets the consumer decide if something is a real book to them, not the publishers.

    Also we are picking on a future possible threat that Amazon may or may not do, and one day rob the indies. The major publishers have always robbed the authors, and that’s not just a hypothetical maybe. Fight the injustice thats actually happening versus the one that hasn’t yet.

  4. Book publishing and book selling are almost unique in one respect. Unlike clothes or furniture, it’s not so much a style that becomes popular, but a specific title. Some patrons come in just to browse, but many bookstore patrons are looking for a particular book, and won’t necessarily buy something else if they don’t find it. That’s a difficult business model to compete in when you have limited shelf space. Add in the digital transition and you’ve got a business ripe for disruption.

    Nothing lasts forever, not people and not businesses.

  5. Amazon is a company, they are supposed to take profits. That’s what companies do. Being a consumer friendly company where other companies put profit first has served Amazon well. And no one is saying authors shouldn’t sell else where but we have to be real and face they won’t make anywhere close to what they make selling through Amazon. That’s just how it currently is until someone comes up with a bigger and better way of doing it.

  6. Just just reminds me of how I try to avoid amazon where possible. Of course I also avoid supermarket chains when it comes to fresh food and go to farmers markets instead.

  7. Marion,

    Your argument is flawed. Such large companies don’t exist as monolithic entities. Amazon Publishing is it’s own unit with several subsidiary companies. They are 100% focused on books. Amazon.com as a whole is not interfering with Amazon Studios, Amazon Publishing etc. on a daily basis.

    Indie writers need Amazon as they are the only game in town. But Amazon needs them just as much because they are the ones driving not only Kindle Unlimited but the majority of ebook purchases. It’s a symbiotic relationship. Just because it is driven by profit doesn’t make it fundamentally untrustworthy.

    I agree that it is not in the benefit of the consumer for one company to monopolize the market, but that is not the fault of the indie author. And telling them to just not publish or make any money if they have to do it through Amazon is STUPID. It is up to Apple, Nook, Kobo and Google to step up their game.

    Your post really has the echo of the Amazon vs. Hachette dispute. It goes through the same tired argument that distributors are not publishers, and emotionally charged claim that Amazon is evil. I think that the worst part of your post is that you demonize authors, saying that they don’t care if they make money and assert that they’re part of the problem. Shame on you.

    You think that Amazon will destroy the book industry. But your argument is based upon a deep seated distrust of the company, of capitalism, of authors and readers and is guided by emotional rhetoric whereby the reader accepts your conclusion only if they also share your cynicism. Cynicism is always easy, but it is not necessarily truthful and ultimately is as naive and misguided as unbridled optimism. You have neither evidence nor a compelling argument.

  8. The way it works in capitalism is that there are winners and losers and, at least ideally, the winners are the ones who do the best job for their customers. I think Amazon has, so far, been a prime example of capitalism at it’s best.

    Yes there are dangers when a company gets so powerful. Amazon could become a problem in the future but if it does we have laws to deal with that. And those laws might just be part of the reason Amazon hasn’t become a problem.

    It’s perfectly reasonable to lament the passing of indie bookstores. I certainly do. I spent a lot of time in my youth and middle age browsing bookstores. When I retired it became nearly a daily practice to go from store to store, just enjoying myself.

    Now they’re nearly gone. That’s sad. I also lament the passing of the Sabre Tooth Tiger. But we grew up in a changing world and that’s just part of life. And in this case, since Amazon is currently doing a very good job for us readers, it’s a sad but not bad part of life.

    Barry

    • Barry: Yes, Amazon is winning because it serves a need exceptionally well.

      I suggest looking for solutions now, because the danger is predictable, and the solutions are hard to find. For bigger publishers, there are more opportunities to go around Amazon than there are for indie authors, and they have more resources to devote to creating opportunities for themselves.

      This is good, because they’re higher on Amazon’s target list because they’re bigger and more uniform than indie authors.

      Maybe they’ll solve the problem for the smaller publishers, including author-publishers, but I’m dubious about that.

      This is why I advise devoting a little thought and effort to the problem now. It can’t hurt, and it might be important later.

      This is NOT going to be an easy problem to solve.

  9. Tired: Amazon as a whole needs to increase its profits. It can kill any part, or diminish it, as needed to increase profits. It’s how companies work.

    And I NEVER suggested that
    — indie authors are to blame for any of this. I said that they’re missing a threat to them, and that they need to take action to protect themselves.
    — Amazon is evil. It’s actually quite ethical, which is WHY it will inevitably kill off author profits.
    — capitalism is less than the best economic system. It’s great, but it’s also predictable. Not all of the consequences are good. That’s why we have anti-trust and environmental regulations, etc.

    Of course Amazon is the best game in town for indie authors. That was, after all, part of my point.

    I’m simply saying that you need to think carefully and prepare for the future, where there are obvious, and predictable consequences of the ethically sound behavior of a corporation with a monopsony.

    What I’m saying isn’t radical. It’s basic stuff in finance or corporate strategy. It’s not cynical. It’s what a company that manages to achieve a monopsony is SUPPOSED to do.

    But monopsonies are rare, and hard to create. Amazon is both lucky and skilled.

  10. I went several times to physical bookstore they never had what I was looking for. I went to another one I wanted to get the books of Jose Saramago they never had them I was told his books sold like hotcakes. There comes B&N and Amazon Kindle, never looked back this without mentioning they often offer good ebooks for discounted prices.

  11. You realize that evil Amazon was made number one because other companies like Barnes and Noble handed it to them on a silver platter. Barnes and Nobles had the most unfriendly consumer policies and people started jumping ship in droves.

    How about Walmart, ever go there and need help? Goodluck finding someone in a timely manner. These places cut corners for profits at the expense of the consumer. Amazon seemed to figure out the key to success is to put the consumer first and reinvest back into the business to keep it growing. If other companies aren’t doing that, why is that Amazon’s fault?

    People want it both ways. Punish a company for doing a crappy job then punish them for doing it so well other crappy companies can’t compete.

    If you are an indie aithor, I really hope you aren’t selling through Amazon.

  12. Nate’s main point is correct and has nothing to do with independent authors. Consumers are patronizing physical bookstores less and less. People who are upset with the declining fortunes of those bookstores blame Amazon because it is a “big company” and that way they don’t have to blame real people who make real people-type decisions and aren’t even bothering to pay attention to the problem of bookstore viability.

    I see this over and over again in articles about closing bookstores. They are penned by people who write for a living, yet they often contain quotes like “I feel a little guilty because I haven’t been there for years”, etc, etc. They also end with “too bad, they will be missed.”

    Perhaps they will be missed, but the nails in their collective coffins will have been driven in by a great mass of book shoppers who just stopped showing up. Blame them if you must.

  13. What far too many people are missing is Amazon is trying to be/become the consumers’ one-stop-shop for everything/anything (thus the whole foods and the drugstore talks.)

    So they are going to avoid things that might cause the buyers (or sellers) to go elsewhere. But the power is to the buyers – not the sellers, be/act stupid and Amazon won’t mind if you go sell elsewhere instead.

    Take the Apple/big5 trick, that little game called ‘agency’ that forced Amazon and everyone else to only sell at the publishers’ price-point. Who did that help? No one if you read the news on how much ebook sales have dropped for the big5 since then.

    And then there was that little space in time when Amazon no longer had a contract to sell Hachette books. ‘If’ Amazon was as evil as all the ADS types like to claim, one would have expected them to simply stop carrying/selling any Hachette books. Instead, Amazon removed the ‘pre-buy’ buttons on books they didn’t know if they’d ever get to sell and stopped ordering large orders of Hachette books and just ordered what they thought they might sell (after all, Hachette was already delaying book shipments and Amazon had no idea what Hachette’s next trick would be.) Hachette gave up on their little games when the next of the big5 to go out of contract signed a new one with Amazon before the old had expired (most likely because they’d noticed the Hachette/Amazon battle was hurting Hachette far more than it was Amazon.)

    Amazon made it easier to buy and sell things (I sold an ebook to someone in the UK from here in Texas just today – and didn’t have to figure out the VAT and exchange rates!)

    IF Amazon ever becomes a bad place to buy/sell then people will flock to where it’s easier – which was why they flocked to Amazon in the first place …

  14. Smart Debut Author // 24 July, 2017 at 10:34 pm // Reply

    Many of the comments above all suffer from the same serious logic flaw.

    Amazon ever-growing publishing industry dominance has ABSOLUTELY ZERO to do with the distribution choices that authors make.

    The reason Amazon owns 45% of US print book sales, 85% of US ebook sales, and nearly 100% of US audiobook sales is due the shopping choices that readers make.

  15. https://www.nytimes.com/roomfordebate/2015/04/16/what-are-corporations-obligations-to-shareholders/corporations-dont-have-to-maximize-profits

    Gropen said Amazon as a public company has an “ethical and legal obligation” to maximize profits.

    This is not true.

    The Supreme Court RECENTLY said it is not true. And certainly, there is no legal obligation for any public company to violate the law by exploiting a monopsony or monopoly to bid lower or charge more than a competitive price. In fact, there are laws — not always enforced the way some people want them to be — saying you really better NOT exploit a monopsony or monopoly to charge excessively high or bid excessively low.

    The entire argument — Amazon’s market dominance will inevitably lead to abuse — is first a slippery slope argument (not usually a good sign!) and second based on a wild misunderstanding of the law. It also — and this is frequently noted including in this comments thread — ignores the context Amazon exists in (the status quo ante had a publisher monopsonistic cartel abusing authors), which will tend to result in authors, customers and the regulatory environment (everyone but the beneficiary of status quo ante) to cut them a little extra slack.

    I know why people keep making this bullshit argument (companies HAVE to break the law to comply with legal / ethical requirements as a company!). There isn’t a better one, and this one has at least an appearance of helping some underdog, somewhere. I just wish they’d go find something better to do with their excellent written language expression skills.

  16. I’m no lawyer, but as I understand anti-trust laws, they only say that you must treat all business customers (in the same class) the same way, and that you cannot use your market power to make consumers pay more, or to otherwise harm them.

    I don’t think it says anything about whether or not Amazon (as a distribution channel) can use its muscle to force vendors to offer bigger discounts, lower prices, or whatever — because that would create either lower prices for the consumer, or no change.

    If I’m wrong, would you mind citing statutes?

    As for the SCOTUS decision, I’d love to look that up, and read it. Which case was it?

    • “I don’t think it says anything about whether or not Amazon (as a distribution channel) can use its muscle to force vendors to offer bigger discounts, lower prices, or whatever — because that would create either lower prices for the consumer, or no change.”

      If that was against the law they’d have to go after Walmart – because they’re known to do those very things!

  17. I just went and re-read the NYT article, and I don’t think it applies here, Rebecca Allen.

    None of what I said that Amazon was likely to do violates any broadly accepted ethical canon, nor does it harm any people or business other than authors and publishers.

    As for business judgment: my point was that it will help Amazon’s business, not hurt it.

    Amazon doesn’t need books. At all. It certainly doesn’t need professional-quality books.

    Amazon’s management is firmly convinced that publishers are horrendously inefficient, and are investing far too much money in the books that they make. I very much doubt that they would expect publishers to go out of business, if they forced the amount that publishers get per copy to drop drastically.

    Last, but not least, I agree with the person earlier in this comment thread who said that Amazon might very well pass most of the extra margin on to consumers, instead of keeping it. That in itself would probably convince a court that the action was legal.

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