Amazon Caught Bullying Suppliers (Again)
Just when you forget the past shenanigans Amazon has pulled on their partners something new comes up and reminds us why it’s not safe to rely on Amazon for your income.
The Wall Street Journal is reporting that M-Edge, a Baltimore based ereader case manufacturer, has filed suit against Amazon. According to the filings, Amazon pressured M-Edge into revising their contract, pulled M-Edge’s products from Kindle listings, as well as other skullduggery.
Chief among their complaints is that Amazon infringed on an M-Edge patent. You might recall that Amazon launched the new Kindles with lighted cases. Well, guess who had already thought of the idea and was already selling similar cases for the Kindle?
But wait, there’s more. This lawsuit alleges that Amazon bullied M-Edge into renegotiating a contract, and the new one cost the case maker over 6 million dollars.
M-Edge first signed a first contract to sell their cases via Amazon.com in November 2009. It was supposed to run for 3 years and it would have paid Amazon a roughly 15% commission. About 2 months later, according to the filings, Amazon decided that the terms weren’t good enough and they started pressuring M-Edge to sign a new contract, only this time Amazon would get 32% of the sale price.
One Amazon exec reportedly tried to blackmail M-Edge into agreeing to the change. The threat was one we’d heard before; M-Edge was almost delisted from Amazon.com. M-Edge eventually caved, and they signed the new contract in July 2010. M-Edge claims that that contract cost the company $6.5 million in commissions and fees they wouldn’t have otherwise had to pay.
Folks, this should come as no surprise because it’s not the first time that Amazon has pressured their suppliers into giving them sweetheart deals. Did you know that 2008 Amazon was caught blackmailing publishers?
Back in March 2008 Amazon started telling small POD publishers that they had to print their books through BookSurge, an Amazon sub, or else. In this case there was no carrot, and the stick was a serious threat. If publishers didn’t cooperate, Amazon would delist the books from Amazon.com. One publisher called Amazon’s bluff, and their books had their "Buy" buttons removed.
That publisher sued, and the case was eventually settled.
I know that I like to defend Amazon because I’ve been well treated as a customer, but even I will admit that I know that they have an ulterior motive. The only reason why Amazon is nice to customers is to keep us loyal. Their large customer base is the club they use to beat up suppliers.
If you’re publishing your ebooks in the Kindle Store, be warned. Amazon might do this to you someday.
image by delegate.zero