Amazon the Extortionist: Part N+1
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.