I have two articles from ShelfAwareness that I’d like to share. The first is dated July 5, 2013 and is taken from an article found in the NYT:
Amazon: Less Competition, Less Discounting?
Although numbers are difficult to ascertain–as is usual with the e-retailing giant–Amazon.com has been lowering or eliminating discounts on many printed scholarly, university press and backlist titles, much to the chagrin of some authors who say the prices closer to the suggested retail price lower their books’ sales and exposure, the New York Times wrote.
Prices at Amazon “have all the permanence of plane fares,” the paper wrote, citing many small press and academic publishers and books published by those presses. Amazon, which didn’t directly answer questions about why certain titles are priced higher than in the past, continues to discount many current and popular titles.
Because Amazon “sells about one in four printed books” and has no close rivals, many believe that less competition is responsible for the tendency. Stephen Blake Mettee, chairman of the Independent Book Publishers Association, called this a classic move by a large company that has come to dominate a market. “You lower your prices until the competition is out of the picture, and then you raise your prices and get your money back,” he said.
The Times noted that “in its 16 years as a public company, Amazon has received unique permission from Wall Street to concentrate on expanding its infrastructure, increasing revenue at the expense of profit. Stockholders have pushed Amazon shares up to a record level, even though the company makes only pocket change. Profits were always promised tomorrow. Small publishers wonder if tomorrow is finally here, and they are the ones who will pay for it.”
Unexplored in the article is the role of some publishers in setting the “high” retail prices at the heart of the complaints.
The second article is from ShelfAwareness of July 27, 2013:
Amazon’s ‘Declaration of War’
Yesterday Amazon.com quietly began discounting many bestselling hardcover titles between 50% and 65%, levels we’ve never seen in the history of Amazon or in the bricks-and-mortar price wars of the past. The books are from a range of major publishers and include, for example, Inferno by Dan Brown, which has a list price of $29.95 but is available on Amazon for $11.65, a 61% discount; And the Mountains Echoed by Khaled Hosseini, listed for $28.95, offered at $12.04, a 58% discount; Lean In by Sheryl Sandberg, listed at $24.95, available for $9.09, a 64% discount; and The Fault in Our Stars by John Green, listed at $17.99, available for $6.55, 64% off. A notable exception is The Cuckoo’s Calling by J.K. Rowling, using the pseudonym Robert Galbraith, which is discounted 42%.
The discounts are far below the usual 40%-50% range sometimes offered by Amazon, warehouse clubs and other discounters and are more typical for remainders than frontlist hardcovers. In some cases, the hardcovers are priced below the Kindle editions.
“It’s an open declaration of war against the industry,” said Jack McKeown, president of Books & Books Westhampton Beach, Westhampton Beach, N.Y. Like several people familiar with Amazon’s move, he speculated that Amazon has been “emboldened” by the Justice Department’s victory against five major publishers in the e-book agency model case as well as Wall Street’s acceptance of continued losses by Amazon for now in the expectation of retail domination–and major profits–eventually. This last point was seen most recently on Thursday, when Amazon’s quarterly results included a net loss and were below Wall Street expectations but did not provoke the usual rush to sell, as is the case with most companies whose results are disappointing.
Another possible reason for Amazon’s boldness is its apparently cozy relationship with the Obama administration–whose Justice Department pursued the agency model case, which mainly benefited Amazon. This relationship will be highlighted this coming Tuesday, when the president will give another major speech on the economy and aiding the middle class at, of all places, the Amazon warehouse in Chattanooga, Tenn. This is roughly equivalent of going to a Wal-Mart and calling for more of the kinds of jobs it offers. —John Mutter
– Sunny Solomon