Amazon Behemoth Challenges Traditional Book Publishers

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Amazon.com has done a lot of things right when it comes to online marketing, from pioneering customer reviews (even when they were negative) to offering a platform for self-published authors. By accelerating its publishing program with 122 books being offered this fall, in both physical and e-book form, they’ve just launched their latest salvo against traditional publishers.

As a former book publisher, you’d think my loyalties would lie with publishing houses. The reality back in the 90s was that only BIG publishing houses made money. Less than 1% of all books published sold more than 5,000 copies.

At least Amazon is being transparent; they give the author an inexpensive way to reach a wide audience, take a small percentage, and tell the author that promotion and marketing expenses are up to the author. I could argue that access to Amazon’s worldwide audience is marketing push enough.

With traditional publishing, few unknown authors receive an advance and are expected to perform most of their own marketing which includes those painful local “dog and pony” book tours. Even then, when a bookseller received a request, they often didn’t have the book in stock. Unsold books only stay on the shelf for a month at most, and then are shipped back to the distributor. Only big publishing houses with marketing clout receive special treatment, generally by paying booksellers a “stocking” fee.

I experienced the futility of book selling first hand when a customer would order a book from my small house imprint, but the bookseller had returned the book to the distributor because it had been on the shelf too long. The distributor then would send another book from inventory and the publisher (me) would be issued a charge back. I concluded that the only company making money on book selling was UPS!

Amazon as Digital Retailer

With the introduction of the Kindle Fire, Amazon opened its vast warehouse of digital products and now competes head-to-head with Apple’s Ipad and Barnes & Nobles’ Nook. Early adopters, though small in number, tend to embrace new technology, so sales should be steady. But pricing on the latest Kindle version makes it appealing to even the most cost-conscious consumers. The product ships November 15th. I wouldn’t be surprised to see if sales set a record.

Jeff Bezos gets my vote for “Entrepreneur of the Decade” for keeping markets open and honest.

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