So Amazon has removed the Kindle titles of books who are distributed by IPG because Amazon wants to negotiate a more favorable contract – for Amazon. IPG demurred, so they are feeling the Amazon Backlash.
Mark Suchomel, head kahuna of IPG said, “Amazon.com is putting pressure on publishers and distributors to change their terms for electronic and print books to be more favorable toward Amazon.”
In other words, if you don’t pay, you don’t play. And the result is that you’re slammed out of the largest selling marketplace. And this is why I worry about Amazon’s overreaching power. They can dictate terms to distributors and publishers that are more and more onerous to our ever-shrinking profit margin. They’re reaching the point where it doesn’t matter whether they squeeze us out or not because they have their own publishing company.
Frankly this scares the stuffin’ out of me because I’m powerless to call any shots. If they’re slamming IPG, is my wonderful distributor, Consortium, next, and we’ll have to swallow untenable terms? Publishers have long bemoaned the “it’s the price of doing business” because it’s true.
For instance, if a publisher doesn’t accept returns on their books from bookstores, they’re slammed out of getting their books stocked. These books invariably come back in such poor shape that they can’t be used again. That means if we sent out 500 units and 150 came back, then goodbye 150 units…and we still had to pay for the print runs. That’s why publishers have to be mindful about what goes out and make sure it doesn’t come back.
Returns were a horrible little thing created to entice bookstores to buy a publisher’s books. Like taxes, it grew and expanded into an ugly behemoth that sucks money faster than the government. I’ve seen countless publishers go out of business due to massive returns.
Discounting is another hoop publishers have to jump through. Like returns, publishers started this to entice bookstores to order their books. And like returns, this turned into a huge money suck because publishers were competing against each other to see how large the discounting would go. So in that example, bookstores are the monopoly that keeps publishers paying the piper. It’s the price of doing business. And it’s an interesting piece of irony that both returns and discounts were started by publishers. Oh the tangled web we weave.
This is especially egregious because distributors like IPG, Consortium, PGW, Perseus, represent thousands of smaller independent commercial presses who don’t have their own sales staff. That means in order for our distributors to stay in business and do the fabulous job they do, they get a cut of our sales. If Amazon cuts more deeply into those margins, at what point will these smaller presses throw in the towel because they are no longer financially viable?
IPG’s publisher clients are holding their breath to see how this will end – and frankly, so is every other small commercial presse. And so are thousands of authors.
When you’re the biggest game in town, you can call the shots, and I only hope and pray that their monopoly doesn’t destroy all that’s good about publishing.