Aug 032008
 

Being involved in the wrap-up of my own lawsuit during the last couple of months, I haven’t kept up to date with how small publishers are dealing with the Amazon Ultimatum. The last I heard was that the American Society of Journalists and Authors, among other organizations, had joined the fight to prevent Amazon from monopolizing the book retailing and printing market.

Turns out BookLocker filed a class action antitrust lawsuit against Amazon and BookSurge in May (the latter is the print-on-demand company that Amazon bought and which requires all print-on-demand or POD publishers to use). The thing that hadn’t really sunk in when I first started following this story was that Amazon is not only forcing small publishers to use their printer BookSurge in order to sell books on Amazon, but that they are also putting the screws on publishers to give Amazon more of a discount than any other wholesaler or retailer or even the publisher itself through their own bookstore.

At the moment, the person who gets the smallest part of the pie is the author. With Amazon insisting on even tighter margins for the publisher and author, guess whose tiny pie piece is going to shrink even more? Yup, the author’s.

Publishers already work on thin margins, and so it will be very difficult for them to absorb giving more of the price to Amazon and having less of it for themselves. Thus, in time, the author will more than likely be asked to take a smaller royalty percentage under the new Amazon model. Right now, the numbers are like this: If, for example, a book sells for $20 retail, and Amazon gets a 50% discount, then that means Amazon pays $10 for the book, but like all retailers, it still prices the book at the printed retail price of $20. However, with such a deep discount (wholesalers get 36%), Amazon has the leeway to sometimes offer a better price to customers than what’s printed on the book. Let’s say they discount it 30%, that’s $6 off. Amazon would then net $4 from the sale. (If it doesn’t offer a discount, it’ll net $10.) In comparison, the author receives a royalty of 10 to 20%, depending on the publisher, on the $10 Amazon wholesale price — not the retail price — which is $1 to $2. Seem fair that the company who simply retails the book earns 2 to 5x more than the author who created it? No, not to me either.

Now, Amazon apparently wants more. And it’s trying to get the class action lawsuit dismissed, standard operating procedure. If Amazon gets its way, then the author will earn a royalty on less than $10 per book sold through Amazon, so even less than the $1 to $2 they receive now.

iUniverse has an interesting deal with Barnes & Noble for its authors. Any book sold through B&N, and only through B&N, receives a much larger royalty rate of 25%. Now Amazon may be more of a book retailing juggernaut than B&N, but B&N has far more consideration for authors, the very people who make their business and Amazon’s possible, if I may be so blunt.

This looks like it’s going to be a long fight. Money is a powerful incentive for Amazon to try to shaft small publishers and authors for as long as possible. What’s an author to do? What’s a consumer to do?

Here in Canada, we have Chapters Indigo as an alternative to Amazon for buying books online. I’ve found the Chapters community in-house support for authors very good; there isn’t the equivalent from Amazon as far as I can see. Even Facebook provides more advice and support for budding authors than Amazon does. As for customer support, I’ve always received good service from Chapters Indigo. I found Amazon.ca actually to be slower in delivery than Chapters Indigo. In the US, you have B&N. I’m not familiar with their customer support, but I’ve heard that they’ve been improving their online presence. For Britain, I’m afraid I don’t know what your online alternatives are. But if anyone has good suggestions for Britain or any other non-North American country, please leave them in the Comments section!

As for me, I’ll be leaving my Orders page as is. First off, decision making is no longer my forté (thank you stupid drivers), and second I really don’t know what is best for me as an author. The thing that concerns me the most is that Amazon.com is the only place that has reviews on my book. B&N does have one review, but Chapters has zip, not even a rating. Reviews and ratings are very helpful for would-be readers to determine if a book is worth buying. And, as well, Amazon has the most informative affiliate links. Even if people don’t use them, the information contained in the Amazon affiliate links is far more helpful than the Chapters affiliate links (just a graphic, big deal). Plus, after doing a quick check on my Amazon rankings, it looks like people are ordering from Amazon.com and Amazon.ca, but alas not Amazon.co.uk. (Now if only someone would buy the darn copy at Book City…) Eventually, I’ll figure it out. Meanwhile, I’ll probably post updates about this issue every so often. Stay posted!

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    I am an Author who is getting very little (less than a dollar a book) for something I wrote. What makes them think they are entitled to MY money? I want a class action lawsuit agasint’ them. Those thieves.

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    I am an Author who is getting very little (less than a dollar a book) for something I wrote. What makes them think they are entitled to MY money? I want a class action lawsuit agasint’ them. Those thieves.