Thursday, May 10, 2012

Boycotting versus Marketing

Boycott – to combine in abstaining from, or preventing dealings with, as a means of intimidation or coercion: to boycott a store ... to abstain from buying or using: to boycott foreign products.

The practice of boycotting has become a method for consumers to join together and fight back against ‘big, bad corporations’ like Walmart and Proctor & Gamble. For authors the ‘big, bad corporation’ (besides the ‘Big Six’ publishers – Hatchette, Macmillan, Penguin, HarperCollins, Random House, and Simon & Schuster) is Amazon. Like consumers who have a general distrust of the secret behind-the-scenes goings-on of large corporations, authors harbor animosity against any publishing giant that ignores their work and seems to stand in the way of their work being published or of selling well after it is published by whatever means.

From trailblazing profiteer to publishing pirateer. It should be noted that the Big Six publishers are often at odds with Amazon, as is Apple, a retail competitor of Amazon. In fact, it seems that almost everyone at some time or another is at odds with Amazon. And sometimes with good reason. Amazon has set itself up as a publisher competitor, having lured away some better-selling authors from the Big Six to create its own stable of authors for its own publishing venture. In a clever and insidious retail ploy to undercut other booksellers, Amazon instituted deep book pricing discounts to lure customers to buy online. Amazon further strong-armed the Big Six into paying to sell their books on Amazon and then took away those publishers’ right to set their own retail price for their books by threatening to stop selling their books if they didn’t agree to whatever terms Amazon wanted to impose. The publishers were then left with profit loss on books that Amazon sold below their overhead-heavy wholesale threshold. Amazon did all this with a multi-faceted market-domination campaign.

But when the Big Six got together with a retail competitor to put a stop to Amazon’s price-bullying, the Department of Justice slapped a suit against them. Looking back on the way Amazon did things, it is easy to label this company as a ‘big, bad corporation’ reminiscent of the robber-barons of the industrial railroad age. It is Amazon-amazing how the DoJ turned a blind eye to Amazon’s underhanded market tactics. Or maybe it was naivety on the part of the Big Six in handing over all the retail work to Amazon, then crying foul when Amazon decided it didn’t need the Big Six to do anything, that it could get the unhappy authors, hire the displaced editors, and start its own publishing arm.

Bookstore owners and ‘box retailers’ like Borders and Best Buy have found themselves at a loss to survive this insidious shift in retail consumer buying habits. In a death-gasp, booksellers have called on their remaining loyal customers to boycott Amazon, and many authors have joined in, rallying for ‘buying local’ instead of feeding the profit-hungry monster they picture Amazon to be – a monster that will stop at nothing, even cutting off its own nose to spite its face just to build and maintain a market advantage. And maybe they are exactly right in this perception. But what does it mean to the individual author who refuses to sell his or her books on Amazon?

Opening the gates to the masses. The Big Six publishers still carry on the practice of accepting only agent-screened book submissions for consideration, and agents only take on books by authors they think they can sell to Big Six or second-tier publishers. Publishers base their acceptance policy on the bottom line – how much profit they can make from sales of each book they accept. Agents make their money by taking 15 percent off the top of royalties paid to authors they represent. (Amazingly, many agents have jumped ship and cut out the publisher by starting their own publishing firms after doing all the author screening and developing ... figuring why did they need the publishers in the first place. But that is for another blog topic.) This means that – until just a few years ago – the majority of authors whose books were not considered viably marketable were left unpublished, with only expensive vanity publishing or subsidy publishing as a self-publishing alternative.

Amazon, in the beginning, based its model of online book sales on charging everyone for the privilege of listing their books on its site. However, Amazon quickly saw the folly in the Big Six publishing model of ‘gate-keeping’ based on sales profit and gradually dispensed with the practice of charging ‘admission’ for the privilege to sell books on its site. At the same time, Amazon developed an automated machine of self-service book uploading and made it available to everyone for free, or for a very affordable nominal cost. That meant that self-publishing and selling books online suddenly became availabe to every author who was formerly shut out of the publishing arena by the Big Six or by the sheer cost of for-profit self-publishing services.

Amazon saw the profit value in a ‘pay when you sell’ model, and the sheer mass of books flooding in for sale would mean profit would come from anything that sold, no matter how good or bad it was. In Amazon’s model, there was no need to pretend that gate-keeping was a method of quality assurance for customers, because the customers would be the quality assessors – but would have to buy the products in order to assess them. So it was a win-win situation for Amazon, and the gates were swung wide open, allowing any author to try his luck at publishing, promoting, and selling his work. The ‘pay when you sell’ model of taking 30 to 65 percent of every book's retail sale has apparently worked very well for Amazon, but the corporation has not stopped there.

Shutting out the competition. Amazon has come up with a new clever ‘exclusive representation’ ploy disguised as a new marketing opportunity for sales-hungry authors. This plan requires authors who sign up for the free Kindle Select program to stop selling titles enrolled in this program on any other retailer’s site. The lure is the ability to give their titles away for free for five days during every 90-day enrollment period in the program. There is also the opportunity to lend the book and get paid for it, even though Amazon would not charge the Amazon Prime customer for borrowing of a title (presumably because the customer has already paid for it up front in the $75 program fee to join the Amazon Prime ‘favored customer’ program). And the book would remain for sale to ‘regular’ customers at the regular price. Authors have jumped at the chance to give their books away while making absolutely no sales, all for the chance to lure readers into looking at their books.

With this three-tier ploy to create a monopoly, Amazon first lured authors to give their stuff away for free in an attempt to attract new customers. While authors were doing that, these new customers were becoming Amazon’s customers. The exclusivity of content and the lure of free content ensured these customers would not be going to any retail competitors for books, thus shutting out all competitors during prime Christmas shopping season. This resulted in authors taking down hundreds of thousands of book titles from other retailer sites, drying up the pool of products available for those retailers to sell. With the sudden disappearance of retail content from Apple’s iBooks site, Barnes & Noble’s online retail site, Googlebooks, Smashwords, Diesel, Kobo, and so on, and Amazon scooping up all these titles and making them available only through the Kindle Select program, Amazon was able to effectively shut out its competition and damage their prime retail selling prospects during the holiday season and after. Already having instituted a Kindle-device-specific format for ebooks, Amazon further controlled the competitive sale of alternate reading devices like the Barnes & Noble Nook.

What does this mean for authors? In looking at the history of Amazon’s behavior in the marketplace, two things become obvious. Amazon recognizes that any group can be utilized as a means to an end. Publishers were lured to the online retail platform and then bullied with it once Amazon had them locked in as the only game in town for ebook sales. When online competition from other retailers began to build, Amazon used its superior marketplace advantage to bully publishers into its profit-loss campaign to undersell and undercut and weaken all competition, including online retailers and physical bookstores, in an attempt to maintain its own market dominance. At the same time, Amazon enlisted the help of hungry and neglected authors to flood the marketplace with alternate content to weaken the publishers’ position as the only provider of content for retail sale. Then Amazon stepped in as an alternate provider of ‘curated’ retail content to offset the flood of uncurated content from self-published authors whose work was not properly prepared for consumer consumption with editing and artistic standards the Big Six publishers had tried to maintain.

So, yes, overall ... Amazon does look like an evil giant corporate monster poised to take over the world. And in giving all authors – ready or not – the opportunity to publish their work, Amazon may appear to have been a benefactor of the literary arts. But the truth is, the deliberate offer of alternate cheap self-publishing opportunities was not an altruistic act, it was just part of a larger profiteering ploy that included killing the competition and weakening the exclusive source of content so Amazon itself could wrangle control of every aspect of the book production chain. Now Amazon stands poised to maintain control over pricing and royalty percentages so that eventually there will be no place else to go. In any market environment, an exclusive monopoly is a bad thing.

Don’t put all your eggs in one basket. So, should you, the author, sign up for Amazon’s market exclusive Kindle Select program and pull your books from all other retails for the ‘privilege’ of giving your books away on Amazon?

It’s true that Amazon has built market visibility online that dwarfs every other retailer. It’s true that Amazon has used some underhanded tactics to build that market visibility – often at the expense of content providers. But the old adage about all your eggs has never been truer. You should spread your product far and wide. Use multiple retailers to sell your content. The more places for your books to be seen, the more chances someone new will see it. But also take a lesson from Amazon. Don’t ignore any reasonable opportunity. Even if Amazon sales of your books are higher than anyone else’s, don’t take your books off other retail sites just because the sales revenue is smaller than on Amazon. And just because you don’t like Amazon’s market tactics, don’t pull your books from their site. They are a retailer like anyone else. If they start dictating unreasonable terms, then pull out. But don’t ignore them as a sales opportunity on principle alone. You’ll just be shutting off another source of potential sales of your book. And what’s smart about that? Nothing ... nothing at all.

It’s a business, after all. Your responsibility to yourself and your books is to treat your writing/publishing endeavor as a business. Make business decisions about marketing and selling your books based on what credible information you have available.

If you have multiple books for sale, you can choose one or maybe two books to offer on the Kindle Select program for a trial 90-day period. It’s best not to split up a series and leave part of it on other retail sites, because making only part of a series available to readers that visit those sites will discourage sales if some of the books in the series are not available. If you have only a single series to work with, you’re going to have to decide how important it is for you to try the Kindle Select program. Maybe you’ll decide to remove all the books and put them in the program, or maybe none of them. You have to judge how detrimental it will be to your sales on other retail sites to temporarily remove your books from those sites. If the majority of your sales come from sites other than Amazon, then experimenting with Amazon’s exclusive marketing scheme could actually kill all your sales.

When you sign up for Kindle Select and enroll a title, don’t leave the default set at ‘auto-renew.’ Use your five-day-free promo one day at a time or all at once, whatever seems like the best ploy for you. Broadcast it everywhere – Twitter, Facebook, blog, etc.

Recognize that for every book you give away, most people won’t ever get around to reading it because there will be a download frenzy that will make it physically impossible for everyone to read in the next five years every free download they make. Take minimal pleasure in your ‘apparent’ sales spike for those free-download days, because as soon as the free days are over, so is your sales spike. Take solace in believing that at least a few people will read your book, and others may buy it in response to that temporary sales spike or based on some nice reviews you may, by chance, get from some thoughtful readers. Check your follow-up sales and see if that freebie promo did any real good. If all you get is a bunch of free books given away, and no follow-up sales, then at least you’ll have the satisfaction of knowing you gave it a shot. And then put your trial books back up on the other retail sites where you took them down, and move on.

You can try another book or two in the Kindle Select program, to see if you can break in with a fluke, but don’t expect much lasting sales improvement from this ploy. Always be ready to put your books back on other retail sites when your market experiment concludes – because your main objective is to give all your books the best visibility you can, to get the most sales you can. That’s why you’re in business – to sell your books, not to show some misguided sense of loyalty to one retailer who could turn around tomorrow and eat you for a snack and then move on to the next victim without even a backward glance. That is the nature of the beast, and you must never forget it.


  1. What a great interesting well written well thought out article. You should consider submitting this article to magazines and or newspapers.

    When I first published in January 2010 Amazon Kindle payed a 35 percent royalty for my E-books. A few months later Amazon changed the royalty payment to 65 percent. Amazon has a history of treating authors well. So far, so good. If it wasn't for Amazon, I could not sell my books, and Penumbra Publishing would not be a viable company.

    Will Amazon turn on me. Should I be weary of the big evil corporation? Big is not evil. Inovation 9inventing Kindle E-books) is not unfair competition. Amazon is throwing its weight around. The Big Six publishers may get hurt. Call it payback for the Big Six monopoly on bookstore distribution that existed forever.

    I say let the gatekeepers fall. The gatekeepers do not just control 'quality,' they controll thought. I don't need the thought police telling me what I am allowed to read. The Bix Six NY publishiers do not make decisions solely based on business principles. Their politics and predjudice are a factor, too. The Bix Six can shove their cartel up their collective high brow elite asses.

    From the perspective of an unknown first time author, I say God Bless the American Dream, and God Bless Amazon.

  2. Walt,

    Shaking up the status quo is generally a good thing. 'Status quo' usually means some narrow-minded, tight-fisted enclave who has a stranglehold on whatever is the plaything of the 'status quo.' For publishing it is freedom of opportunity to publish.

    Today it's the Bix Six falling from 'status quo' status ... tomorrow it could be Amazon.


  3. Great points, Pat. Thanks for this article :)

  4. Hi Pat, Walt and Tasha :)

    Interesting article (well done Pat!). I agree that a monopoly is never a good thing. Amazon certaintly has pros and cons but needs to be dealt with carefully. I like helping out smaller companies and don't like being forced to only sell at one place. Democracy is about choices and I don't think the economy should be any different. Competition can only help customers (and companines as well) and the economy as a whole (or so I've heard from business people :-) but I'll admit with the book industry my experience has been limited so far. Thanks for a thought provoking article, always a pleasure to read them =)


  5. Thanks everyone, it's always good to look at everything from different views to get a better idea of the whole picture.


  6. Good article, Pat. Walter was right--the Big Six can shove it. (They can also vanish in the dust, for all I care.) They'd been rejecting me since 1971, and I have all the confidence in the world that they would have rejected me the rest of my life as well. Ditto for the nearly four hundred agents I'd also tried during this same thirty-year time frame. Maybe Amazon IS a beast in some things . . . but because of them, I've made a bunch of sales I wouldn't have made if I'd still been waiting for those arrogant, self-serving jerks from New York to take a minute of their valuable time to at least glance at one of my queries. Life is short. We can't spend ALL our time waiting for that dream, can we?

  7. Dave, you are so right. Wait too long to achieve your dreams, and it'll be too late. It's better to try and fail than never try at all. Make no mistake, Amazon did not offer free publishing to everyone for selfless magnanimous reasons - the only impetus was to shake up the publishing establishment and steal their business. Amazon has done that in spades. As a by-product, many authors who never would have been given the time of day through 'traditional' publishing have broken the institutional mold and gone on to pave new paths. Regardless of all the sub-motivations and behind-the-scenes plotting and ignorance and wastefulness of corporations, us 'little folk' have been given an unexpected gift - the chance to do something we've always wanted ... get published.



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