Author Discussions: Amazon’s New Buy Button

Buy-Button

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Publisher’s Weekly alerted authors and publishers: “A new program from Amazon is drawing a range of reactions from those across the publishing industry, from fear to downright anger. The e-tailer has started allowing third-party book re-sellers to “win” “buy buttons” on book pages.  The program, publishers, agents, and authors allege, is discouraging customers from buying new books, negatively affecting sales and revenue.”
Interesting comments from authors and publishers on this site too.

And Brooke Warner,  contributor to Huffington Post, wrote: “How Amazon, Once Again, Is Driving Down The Value Of Books And Undermining Authors.  Third-party sellers can now ‘win’ the Buy box.  Here’s what that means:
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When you go to a product page on Amazon, the ADD TO CART button is the default offer.  Other used options fall below the ‘Buy Box’.  Where books are concerned, the default “Buy Box” option has always belonged to the publisher.  When you buy a book, Amazon pays the publisher 45 percent of the list price, so authors are making a profit (albeit small) every time you buy.  This contributes to authors’ royalties and also means that your purchase is supporting the entity that published the book, namely the publisher.

Now, Amazon’s policy states that “eligible sellers will be able to compete for the “Buy Box”, but in this case, we had been completely wiped off of Amazon as an eligible seller in any capacity, without being notified.

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A Big Question Comes to Mind Here:
Where is Amazon’s accountability to publishers? The impact this policy has on publishers’ backlist (typically meaning any book that’s six months or older) is potentially devastating, especially because consumers don’t understand what’s going on here.

Small publishers, in particular, are dependent on backlist sales for their livelihood.  Amazon is a Herculean player when it comes to backlist sales because bookstores favor front-list books. If you’re looking for a book that’s a year old or more, you’re likely to go to Amazon to find it.  Second Wind was published in 2010, but the way Amazon has set up this listing, it’s as if the book were out of print with the publisher.  I know for a fact it is not.

• Amazon, once again, is attempting to drive down the value of books, and therefore intellectual property and creative work in general.

• Amazon suggests that one of the ways you can win the Buy Box is to keep books “in stock”.  This poses a major problem for self-published authors and any backlist author whose books are print-on-demand.  Print-on-demand automatically means there’s no stock.  The books are printed to order.  If Amazon is penalizing books that are set up as POD titles and favoring third-party sellers who have stock due to any of the above-mentioned means of procurement, authors will again be dinged when their own listing, or publisher listing, doesn’t exist on Amazon.”  Read the whole article with screenshots here:
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Nate Hoffelder counters in Digital Reader:
In recent weeks, Amazon’s new Buy Box policy has received a fair amount of industry attention and blowback, leaving publishers and authors speculating about Amazon’s motives for implementing it.  While some think the industry reaction is a tempest in a teacup, with publishers raising their hackles once again over an Amazon business decision, others see the policy—which allows third-party sellers to “win” the “Buy Box”, thus relegating publisher listings to the “Other Sellers on Amazon” section—as an aggressive move against publishers and authors.

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The revelation early last week that Amazon is allowing third-party resellers to compete to win the featured “buy buttons” on the e-tailer’s book pages led to criticism from publishers, authors, and agents, as well as a fair amount of confusion over how the program actually works.

Up until March 1, the featured buy button had been reserved for books that Amazon sold on behalf of publishers.  Under the new program, to win buttons, resellers must meet various Amazon criteria that include some combination of price, availability, and delivery time.  In addition, the program is only open to books in new condition.  Amazon noted that it permits resellers to compete with it on the sale of new items in most of its other product categories and that the recent change allows resellers of new books to compete in the books category.

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The “Buy Box” Change
Announced in November 2016 without much fanfare, in a seller forum notifying vendors: “Sellers will be able to compete for the Buy Box for Books in new condition.”  The language of the announcement was geared toward vendors, not publishers or author-publishers.

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And despite the controversy, some people’s reaction to the change has been ambivalent: So what if a publisher’s listing ranks third or fourth under “Other Sellers on Amazon?”  The argument supporters of Amazon love to make is that e-tail giant is just beating publishers at their own game – so publishers should start playing the game better and stop complaining.

Here’s the problem: Amazon is much more than just a retailer. It’s the go-to site for books. And reliance on Amazon as your only vendor is a dangerous business strategy.
Many in the industry speculate that Amazon’s ultimate motive with the “Buy Box” policy relates to the company’s plans to expand its POD offerings.  Amazon’s guidelines for how to win the “Buy Box” states that vendors must excel in pricing, availability, fulfillment, and customer service.

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Print-on-Demand Books
For authors using CreateSpace for POD titles, the only one of these areas Amazon will not directly control is pricing.

  • Authors who distribute their POD books through CreateSpace can choose an option called expanded distribution.  The authors agree to take a smaller royalty (40% vs 60%) in order for the book to be listed with third-party retailers like Barnes & Noble’s website and Walmart’s website.
  • The thing about expanded distribution is that those third-party retailers can price the book however they like.  They can discount the book if they so choose, and they can sell the book at twice the list price.  What’s more, those third-party sellers can also list the book on Amazon’s marketplace.

Authors who choose expanded distribution could now see the “Buy Button” going to third-party sellers that offer the authors’ books at a discount.  On the other hand, given that most indie authors have anemic print sales because POD books are so expensive, any discount is bound to result in an increase in print sales and a net benefit for authors. But they will also be getting a smaller royalty on the list price, meaning they’re earning less per title.

While publishers and authors acknowledged that Amazon has the right to facilitate sales of used books through resellers, they are mystified about how third-party resellers can sell new books at the low prices they are charging and, more importantly, about how they are obtaining the books.

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What is a New Book?
In a letter sent to resellers about the new program, Amazon said books must be in “new condition,” a phrasing that made publishers and authors believe resellers are using the term as a loophole to sell used books. Amazon said that, though the reseller letter does use the phrase “new condition,” the definition of what new means is found in its guidelines; a new book must be a “brand-new, unused, unread copy in perfect condition. The dust cover and original protective wrapping, if any, is intact.”

In a statement, Amazon said it has procedures in place to make sure new books are in fact new: “We want customers to buy with confidence any time they make a purchase on Amazon and require all sellers to sell authentic products. We use a variety of methods to review sellers and individual offers depending on the situation and this can include asking for invoices, identity documentation, and other information.”

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Lot’s of Comments From Readers
The impact of the change is far from clear at this stage; a number of observers believe it will hurt smaller publishers more than big publishers. But all publishers and authors see it as Amazon taking another piece of the book revenue pie.

“Amazon no longer needs to sell books at all, so there’s no reason that it will fail to extract all possible profit from all transactions.”

“It’s not about extracting profit as it is eliminating the profit margin in order to drive down the price. Amazon has always, always gone for volume.  They sell as much as they can as cheaply as they can.  This latest change is another step in this direction.”

“On the other hand: If you distribute through IngramSpark and offer the short discount of 40%, then you will always get 60% regardless of downstream discounts. Net of print costs – but that applies everywhere.”

“Amazon is getting a profit margin from the sales. And they’re pumping up the volume (to increase their total margin) by dropping the price.”

“They’ll keep it up until they’ve moved every drop from our column into theirs, by forcing the share of the prices offered to (self-)publishers down, and manipulating the demand and supply curves until they’ve got all the available margin possible.”

“Given that Amazon is a publicly traded company, and a near-monopsony, they have no other ethical option.”

“As I understand it, PoD (at least at CreateSpace and Ingram) pays out based on the cover price that I list, not the sales price (the way KDP pays out). Who cares what discount anyone wants to run? I get the same royalty, and (hopefully) a sales increase.”

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What Authors Can Do:
The only way to escape somewhat from Amazon’s near-monopoly is to expand to other online retailers, such as iBooks, Kobo, Barnes & Noble, Scribd etc., setting up an account with each of these retailers or use the services of distributors.

Draft2Digital for example formats your manuscript for free into the epub format and transfers it to dozens of online retailers in North America and Europe – in hours! and promote your book through Books2Read.  They get a 10% commission on sold books. eBookPartnership in Great Britain charges for formatting, but don’t take a commission. Smashwords also takes ten percent.

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Sell From Your Own Website!
With all of the fantastic options via e-commerce apps, you have plenty of reasons to sell your book directly from your website in addition to your sales through online retailers. Shopify, Selz, Gumroad or Ganxy offer easy and inexpensive shop programs for your website. Put your eggs in several baskets – not just in one! The best part: you have access to your readers, you know who is buying and reading your books, in order to communicate with them and inform readers about your next works.

 

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