Amazon Defends Its Hachette Negotiating Tactics, Suggests Hachette Customers Order Elsewhere

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Part 2 - The One about the Small Publisher Who Defended Amazon and Amazon's Statement

 

The most interesting passage came at the end of the statement, where Amazon said:

This topic has generated a variety of coverage, presumably in part because the negotiation is with a book publisher instead of a supplier of a different type of product. Some of the coverage has expressed a relatively narrow point of view. Here is one post that offers a wider perspective.

http://www.thecockeyedpessimist.blogspot.com/2014/05/whos-afraid-of-amazoncom.html

Amazon is essentially crying foul because coverage of this topic hasn't favored Amazon. It's worded professionally and well, but...you know, cry me a river.

The piece Amazon linked to was written by Martin Shepard, co-publisher of The Permanent Press, on his personal blog, The Cockeyed Pessismist. Mr. Shepard lays out an impassioned defense of Amazon with sharp criticism of The New York Times's coverage as shoddy journalism that is not "Fit to Print," a reference to the newspaper's motto.

Mr. Shepard's zeal for Amazon seems genuine, and he makes some great points about how beneficial Amazon has been for small publishers like his company. He didn't mention how other small publishers distributed by Hachette are in danger of going out of business.

In my mind, however, what's wrong with his piece is that he fails to note Amazon's near, if not outright, monopoly power in the book industry, something that casts Amazon's actions in a different light from any other retailer. This is part of any valid discussion on what transpires between Amazon and any publisher, including the thousands of small and tiny publishers who sell books through Amazon.

Amazon characterized the piece as offering "a wider perspective," but it would be more accurate to say that it offers a different, but still very narrow perspective.

Amazon's statement in full:

We are currently buying less (print) inventory and "safety stock" on titles from the publisher, Hachette, than we ordinarily do, and are no longer taking pre-orders on titles whose publication dates are in the future. Instead, customers can order new titles when their publication date arrives. For titles with no stock on hand, customers can still place an order at which time we order the inventory from Hachette -- availability on those titles is dependent on how long it takes Hachette to fill the orders we place. Once the inventory arrives, we ship it to the customer promptly. These changes are related to the contract and terms between Hachette and Amazon.

At Amazon, we do business with more than 70,000 suppliers, including thousands of publishers. One of our important suppliers is Hachette, which is part of a $10 billion media conglomerate. Unfortunately, despite much work from both sides, we have been unable to reach mutually-acceptable agreement on terms. Hachette has operated in good faith and we admire the company and its executives. Nevertheless, the two companies have so far failed to find a solution. Even more unfortunate, though we remain hopeful and are working hard to come to a resolution as soon as possible, we are not optimistic that this will be resolved soon.

Negotiating with suppliers for equitable terms and making stocking and assortment decisions based on those terms is one of a bookseller's, or any retailer's, most important jobs. Suppliers get to decide the terms under which they are willing to sell to a retailer. It's reciprocally the right of a retailer to determine whether the terms on offer are acceptable and to stock items accordingly. A retailer can feature a supplier's items in its advertising and promotional circulars, "stack it high" in the front of the store, keep small quantities on hand in the back aisle, or not carry the item at all, and bookstores and other retailers do these every day. When we negotiate with suppliers, we are doing so on behalf of customers. Negotiating for acceptable terms is an essential business practice that is critical to keeping service and value high for customers in the medium and long term.

A word about proportion: this business interruption affects a small percentage of Amazon's demand-weighted units. If you order 1,000 items from Amazon, 989 will be unaffected by this interruption. If you do need one of the affected titles quickly, we regret the inconvenience and encourage you to purchase a new or used version from one of our third-party sellers or from one of our competitors.

We also take seriously the impact it has when, however infrequently, such a business interruption affects authors. We've offered to Hachette to fund 50% of an author pool - to be allocated by Hachette - to mitigate the impact of this dispute on author royalties, if Hachette funds the other 50%. We did this with the publisher Macmillan some years ago. We hope Hachette takes us up on it.

This topic has generated a variety of coverage, presumably in part because the negotiation is with a book publisher instead of a supplier of a different type of product. Some of the coverage has expressed a relatively narrow point of view. Here is one post that offers a wider perspective.

 

Thank you.

Comments

Arnold Ziffel

Oh, poor widdle Bilderberger Bezos. He’s so mistreated.

geoduck

I agree with them, just order elsewhere. I will be ordering elsewhere. Everything I used to get from Amazon will henceforth be ordered elsewhere, even if it costs more.

**** Amazon

Lee Dronick

Well for that matter one can almost certainly purchase other products elsewhere. Are there any Amazon exclusives?

jhorvatic

The correct way to say this is boycott Amazon period. The customers have the power to say they dislike these kind of monopolistic practices. Why does Amazon make the customer suffer just because they don’t like the terms of sale with a publisher. Seems wrong to me in every way. And so BOYCOTT Amazon for all further purchases. I used to order from them a lot. Not anymore, I’m done.

Lee Dronick

jhorvatic, I suppose that the situation is similar to Walmart. People shop there in large part for the low prices even though that may hurt smaller retailers in the neighborhood.

ibuck

I have already stopped ordering from Amazon, except for occasional used books from 3rd party vendors on their site. And I wish some other entity, like B&N, would offer that option. I am checking out Booksamillion.com, BarnesandNoble.com and patronizing my local brick bookstores.

I’m dismayed that the current US administration and attorney general have not moved against monopolist/oligopolist Amazon. And I continue to wonder if Amazon’s house of cards (thin margin or no profit, but constantly expanding) is about to fall.

iJack

Methinks it’s possible some of Mr. Shepard’s titles may have received less than glowing reviews from The Gray Lady.

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