Portrait of American businessman and Amazon.com CEO Jeff Bezos poses in an aisle of bookshelves with a shopping cart full of books and compact discs, Seattle, Washington, September 1998. (Photo by Rex Rystedt/Time Life Pictures/Getty Images)
Amazon is an amazing online retailer, capable of shipping products within 48 hours (or even less) from the moment you click “Buy Now with 1 Click.” It’s a miracle of modern logistics and technology.
So why, for one particular book publisher (Hachette), does Amazon appear to be using a horse and buggy for its deliveries?
Could it be spite?
Under founder and CEO Jeff Bezos’ leadership, Amazon has become the world’s most aggressive retailer. It gives no quarter to any competitor and is always looking for ways to deliver products from its voluminous catalog as soon as possible. The company is actually investigating how to intuit in advance what products you’ll buy in the future, so Amazon can have enough of that stuff at a nearby fulfillment center and delivered to you even faster. Bezos is so concerned with fast, cutting edge delivery that he even went on CBS’s 60 Minutes and unveiled a completely impractical drone delivery service.
Bezos, it’s fair to say, is obsessed with fast delivery.
But here I am, thinking about buying the new book Good Talk, Dad by William Geist about conversations with his father, legendary CBS Sunday Morning commentator Bill Geist, only to find that it will ship in “three to five weeks.” At Amazon’s chief online book competitor Barnes & Noble I can get the hardcover edition shipped to me within 24 hours.
I’m signed up for Amazon Prime, which means I get two-day shipping on everything I buy from the site, so I’m not about to rush off and order from another service. Still, I’m willing to put aside Geist’s warm humor for something different.
Years ago I met Mariano Rivera, the Yankee’s legendary Major League Baseball closer; his autobiography looks intriguing. On Amazon, The Closer by Mariano Rivera is still in hardcover and, for Prime members, a good deal at $16.80. It ships in … two to five weeks.
Barnes and Noble beats Amazon’s hardcover price by a penny, and it ships in 24 hours (or I can pick it up at one of their hundreds of retail locations).
What is going on here?
Amazon, it appears, may be doing something awful. According to numerous reports, the retail giant is locked in contract negotiations with publisher Hachette, the company that — you guessed it — publishes both Geist’s and Rivera’s books, along with those of other well-known authors such as David Sedaris and Malcolm Gladwell. Amazon apparently wants better terms from Hachette.
Bezos’ company has said little about what’s going on here. The only on-the-record statement I got from Amazon was “we are not commenting on this.” Hachette has publicly stated that there are no supply issues on their end, and that Amazon is holding onto minimal amounts of Hachette books “for reasons of their own.”
I don’t know what new terms Amazon is seeking — but if it’s doing what Hachette and others say it’s doing here is true, it’s petty and just plain wrong.
Amazon is unquestionably the most powerful book seller in the world. It is the de facto gatekeeper for new titles and a kingmaker for new and upcoming authors. A bestseller on Amazon (even on their Kindle Single platform) can make or break a book and its author. Fiddling around with the entire line of a publisher can also do its share of damage.
Oddly enough, there’s at least one Hachette book that is relatively easy to get via Amazon — and it’s about Amazon. The Everything Store: Jeff Bezos and the Age of Amazon, by Brad Stone, a tome lambasted by Bezos’s wife and published by, yes, Hachette, can ship to you in a few as four days.
Some observers have speculated that the alleged Hachette supply action is Amazon’s retaliation for the book, but that seems unlikely. It’s not much of a tell-all. Bezos is described in it as an extraordinarily bright child who grew into an “avid problem solver.” He also, apparently has “a chess grandmaster’s view of the competitive landscape.”
Is Bezos playing chess here? For brand new Hachette books, at least, he’s not living up to Stone’s glowing description of the company: “[Amazon] has perfected the art of instant gratification, delivering digital products in seconds and their physical incarnations in just a few days.”
One quote Stone attributes to Bezos may offer some insight into his alleged actions here:
There are two kinds of retailers: there are those folks who work to figure how to charge more, and there are companies that work to figure how to charge less, and we are going to be the second, full-stop.
Whether or not he said it that way, this is clearly Bezos’ strategy. He sells his own products with virtually no margins so he can get more people shopping in his online store. Bezos himself told me that he sells his Kindle Fire HDX tablets at “break even.” Perhaps he’s still trying to push Hachette in that direction as well.
Of course, you can go elsewhere for hard- and softcover Hachette books and, if you really want to read The Closer today, you can order the Kindle Edition. Personally, I haven’t read a hardcover book in years. However, there are many people, like my daughter, who still prize physical books. If you’re lining up your summertime reading, a book retailer who can’t deliver before the first week in July is unacceptable.
Amazon’s relationship with publishers has been fraught with animus from day one. While hardcover books on the site now range in price from $9.99 to $24, at first Amazon sold nearly all books, no matter how new, for $9.99. Publishers who wanted to be on the vital new platform had no choice but to acquiesce. They were not happy, nor were authors who saw returns tumble. Some, like James Patterson, kept their books off Amazon for years.
In the end it was Apple that turned things around. When the company launched iBooks, it went with the more traditional agency model, which let publishers set the prices and gave Apple a 30% cut. But if Apple found out that the same books were being sold more cheaply elsewhere, the publishers would be contractually forced to lower the price for Apple, too.
Oddly enough, this price gerrymandering resulted in Amazon switching to the agency model as well — and in the end, both online retailers ended up selling books for roughly the same price.
It’s not clear what Hachette is doing to upset Amazon, but it is clear that something here is amiss. The retailer cannot afford to have even the appearance of impropriety when it comes to stocking and selling partner books. It’s simply too powerful.
My suggestion is for Amazon to stop messing around, and pledge that it will never use its position as the world’s number one bookseller for leverage. You can’t play hardball on a world stage unless you expect to get bruised.
Read more: http://mashable.com/2014/05/23/amazon-hachettes-books-op-ed/