One of the great things about the internet for publishers is that it gives them a chance to communicate directly with readers. Gone are the days of those “cut out and post” coupons, which would appear at the back of books to be mailed off for the publisher’s latest catalogue. Now we can go online, see what else the publisher’s doing, find out about their upcoming releases, and even buy their books directly.
These direct sales can be an important revenue boost to publishers—they don’t have to share the price of the book with a bookshop—and offering customers a discount is an obvious way of increasing sales.
But now, just as Amazon.com has come under fire for allegedly trying to strongarm Print on Demand publishers into using Amazon’s own POD system, Amazon.co.uk has been revealed to be getting up to some mischief of their own, and it could threaten the future of publishers’ direct sales.
Amazon, like other bookshops, purchases books from publishers at a fixed, agreed discount from the full RRP. So, if a book has an RRP of £10, and the publisher gives Amazon a 50% discount, Amazon pays the publisher £5 for the book.
What Amazon is allegedly saying is that they shouldn’t have to pay the publishers their percentage of the RRP, but of the lowest price listed on the publisher’s website. So if that £10 book is for sale on the publisher’s website with a £2 discount, making it £8, then Amazon only wants to pay the publisher 50% of the lower figure, or £4. This forces the publisher either to a) give Amazon a bigger discount or b) charge more to the consumer, so that Amazon can undercut them. Either way, it risks reducing publishers’ revenues.
One publisher is quoted—on Publishing News—as saying, “Essentially, they’re not happy when the manufacturer, as they call us, sets the price of a book. The threat is that they will apply the agreed terms of trading to our web price. But they are on very shaky legal ground. After all, they’ve been invoiced at an RRP less their discount, so if they refused to pay that amount, they would be in breach of contract.”
It’s this kind of story that reminds us to pay attention not only to which books we buy, but to where we buy them.
you can read more about this story at the O’Reilly blog, and in The Times, and The Bookseller.
