Amazon Sells Books at a Loss
It’s no secret that Amazon’s cheap prices come from selling books at a loss. News stories about the company’s practices have been making news for years. The Seattle Times, for instance, reported in 2012 that Amazon was asking McFarland & Co. to buy their books 45% off the cover price– a deal that would lose the publisher money. Around that time, the company offered Berkshire the poor deal of paying than 40% of the cover price. In 2015, The Washington Post covered a story about the American Booksellers Association’s concern with Amazon selling books below cost. Their concerns stemmed from the inability of smaller publishers to provide such deep discounts, an inability that could lead to fewer publisher to stay in business. Now a May 2018 New York Times article is making the rounds of the book blogosphere as it predicts the fall of Barnes and Noble due to their inability to compete with Amazon. Amazon, as the article explains, attracts more consumers because of its lower prices–prices that are so low because they are often lower than the cost of producing the book. Amazon is able to take this loss because consumers buy non-book products from the site to make up for it.
Amazon and Publishers Have Been in Ugly Disputes Over Book Pricing
Amazon is also able to offer such deep discounts because of a well-publicized track record of attempting to persuade publishers and authors into deals that are financially unviable for them. In 2010, the “buy” buttons were taken off Macmillan titles when the publisher wanted higher prices listed for their books. In 2012, Amazon removed IPG titles from the Kindle store because the publisher did not agree to unfavorable terms. And in 2014, Amazon made news for refusing to offer discounts on or preorders for Hachette titles as the two companies argued over e-book prices. Amazon is able to employ pressure by using such tactics because so many consumers buy books through their website; consumers who do not see a title listed may believe it is unavailable and not purchase it.
Amazon Customers May Not Be Purchasing from Publishers–And Thus Not Supporting Them with Their Money
However, Amazon also made a much less-publicized decision that would offer consumers lower prices while hurting publishers and authors. In May 2017, Vox reported that the main “buy” button on a title’s page would not necessarily allow a consumer to purchase a book from the publisher. Rather, an algorithm would determine whether consumers were purchasing from the publisher or any number of third party sellers. These third parties are offering new books that they themselves may not have purchased from the publisher. The result is that Amazon customers might be buying a book and not giving the publisher (and thus the author) any money in exchange.
Publishers and Authors Need Money to Keep Producing the Books We Love
I have not bought physical books from Amazon in years specifically because of these practices. (Though comments have made me realize that I do check out Kindle books from my library and that I have bought I think two ebook titles from Amazon more recently. These practices I will have to reevaluate going forward.) Even though other booksellers offer books at higher prices, I recognize that these prices are generally fair and are mean to support the publishers and authors, who often earn far less than readers assume. If you want hard numbers, NPR summarized the results of a 2015 Authors Guild Survey indicating that the average author is not likely to be able to quit their day job any time soon:
Just over 1,400 full- and part-time writers took part in the survey, the Guild’s first since 2009. There has been a 30 percent decline in author income since then and more than half of the respondents earned less than $11,670 (the 2014 federal poverty level) from their writing related income.
Meanwhile, this 2014 Quora answer by Lee Ballentine asserts that 90% of titles published will lose money. As Vox explains, “Right now publishers can afford to subsidize a few prestige titles every year with the profits they make on the types of books that generally do sell well.” The takeaway from all this is that publishers and authors actually need our money in order to keep publishing and writing. They cannot afford to have Amazon routinely selling their books for less than they are worth as this will result in both lower profit margins and potentially in an increasingly financially unviable book market–a market where consumers now expect to purchase books for under cost.
What Can Book Bloggers Do?
The May 6 article from The New Times has caught the attention of book bloggers and a new discussion is opening up around the best way to support publishers, authors, and bookstores. (Check out “The Decline of the Bookstore Part 2” @ A Great Read and “Bookstores: Are They in Danger?” @ Rabbit Ears Book Blog.) Quite simply, the best way to do this is not to shop on Amazon. The low prices are tempting, yes. However, if readers buy books at less than cost, this means that financially struggling publishers and authors will be able to produce fewer books in the future. If readers buy books at less than cost, soon Amazon’s bookselling competitors will no longer be able to compete. And then what incentive will Amazon have to keep those cheap prices, when they are the only bookseller around? By buying Amazon’s books, readers get a good financial deal today, but only hurt themselves in the long term. And, believe me, Amazon has been playing a long-term game since they opened, while the rest of us cheerfully snapped up their cheap titles.
If readers do not want Barnes and Noble to close, if they do not want indie bookstores to close, they need to support those places with their money. Even if if means buying fewer books. Readers naturally want their money to go towards enabling publishers to publish and writers to write. The best way to do this is to pay for the actual cost of a book.
Other Suggestions for Supporting Publishers and Authors
- Buy books as gifts.
- Buy books to donate to schools, libraries, women’s shelters, and more.
- If donating to a raffle, buy books as the prize.
- If you want to buy books for yourself but don’t like the prices at Barnes and Noble, try the Barnes and Noble website. Their books are cheaper online than in-store. Barnes and Noble will also now let you order online and pick up in store so you can pay the online price but also get the book immediately. (No, I don’t work for Barnes and Noble. )
- Patronize your local library. Increased usage stats means they can lobby for more funding to buy more books.