Amazon reduces discounts offered on books, according to report

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Amazon upset the entire book publishing industry by offering ridiculous discounts on physical print books that were so substantial they actually lost the e-commerce giant money.

However, according to a report by the New York Times, now that the company has driven all of its potential competition out of business, or at least placed them firmly behind in the book-selling pecking order, Amazon decided to cut back on its steep discounts, once again upsetting the balance of the industry and putting smaller publishers and authors at a serious disadvantage.

Miller Trade Book Marketing is a Chicago-based firm that specifically represents university and independent presses. Recently, the firm’s president, Bruce Joshua Miller, surveyed 18 publishers in his niche, and 14 of them told him that “over the last few years,” the e-commerce company lowered discounts on their products. And for some older or slower-selling items, the company completely eliminated the discounts.

These altered discount prices not only affect authors and publishers, though; many consumers are also feeling the sting, especially since Amazon has made such a concerted effort over the past few years to totally eliminate competition like Borders, while Barnes & Noble, now it’s biggest and, really, only competition in the industry, is having trouble keeping its doors open in many locations. Many people who would be buying books from these stores, or those who live in less populated areas that may not have a wide selection of independent booksellers (another competitor that Amazon has successfully endangered) are more or less forced to use Amazon to buy printed books, and now the company is essentially raising prices on them.

It’s likely that this is all an attempt to drive consumers to the Kindle and Amazon’s e-book marketplace, but the fact of the matter is that printed books still sell more on Amazon than e-books, and Amazon sells approximately one of every four printed books sold, meaning it basically dominates the market above and beyond any of its competitors.

Needless to say, these noticeably diminished discounts are having a major effect on both publishers and customers, as many shoppers will simply reject more expensive books, leading to less revenue for their authors and publishing companies, and leaving the customer with one less avenue to purchase their books.

For its part, Amazon is denying the allegations. According to Amazon spokeswoman Sarah Gelman, Amazon is “lowering prices”:

“We are actually lowering prices. We pay for these price decreases with relentless focus on improving our execution — and this commitment to low prices is one of the reasons our print books business continues to grow.”

My guess is the truth is somewhere in the middle.

[via The New York Times]

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13 comments

  1. Ashraf
    Mr. Boss

    [@Henry Wood] You are arguing semantics. Decreasing discounts and increasing prices are one in the same. You are right with a roughly 25% marketshare it doesn’t have a monopoly. However, Amazon is the most dominant player in this business in the US, and if it is true that they are increasing prices, then I’d have to agree with NYT — they are doing it because they now have less competition than before.

  2. Seamus McSeamus

    [@Henry Wood]

    What you say is true – Amazon is merely reducing the size of the discount they are offering. However, the average customer isn’t going to see it that way; it’s going to come across as a price increase. That is, if they are even doing what is being claimed, of course.

    Even with a smaller discount, I think people will be hard pressed to find better prices on books.

  3. Henry Wood

    Sorry to disagree again but Amazon are not increasing prices – they are reducing the discount they offer against the full price. If customers can find better discounts elsewhere they are free to shop there. Amazon does not (yet) have anything like a monopoly on book sales.

  4. Ashraf
    Mr. Boss

    [@jayesstee] I agree with you Amazon did us all a favor by coming along and helping tower prices of books. However, I believe the point of the NYT article is that now that Amazon has changed the industry, they are taking advantage of this dominant position and increasing prices. Of course, it is still up for debate if Amazon is actually doing what is alleged, but that doesn’t change the point of the article.

  5. jayesstee

    Gentlemen, Gentlemen and Lady, take a step back to how it was pre-Amazon.
    Publishers set (and still do set) absurd prices.  Their margin, after deducting the measly authour’s cut, production and distribution costs, was obscene.
    The average guy could/would not afford their prices.  Many people waited for more affordable the paperback edition.  Most of us borrowed books from friends, relatives or libraries.  While, students survived on second hand and/or library books.
    Along came the wicked Amazon who sold at a loss (increasing the book-buying public) and did this long enough for to force publishers to give discounts to them (and any others who could shift large numbers of books).
    Now Amazon are reducing their discounts, but not too much less they reduce their market and the publisher discounts, they command.
    So what are they doing wrong?
    I have no truck for Amazon, especially as they ‘avoid’ taxes here in the UK. And in principle I am totally against large organizations who use their buying power to squeeze out small, independent traders.  But Amazon did us all a favour by breaking the book price monopolies.  At 25% market share, there is still room for competition.

  6. Janet

    I thought the Hoffelder article was very well-argued (though I could do without its sarcasm…..). If companies like Amazon, etc. did not sell at discounts, the books would undoubtedly have MUCH fewer sales! The publishers should be grateful that Amazon is increasing the books’ sales at Amazon’s expense…..

  7. Henry Wood

    [@Ashraf]
    Sorry, but I disagree. He demolishes the whole article point by point. There is no Whining and childish mocking” though there may well be sarcasm? He absolutely answers the point also repeated here that Amazon have destroyed all competition in the books sales business.
    And at the end of the day, the real question still remains: Who is guilty of “poor” sales for certain books/authors? Is it the publishers who set the initial price or Amazon who come along and *discount* that set price. How much better would their sales be if Amazon did not offer the books at a discount?

  8. Ashraf
    Mr. Boss

    [@Henry Wood] It isn’t cut and paste. It is using NYT as a source for this article; we wrote the article in our words using the information provided by NYT and we properly credited the article with a via link at the end.

  9. Henry Wood

    Instead of authors bitching about Amazon reducing discounts, why don’t they get onto their publishers to reduce their prices! (Oh, I see the publishers are bitching too according to this story.) Amazon is *still* discounting. Publishers are *still* charging way too much. Reduce prices and see stock/ebooks march out the doors. (And cut pircacy!)