Amazon Drives Publisher Discounts Too Hard

Book publishers are worried that Amazon's quest for greater discounts will create too much pressure, and will eventually crush them.

Publisher McFarland & Co. received an email from the Internet giant, wanting a better deal for wholesale purchases. Amazon wanted to buy the small publishers' books at 45 per cent off the cover price. McFarland & Co. had to refuse, and fortunately, Amazon relented. Last year, Amazon was responsible for almost 70 per cent of the retail sales of McFarland & Co.

"The thing that has really aggravated me is the one-sided nature and anonymity of their business negotiations," explained Karen Christensen, CEO of Berkshire Publishing Group. "They're trying to dictate terms to their suppliers without seeing it as something where there are two parties involved."

Amazon was purchasing books from Christensen at 40 per cent off the cover price, but emailed, wanting a bigger discount. When she said no, Amazon simply stopped placing orders. This has affected 10 per cent of Christensen's business.

Back in February, Amazon removed almost 5,000 titles from its Kindle e-book store by the distributer Independent Publishers Group. IPG refused the terms Amazon demanded. Fortunately, for the distributer, other online retailers are still selling the e-titles.

Amazon generates at least 75 per cent of printed book sales purchased online, and 60 per cent of e-books, estimated Mike Shatzkin of Idea Logical. Publishers are concerned that tactics like the ones currently deployed by Amazon will lead to a monopoly by the internet giant.

Source: The Columbus Dispatch