Amazon Makes It More Difficult for Small Publishers

A recent policy change by Amazon.com looks like it may make the already difficult job of publishing books even more difficult, especially for small and self-publishers. The change already has small publishers and authors circulating petitions, filing complaints with the US Department of Justice, the Federal Trade Commission and many state attorneys general. For those Mormon publishers affected, it will probably raise costs and could also limit sales.

I’ve talked a bit here about how difficult it can be for self-publishers and many of the challenges that small publishers face in getting books known in the market. Despite these difficulties, technology has made some aspects much easier, especially since the development of print-on-demand technology 15 years ago or more.

About 10 years ago this promising development was married to the heart of US book distribution when Lightning Source (LSI) began operating. A sister company of giant book wholesaler Ingram Book, LSI offers not only the ability to print books one by one, it also connects those books to the national book distribution network, so books show up in online bookstores like Amazon.com, Barnes & Noble and a host of other online stores. They also become available to brick & mortar stores, although only rarely do bookstores order them.

For most small publishers, Amazon.com has become a kind of linch pin to this system of selling books. Amazon now counts for more than 10% of booksales, and a huge portion of online sales. Some consultants, such as my online friend Aaron Shepard, even suggest a strategy of Aiming at Amazon.

Now, however, Amazon is threatening to pull the rug out from under these publishers.

Starting about a month ago, Amazon quietly began contacting LSI’s print-on-demand customers and threatening to turn-off the button that enables customers to purchase books from Amazon unless they started using Amazon’s inhouse print-on-demand printer, Book Surge. As you might imagine, many publishers felt betrayed and manipulated at this move.

Apparently Amazon’s new policy is that all publishers wishing to sell through Amazon must use Book Surge for the copies that Amazon sells of any title printed with print-on-demand. In essence, this means that eventually Amazon won’t knowingly purchase books directly from any of the print-on-demand printers.

While the debate over whether or not Amazon’s move is legal (some claim that it violates anti-trust laws) rages and publishers try to figure out what to do about this, the effect on Mormon publishers and authors isn’t clear.

Most authors and self-publishers (those that use vanity print-on-demand companies like Lulu, PublishAmerica, Xlibris, iUniverse, etc. despite my advice to avoid these services) will not be affected, unless their publisher refuses to give in. Authors in that case will be caught in the middle, and their books won’t be available from Amazon! [PublishAmerica has issued a statement that it will not give in. I don’t know what the other companies in this category will do.]

From what I can tell, Mormon publishers will probably need to use both Lightning Source and Book Surge — the first to get the broader, world-wide distribution it allows; the second to get into Amazon.com. And they will have to pay setup fees for each title on each print-on-demand service.

However, it is interesting to note that neither will get books into LDS Bookstores! LDS Bookstores generally don’t purchase from Lightning Sources’ sister company, wholesaler Ingram Book Company, where LSI’s books are available. Instead they purchase directly from LDS publishers and distributors.

But that doesn’t mean that publishers trying to reach the Mormon market can avoid Amazon and other online retailers. Because LDS Bookstores don’t reach the whole market, a significant portion appears to buy from Amazon and other online retailers.

Unfortunately leaving any one of these sales channels out (LSI, Amazon and LDS Bookstores) could limit sales of a publisher’s book, depending on the kind of book and probably other factors. For larger publishers, this isn’t such a large problem because large publishers generally don’t use print-on-demand, and usually have access to normal distribution channels.

Fortunately, small publishers probably have a while to figure out what to do — Amazon seems to be concentrating on the largest users of print-on-demand first, and letting the small publishers enjoy the status quo for the moment. My own situation is a little easier because I already use both services. But doing so is more expensive, it takes additional time to format books (the two companies have different specifications) and it is a little harder to track what is happening with a title.

But I still feel a little strong-armed by Amazon’s move, in spite of the fact that I was already using their service. And I can’t help wondering what this may mean for the future. If Amazon has the power to make a move like this and force small publishers to accept it, what moves will they make in the future?

If you are interested in more information about this move, and the protests against it, I suggest the following links:

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