As per the title, I’m wondering how many of you have taken the time to read through the letter Amazon.com sent to publishers on March 31st of this year? If you have not, it’s probably worth your time to read through to gain a better understanding of what is seemingly taking place.
A couple of highlights,
One question that we’ve seen is a simple one. Is Amazon requiring that print-on-demand books be printed inside Amazon’s own fulfillment centers, and if so why?
Yes. <snip/> (for a reason… reason to follow)
The reason: If the above is all that you read, outrage I believe would be the only sensible response. However, from what I have read thus far from both the blogosphere and professional journalists alike, I have yet to stumble upon anything that provides a sensible overview of the reasoning behind Amazon.com’s new policy. I’m not here to judge nor really even make attempt to change your opinion. Instead, I just want to be sure that both sides of this story have been properly propagated.
With the above in mind, a Q and A style summary follows, and below that, a copy of the entire letter.
Summary
Q:Is Amazon requiring that print-on-demand books be printed inside Amazon’s own fulfillment centers?
A: Yes.
Q: Why?
A: Most of their customers in whom purchase POD books also purchase other items that may or may not be POD books, or even books at all for that matter. Amazon.com’s printing facility is on site. Because of this they are enabled to manufacture and ship a title, along with the other items ordered, at the same time and on the same day.
With other POD service providers, they can not provide this same level of service for the simple fact that these same service providers must ship the title to Amazon.com first. This point becomes even more significant when you account for Amazon Prime customers in which Amazon.com is contractually obligated to ship qualifying items to members within two days, one if they pay an extra $3.99 per item.
Combining the speed at which an order that otherwise qualifies for Amazon Prime can be fulfilled with the savings incurred by not requiring an additional shipping process, Amazon.com is better enabled to provide faster service at lower prices to their customers.
Q: Do I need to switch completely to having my POD titles printed at Amazon?
A: No. Existing POD’s can use Amazon.com POD service for orders made on Amazon.com, but there is no requirement that they use them exclusively for orders not made through Amazon.com. In other words, this isn’t a “If you want to sell on Amazon.com you MUST use our POD services for ALL orders, regardless of whether or not they come through Amazon.com”-type situation.
Q: Is there an alternative?
A: Yes. If you would like to use another POD service provider, they simply ask that you have enough copies of your title printed and shipped in advance to their facility(s) such that they can provide the same level of service afforded to them when using their own POD machines. They are requesting a minimum of five copies, which they believe,
… is a small enough quantity that it is economically close to an inventoryless model.
The Complete Letter
@ http://phx.corporate-ir.net/phoenix.zhtml?c=176060&p=irol-printondemand
One question that we’ve seen is a simple one. Is Amazon requiring that print-on-demand books be printed inside Amazon’s own fulfillment centers, and if so why?
Yes. Modern POD printing machines can print and bind a book in less than two hours. If the POD printing machines reside inside our own fulfillment centers, we can more quickly ship the POD book to customers — including in those cases where the POD book needs to be married together with another item. If a customer orders a POD item together with an item that we’re holding in inventory — a common case — we can quickly print and bind the POD item, pick the inventoried item, and ship the two together in one box, and we can do so quickly. If the POD item were to be printed at a third party, we’d have to wait for it to be transhipped to our fulfillment center before it could be married together with the inventoried item.
Speed of shipping is a key customer experience focus for us and it has been for many years. Amazon Prime is an example of a successful and growing program that is driving up our speed of shipment with customers. POD items printed inside our own fulfillment centers can make our Amazon Prime cutoff times. POD items printed outside cannot.
Simply put, we can provide a better, more timely customer experience if the POD titles are printed inside our own fulfillment centers. In addition, printing these titles in our own fulfillment centers saves transportation costs and transportation fuel.
Another question we’ve seen: Do I need to switch completely to having my POD titles printed at Amazon?
No, there is no request for exclusivity. Any publisher can use Amazon’s POD service just for those units that ship from Amazon and continue to use a different POD service provider for distribution through other channels.
Alternatively, you can use a different POD service provider for all your units. In that case, we ask that you pre-produce a small number of copies of each title (typically five copies), and send those to us in advance (Amazon Advantage Program-successfully used by thousands of big and small publishers). We will inventory those copies. That small cache of inventory allows us to provide the same rapid fulfillment capability to our customers that we would have if we were printing the titles ourselves on POD printing machines located inside our fulfillment centers. Unlike POD, this alternative is not completely “inventoryless.” However, as a practical matter, five copies is a small enough quantity that it is economically close to an inventoryless model.
Might Amazon reconsider this new policy?
Only if we can find an even better way to serve our customers faster. Over the years we’ve made many improvements to our service level for consumers. Some of these changes have caused consternation at times, but we have always stuck with the change when we believe it’s good for customers. An early example: many years ago we started offering customer reviews on our website. This was a pioneering thing to do at the time. The fact that we allowed *negative* customer reviews confounded many publishers — some were downright angry. One publisher wrote to us asking if we understood our business: “You make money when you sell things! Take down these negative reviews!” Our point of view was that our job was to help customers make purchase decisions. It made sense to us to stick with the customer-centric position of embracing customer reviews, even negative ones.
Another example: a few years ago, we made the decision to offer used books, and to make those used copies available directly alongside the new editions. This caused significant consternation, but we stood by the decision because we were convinced it was right for customers. Sometimes a used book will do and it can sometimes be had at a significant cost savings relative to a new book. We stuck with the customer-friendly decision.
Our decision with POD is the same. Once a book is in digital format, it can be quickly printed on modern POD printing equipment. It isn’t logical or efficient to print a POD book in a third place, and then physically ship the book to our fulfillment centers. It makes more sense to produce the books on site, saving transportation costs and transportation fuel, and significantly speeding the shipment to our customers and Amazon Prime members.
We hope this helps those who are interested understand what we’re working to do and why. We believe our customer-focused approach helps the entire industry in the long term by selling more books.
Sincerely,
The Amazon.com Books Team
Shakespeare: "Friends, Romans, countrymen, lend me your ears"
Translated: "Has Anybody Actually Read Amazon.com's Letter To The Publishing Industry?" [Read my blog]
Shakespeare: "I come to bury Caesar, not to praise him;"
Translated: "I’m not here to judge nor really even make attempt to change your opinion."
Shakespeare: "The evil that men do lives after them, The good is oft interred with their bones,"
Translated: Just because Amazon is still holding on to that One Click patent does not mean this new publishing requirements is bad.
Shakespeare: So let it be with Caesar ... The noble Brutus Hath told you Caesar was ambitious:
Translated: 'A list' bloggers are calling Jeff Bezos a greedy bastard
Shakespeare: If it were so, it was a grievous fault,
Translated: Amazon is only as bad as other companies with Monopolistic tendencies (like eBay now requiring paypal)
Shakespeare: And grievously hath Caesar answered it ...
Translated: Perhaps Amazon may loose a little sales,
Bottom line: You can dress it up in pretty prose, but this was a dumb move by Amazon.
Thank you for posting Amazon's letter. I had already formed a negative opinion of Amazon's decision, without reading the letter. Now the decision seems much more reasonable.
@Ric,
Couple of points,
1) Capitalism without control is the equivalent of freedom without laws.
1.1) Capitalism can not survive without controls to protect a free economy from spiraling out of control in either direction.
1.2) Freedom can not survive without rules, regulations, and laws to protect a free society from spiraling out of control in either direction.
2) We live at a very strange moment in time, a period in which Mass Production of the 20th Century is slowly but surely being replaced by Production by the Masses in the 21st.
3) A common misconception in recent years, in my opinion, is that real capitalism and real freedom can not and should not be controlled, allowing the masses to run free and rampant amongst the lush and rolling hills they pass along the way while traveling the highways an byways of the Internet.
It seems to me that everyone believes that point two and point three go together like peas and carrots whereas point one is more like asparagus; better when left on it's own, and even better yet when it's left off the plate entirely.
Unfortunately that's not the way it works. Of course you have RIAA on one side of the argument in which has taken things to such an extreme it seems the only logical reaction is to take the exact opposite position, the peas and carrots position if you will: Take what you want, the masses will just make more.
There's a problem with this however: How do those who want to make a living in these industries separate themselves from those who simply want to play around?
From a writers perspective, there's Print On Demand. No massive upfront costs are required, so no risk is involved. While a publisher (like O'Reilly, for example) can offer an author much more than what they could gain on their own via POD (distribution channels, promotions, consumer brand loyalty, etc.), the fact of the matter is that not everyone who writes a book (or better said, wants to write a book) does so to make money. While there's more reasons than this, many do it such that they can say that they did. And that's great!
But at some point in the process there needs to be an understanding that while "Jane Doe" may only be interested in the gratification that comes from the accomplishment of writing a book, free market economies are driven by balance sheets: Profit and Loss. That's not a bad thing. Nor is it going to change.
In fact, it's a necessary thing. It's how our economy works. And to compete in this economy of ours, we have to be constantly looking for ways to reduce costs while increasing customer satisfaction. Faster, more reliable service coupled with reduced prices allow for businesses to compete more aggressively, the end result of which is a stronger relationship with your customers and a market in which is now forced to work even harder such that they can compete more aggressively.
So here in exists the dilemma: If Amazon is being faced with one order after another in which is delayed due to the latency of manufacturing and shipping a POD title, they have at least two choices: Let the competition provide better service, or find ways in which they themselves can provide that same level of service while at the same time not getting in the way of the "little guy/gal" having the ability to choose her/his POD service provider.
The compromise? They need at least five copies of your title on hand if manufactured and shipped from an external POD. If this is not something you have interest in, they will be happy to provide you with these same services. Capitalism is the key. A reasonable minimum requirement the control. Amazon can increase their response time to an ever demanding base of "gotta-have-it-now" customers, and the writer/author/publisher maintains control over their own destiny. It might cost them(meaning the writers/authors/publishers) a little bit more at first, but then again here in lies the opportunity for the POD service providers,
FInd ways to reduce the cost of an authors first five titles, and guarantee them to keep Amazon's stock level of this title within the acceptable range. As a POD service provider, you can save money by shipping groups of titles together as one shipment, a savings that can then be used to offset any incentives initially provided to the author to entice them to use your services.
Call it capitalism with controls to help maintain balance and order within our economy if you'd like. Or call it freedom with rules, regulations, and laws to help maintain this same balance and order as it relates to our society. But contrary to your own bottom line, this isn't about pretty prose, or attempting to defend that in which is indefensible. Instead, the bottom line is this,
Regardless of whether it's Mass Production, or Production by the Masses, the controls of capitalism and laws, rules and regulations placed upon a free society must still exist if we are ever to find hope in striking a balance between the ever clashing "Freedom Segments" of our combined societies.
Free Economy and Free Culture *CAN* coexist if we are both willing to make compromises. Five titles is not an unreasonable request and it's certainly not something that should be seen as a compromise.
For some, maybe it is. But give it some time... There will be other choices. Of course, each of them will have to maintain their own levels of rules, regulations, and controls to stay both profitable and competitive. But that's the way the system works. And that's not going to change, no matter how outraged people feel they need to be.
@Stuart,
Thanks for the follow-up! I agree, when taken into context, I believe this move by Amazon is something that many will still not like, but should certainly recognize that this isn't about using bullish monopolistic-"marketing" tactics, and instead a way to become more efficient, and better able to compete in the constantly growing and changing world of ecommerce without sticking it to the little guy in the process.
It was the right move for Amazon.com to make. I'm glad they made it. And I hope they don't succumb to pressures to reverse their decision based on negative responses from the blogosphere. Too much power is placed into the hands of few too many. And that's never a good thing.
I'm sorry, but anyone naive enough to think Amazon is not going for the monopoly on POD publishing needs to really read that letter. And, from what I have read, Booksurge not only charges up front fees, but produces a shoddy end product. No thanks. I am cutting all ties with Amazon and believe most writers would be wise to take a stand on this. Do we ultimately want Amazon to tell us what is and is not publishable? What we can and cannot write? Dictatorships start with small, seemingly harmless inroads as well....food for thought.
@Mary,
>> I'm sorry, but anyone naive enough to think Amazon is not going for the monopoly on POD publishing needs to really read that letter.
I _really did_ read that letter, so I guess I'm just going to have to deal with being passed off by you as naive.
>> And, from what I have read, Booksurge not only charges up front fees, but produces a shoddy end product.
Can you provide links to back things up? Or is this just from hearsay?
>> No thanks.
Fair enough. Are you a writer, consumer, or both?
>> I am cutting all ties with Amazon and believe most writers would be wise to take a stand on this.
So I assume then yes, you are a writer?
>> Do we ultimately want Amazon to tell us what is and is not publishable?
How'd we go from "they charge up front fees and create shoddy products" to "they perform censorship."? Kind of a big jump from one criticism to the next, don't ya think?
>> What we can and cannot write?
How would they do that?
>> Dictatorships start with small, seemingly harmless inroads as well.....
They're now dictators too?
>> food for thought
I've thought about it, and I'm just not sure how we went from one extreme to another, and now to another w/o any explanation as to how and/or why we got there. Monopolist is one charge, and while I completely disagree (see my follow-up to Ric from above for my reasoning) with this argument, I believe it's certainly fair to ask the question "Is Amazon using monopolistic tendencies to corner to POD market?". But it's a far stretch to make attempt at adding "censors" and now "dictators" to the accusation mix. Care to explain/justify further?
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