I'm Bullish on Amazon, and So Can You!


There have been rumblings in the small and indie publishing scene of late foretelling Amazon's imminent lapse into tyranny. "They're just too big!" goes the lament. "With no moral or economic checks on their operation, Amazon is sure to screw authors...somehow!"

I've been publishing with Amazon for two years. I thoroughly researched their business practices before publishing with them, and I've called them out when I thought they screwed up. When it comes to Amazon, I'm neither an uninformed rube nor a starry-eyed ideologue.

And I don't buy the panicked cries insisting that the sky is falling.

Why not? For one, pundits have been prophesying doom for Kindle Direct Publishing since day one. Every time I've looked into the latest anti-Amazon scare, the doomsayers have come up empty-handed.

But these Amazon zombie memes keep cropping up, so to recap:
  • Amazon is not a monopoly. They don't have exclusive control over the supply of a commodity or service.
  • Nor is Amazon a monopsony. They don't have exclusive control over an entire market, either. Amazon's competitors in the eBook market include Barnes & Noble, Google, and Apple, the biggest company in the world.
  • Even if they were, monopolies/monopsonies aren't illegal, or even necessarily immoral, in and of themselves.
To counter these zombie memes, here are some indisputable facts:
  • Amazon offers far more lucrative and fairer terms to authors than the Big Five publishers' contracts.
  • Thanks to Amazon, more authors are able to reach readers and earn a living from writing than at any other time in world history.
  • Amazon achieved market dominance by offering the best customer service experience in the business.
The reason that Apple, which dwarfs Amazon, is losing out to them in eBook sales is because the iBook store sucks in comparison. Apple could easily give Amazon a run for their money if they got serious about delivering a superior customer service experience.

By the same token, if Amazon suddenly went all Mr. Hyde on its authors--say, by drastically lowering royalties; authors would compensate by raising prices, which would negatively impact Amazon customers. This would create an opening whereby KDP could be disrupted by a competitor offering better royalty rates.

Customer service is the name of the game. Amazon damn well knows this and would be consciously shooting themselves in the foot to endanger their relationship with their customers. That means staying on good terms with KDP authors.

I can hear the objection: "But Amazon just uses books as loss leaders! They don't really care about authors or readers!"

That's another common meme, and it's false. The Kindle is Amazon's loss leader, They make money on books, and it's in their interests to keep doing so.

"But what about Amazon's recent decision to reduce their sales affiliates' commissions?"

What about it? Amazon Affiliates isn't KDP. They haven't shown any sign of touching their royalty rates. If they do, see the above explanation for why that would be incredibly stupid of them.

Not that people can't act irrationally and businesses can't commit huge unforced errors. But even if Amazon goes full retard, wailing and gnashing your teeth won't help anyone. What you should be doing instead is building your author brand and platform. That way, you can move to a competing sales channel, or create your own, if Amazon turns tyrannical.

And if you aren't already building your own platform, you haven't been paying attention.

Speaking of creating a positive shopping experience, the highly acclaimed third book of the Soul Cycle, The Secret Kings, is now 99 cents for Kindle.

The Secret Kings - Brian Niemeier


1 comment:

  1. Brian,

    thanks again or an informative post. i neither love or hate Amazon. I prefer epub but i have Amazon kindle app on my devices

    Here's a timely post by Mike Shatkin reporting about his wife's experience with the Amazon bookstore in NY


    As for building your platform, here's a post about Catalan independent bookstores http://www.vilaweb.cat/noticies/pla-de-lectura/

    There are 2 implicit takeaways from the article that might be useful for American ones
    1) become a talent incubator for potential writers
    2) become a publisher (nothing new for Spain as some bookstores did this during the 20-30s before the civil war)

    Thanks as always for explaining the business side of writing in easy to understand language