Published initially 11/14/2014; updated 12/5/21, 3-10-23
• Amazon to shut its bookstores and other shops as its grocery chain expands (Jeffrey Dastin, Reuters, 3-2-22) Amazon.com Inc plans to "close all 68 of its brick-and-mortar bookstores, pop-ups and shops carrying toys and home goods in the United States and United Kingdom, ending some of its longest-running retail experiments. The news marks a turning point for a company that began as an online bookseller and helped drive established rivals such as Borders to bankruptcy.
"But the company's innovations were not enough to counter the march toward online shopping that Amazon itself had set off. Its "physical stores" revenue - a mere 3% of Amazon's $137 billion in sales last quarter, largely reflective of consumer spending at its Whole Foods subsidiary - has often failed to keep pace with growth in the retailer's other businesses.
"Michael Pachter, an analyst at Wedbush Securities, said internet-savvy Amazon was right to forgo the niche market of brick-and-mortar book shoppers, as bad a match as electric car maker Tesla Inc (TSLA.O) opening gas stations."
• Amazon’s Toll Road: How the Tech Giant Funds Its Monopoly Empire by Exploiting Small Businesses (Stacy Mitchell, Institute for Local Self-Reliance, December 2021) "One of the most striking measures of Amazon’s monopoly power is the extraordinary amount of money that it’s able to extract from the independent businesses that rely on its site to reach customers. In this report, we find that, over the last two years, Amazon’s revenue from the fees it levies on third-party sellers has more than doubled. In 2019, Amazon pocketed $60 billion in seller fees.This year, its take will soar to $121 billion, our new research finds....
"Amazon’s dominance of online retail means that small businesses have little choice but to rely on its site to reach consumers. This report finds that Amazon is exploiting its position as a gatekeeper to impose steep and growing fees on third-party sellers. Even as these exorbitant fees bankrupt sellers, they are generating huge profits for Amazon, a fact that the tech giant conceals in its financial reports. These profits are not only the spoils of Amazon’s monopoly power. They are the essential fuel that feeds its market-domination strategies, enabling it to absorb massive, predatory losses designed to lock-in market control and fund breakneck expansion."
• What Happened to Amazon’s Bookstore? (David Streitfeld, NY Times, 12-3-21) A lawsuit filed in federal court in Maryland "offers a glimpse into Amazon’s dominance and perhaps its vulnerability. Amazon’s online store has surpassed Walmart, making it the largest retailer outside China. By delivering essentials and luxuries to those stuck at home during the pandemic, it helped many people navigate a bleak moment....It is one of the few companies valued at more than a trillion dollars. For all that success, however, Amazon is under pressure from many directions....
"There are sellers like Mr. Boland, who say they are suffering from the Wild West atmosphere on the site; regulators, who are taking a closer look at Amazon’s power; unhappy warehouse employees, who would like a better deal; and lawmakers, who want Amazon to disclose more about its third-party sellers. There are also the devious sellers themselves, whom Amazon says it is having a hard time eradicating....
"The bookstore is the oldest part of Amazon, still central to its identity but no longer to its bottom line. It feels like where every Amazon shopping experience could be heading — immense, full of ads and unvetted reviews, ruled by algorithms and third-party sellers whose identities can be elusive.... “Should we care as a society that a single firm controls half of our most precious cultural commodity and its automation isn’t working right?” asked Christopher Sagers, the author of “Antitrust: Examples & Explanations.”... Offering tens of millions of items to hundreds of millions of customers prevents any human touch — but opens up a lot of space for advertising, and for confusion and duplicity....Mr. Boland said: “Amazon has done a great job of expanding the marketplace for books. It’s too bad they’ve decided not to police their own platform, because it’s leading to all sorts of trouble.”Amazon acknowledges that some third-party sellers bring problems, including fraud, counterfeiting and abuse." ...Amazon gives writers and publishers broad latitude to sell anything, including the mediocre and the misleading. The store’s logic has always been that the good work will rise and the bad will fall. In the meantime, however, some readers get suckered."
• People Now Spend More at Amazon Than at Walmart (Karen Weise and Michael Corkery, Technology, NY Times, 8-17-21) Proof that the online future has arrived: The biggest e-commerce company outside China has unseated the biggest brick-and-mortar seller. Propelled in part by surging demand during the pandemic, people spent more than $610 billion on Amazon over the 12 months ending in June... Indeed, the company’s delivery (many items land on doorsteps in a day or two) and wide selection first drew customers to online shopping, and it has kept them buying more there ever since.... “Walmart has been around for so long, and now Amazon comes around with a different model and replaces them as a No. 1.”
• Amazon’s Importance to US Book Sales Keeps Increasing—for Better or Worse (Jane Friedman draws from material first published in The Hot Sheet, 9-23-2020) Since Hot Sheet started publishing in 2015, Amazon has changed, grown, and dominated more than any other company in the US book publishing industry. Among points discussed (quoting roughly from headings): Of all the writer-focused programs Amazon has launched in the last decade; only one is still active: Kindle Singles, an ebook subscription service which requires exclusivity, has become essential for some genre fiction authors. Amazon could be making it difficult for other publishers to break out new novelists. Amazon has doubled down on its own traditional publishing program, Amazon Publishing (APub). Amazon creates its own bestseller lists and also dominates its own Kindle bestseller list. Definitely worth reading (and The Hot Sheet is worth subscribing, if you're deeply interesting in publishing).
• Amazon Publishes Books by Top Authors, and Rivals Fret (Jeffrey A. Trachtenberg, Wall Street Journal, 1-14-2020) "Dean Koontz, Patricia Cornwell are among the blue-chip writers whose books the tech giant is not just selling but publishing. It was a surprising move because it means his new books likely won't appear in retail stores, which generally boycott Amazon-published titles. But Mr. Koontz is banking on Amazon’s vast retail machine to get his work to readers, whether in physical or digital formats."
• A lot has changed in book publishing in the last ten years (Mike Shatzkin, Shatzkin Files, 7-23-19) "At the beginning of this decade, Amazon Publishing had ideas about signing up big authors. But they were stymied then by the pretty stubborn refusal of the rest of the supply chain to stock books published by their biggest retail competitor.
"But that was when Amazon sales were about 20-25 percent of the market. Now they’re probably over half, and well above that for many books. Whether they will successfully sell Koontz beyond Amazon remains to be seen, but their no-middleperson structure enables them to pay far more of each retail dollar in royalties, so half the sales or more can generate more income to the author than a publisher without its own retailing capability can deliver selling a larger number of units. If this is a sign of things to come, and it is hard to see why it wouldn’t be, some profound changes might be just around the corner."
• The Week’s Big Story: Amazon Publishing on Wooing Dean Koontz (Porter Anderson, Publishing Perspectives, 7-26-19)
•Amazon To Open Hundreds Of Brick-And-Mortar Bookstores (Pavithra Mohan, Fast Company, 2-2-16) Amazon, the online retailer that killed off so many independent bookshops, is getting ready to launch its own brick-and-mortar book chain. According to the Wall Street Journal, the CEO of a major mall operator, General Growth Properties, revealed on Tuesday that Amazon intends to launch hundreds of bookstores.
Why Amazon's Rumored "Bookstores" Probably Won't Be What You Think (Rich Bellis, Fast Company, 2-3-16) If Amazon does expand its physical retail footprint, don’t expect it to focus exclusively or even primarily on books. It may see physical locations as (among other things) more akin to Apple Stores, where it can showcase the hardware it sells online.
• Meet the Guy Behind Amazon’s Secret Retail Store Plans (Jason Del Rey, re/code, 2-3-16) The man behind the Kindle is leading Amazon’s project to create the retail stores of the future. And bookstores are just the beginning. These are two of the new details Re/code has uncovered about Amazon’s plans for expansion into physical retail.
• Amazon Plans Hundreds of Brick-and-Mortar Bookstores, Mall CEO Says (Greg Bensinger, WSJ, 2-2-16) mazon Plans Hundreds of Brick-and-Mortar Bookstores, Mall CEO Says
In the following pieces about a dispute among them, Amazon and book publishers take turns being the bad guy. Authors, read these often excellent arguments for and against book publishers, Amazon, and others engaged in this battle for market power and tell us what you think! Read More