Last Friday the Wall Street Journal reported Amazon has notified publishers that they must use the company's own on-demand printing facilities if they want their books sold on amazon.com.
Although Amazon doesn't give out its sales numbers, it's estimated that the company's market share of book sales is around 15%. This new policy is designed to strengthen its presence in other phases of the book industry.
In 2005 Amazon acquired its P.O.D. unit, BookSurge. BookSurge has numerous competitors, such as Lightning Source, a unit held by Ingram Industries. Since it started in 1997, Lighning Source has printed over 50 million books for over 5000 publishers worldwide. As a whole the P.O.D. industry has been embraced by over half the country's university presses and just about every major consumer publisher for certain titles. A 256-page paperback can be printed and bound in under ten minutes, allowing publishers to replenish their inventory within a few hours, versus weeks through a regular printer.
Amazon's new policy means all those books now have to be printed by BookSurge if they want to sell on amazon.com. According to the Journal, this will surely hurt rivals such as Lightning Source, as well as reduce publishers' bargaining power, because Amazon will set the price for each book, according to its own costs for printing. Bob Young, CEO of Lulu, Inc., another P.O.D. publisher, said he believes Amazon's prices are "slightly higher" than other P.O.D. printers. Amazon wouldn't comment.
According to Amazon spokeswoman Tammy Hovey, this is a "strategic decision" to "better serve [Amazon's] customers and authors." She does not view it as an ultimatum.
Anyone out there self-publishing with another company and wanting to sell through Amazon? Better check out this new policy.
5 comments:
This may not be as bad for publishers as it appears on the surface. Suppose Zondervan makes the business decision to make Amber Morn available through POD. Now, suppose an order comes in to Amazon.com. If Lightning Source is the sole POD printer, that order has to go through the channels, first to Zondervan as the publisher, then to Lightning Source. Then Lightning Source has to ship the book. Amazon.com gets a copy of it, and ships it to the customer. If Zondervan is using Booksurge, the customer’s order will be filled from the books on hand or Booksurge will print a book, pack it in an Amazon.com box and send it on its way. There is nothing to prevent Zondervan from using a combination of offset printing, Lightning Source and Booksurge all at the same time and filling orders through the method that is the most cost effective. For Amazon.com, it makes no sense for them to pay Lightning Source to print a book and ship it when they have the capability to print a copy at a lower cost. We would hope that some of this cost savings will make it into the pockets of publishers and customers as well.
Companies like LuLu are different. Some may leave Lighting Source in favor of Booksurge for books with ISBNs, so they can still make their books available through Amazon.com.
You might be interested in my post on this issue on my Publishing Blog, "Amazon Declares War on Lightning Source."
http://www.aaronshep.com/publishing/blog.html
Aaron Shepard
Author, Aiming at Amazon
Webmaster, Sales Rank Express
Hi Brandilyn,
So what does this mean for new writers trying to break in? Not writers who plan to self publish.
Does this lessen the demand for new titles in fiction - kind of like the "face out" policy for (Borders or B&N) will do?
I guess what I'm trying to articulate is, how should someone like me, finishing my wip, preparing the synopsis to start pitching in May view this development?
d. gudger,
Worst case, publishers decide they will not comply and stick with Lightning Source combined with offset printing rather than adding Booksurge to the mix. Every book sold through Amazon.com will have to be shipped to Amazon.com. This raises the price of the book and for low volumn authors, the Shipping within 24 hours may indicate that it will ship within three days. This could cause people to think twice about lumping your book with a better selling book because your book will delay shipment of the other book. Realistically, if your book is selling so poorly that Amazon isn't keeping several on hand, I doubt you'll lose as much as $100 over it. Big name publishers with many books could lose thousands an Internet marking campaign produces a sudden demand for the product.
Darcie, if you're targeting traditional publishers, I don't think it will matter. For those looking to self-publish, it will.
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