Cheap Words - The New Yorker. In the era of the Kindle, a book costs the same price as a sandwich. Dennis Johnson, an independent publisher, says that . Its founder and chief executive, Jeff Bezos, also owns a major newspaper, the Washington Post. All these streams and tributaries make Amazon something radically new in the history of American business. Sam Walton wanted merely to be the world.
After Apple launched the i. Pod, Steve Jobs didn. Amazon is not just the . What remains constant is ambition, and the search for new things to be ambitious about. It seems preposterous now, but Amazon began as a bookstore. In 1. 99. 4, at the age of thirty, Bezos, a Princeton graduate, quit his job at a Manhattan hedge fund and moved to Seattle to found a company that could ride the exponential growth of the early commercial Internet. All the other titles, including .
- Cheap Words Amazon is good for customers. But is it good for books?
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- The caramel-chocolate flavored candy bar looked so innocent, like the Sky Bars I used to love as a child. Sitting in my hotel room in Denver, I nibbled off.
Bezos is, above all things, pragmatic. Books are easy to ship and hard to break, and there was a major distribution warehouse in Oregon. Crucially, there are far too many books, in and out of print, to sell even a fraction of them at a physical store.
The vast selection made possible by the Internet gave Amazon its initial advantage, and a wedge into selling everything else. For Bezos to have seen a bookstore as a means to world domination at the beginning of the Internet age, when there was already a crisis of confidence in the publishing world, in a country not known for its book- crazy public, was a stroke of business genius. In 1. 99. 5, in Chicago, Bezos manned an Amazon booth at the annual conclave of the publishing industry, which is now called Book.
Expo America. Roger Doeren, from a Kansas City store called Rainy Day Books, was stopped short by Amazon. Who are your suppliers?
So what makes you Earth. The books would be priced close to cost, in order to increase sales volume. After collecting data on millions of customers, Amazon could figure out how to sell everything else dirt cheap on the Internet.
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While conservatives often like to claim that President Obama is the 'worst president in history,' I thought I'd remind them, and everyone else, of just how bad things.
Two decades later, Amazon sells a bewildering array of products: lawnmowers, i. Pods, art work, toys, diapers, dildos, shoes, bike racks, gun safes, 3- D printers. Few notice if Amazon prices an electronics store out of business (except its staff); but, in the influential, self- conscious world of people who care about reading, Amazon.
For its part, Amazon continues to expend considerable effort both to dominate this small, fragile market and to win the hearts and minds of readers. To many book professionals, Amazon is a ruthless predator. The company claims to want a more literate world. But then it started asking a lot of personal questions, and it created dependency and harshly exploited its leverage; eventually, the book world realized that Amazon had its house keys and its bank- account number, and wondered if that had been the intention all along.
Recently, Amazon even started creating its own . The results have been decidedly mixed.
A monopoly is dangerous because it concentrates so much economic power, but in the book business the prospect of a single owner of both the means of production and the modes of distribution is especially worrisome: it would give Amazon more control over the exchange of ideas than any company in U. S. Even in the i. Phone age, books remain central to American intellectual life, and perhaps to democracy. And so the big question is not just whether Amazon is bad for the book industry; it.
When Amazon emerged, publishers in New York suddenly had a new buyer that paid quickly, sold their backlist as well as new titles, and, unlike traditional bookstores, made very few returns. Publishers must buy back unsold inventory from retailers, an archaic and costly practice that one ex- Amazon employee called . He was a skinny kid, he was young, he was excitable, and he was completely serious about what he was doing. I drank the Kool- Aid. In the late nineties, an Amazon vice- president named Mary Morouse e- mailed her colleagues after a trip to visit publishers in New York. There were several examples cited where Amazon.
And they love our sales numbers. They all wanted to collaborate with the Seattle upstart, and they used Amazon as an information resource; it was a vast improvement over the old green- bound copies of . But someone who read Bezos. In the letter, Bezos noted tersely, . A New York literary agent told me that books were Amazon. Books were going to be the way to get the names and the data.
Books were his customer- acquisition strategy. In 2. 00. 4, Marcus, now the executive editor of Harper. One day in 1. 99. Fried went into the company kitchen and found him absorbed in assembling an ant farm. He was really pleasant and fun. Lots of managers had to take the Myers- Briggs personality tests. Eighty per cent of them came in two or three similar categories, and Bezos is the same: introverted, detail- oriented, engineer- type personality.
Not musicians, designers, salesmen. The vast majority fall within the same personality type. Bezos closed annual reports to shareholders with an exhortation to experiment and to fight complacency: . I think we were flat last year.
They were full of inefficiences, starting with overpriced Manhattan offices. Employees with publishing experience, like Fried, were not consulted. Weathervane fell into an oblivion so complete that there. A decade later, the company would try again. Amazon was a megastore, not an indie bookshop, let alone a literary review, and its writers were under pressure to prove that their work produced sales. If a customer clicked on a review or an interview, then left the page without making a purchase, it was logged as a Repel. Marcus was informed that his repulsion rate was too high.
Although co- op fees weren. They never knew exactly how much these payments helped sales, and negotiations over them became tense. In 1. 99. 9, the company received $3,6. When Marcus asked if publishers should be given sales targets in exchange for their payments, Lyn Blake, the executive who had created the co- op program, said no, adding, . Judgments about which books should be featured on the site were increasingly driven by promotional fees.
Around this time, a group called the . Author interviews became less frequent, and in- house essays were subsumed by customer reviews, which cost the company nothing. Tim Appelo, the entertainment editor at the time, said, . According to Brad Stone, a trash- talking sign was hung on a wall in the P1. N office: . One day, Fried discovered a memo, written by a programmer and accidentally left on a printer, which suggested eliminating the editorial department.
Anne Hurley, the editor- in- chief of the DVD and Video section, was viewed dismissively by her boss, Jason Kilar, who went on to run the video- streaming company Hulu. For the first time, Wall Street lost faith in the company, and Bezos announced that the next eighteen months would be devoted to making .
Tim Appelo took Marcus. According to one insider, around 2. Authors started to be considered among the company. By then, Amazon had lost much of the market in selling music and videos to Apple and Netflix, and its relations with publishers were deteriorating. These difficulties offended Bezos. In its drive for profitability, Amazon did not raise retail prices; it simply squeezed its suppliers harder, much as Walmart had done with manufacturers.
Amazon demanded ever- larger co- op fees and better shipping terms; publishers knew that they would stop being favored by the site. Eventually, they all did. Melville House puts out quality fiction and nonfiction, including . In 2. 00. 4, when Melville House was just getting started, Johnson.
By the next day, the BUY buttons had disappeared from Melville House. Not long afterward, the Book Expo was held at the Javits Center, in Manhattan. Two young men in suits approached Melville House. The men were wearing Amazon nametags. Before the impasse, Amazon had represented eight per cent of Melville House.
Without dropping co- op fees entirely, Amazon simplified its system: publishers were asked to hand over a percentage of their previous year. According to the marketing executive, the larger houses, which used to pay two or three per cent of their net sales through Amazon, now relinquish five to seven per cent of gross sales, pushing Amazon. Random House currently gives Amazon an effective discount of around fifty- three per cent. For a smaller house, Amazon. Because Amazon manages its inventory so well, it often buys books from small publishers with the understanding that it can.
Publishers sometimes pass on this cost to authors, by redefining royalties as a percentage of the publisher. Recently, publishers say, Amazon began demanding an additional payment, amounting to approximately one per cent of net sales. Once the fee was paid, publishing executives could discuss marketing strategies with Amazon staff; otherwise, they. If a publisher resists when Amazon asks for a . Publishers warily allowed Amazon to scan some of their titles and convert the images into searchable text. In 2. 00. 4, he set up a lab in Silicon Valley that would build Amazon.
Bezos announced that the price of best- sellers and new titles would be nine- ninety- nine, regardless of length or quality. Amazon had carefully concealed the number from publishers. Bookstores that depended on hardcover sales. If reading went entirely digital, what purpose would they serve? The next year, 2. By 2. 01. 0, Amazon controlled ninety per cent of the market in digital books.
Its prohibitively low prices warded off competition. The literary agent Andrew Wylie (whose firm represents me) says, . Apple wanted a deal with each of the Big Six houses (Hachette, Harper.
Collins, Macmillan, Penguin, Random House, and Simon & Schuster) that would allow the publishers to set the retail price of titles on i. Books, with Apple taking a thirty- per- cent commission on each sale. This was known as the . But it gave publishers control over pricing and a way to challenge Amazon. In an e- mail to a friend, Sargent wrote, .