So, you think Amazon’s prices are cheap?

When Amazon started, the company’s founder and directors decided to use books as a loss leader, to sell them at prices where they were certain to lose money — a lot of it. Why would they do that? While no one except Jeff Bezos and his minions knows for sure, there are several likely reasons:

• The ISBN (International Standard Book Number) system. That system gave Amazon immediate access to a numerical listing of almost every book in print (or out of print, since the ISBN was introduced in 1970) — perfect for database-organized online sales.
• Selling books at or below cost was an easy way to build market share and visibility.
• That money-losing strategy drove competitors out of business, especially independent bookstores and most of the chains — Borders, B. Dalton, Waldenbooks, etc., and it greatly weakened the only remaining large chain, Barnes & Noble. This drastically increased Amazon’s leverage with publishers. Jeff Bezos famously said that Amazon should “should approach these small publishers the way a cheetah would pursue a sickly gazelle.” And Amazon has done that.
• Amazon, which was founded in 1994, had deep enough pockets to lose money — a great deal of it — in pursuit of its goal of complete dominance of bookselling and damn near everything else, and in fact did not turn a profit until 2001.

The results of this are well known. In addition to driving myriad independent booksellers — who simply couldn’t compete on price — out of business, Amazon also drove out most of the chains, which bore massive expense through their bricks-and-mortar stores, and so again couldn’t compete on price. The irony is that the chains had driven huge numbers of independents out of business by undercutting them on price, and they in turn were undercut by Amazon.

Amazon still sells books fairly cheaply — though it seems like their massive book discounts of decades past have largely disappeared except on the most popular titles — and, using their ill-gotten reputation as the lowest-price seller, have branched out into selling damn near everything.

Many people apparently still assume that Amazon will provide the lowest price on almost anything they buy. Guess what — they’re wrong.

I occasionally order goods online, mainly musical gear, computer gear, electronic components, and optics. When I do so, I always check prices, and I’ve almost always found lower prices than those on Amazon, usually on eBay. Here are a few examples of items (all brand new) I’ve purchased recently where I could find exact comparisons between Amazon and other sources:

• NUX OD-3 guitar drive/preamp pedal — $35.99 on Amazon, $20.02 (with free shipping) on eBay.
• 1/4″ female guitar jack (metal construction) X10 — $4.57 on Amazon, $1.89 (with free shipping) on eBay.
• 10mm Plossl eyepiece (for telescopes) — $34.00 on Amazon, $6.26 (with free shipping) on eBay.
• 250K audio taper potentiometer — $1.40 on Amazon, $1.32 (with free shipping) on eBay
• Acer S200hql monitor — $127.95 on Amazon, $79.99 (with $8.50 shipping) on eBay

There are other online retailers who usually have better prices than Amazon for the things I often buy; a few that come to mind are SurplusShed for optics, Newegg and Fry’s for computer gear, and Musicians Friend and Sweetwater for musical gear. However, while their places normally beat those of Amazon, you can often find whatever you’re looking for on eBay for even less.

So, you think you’re getting the cheapest price by buying from Amazon? Think again.

 

 

Quote of the Day 4-8-18 (Thomas Frank)

“I don’t like Amazon, and I don’t like Donald Trump either. I would approve enthusiastically if a president started enforcing antitrust laws, but that’s not what Trump is proposing to do. What we are being offered instead is a choice between the worst president of our lifetimes and one of the most rapacious corporate enterprises in the country. And, eagerly, we are lining up with one or the other.

“This in turn seems to me an almost perfect representation of the wretched choices available to Americans these days, as well as the megadoses of self-deception we are swallowing in order to make them. It is everything that is wrong with our politics, and it extends from the most sweeping matters of state right down to the individual reader.

“. . . [T]his [is] where we are now in the world’s greatest democracy. We have the billionaire Republicans, with their bigotry and their war on all things public, and the billionaire Democrats, with their oblivious ideology of globe and technology. To the common people, assembled in all our majesty, the momentous question is posed: who do you hate more?”

— Thomas Frank, in his wonderful piece in The Guardian, “Trump’s enemy is not your friend“

(U.S. readers might not be aware of this, but The Guardian [formerly  The Manchester Guardian] is the single best news source on the Internet, including sources hidden behind a paywall [e.g., New York Times or Jeff Bezos’s Washington Post]; The Guardian is the best source, period. I like them enough that I occasionally contribute money to them. The only other news outlet that I would unreservedly recommend is The Intercept, which due to lesser financial resources posts fewer stories than The Guardian, but whose journalism is arguably of even higher quality. For opinion mixed with news, you won’t do better than Truthdig.)

Where do I get my news?

As anyone in his or her right mind would agree, you can’t trust the New York Times — not after their role in selling G.W. Bush’s Iraq invasion — nor the even further-right Washington Post, especially after Satan’s little brother (Amazon’s Jeff Bezos) took it over recently. So, what’s left?

A lot. I typically look at a good half-dozen news and/or compilation sites every day or two:

• The Guardian (the single best paper on the ‘net)
• El Pais (Spanish-language, the major Madrid daily)
• CNN (international, i.e., the “adult,” edition — not the U.S. “kiddie” edition)
• Al Jazeera (the best Middle East news site, and after The Guardian, probably the second best international news site; soft on Islam, but otherwise great)
• The Intercept — by far the best behind-the-scenes whistle-blower and analysis site
• Le Monde (French-language, the Parisian paper of record — my French is lousy, so I normally check this only when I want their take on particular stories or events)
• Truthdig — Chris Hedges’ and Robert Scheer’s essential hold-their-feet-to-the-fire whistle-blower and analysis site
• Truthout another good leftist compilation/analysis site
• The Cult News Network Run by a conservative Republican (!), this is by far the best site on the ‘net for news about religious cults
• The Underground Bunker — getting toward even more specialized news, this is the best source of info about one of the most two American bizarro, destructive cults (Scientology — the other is Mormonism)
• Fark — The best weird news site, and one which will lead you down all sorts of rabbit holes, sometimes toward real understanding — but more often not.

Please pass along any feedback about these sites, or any others you’d recommend, in the comments section.

 

 

Amazon’s Predatory Policies

If you ever buy books or anything else from amazon.com, you’ll probably find the following of interest. This article, “Addressing the Elephant in the Room,” by Alex Mutter, appeared in today’s Shelf Awareness (publishing industry blog).
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On the second day of Digital Book World 2014, many of the morning’s keynote speakers focused on one subject: Amazon.com. Brad Stone, author of The Everything Store: Jeff Bezos and the Age of Amazon, led off by highlighting instances from his book that he believed would help “illuminate the way Amazon operates” and help publishers predict how Amazon may operate in the future.

The launch of the original Kindle e-reader, Stone said, was the company’s defining moment, and Bezos has been “running the same playbook” ever since. It took three years to develop the first Kindle, and the company’s senior vice-presidents argued against the project. The Kindle’s runaway success has emboldened Amazon, Stone asserted, and the company has tried to replicate that success in each new market that it’s entered. He speculated that right now, “Amazon has offices working on hardware: set-top boxes, mobile phones and who knows what else.”

Stone also touched on the infamous “Cheetah and Gazelle” episode, in which Bezos told his staff to pursue re-negotiations with the smallest book publishers like “a cheetah would pursue a sickly gazelle.” As part of that, Amazon employees pulled small publishers’ books from Amazon if they did not agree to new terms. Amazon also encouraged authors, especially those focused on their Amazon sales rank, to put pressure on their publishers. “It showed that Amazon really has no balance,” said Stone. “Customers come first, and customers are entirely synonymous with its own self interest. [emphasis added]

“There might be an inclination in the industry or at Digital Book World to take comfort or glee in the declining pace of change in the book business,” Stone cautioned, referring to the leveling-off of e-book sales and the mixed results of Amazon’s publishing efforts. “I can assure you that Bezos and his colleagues do not believe that the pace of change in any business is stagnating,” he continued. “The one constant is that [Amazon] does not give up. It’s fairly ruthless and self-absorbed in how it tries to disrupt existing order.”

Joseph Esposito, publishing consultant and president at Processed Media, discussed Amazon’s growing, often-overlooked share of the institutional book market and the difficulty of gaining insight into Amazon’s business. Not only is Amazon “notoriously secretive,” said Esposito, but much of the information that it releases is also intentionally misleading. When Amazon announced that e-books were outselling print books, Esposito added, the company neglected to mention that it was referring only to its own sales. Subsequent, uncritical reports from the general media also contributed to the misconceptions.

“It would lead you to believe that print books have disappeared,” he said.

To find information about Amazon, Esposito polled university presses and libraries. He found that university presses had declining sales to traditional wholesalers such as Baker & Taylor and Ingram and increasing sales to Amazon, while librarians, especially those with severe budget restrictions, are turning to Amazon in greater numbers. Given that Amazon is also a customer of Baker & Taylor, the situation can be bizarre: Esposito brought up the case of a librarian who, needing a book on short notice, went to Amazon rather than Baker & Taylor, saying that B&T orders would take two weeks while Amazon orders would take two days. The rush Amazon orders, however, were drop-shipped by B&T. The implication here is that wholesalers provide higher levels of service to Amazon than to their direct customers.

In a subsequent panel on the future of Amazon and the publishing business, Michael Cader of Publishers Lunch encouraged members of the book business to stop thinking about “being under siege,” and instead think about ways to innovate. The resurgence of local, independent bookstores, Cader said, offered a “glimmer of hope” to those wanting to take some of the business back from Amazon. Cader, along with Esposito and Stone, suggested that publishers and booksellers can also take advantage of Amazon having to fight hard battles on so many fronts–in essentially every market that it’s entered since it established itself in the book industry.

“We ought to think about where can people who know the book business well adopt the ‘Amazonian’ attitude,” Cader suggested. “If you put a bicycle in every independent bookstore, that could defeat octocopters.”

During the same panel, Esposito advised publishers not to look to the Department of Justice or any other government agency for help against Amazon.

“My observation is that everything to do with antitrust issues seems to come down to what does it cost the customer,” he reflected. “Where consumer prices are kept low, things seems to pass muster with the DoJ. I don’t see any reason to see regulatory support going ahead. It seems to me that publishers can do more in this situation by being more innovative than appealing to regulatory forces.”

Jim Cramer, the host of CNBC’s “Mad Money” and author of Get Rich Carefully, also briefly reflected on Amazon during his talk on investment prospects in the publishing business.

“If Amazon would report earnings, I believe their stock would go down,” said Cramer. “They’ve never been constrained by the need to make money.”

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And rest assured, Amazon did go after small publishers like “a cheetah would pursue a sickly gazelle.” For several months last year, our distributor, Independent Publishers Group, which represents several hundred small book publishers, refused to supply our e-books (and those of the other IPG publishers) to Amazon because of Amazon’s demand for preferential discounts.

It’s entirely up to you whether you continue to buy from Amazon.

Related articles

• Dissecting Amazon’s Predatory “Everything” Strategy
• Amazon’s Data and its Move to Take Over Academic Publishing
• Afraid Amazon Will Crush Your Small Business? “Complaining Is Not a Strategy,” Says CEO Jeff Bezos.
• Amazon Is A Hornet’s Nest Of Malware
• When will publishers wake up to the challenge of Amazon?
• Amazon Now Poaching Customers From College Bookstores