Saturday, October 17, 2009

Amazon and WalMart Book Price War

Yesterday I saw a e-mail report on Publisher's Lunch from Publisher's Marketplace saying a price war is going on between Amazon and Wal-Mart. They're offering hardcover books by well known authors for $9.00. The book price war even made the news on TV.

This move has me worried. Where does this move  leave the midlist authors published by the big houses? If these authors have hardcover books out, they'll most likely be left in the dust by readers grabbing the lesser priced books by popular authors.

Small publishers will have an even more difficult time. How can they possibly pay expenses and still compete in such a market?

What are your thoughts on this? Does it seem a good or bad thing?

13 comments:

  1. I heard about this on the news yesterday. Hard to say. It's always going to be a competitive market either way you look at it. The best thing small press authors can do whether there's a price war or not is just to keep promoting!

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  2. Scary, ya ask me. Like gas price wars - nobody's profiting. You think it's in response to the ebook taking off so huge phenomenon?

    The Old Silly

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  3. Walmart only buys books it can get from its huge distributor at very low prices, lower than bookstores can buy them for because they buy in bulk. The big problem is that they buy them so low that authors make almost nothing on Walmart sales. Walmart may actually lose money on the $9 sales but they can afford to do that because people will buy other things while they go in to pick up the book and they make money that way.

    It's just like Amazon's Advantage program where Am. gets 55% OFF retail price and sells for retail or barely under and the author gets maybe $0.50-$1.00 per sale. I hear Am. also loses money on Ebook sales but they make it up by selling the Kindle which is so overpriced they make tons from it.

    I refuse to buy from Amazon and I never buy books at Walmart. Go to a bookstore, or buy directly from the publisher, if you care about how authors are treated.

    Someone is definitely profitting, but it sure isn't authors.

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  4. It's horrible! What will happen to publishing houses when they have their profits slashed? Will quality suffer? How much time and money can you put into a book when you're only making a small fraction of what your profit had been? I wish the avid readers would band together and boycott the 'cheap' books!

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  5. LK, good points. I'm not sure how this price war helps anyone. If the author makes royalty only on the actual sold price ($9), instead of the the srp, then this is not good. Wal-mart and Amazon are making money off the backs of the writers.

    Any way you cut it, this does not seem to be good news for writers. Big names don't really need the publicity, but they aren't getting the same royalty they would otherwise and the midlist authors are losing out as well.

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  6. I agree with what the others have said. This seems like bad news for authors.

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  7. Okay, I'm going to be the dissenting voice here. Let them have their price war. Most small publishing houses don't do hardbounds, they do trade paperbacks. Few of the chain bookstores, WalMart or Costco will carry those books anyway. All but one of the Big Six publishing houses are owned by foreign companies. Major authors gettin less money? Welcome to my world.

    Yes, they will have to promote now and not depend on their houses to do the work for them. I'm sure they will still get the money and advances to make this easier.

    I now get my "big" books from the library. I only spend money on authors whose books will never find a place on the shelves of libraries or bookstores. I want to read something less mainstream and discover new voices. Plus, I can buy more books that way. My own novels only cost $13.

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  8. Anonymous3:49 PM

    Wow,

    I like what Sunny said.
    (how can you disagree with a woman named Sunny?)
    We can only wait and see. I heard Stephen King was a fan of the ebook,he liked the idea of cutting out the middle man and having the author deal directly with the publisher. It might be biting the hand that feeds him in his case.
    I still like to hold the book in my hand and cuddle on the couch but this might give ebooks an extra push, who knows.

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  9. What Loraine said. Walmart gets big discounts. I do buy from Amazon only because of the convience. For me, yes, if it wasn't for Amazon, I wouldn't have any books. Haha!! I do try to buy from online publishers, especially my ebooks. I would love to go to a B&N and hang out, but my kids, ain't gonna happen.

    Overall, I don't this being a good thing. The only advantage small time press have is the wide range of the Internet. I'm privy to Internet sales info, in that regard but I think as long as solid small presses continue to do well on the Internet, I don't think it's as big a worry as we intially think it might be.

    I hope that made sense,
    Steph

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  10. Anonymous8:30 AM

    I don't think this is going to do the small publishing houses and their authors any good. I don't know about the rest of you authors who write for the independent publishers, but I make little enough royalty on each book as it is now. This is not good news.

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  11. Another reason why I refuse to shop at Walmart!

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  12. Anonymous1:39 PM

    As another non-Walmart shopper and non-Amazon shopper, I agree with Sunny's earlier comment about the delight of discovering new voices rather than reading what is prescribed by best seller lists.

    Beverly Lauderdale

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  13. This won't have much effect at all on small publishers and their authors, because for the most part they aren't going to be stocked in Wal-Mart anyway. Wal-Mart buys titles that they can sell through name recognition to people who casually stroll by the book shelves on the way to the electronics department. "Hey! The new Michael Connelly! And only $9.00! Toss it in the buggy, Harry!"

    Same goes for Amazon. If you really want your own copy of Reed Coleman's wonderful book EMPTY EVER AFTER (which won the Shamus Award on Friday night for Best PI Novel), then you'll find it on Amazon and pay what they ask. Bleak House, who publishes Reed, gives Amazon a decent discount, and you might get a buck or two off the cover price, but that title isn't necessarily competing with the most recent Jonathan Kellerman or (shudder) Patsy Cornwell. Different markets, different niches. And you won't find Reed Coleman at Wal-Mart (sad to say) because he isn't a household name.

    The people really getting hurt here, as someone already noted, are the midlist authors at the major houses -- not because they are competing for shelf space a Wally World with the likes of Connelly, King, and Steele, but because (at least for the most part) Wal-Mart isn't really interested in them in the first place. Limited shelf space means the big dogs get the real estate. The mid-listers fight for big-box shelf space and online/library sales. Shoot, getting sold to Wal-Mart would be the kiss of death for most mid-listers, since all the publisher would get in return would be piles of stripped covers. Name recognition is the whole game at Wal-Mart, and most mid-listers aren't well-enough known to stand up to the competition.

    The publishers may feel a bit of a pinch because of the need to offer a slightly higher discount than usual, but they make it up on bulk sales and (hopefully) fewer returns based on Wal-Mart using the major authors as loss-leaders ("Hey! The new Michael Connelly! And only $9.00..."). Losing a buck per unit on 100,000 copies doesn't look so bad when your sell-through reaches 85%.

    As for royalties for authors, the end-seller price has nothing to do with that in most cases. If Wally World buys a Michael Connelly title at a 60% discount and sells it for a few cents more, that contingency has already been figured into the author's contract. You can sign a contract that gives you fifteen percent of the wholesale price, or eight percent of the cover price. Evens out to roughly the same royalty in either case, with no real impact on the author if a bookseller drops the shelf price to a percent or two over the discount. Random House doesn't care what Wal-Mart or Amazon charges for the book, as long as they get their 40-45% of the MSRP.

    The publishing world isn't really very different than most other commodities. The profit margin is pretty much razor-thin in every sector of the economy these days, and everyone is doing what they have to in order to get by. I think it's time we realize that the halcyon days of the 1980s are long gone, and it's now a dog-eat-dog world in the book biz.

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