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May 18, 2012
From Our Partners - Disintermediating Amazon
Disintermediating Amazon - An alternative publisher takes responsibility and encourages others
More readers than ever are reading more books than ever. Yet for more than two decades now, for at least as long as I've been in publishing--and certainly preceding the rise of Amazon--the lamentations of publishers and storeowners have filled the land. There have been little blips along the way when things seemed to be looking up-a Harry Potter series here, an Oprah Winfrey selection there-but overall it's been a long, sad decline. We've been an industry of enablers: giving huge discounts to mollify ailing stores; overstocking books to mollify ailing publishers. The outcome, more often than not, has been and continues to be shelf space stuffed with unsold product and massive returns. A very few benefit while almost everyone else involved, be they retailer, author, or publisher, suffers.
Now comes something really different. E-books, and the Internet, and with them the prospect of lightning-fast distribution, high efficiency, and minimal, or nonexistent, returns. Perhaps we in the industry are so used to being glum that we refuse to see the thrilling opportunity in front of us. We remain committed to doing business the way it's always been done. Despite a computer on every desk and exciting new marketing tools online, we perpetuate the same old system, working through retailers and treating the electronic world as simply a tool to augment our presence in the real world. And it means wrestling with Amazon over how to sell. It's a match that publishers are likely to lose-consumers like getting books for less money-but this is not a battle publishers have to fight, unless they refuse to evolve.
Amazon has emerged as the champion of electronic reading for the masses, facing off against the stubborn big six (or is it five? or four?). But Amazon's brutal tactics--ham-handed at best, mafia-like at worst-have alienated freethinkers everywhere. From Macmillan to Melville House, publishers and distributors who object to doing things Amazon's way find themselves abruptly cut off. After a few such "examples," and some strategic $25,000 grants scattered throughout the industry, the Seattle gang has encountered little resistance. (If that's not evidence of a monopoly in action, I don't know what is.)
Yet Amazon, which has so neatly disintermediated physical bookstores and intimidated publishers, may carry within itself the formula for its own destruction. The one great service it provides is a comfortingly familiar Web site, a Web site that just a few years ago was unknown. And despite all its cash, its forays into publishing seem doomed, thanks to the hatred it engenders among rival stores and sites; it is likely that the fate of its publishing efforts will mirror that of Barnes & Noble's. What is it selling? Its ability to sell. What if publishers were to sell e-books and print books direct, straight to consumers-and consumers were to get used to the idea of buying direct? Suddenly one can imagine Amazon becoming an anachronism, joining the lengthy list of publishing's dying or extinct species.
At OR Books, which specializes in nonreturnable, prepaid sales straight to the consumer, we've found that, with some effort and increasing success, it's possible to persuade readers to sidestep the still-young tradition of heading straight to Amazon for purchases. Such a prospect needn't spell disaster for physical stores, either. Counterintuitively, our growing experience with direct sales has led us to re-examine our bookstore connections.
By creating a buzz around a book online and fostering online communities of readers around each book, we create a small but reliable in-store demand as well. And we've found that increasingly stores are open to buying on a prepaid, nonreturnable basis; we give them a flat 50% discount, not dithering over a percentage point here or there. Stores order a smaller amount than they would under the old "order now, pay later" system, but they sell what they take in stock, and reorder. New distribution models such as On Demand Books' Espresso Book Machine provide another way to sidestep the old system. The result is a good one for this publisher, for consumers, and for participating stores as well: they no longer sacrifice valuable shelf space to inventory that doesn't sell.
This model seems workable, and we look to see more publishers, consumers, and stores joining us. Amazon is not the last word in bookselling.
Article by John Oakes
John Oakes is the cofounder of OR Books (www.orbooks.com), an alternative publishing company that embraces e-books and other new technologies.
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