May 23, 2014

I LOVE AMAZON, BOTH AS A CUSTOMER AND AN AFFILIATE, but the problem with such great dominance is too much market power, which, inevitably, becomes abusive.

UPDATE: A contrary take. “It’s an absolutely ridiculous charge. What Amazon is actually doing is refusing to continue its extreme discounting on the artificially high retail price of books. Castalia House has no issue with Amazon, and Amazon doesn’t discount its prices on our ebooks much because they are already in the price range that Amazon expects: 2.99 to 4.99. But publishers that price their ebooks at $15.99 are in trouble, because no one wants to pay actual retail price for them on Amazon. . . . No wonder Amazon is unwilling to continue this arrangement. Amazon can only sell its books up to a certain price, depending upon the format and length. Due to the distribution discount system, a higher retail price means a higher distribution price, so Amazon makes half the margin on the more expensive, more steeply discounted books from the major publishers. Amazon is not only perfectly within its rights, but logically needs to stop discounting the book from what is, after all, the publisher’s suggested retail price; Hatchette’s complaint is rooted in the fact that Amazon is now selling its books for the price that Hatchette itself suggests!”