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It's a sticky wicket. Shipping costs need to be charged somewhere and Amazon doesn't want to load all of it onto the consumer. But I can't imagine that they'll push this to the point of losing sellers to other retailers.

Shipping fees are what's keeping me from buying more online, as a consumer.

I'm not sure how this article translates to e-wares but if there's a way for the mighty zon to increase margins they'll find it. I just don't think they'll do so at the risk of losing valuable sellers.
 

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Hugh Howey said:
No. But even if Amazon moves to a 50% rate, I'll thank them. They have a LONG way to go before traditional publishing appears advisable. Right now, I feel like I'm taking advantage of Amazon. They've earned my trust and thanks.
In terms of e-books I doubt Amazon is going to offer much less than they other vendors.
But paperbacks are as much affected by shipping logistics as any other product. I'd have to increase my price to retain any revenue at all (although paperback sales aren't exactly through the roof for me :) )
 

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To the extent that Amazon becomes a monopsony (the only buyer who matters) in particular areas of its business, mainstream economic theory (if my econ classes are recollected correctly lo these many years) predicts that suppliers eventually get squeezed. In short, Amazon needs a real competitor in the ebooks market or yes author-suppliers will feel the squeeze one day too.
 

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Shalini Boland said:
I'm now wondering if the speculation about Google starting an Amazon-style marketplace is true...
I talked about this a while back in another distant thread. I met with a guy from Google Play/Books at the book america show last year and he said that this might/will happen. He didn't give any real indication. But I'm hoping it does. Competition is good, and Google is about the only player in the world besides Apple who could instantly compete with Amazon.
 

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jimkukral said:
I talked about this a while back in another distant thread. I met with a guy from Google Play/Books at the book america show last year and he said that this might/will happen. He didn't give any real indication. But I'm hoping it does. Competition is good, and Google is about the only player in the world besides Apple who could instantly compete with Amazon.
That would be pretty amazing. And could take away some of the 'Indie Author Fear' that Amazon is the one and only place to make a living. Apple & B&N aren't consistent enough sellers for me. Although I did have some good success with B&N a couple of years ago, the sales fell off pretty quickly and I couldn't get them back up there.
 

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I'm working on the assumption that ebook royalties will eventually drop to somewhere around the 30-50% range - possibly lower in the longer term.  I don't worry about it because there's bog all I can do about it!  If and when it happens, I'll adapt.
 

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I don't think authors are in danger of having their cut reduced from the retailers. Amazon is the dominant player in the market right now, but if they start offering lower royalties than a competitor, then books on the competitor's site will have lower prices than on Amazon. This is why Amazon gave authors 70% in the first place. They wanted us lowering the price of our books so that the Kindle store had the best prices of any online retailer.

Amazon's corporate strategy has always been to have the best price. As Jeff Bezos likes to say, "Your margin is my opportunity." In the case of this third party store, Amazon sees these third party vendors on Amazon.com undercutting Amazon's own price on similar products. From the article:

Fee hikes by Amazon are particularly irksome to sellers because they compete with the company, a seller in its own right, in many categories on the site.
That's what this is about. Amazon is so big and all-encompassing that sometimes it finds itself in a situation where divisions within its own business are competing with one another. In this case, 3rd party sellers (low profit for Amazon) sometimes compete with Amazon's own offerings (higher profit for Amazon). They want to ensure that their own offerings, not the 3rd party offerings, are at the best price.
 

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Anyway, this applies to physical items and 3rd party sellers in the Amazon marketplace. I don't see the link to lowering royalty rates. More likely they raise fees for server space and possible charge per free book download. But they are doing none of those things now and I don't see the point in speculating on some possible future.
 

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I think Amazon would take a great deal of grief were they to try to reduce the royalty rate. The criticism would be widespread and withering, given that they do pretty much nothing for their 30%.

We also have a very different relationship with Amazon than the third party vendors do. We provide them product, the third party vendors are increasingly in direct competition with Amazon, often undercutting the already low Amazon prices.
 

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Pardon me if I'm totally off the wall with this, but wasn't it Google that wanted to scan and make available everyone's books and had to back off from whatever it is they were planning?
I kind of stopped following all that, so I could well be wrong. However, it did leave me with huge trust issues and when I hear Google and book sales in one sentence I get kind of nervous.
 

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Hopefully not. Fees are already pretty bad. Getting 70% is fine. But getting only 35% for books less than 2.99 and for sales in many countries is pretty bad. (They are not royalties since Amazon isn't the publisher.)
 

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Quiss said:
Pardon me if I'm totally off the wall with this, but wasn't it Google that wanted to scan and make available everyone's books and had to back off from whatever it is they were planning?
I kind of stopped following all that, so I could well be wrong. However, it did leave me with huge trust issues and when I hear Google and book sales in one sentence I get kind of nervous.
I remember all that, but most authors didn't want to know. So you'd hope Google has learnt their lesson and won't try that again. If they did set up a store, you can bet there'll be legal-savvy authors going through the smallprint with a nit comb.
 

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jimkukral said:
I talked about this a while back in another distant thread. I met with a guy from Google Play/Books at the book america show last year and he said that this might/will happen. He didn't give any real indication. But I'm hoping it does. Competition is good, and Google is about the only player in the world besides Apple who could instantly compete with Amazon.
That should be good for us. After reading the article, I don't think I want to be any of those guys. Not Amazon and not the sellers. Amazon promises fast shipping, but that costs money. Sellers need to make money too, and Amazon has the largest market and also the easiest to find stuff on.

As a consumer, I want fast shipping-it's the reason I bought Prime for the third year now. I would not complain if Amazon raised the Prime membership fee anywhere from $10-$20 a year if that would keep the selection available at Amazon. I use the shipping, movies and books enough to still justify it. Plus, we live about 15 miles from anywhere in all directions, so having items shipped to us rather than driving and using gas, saves us money right there.
 

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It's a sticky wicket. Shipping costs need to be charged somewhere and Amazon doesn't want to load all of it onto the consumer. But I can't imagine that they'll push this to the point of losing sellers to other retailers.
There are two shipping costs involved. One ships the goods to Amazon, and that is done using Amazon's account under very favorable UPS rates. Amazon pays UPS, and charges the seller's account. Amazon directs the seller to ship to various warehouses around the country. Sellers are upset that Amazon is having them send stuff to two or three warehouses rather than one. That costs more.

The other shipping cost is from Amazon warehouses to the consumer. Amazon stores the stuff at the warehouse, picks the order, packs it, and ships it. These costs have increased lately.

Sellers can also hold their own inventory at their own facilities, and handle their own storage, packing, and shipping. In that case, Amazon sends a shipping address, and the seller arranges his own shipping.

"Pardon me if I'm totally off the wall with this, but wasn't it Google that wanted to scan and make available everyone's books and had to back off from whatever it is they were planning?"
They were scanning entire books from large libraries, and letting people search the index based on the entire contents of all the books. The search would return a few paras. The major problem was with orphaned books whose copyright holders could not be found. Other problems involved other countries copyright laws.

The issues raised by the case make a good case for revising copyright law to allow both protection of authors and exploitation of new technology by searchers.

They can scan my book and return a few paras to anyone they want.

"Shipping fees are what's keeping me from buying more online, as a consumer. "
For $79/year Amazon Prime gives free shipping of items that come from Amazon warehouses. Click the prime option on the left of the screen to limit the display to items that ship free. The items that do not ship free are those stored and shipped directly from the seller's facility.
 
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David J Normoyle said:
(They are not royalties since Amazon isn't the publisher.)
Bless you. A thousand times, Bless you. :D I've been arguing this for years. I understand WHY companies call them royalties (because royalties sounds less scary than net profits or revenue minus commission to authors) and I understand why they treat them as royalties (one, because it is a holdover from print-on-demand companies that serve as de facto publishers and because it is easier from an accounting standpoint to treat them as royalties than as revenues paid to vendors), but it DOES cloud a lot of the conversations.

But back to the subject, Amazon has actually been squeezing vendors for years. No surprises here, really. It's what big companies do to little companies. As much as I complain about Amazon, they aren't nearly as bad as WalMart. I could tell you horror stories about WalMart's treatment of vendors.
 
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