Copyright © 2003 Richard Seltzer All rights reserved. To
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Their Amazon Associates program made it very easy to become an Amazon partner -- putting links on your Web site that pointed to specific books at Amazon, and getting paid referral fees if customers following those links bought books. Using any Web space at all -- including the free space that ISPs give their customers -- you could set up a pseudo bookstore of your own, posting reviews and comments about books that you liked, and getting paid if people followed your recommendations. Sure, the payments were low -- 15% of revenue -- but you didn't need to have inventory, or fill orders; you didn't need to do anything but sign up for the program and put the links on your pages.
Over the years, they have reduced the referral fees, and prevented partners from buying books at Amazon using their own links to collect the referral fee (which used to offset the shipping cost). Now the typical fee is a trivial 5%, with lots of messy complicated terms intended to prod "associates" into promoting the sales of non-book products and into putting obnoxious graphic Amazon ads on their pages. In many cases, it's no longer worth the effort.
Very early, they went out of their way to make literary and rare works readily available to the general public. They didn't limit themselves to the books available from any store through the standard book distributors. Rather they reached out to small publishers with their Amazon Advantage program. The terms were tough financially. The publisher had to give them a 55% discount, and the books were sold consignment-style (Amazon keeps the inventory in their warehouse and only pays the publisher after a book has been sold to a consumer). You wind up having to wait for 2-3 months after the sale of an item before you get paid. But this program gets you into their online catalog -- which is now probably used far more often than Books in Print by librarians and book lovers all over the world. And your listing appears with the label "ships within 24 hours." Even now, after more than half a dozen years of Amazon's success with it, Barnes and Nobles still doesn't offer anything comparable. But rather than promote this competitive advantage and public service, Amazon is now cutting back on the program, squeezing their publishing partners even tighter than before. Originally, their insistence that every book have an ISBN (International Standard Book Number) was not much of a problem, but R.R. Bowker, the supplier of such numbers has gone from assigning those numbers for free (which is common in countries outside the US) to charging hundreds of dollars. And starting a couple years ago, Amazon has been requiring that bar codes of the ISBN appear on your books -- adding more cost and hassle. Now they say that starting May 1, 2003, they'll start charging an annual fee to participate in the Advantage program, now estimated at $49.95.
One other innovative program remains intact -- Amazon Marketplace. This allows anyone who has a book for sale (a publisher with new copies or a reader with a second-hand copy) to offer it for sale through Amazon. There is no fee to post such an item. When buyers look at the discription pages for books, they see a choice of buying the same item at a discounted price. That link takes the customer to a listing of these alternate book sellers. Buyers use their credit cards to buy from Amazon, with a standard shipping charge automatically added. Hence the seller doesn't need to have a merchant credit card account. Amazon takes a reasonable percentage of the sale price as its fee. It's even easy to participate -- just click on "Sell yours here" from the description page of any book and fill in a few quick forms. The problem is that only books which already appear in Amazon's catalog are eligible for inclusion in Amazon Marketplace. So as small publishers get squeezed out of Advantage, they lose their opportunity to sell their titles by way of Marketplace.
In the early days, Amazon was flexible and creative. If you had a problem with one of their policies, you could get their attention with a clearly reasoned email; and often they would make exceptions. For instance, way back around 1996, they made an exception to let me sell books on computer diskette through their Advantage program, and we went back and forth a few times to arrive at a mutually acceptable way of packaging those diskettes so they could handle them efficiently in their warehouse and shipping operations.
Now they operate much more like a typical large bureaucratic business -- hence the imposition of an annual fee for Advantage that will bring them very little revenue and chase away thousands of previously loyal partners.
Rather than assessing a fee, they should come up with creative ways that partners could help them reduce costs and increase sales, including linking the Advantage and Associates programs and making it easy to put Amazon search boxes on their Web pages. But no, they are (for now) rejecting such suggestions and plowing ahead arrogantly, imposing their annual fee on people and companies that have been their friends for years. By so doing they are sending a message that they no longer care about small publishers.
And recently at the entry page to the Amazon Advantage site, they posted, unobtrusively, new legal terms that literally say that Amazon has non-exclusive rights to any and all content submitted to Amazon through this program -- in perpetuity and transferrable to anyone else.
"... you grant to Amazon.com and its affiliated
companies a royalty-free, nonexclusive, worldwide, perpetual, irrevocable
right and license to: (a) use, reproduce, perform, display, and distribute
any copyrightable works (e.g., creative text, images, and artwork),
trademarks, or trade names included in the Content; (b) adapt, modify,
reformat, and create derivative works of any Content; and (c) sublicense
the
foregoing rights."
Taken literally the terms mean that a small publisher (and publishers of electronic books are particularly vulnerable) hands over the rights to the content of their books by submitting the books to the program. Purportedly, that was not the intent of the terms. The terms were meant to apply to the promotional content -- like images of the covers of books and book excerpts -- that publishers submit to Amazon to help promote their sales of books. But the terms were quite clearly far more broad than that, and legally enforceable "in perpetuity" by whatever company may choose to pick up those rights in the future.
After a couple of weeks of pounding away at Amazon by email and spreading the word through email discussion groups, I finally got them to relent and to promise to edit those terms "with a better explanation." But it is sad that they ever considered forcing such terms on their partners.
Now whenever I get a communication from Amazon, I have to read carefully
and suspiciously to figure out what they really mean and how their latest
change is likely to hurt me and my business. I long for the good old days
when every change from Amazon was for the better, and pioneered interesting
new business models that we all could benefit from.
The full text of Richard Seltzer's books The Social Web,
Take
Charge of Your Web Site, Shop Online the Lazy Way, and
The
Way of the Web, plus more than a hundred related articles are available
on CD ROM My
Internet: a
Web
Business Boot Camp: Hands-on Internet lessons for manager, entrepreneurs,
and professionals by Richard Seltzer (Wiley, 2002).
No-nonsense guide targets activities that anyone can perform to achieve
online business success.
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