Amazon and the Third-Party Sellers Brouhaha

Rachelle Gardner

Blogger: Rachelle Gardner

By now you’ve probably heard about Amazon’s latest affront to authors and publishers—the fact that they’re allowing third-party sellers to own the “buy button” on new books. This article explains it.

I’ve spent some time checking Amazon listings for books we represent. I found that some of our clients’ backlist books published in 2015 or earlier are affected by this decision. The buy button you see for these books now belongs to a third-party seller rather than the publisher, which means those copies will not generate royalties for the author. (A consumer needs to dig deeply to locate the place to click to purchase from the publisher.) I’ll try to answer some of the questions I’m getting from authors.

Where are the third-party sellers getting the books they’re selling as new?

There could be a lot of answers. They might be remainders, or in many cases, the books represented as new probably aren’t actually new.  The sellers could be buying slightly damaged books or overstock from wholesalers, or they could be outright counterfeit copies. There are a variety of possibilities.

Doesn’t Amazon prohibit selling used goods as new?

Yes, they explicitly prohibit this. But selling used items as new can be a lucrative business, so the practice is widespread among many product categories, not just books.

Didn’t the author already receive a royalty on those books?

Maybe, maybe not. In some cases, as in high-discount or remainder sales, the author got a reduced royalty or none at all. However, even if the original sale was royalty-bearing for the author, these third-party sellers are taking away from the author’s future royalties by selling used books as new.

Can’t the big publishers do something about this?

Past experience shows that trying to work directly with Amazon can be frustrating at best; it’s often fruitless, and it can even backfire. But publishers are aware they can do a few things to prevent used or remaindered books being sold as new. They can be more intentional about marking remaindered books so they’re obviously not new; they can make sure reviewer copies and galleys are also clearly distinguished.

According to Publishers Lunch, Penguin Random House has been corresponding directly with third-party booksellers, informing them that their actions may be in violation of various laws and statutes, asking them to “cease and desist” any illegal activities (implying that the publisher will take action if necessary). We at Books & Such will be keeping an eye on developments, especially any actions taken by the Big 5 publishers.

Why is this such a big deal for authors?

In reality, it won’t matter for some authors. But others make a significant portion of their income from royalties on backlist books. For example, if you’re a novelist with 30 backlist titles, it’s possible you could be making more from the aggregate of all your backlist books than you’re making on your latest 1 or 2 titles. If that backlist income were to suddenly drop because people are no longer buying from the publisher, you’d notice the difference. But again, many authors don’t have that many backlist books, or their backlist books don’t generate significant income anyway, so they don’t need to be overly anxious about this.

What can authors do?

Authors are not powerless. One of the best things you can do is make sure your website lists several buying links in addition to Amazon, especially for your backlist books. (Perhaps you could list the Amazon link last.) You can find ways to gently encourage readers, friends, and family members to buy books from other vendors. You can occasionally blog or write a Facebook post that highlights other retailers who carry your books, subtly reminding people that Amazon is not the only option.

I’m truly hoping something will cause Amazon to reverse this decision. But as always, Amazon will decide what is a good business decision for them.

Let me know if you have any questions, and I’ll do my best to answer.

 

Image copyright: limonzest / 123RF Stock Photo

28 Responses

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  1. Rachelle, do you have a source for Jeff Bezos voodoo dolls?

  2. Your last-link suggestion is powerful, Rachelle. Amazon’s strategy played back to them.
    * I don’t need links to buy my WIP. Yet. And yet again, Books & Such offers wisdom I don’t even know I need. I’m grateful.

  3. Robin says:

    Didn’t know about this. Thank you for sharing.

  4. It’ll be interesting to see how this plays out. But it just seems so smarmy.

  5. Thank you for this insight!

  6. I had heard about this, but your breakdown is helpful. Do you think it will also affect indie authors and small presses publishing through Amazon?

    • Rachelle Gardner says:

      Amber, I think we can safely assume that if you published through Amazon, then Amazon will own the Buy button. As far as other indie authors, they’re just as subject to this as anyone else.

  7. Beth Vogt says:

    Thank you, Rachelle, for your excellent explanation of this situation. I’ll be sharing this post.

  8. Carol Ashby says:

    Rachelle, if the buy button is for sale, why doesn’t the publisher just buy it first? What is the cost of the buy button? Is the purchase for a limited time period with right of renewal?
    *I agree that the publisher should have the first choice position, but surely this policy change was announced. Were the CBA publishers not paying attention to Amazon policy announcements?

    • Carol Ashby says:

      I know Amazon is the big dog, and that alone makes them a target for criticism, but they aren’t evil monsters out to get us. They’re looking to maximize what they consider honest profit.
      *But that profit isn’t all going into Bezos’s pocket. It was in the news feeds this morning that Amazon will spend millions of dollars designing and constructing a homeless shelter in its new headquarters building in Seattle. That 47,000 square feet of prime real estate (imagine the $ value!) being used to help those needing help most.

    • Rachelle Gardner says:

      Sellers don’t outright “buy” the button. They compete for it based on price and other terms that Amazon negotiates with sellers. The big publishers are rarely willing to list a $9.00 book at $1.32 (for example), except when it’s on a sale or promotion. So by letting the third parties in there, the publishers are getting pushed lower and lower in the seller listings.
      *This has absolutely nothing to do with CBA publishers. Zero. We are talking about every publisher who has ever published a book and listed it on Amazon. And I don’t understand your statement that “surely this was announced.” Amazon announces things simultaneously with DOING them. So publishers and third-party sellers (everyone who does big business with Amazon) has been aware of it since it started. Are you implying that somehow, someone could have done something? The biggest publishing corporation on the planet (Penguin Random House) is doing what they can, and you can bet all the other publishers have their people on it as well, trying to come up with solutions.

      • Carol Ashby says:

        Thanks for clarifying how it works, Rachelle. What you say makes sense. I didn’t realize Amazon didn’t announce such a big change before implementing it That surprises me, since many companies do make such announcements.
        Maybe Amazon will consider making books a special case in response to the logical arguments by the publishers. It’s to Amazon’s benefit to have publishing houses stay in business and healthy, so maybe they will.

  9. David Todd says:

    Rachelle: The Huffington Post article you link to has so much wrong with it, I can’t even begin to figure out how to break it down. It’s full of hysteria, not sound journalism. Amazon isn’t trying to drive down the value of books as she says, but rather to keep the cost low for its consumers, the book-buying public.
    .
    And does she really think consumers are so stupid that they won’t realize that they are buying the book from someone other than Amazon? It shows up clearly once you click to do the purchase, and you can back out at any time. If she disdains readers and buyers that much, I don’t imagine she sells many books to them.
    .
    She asks us to support indie bookstores. That’s exactly what third-party sellers are: independent, on-line bookstore. I was one of those once, selling used books on line for three or four years. No, I didn’t have a storefront, but I was still a small bookstore.

  10. Elissa says:

    I already avoid buying from Amazon unless I truly cannot find what I want elsewhere. This information only reaffirms my decision–and will now make me think at least three times about whether I actually need a particular product before I buy anything off their site.

  11. Rachelle, thank you for this enlightening post. It’s disheartening to see that third-party sellers can sell books in a way that causes the books’ creators to lose out on royalties. I appreciate your succinct breakdown of this newest development, and I’ll be watching for more news about this topic as it unfolds.
    *Thanks for keeping us up to date on what’s going on in the publishing world.

  12. Craig Allen says:

    I found one of my books offered by numerous third party sellers, and since it’s print on demand they clearly can’t have any copies. However, one was offering the book on CD, which is specifically prohibited under the copyrights. When I notified Amazon they punted, refusing to confront the seller or de-list the offer. What can be done?

    • Carol Ashby says:

      Craig, within one week of my POD paperback going on sale at Amazon, there were “New” and “Like New” copies for sale by third parties (some in UK) with prices with shipping higher than Amazon and with delivery times long enough for them to get one through Amazon/Createspace and ship. There’s an occasional sale that nets 8% instead of 28%, but I can’t tell if that is from extra taxes (like VAT) on an international sale or a 3rd-party related effect.

      • Craig Allen says:

        I understand the re-sellers, and as you observe, they typically list a higher price than Amazon…which is not surprising since they’ll have to buy it from Amazon in the first place.

        My bigger concern is them allowing the sale of electronic copies, which is not something they have within their selling rights through CreateSpace, and which I specifically forbid in the copyright declaration printed in the book. I do offer the books through Kindle ebooks, but that’s different.

    • Rachelle Gardner says:

      You can certainly try to brainstorm your own solutions to your problem. At the moment, the choice seems to be, either deal with Amazon on their terms, or refuse to do business with Amazon.

    • Rachelle Gardner says:

      As you know, piracy is common. That’s what you’re experiencing, and it’s really frustrating. Not a lot of solutions, however. I wrote a post about it a few years ago:
      http://www.booksandsuch.com/blog/worried-about-your-work-being-stolen/

  13. Leon Oziel says:

    I see this as giving authors yet another reason to self-publish their stories and books independent of traditional publishers. When I look at how long the publishing process takes, then factor in the drama, expected rejections and attitudes, I imagine it’s far more pleasant and profitable to self-publish. And if you’ve gathered a significant platform, or plan to do so, I can’t see the incentive to go traditional.

  14. Mary Kay Moody says:

    Thanks you, Rachelle, for this important update. As if we needed more circumstances undercutting publishers viability. If I were on FB here, I’d click the angry emoji!

    I guess nearly every business has its scalpers and knock-offs. But creatives, for the most part, get such small payback on their investment. Sad to hear of this avenue. THANKS for the ideas of how to combat it. Will be sharing.

  15. Angela Carlisle says:

    Just a question: Is it generally safe to assume that “new” books listed under Amazon Prime will generate the proper royalties? When I’m looking for a book published by one of my author friends, I choose the Prime option specifically for that reason (two-day shipping doesn’t hurt, but sometimes it isn’t a factor). I have noticed that there are third-party sellers that are still able to offer Prime. Whether their supply is more likely to have a legitimate source than other third-parties is something I hadn’t considered.

  16. LD Masterson says:

    Thank you. This is good information to have.