On The Great Amazon Bunfight of 2014

This is going to be a highly controversial post. I would like to stress that it is only my opinion and while I am happy to receive intelligent and logical debate, or anyone that wants to try and change my opinion to open up a discussion, trolling will not be tolerated. All comments on this blog are moderated before posting.

I also feel at this stage that I should point out that I am an Amazon author and have been for 2 years. While I like to think that I’m unbiased, I do feel that in the interests of transparency I should allow you to bear that in mind while you read the following post.

I’ve been reading dozens of articles about Amazon’s negotiating ‘disputes’ with Hachette and now Warner Brothers with considerable dismay, but probably not for the reason you think. I can’t help but wonder if, on some level, this is yet another witch hunt against Amazon, incited by the media.

Early last year, during what has become known as the ‘Tax Shaming’ scandal, I felt like a lone voice of reason amongst my circle of associates who were all boycotting the chains and supporting mass protests at various locations. For an article on the subject, see here: http://www.theguardian.com/business/2012/dec/03/amazon-google-starbucks-tax-avoidance At the time I have to confess that I was a little bewildered by it. While it might be morally wrong to arrange finances in such a way that much lower taxes are paid, none of these companies were actually doing anything illegal. I will say that again – none of these companies were doing anything illegal. They were not breaking the law. In essence, they were being publicly lambasted for having good business sense. That seems ridiculous to me. That’s why big corporations employ accountants – to save them money.

Fast forward to this business with Hachette and Warner Brothers. While I honestly lament the hit to author’s royalties, and I genuinely do – it’s a horrible situation to be in and I wouldn’t want to experience it, I also don’t feel that we should be stirring such global outrage over a company using heavy-handed negotiating tactics. Before you all fly off your handles over that statement, ask yourself if there would be this much outrage if it was anyone other than Amazon. The answer is probably not. Again, the company is being lambasted for using the means at its disposal to obtain better margins for itself, a tactic that just about every business on earth uses where it can. Your local shop probably refuses to sell things if it can’t get a decent profit on them. I know our shops here do because I’ve dealt with them. If their commission on my handcrafted goods pushes the price above the bracket they feel comfortable selling at, either I take less money or they don’t buy my goods. Is it right? I don’t know. That’s just the way of the world.

And therein lies the crux of the problem. Amazon is one of, if not the, biggest companies on the planet. It’s the Everything Store. It has unprecedented negotiating power. And people, that’s what we made it. Like most people, I do the vast majority of my internet shopping at Amazon because it’s cheaper than anywhere else. It’s easily accessible, most of the time I get free postage and there’s a reviewing system that allows me to canvass honest opinions about what it is I’m purchasing. It’s convenient too – you could order a book, a toy, some cooking ingredients, a tailor’s dummy, a new computer…whatever you could possibly conceive, and pay for it all in one simple transaction. The expansion of Amazon has been consumer driven by the billions of us worldwide that want a good bargain. Like many of you out there, I don’t earn an awful lot. I support my local businesses where I can, but I simply couldn’t afford to do all my shopping at more expensive retailers on principle, even if I wanted to. That’s a sad fact of these economic times.

We give Amazon the power by continuing to support them with our purchases of cheap consumables and then we criticise them for levelling it at their suppliers. Seems marginally hypocritical to me.

While there are many arguments out there about Amazon being greedy and simply wanting to increase their profit margins, I would suggest that you read this highly interesting article: http://www.independent.co.uk/news/business/analysis-and-features/amazons-hollywood-villain-9533840.html If you can get past the first section demonising Jeff Bezos, the second half of the article might surprise you.

Amazon’s margins are “wafer thin” for the sole reason that they are heavily investing in various projects and technologies as they look towards the future. That might not mean much to you, but it means a lot to me. Amazon changed my life. They allowed a single hard-working woman the chance to own her dreams without having to give up the financial security of a day job.

Sounds dramatic, right? When Amazon developed the Kindle, they blew open the world of e-publishing by giving the world the first easily affordable reader. Although there were others around beforehand, they were expensive to buy and available books were limited. The Kindle pretty much changed the face of publishing as we know it. The money they ploughed into the research and development of their range of e-readers and digital data has changed the world and, personally, I think it’s for the better. And it’s not just in terms of changing the way books are published. It’s about people reading more, improving literacy and engaging children on an interface they feel more au-fait with.

On a personal level, when they opened up the world of self-publishing, I got to achieve my dream. All I’ve ever wanted, since I was twelve years old, is to be a writer. While I am still very determined to go down the route of ‘traditional’ publishing, the self-publishing option has been nothing but good for me. It gave me confidence. It honed my writing. It has given me so much experience with editing, design and marketing that I wonder now how I ever thought I was ready to publish before. What’s more, I can now go to an agent and give them my download figures and stats and also prove to them that I’ve built a platform. It’s given me the opening that countless hours spent drafting queries to dozens of people didn’t. For every Hachette author that is struggling from a lack of incoming royalties, there are hundreds of thousands of small SP authors like me that are being given the chance to begin earning them.

This is what Amazon is doing with the profits they’re fighting for. They’re investing in the future. They may never again have a product that changes the world in the same way that the Kindle has, but I think that demonising them for trying is going a little too far and I have to wonder at the motivations behind it.

If you read my blog with any regularity, you’ll know that I have a love-hate relationship with the media. I’m very sceptical of it and have been for a long time. They blow things out of proportion for the sake of a good headline or for some political stirring that precedes an announcement or some new legislation. It’s a tool that is often wielded with brutal blunt force. One has to wonder why they have such an interest in Amazon. Are we being driven towards some sort of restrictive commercial legislation against global corporations?

I can’t lie. The fact that one company has so much power over the world we live in scares me a little bit. Whether or not we as consumers put them in that position, it’s frightening how much of our world Amazon controls, or has done in recent years. If you think that boycotting Amazon is easy, I suggest you read this article: http://www.huffingtonpost.com/2014/05/29/impossible-to-quit-amazon_n_5406916.html

If you can’t be bothered to read it, I’ll paraphrase – Amazon is the largest provider of cloud services in the world. If you use apps on your smartphone, have a Netflix account, visit Reddit, use Yelp, Pinterest or PBS, shop at Etsy or read The New York Times, you have used an Amazon Web Service (hereafter referred to as AWS). AWS is used in government, by the FDA, NASA and the CDC, and that’s just those who have openly declared it. It’s estimated that 70% of the things the average internet user does online every day uses AWS. One expert stated: “They are hands-down the clear leader in public cloud infrastructure.” To me, that basically means they own the internet.

And yes, that is a very scary prospect. When Hachette guestimates that Amazon accounts for 60% of their sales, you expand that out to every stockist Amazon have and it’s just mind-boggling. As a global force, with the internet infrastructure they control, they have unprecedented power.

I still don’t think that’s a good enough reason to demonise them. In many ways, it’s too late to do anything other than work with them to have a greater say in what they do with the power they have. I don’t think it’s fair to focus so much on the negatives of their power when the truth is that they’re doing an equal amount of good and it’s just not being reported on equally. I would urge you to look at all sides of this complex story before you start picking sides and picketing sites.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s