Amazon is big on risk.

 

The History, as I Recall It

 

In my view, Amazon is the epitome of the axiom, nothing ventured, nothing gained. During the 1990s, it ran millions of dollars in the red, to the point that many people expected the company to go under, particularly during the dot com debacle. It didn't.

 

 

Once again, some people expect Amazon to go under. Or perhaps that’s wishful thinking on the part of its enemies, because the company is taking great risks in the ebook realm, pitting the Kindle against the Nook, and anybody else.

 

Amazon came up with a program called KDP Select. If a customer joins Amazon Prime, he or she can borrow a book for a month, rather like a library, and pay nothing. Authors of Kindle books who put their ebooks in the program can have up to five (5) free days of promotion. 

 

What infuriates Barnes and Noble is that in order to put books in this program, publishers (including self-published authors) have to agree not to sell our ebooks on any other ebook platform. In other words, Amazon demanded an exclusive. To get into KDP Select, I had to withdraw my novels from the B&N Nook store.

 

In retaliation, both Books A Million and B&N have said they will not stock any books published by Amazon Publishing. Many independent bookstores have followed suit. That does not mean that they will not stock books sold on Amazon who are published by other publishers or self-publishers. Only books from Amazon Publishing, which now has six imprints.  

 

 

Lest anyone predict the demise of Amazon, however, Michael Shatzkin, author of “The Shatzkin Files,” and probably the most knowledgeable observer of the ebook scene today, has another perspective on how people buy books.

 

In 2007 people bought books 80% of the time in bookstores and 20% of the time online. But that statistic is reversing itself, he thinks.

 

He writes, “… the decline in numbers of bookstores and the shelf space they offer for merchandising is not temporary and not primarily recession-driven. … It is a fundamental societal shift that is inexorable and which shifts power away from publishers to their trading partners on both sides of them: the authors and the retailers.”

 

Put in a table, Shatzkin’s essay reveals the online competition to brick-and-mortar booksellers:

Type of Book     Market Share    Purchased Online            Purchased at Bookstore

Ebook                   20%                        100%                                     0% (or negligible)

Paper book*      80%                        36%                                        64%

*(hardbound and paper back)

 

Shatzkin expects that by 2017 books may be bought 20% in brick-and-mortar bookstores and 80% online.

 

This is not the result of the recession or of Borders’s demise, he writes, but a “fundamental societal shift that is inexorable and which shifts power away from publishers to their trading partners on both sides of them: the authors and the retailers.”

 

To me, that makes it all the more interesting that Amazon is reportedly considering another risky venture – adding brick-and-mortar to its online presence.

 

 

If Barnes & Noble or Books-A-Million or some independent retailers won’t stock their titles, Amazon may build its own store. On the ground.

 

On February 6, 2012, Jameson Berkow, writing in the Financial Post online reported that Amazon may be planning its own brick-and-mortar bookstore in Seattle. The idea, apparently, is to test the waters there to see if it could launch into a brick-and-mortar chain. If this comes about, and Amazon is being typically closed mouth about it, it will seem to many like the ultimate oxymoron – the biggest online retailer of books, whom many blame for the demise of brick-and-mortar bookstores, most notably Borders, may become its own worst enemy. Berkow writes, "if the world's largest online retailer focuses too much attention on an expansion, it could end up missing out on the all digital media future it helped to create."

 

According to the article, Amazon sales for the last quarter of 2011 were dismal.

 

What conclusion can we draw from this, for independent authors? First, as I began this article, Amazon throughout its history has taken huge risks.

 

Second, I'm taking a wait-and-see approach. My books are on KDP Select, and doing well. They have made the top ten a couple of times, without my doing much to promote them during the free promotions. The free downloads for Gold Under Ice translated into increased sales of both God’s Thunderbolt and The Devil in the Bottle.

 

 I have faith in Amazon's ability to take risks and recover, in fact to recover very well.

 

However, I’ll wait and see. An advantage of being self-published is that I’m not dependent on another entity, such as a publisher, to sell my books.

 

(Berkow refers to the article by Michael Kozlowski, “Amazon in the Process of Launching a Retail Store,” in the Good e-Reader blog for February 4, 2012.)

 

I hope this helps you make the best decisions for your independent writing career. If you have any questions about trends in self-publishing, please ask. Or feel free to share your experience via the comments!

 

Carol A Buchanan, Writer. Works include Gold Under Ice and God's Thunderbolt: The Vigilantes of Montana, the winner of 2009 Spur Award for Best First Novel. Carol writes from the Flathead and can be found at her website and blog, The Swan Range. Be sure to read Carol’s most recent work, The Devil in a Bottle.