Smashwords Moves to Agency Model

[rhadin]

Originally Posted by vaughnmr

With your repeated Amazon bashing (I think you have done that in every single article you have written!!!) I am finding it harder to value your opinion.

I appreciate that a lot of people love Amazon and think that Amazon can do no wrong -- it being God's gift to humankind and all. However, the reality is that Amazon is not a fair player in the ebook market -- never has been and probably never will be.

Amazon dictates the terms of the contract to indie authors. There is no negotiation. Either Amazon's way or the highway. This is also true in regards to small presses. I worked with a small press in trying to negotiate a change in certain terms to the contract and Amazon point blank told the publisher to sign on the dotted line or go away.

The only publishers with any clout at all with Amazon are the BPHs and they have clout only because of the volume of books they publish and because Apple gave them an alternative method.

I am not now nor ever will be in favor of any one retailer dominating the ebook market to such an extent that it can dictate everything -- something that Amazon appears to be working hard to achieve. Monopoly is not good for anyone except the monopolist.

As to whether you value my opinions, it is your right to ignore them, value them, or curse them.

[murraypaul]

Originally Posted by lilac_jive

I really, really don't understand why some people are freaking about this. To reiterate: Smashwords is DRM free, selling book in every format. They are supporting indie authors. Indie authors are making more on their royalties. The consumer can still buy the books at other stores. Coupons will still work on the smashwords site. The books often very affordable. I'm still sticking to the opinion that few people use generic coupons from other sites on smashwords books. And it only resembles agency pricing because the price is the same at all stores.

Duh! That is what agency pricing means.
If you think something is wrong, you don't change your mind just because someone nice is doing it.
What I don't understand is how people can support this, but not Agency pricing, as it is exactly the same thing.

If you're stop supporting smashwords and many of the wonderful authors on there simply because of this, you need to rethink your priorities. But I get the feeling that those saying they aren't going to shop there anymore barely did to begin with, and probably get most of their books on the darknet.

Not even going to bother with that.

[Kali Yuga]

Originally Posted by rhadin

I still buy from Smashwords but my question remains: If the author sells the ebook for less than the agency price by providing a discount coupon, don't the terms of Amazon's contract allow Amazon to lower the price to the coupon price?

I may be wrong, but I believe coupons don't count in this situation. It's not the same as if Smashwords put it on sale, since the buyer needs to take additional steps to get the lower price, and it is unlikely to be applied 100% across the board.

Originally Posted by rhadin

The reality is that Amazon is not a fair player in the ebook market -- never has been and probably never will be.

Or in the paper market. They've been the proverbial 800 pound gorilla in the book industry for years now. (And it was not long ago that many people vilified Amazon up and down on MR.)

However, I tend to doubt that eliminating Amazon would truly resolve this issue. B&N used to be the big bruiser; whoever succeeds Amazon will likely be just as abusive.

Plus "monopoly" is not necessarily an unethical or illegal position. It is only problematic when they engage in damaging anti-competitive behavior -- which, by the way is going to be rather difficult with agency pricing.

Originally Posted by rhadin

Amazon dictates the terms of the contract to indie authors. There is no negotiation.

True, but the same goes for Smashwords, B&N and the other distributors.

Meanwhile, none require exclusivity, all let the author keep the copyrights, and there is (afaik) no minimum time you need to offer your books through them.

And let's face it, if you're selling 10 books a week @ $3 each, you are not in a position to negotiate. If you're selling 1,000 books @ $10 each, then perhaps you've got some leverage.


I won't say that Amazon is fantabulous. But for better and for worse, there isn't much doubt that they are the most significant force in developing online book sales and in developing the ebook market; and at this point, they are unlikely to be supplanted by a company whose board of directors is composed of puppies, sunbeams and rainbows.

[lilac_jive]

Rhadin - I have asked Mark Coker if the coupons effect the amazon price. I still do not think it will, but I will await his answer.

Originally Posted by murraypaul

Duh! That is what agency pricing means.
If you think something is wrong, you don't change your mind just because someone nice is doing it.
What I don't understand is how people can support this, but not Agency pricing, as it is exactly the same thing.



Not even going to bother with that.

There's more to agency pricing than that. The publisher sets the pricing in the Agency model, Smashwords is the distributor. Agency pricing also has the book price "fluctuate" according to demand (in quotation marks because the pricing isn't fluctuating like they said it would).

And yes, I will continue to support Smashwords because they are "nice." I did not like the Agency Pricing model from the Big Five because I was getting ripped off. I am not getting ripped off in the smashwords scenario. The max I lost was .25 off a book I was going to buy from Sony that was $4.99 on smashwords. What am I going to do, scream "OH MY GOD THEY TOOK MY TWENTY FIVE CENT DISCOUNT THE BASTARDS ZOMG@!!!!" No. Yell "How dare they let indie authors make more money????" No.

[Andrew H.]

Originally Posted by lilac_jive

There's more to agency pricing than that. The publisher sets the pricing in the Agency model, Smashwords is the distributor. Agency pricing also has the book price "fluctuate" according to demand (in quotation marks because the pricing isn't fluctuating like they said it would).

No. All agency pricing means is that the retailer acts as an "agent" for the publisher (including a self-published author), selling the book to the consumer at the publisher's price and taking a certain cut from the sale. This is the same model ebay uses.

The term is a neutral term; the reason people don't like Big 5 agency pricing really has nothing to do with agency pricing at all; it has to do with the fact that the prices set by the publishers are seen as being too high. If the big 5 set their new release prices at $8.99, no one would complain about agency pricing - if anything, people would complain about how Amazon ripped consumers off by jacking up prices to $9.99.

[lilac_jive]

Originally Posted by Andrew H.

No. All agency pricing means is that the retailer acts as an "agent" for the publisher (including a self-published author), selling the book to the consumer at the publisher's price and taking a certain cut from the sale. This is the same model ebay uses.

The term is a neutral term; the reason people don't like Big 5 agency pricing really has nothing to do with agency pricing at all; it has to do with the fact that the prices set by the publishers are seen as being too high. If the big 5 set their new release prices at $8.99, no one would complain about agency pricing - if anything, people would complain about how Amazon ripped consumers off by jacking up prices to $9.99.

Thanks for the clarification.

[DMSmillie]

Originally Posted by lilac_jive

Rhadin - I have asked Mark Coker if the coupons effect the amazon price. I still do not think it will, but I will await his answer.

I'll be interested to hear what he says.

However I'm pretty sure that issuing coupons for a Smashwords book doesn't and won't affect the Amazon price. Amazon doesn't have a team of people manually checking prices and looking for websites offering discount coupons - they have an automated "bot" which trawls around looking for ebooks on sale with other online retailers which are also available in the Kindle bookstore, and compares the price on those online bookstores with the price of the book in the Kindle bookstore. I've never seen any reports of someone's book being discounted on Amazon where the only "lower price elsewhere" involved coupons like on Smashwords.

[Fbone]

Why would an author discount by coupon their material on Smashwords but not at Amazon or B&N?

[lilac_jive]

Originally Posted by Fbone

Why would an author discount by coupon their material on Smashwords but not at Amazon or B&N?

Coupons are still allowed on smashwords, but not the other two. And I don't think the other two allowed coupons for specific smashwords books. But the coupons from the author are a good way to get people interested in the book (I know I've used a few).

In other words, I think they would if they could, but they can't. They can drop the price though.

[vaughnmr]

[QUOTE=rhadin;1253210]I appreciate that a lot of people love Amazon and think that Amazon can do no wrong -- it being God's gift to humankind and all. [QUOTE]

So now you've gone from Amazon bashing to bashing me. Now it's getting personal.

[lilac_jive]

[QUOTE=vaughnmr;1253691][QUOTE=rhadin;1253210]I appreciate that a lot of people love Amazon and think that Amazon can do no wrong -- it being God's gift to humankind and all.

So now you've gone from Amazon bashing to bashing me. Now it's getting personal.

I don't see how he was bashing you personally in that post...

[Andrew H.]

Originally Posted by rhadin

I appreciate that a lot of people love Amazon and think that Amazon can do no wrong -- it being God's gift to humankind and all. However, the reality is that Amazon is not a fair player in the ebook market -- never has been and probably never will be.

What does "fair" even mean in this context?

Amazon has the choice of screwing the consumers or screwing the publishers. I'm not a publisher, so I don't really have a problem with that. Publishers want to screw retailers and consumers. As a consumer, I object. And as a consumer, I want to screw retailers and publishers. In fact, I want great books for free. I understand that retailers and publishers might object, though.

Amazon dictates the terms of the contract to indie authors. There is no negotiation. Either Amazon's way or the highway. This is also true in regards to small presses. I worked with a small press in trying to negotiate a change in certain terms to the contract and Amazon point blank told the publisher to sign on the dotted line or go away.

So what? There is *no way* that Amazon could afford to negotiate separate contracts with thousands of indie authors, many of whom will sell less than 100 books, total. I don't get to negotiate the price I'm paying for books with Amazon, either. If I don't like their price, I'll look elsewhere.

The only publishers with any clout at all with Amazon are the BPHs and they have clout only because of the volume of books they publish and because Apple gave them an alternative method.

Well, yeah, that's how people get clout. Most indie authors can't negotiate their terms with Amazon. But J.A. Konrath did - because he brought something Amazon wanted to the table.

That's how business (all business) works. If an indie author turns into the next JK Rowlings, Amazon will negotiate with her, too.

I don't see a problem with any of this. Amazon is not a charity. And neither are publishers, and neither are indie authors.

I am not now nor ever will be in favor of any one retailer dominating the ebook market to such an extent that it can dictate everything -- something that Amazon appears to be working hard to achieve. Monopoly is not good for anyone except the monopolist.

As to whether you value my opinions, it is your right to ignore them, value them, or curse them.

In three years, the US e-book market has gone from way less than 1% of books sold to about 9% of books sold. This is almost entirely due to the Amazon Kindle. They've come by their almost 80% market share fairly, and by taking care of consumers like me. So I'll keep patronizing them...until I get a better offer.

[FizzyWater]

I find it frustrating when a seller dictates terms to a reseller.

However, there was an explanation on this thread about how it affects the authors - how the change in price comes back and changes the amount the author receives. I don't think that's fair either.

It seems to me that a reseller should have the right to offer a discount out of the profits they would have received...but it's the reseller's choice to offer that discount. It shouldn't hurt the seller's profits unless they agree on it up-front together.

I don't know if I'm saying that well.

If Acme Corp sells a widget for $10 to BigReseller, suggesting a resale price of $20, but BigReseller sells it for $18, Acme still makes its $10. BigReseller is taking a risk, hoping that by losing $2 in an individual widget price, they'll still make more money overall, because more people will by the widgets from BigReseller at $18 than $20.

But BigReseller doesn't have the right to turn around to Acme Corp and say, "hey, I offered a coupon, so I'm only paying you $8 for your widget".

[lilac_jive]

From Mark:

Jessica, coupons represent a private transaction between you and your reader, and as such, they don't impact your list price or your price at retailers.

As I suspected.

[DMSmillie]

Originally Posted by lilac_jive

From Mark:

As I suspected.

Thanks for confirming that.