MAIN NEWS HEADLINES
April 3 – April 10, 2008 Edition
SEATTLE, WA/LAVERGNE, TN/3/31/08–The heated controversy over whether Amazon will sell a POD book only if it has been printed by its subsidiary, BookSurge, has drawn official statements from both Amazon and LightningSource, Amazon’s chief rival in POD printing services. Below are statements from both sides.
It is worth noting that in Amazon’s statement, they claim there is "no request for exclusivity." Here is how we at Authorlink interpret the Amazon policy: Basically, if someone orders a new POD book from Amazon.com, Amazon.com will be the shipper (unless it is a used title). If they are the shipper, then they will require that the book be printed by their subsidiary, BookSurge. If another entity, say Barnesandnoble.com, were to order a POD title from BN.com, the publisher could print the book at LightningSource or another POD service. Thus, in order to sell a new POD title at Amazon, the publisher must print the book there. In our opinion, the policy indeed restricts the sale of POD titles on Amazon to Amazon’s own printer, a move that can only prove to be harmful to publishers. Since Amazon.com is one of the largest online booksellers, the policy smacks of a monopoly.
The question we’d like to ask Amazon is: In what cases would a new book that is ordered on Amazon not also be shipped from there? If they ship all new orders, then they also require all new orders to be printed at BookSurge. Or have we missed something?
March 31, 2008
We wanted to make sure those who are interested have an opportunity to understand what we’re changing with print on demand and why we’re doing so.
One question that we’ve seen is a simple one. Is Amazon requiring that print-on-demand books be printed inside Amazon’s own fulfillment centers, and if so why?
Yes. Modern POD printing machines can print and bind a book in less than two hours. If the POD printing machines reside inside our own fulfillment centers, we can more quickly ship the POD book to customers — including in those cases where the POD book needs to be married together with another item. If a customer orders a POD item together with an item that we’re holding in inventory — a common case — we can quickly print and bind the POD item, pick the inventoried item, and ship the two together in one box, and we can do so quickly. If the POD item were to be printed at a third party, we’d have to wait for it to be transshipped to our fulfillment center before it could be married together with the inventoried item.
Speed of shipping is a key customer experience focus for us and it has been for many years. Amazon Prime is an example of a successful and growing program that is driving up our speed of shipment with customers. POD items printed inside our own fulfillment centers can make our Amazon Prime cutoff times. POD items printed outside cannot.
Simply put, we can provide a better, more timely customer experience if the POD titles are printed inside our own fulfillment centers. In addition, printing these titles in our own fulfillment centers saves transportation costs and transportation fuel.
Another question we’ve seen: Do I need to switch completely to having my POD titles printed at Amazon?
No, there is no request for exclusivity. Any publisher can use Amazon’s POD service just for those units that ship from Amazon and continue to use a different POD service provider for distribution through other channels.
Alternatively, you can use a different POD service provider for all your units. In that case, we ask that you pre-produce a small number of copies of each title (typically five copies), and send those to us in advance (Amazon Advantage Program-successfully used by thousands of big and small publishers). We will inventory those copies. That small cache of inventory allows us to provide the same rapid fulfillment capability to our customers that we would have if we were printing the titles ourselves on POD printing machines located inside our fulfillment centers. Unlike POD, this alternative is not completely "inventoryless." However, as a practical matter, five copies is a small enough quantity that it is economically close to an inventoryless model.
Might Amazon reconsider this new policy?
Only if we can find an even better way to serve our customers faster. Over the years we’ve made many improvements to our service level for consumers. Some of these changes have caused consternation at times, but we have always stuck with the change when we believe it’s good for customers. An early example: many years ago we started offering customer reviews on our website. This was a pioneering thing to do at the time. The fact that we allowed *negative* customer reviews confounded many publishers — some were downright angry. One publisher wrote to us asking if we understood our business: "You make money when you sell things! Take down these negative reviews!" Our point of view was that our job was to help customers make purchase decisions. It made sense to us to stick with the customer-centric position of embracing customer reviews, even negative ones.
Another example: a few years ago, we made the decision to offer used books, and to make those used copies available directly alongside the new editions. This caused significant consternation, but we stood by the decision because we were convinced it was right for customers. Sometimes a used book will do and it can sometimes be had at a significant cost savings relative to a new book. We stuck with the customer-friendly decision.
Our decision with POD is the same. Once a book is in digital format, it can be quickly printed on modern POD printing equipment. It isn’t logical or efficient to print a POD book in a third place, and then physically ship the book to our fulfillment centers. It makes more sense to produce the books on site, saving transportation costs and transportation fuel, and significantly speeding the shipment to our customers and Amazon Prime members.
We hope this helps those who are interested understand what we’re working to do and why. We believe our customer-focused approach helps the entire industry in the long term by selling more books.
The Amazon.com Books Team
March 31, 2008
Statement of John R. Ingram
Chairman of Ingram Content companies:
The questions that are being raised about Amazon.com and its Booksurge division don’t directly relate to Ingram – either Lightning Source Inc. or Ingram Book Group – but it clearly is alarming many of our publisher partners.
Publishers are telling us they feel Amazon.com’s actions are not appropriate. They have called us in recent days about confusing communications they have received from Booksurge, and we have attempted to learn about this from Amazon.com directly. And today, we have just received an “open letter” from Amazon.com, which we and the publisher community will attempt to digest. So far we’ve been unable to get a response directly from Amazon.com
We all live in a world where decisions are made about insourcing and outsourcing, and free choice is important. At Ingram Book and Lightning Source, we are going to work really hard to continue to be the compelling choice as publishers make their outsourcing decisions. Our breadth of distribution channels including the online retailers remains the same, and Ingram still provides one day turnaround in the fulfillment of orders for books including print on demand titles.
At Lightning Source, we produce a great product and thus do justice to our publishers’ valuable titles. There is no question that we provide the highest print quality, the fastest turnaround speeds, and the most comprehensive portfolio of channels for a publisher’s books.