AMAZON VS. HACHETTE
In the red corner stands the reigning world champion, weighing in at ninety billion: Amazon.
And in the blue corner stands tonight’s challenger, weighing in at four hundred million: Hachette.
In a nutshell:
- Amazon would like to see lower fiction e-book prices, i.e. $9.99.
- Hachette wants to control e-book prices, e.g. $14.99 to $19.99.
For a balanced introduction, see this article.
Imagine that Amazon was a chain underwear store. You could find one in just about every mall in America.
Imagine that Hachette was a popular underwear distributor.
Amazon is where people shop for underwear. Hachette has the underwear that people want to wear.
Suppose that Hachette decides to set its wholesale price at $14.99.
Suppose that Amazon refuses to buy underwear at a price above $9.99.
Should Amazon be forced to stock Hachette’s underwear and sell it at higher prices?
- No. It’s crazy to think that an underwear store would be required to stock every single kind of underwear.
- Each store has the choice to stock whatever items it wishes to sell.
Should Hachette be forced to lower the price of their underwear?
- No. It’s crazy to think that the store should be able to dictate the distributor’s prices.
- Each distributor has the choice to set whatever wholesale price it wishes.
So who’s right?
- The consumers, of course.
- They decide which underwear they would like to wear.
- They decide where they would like to shop for underwear.
- They decide how much they are willing to pay for underwear.
In these terms, Amazon is lobbying on behalf of the consumer, trying to get the consumer the underwear he wants at a more affordable price.
But Hachette must decide how profitable that price is and if it’s willing to sell underwear at that price.
Nobody, especially underwear designers, wants to sacrifice the value of art that goes into underwear.
It’s a negotiation:
- Amazon wants to stock all the underwear, including Hachette’s special brand.
- Hachette wants to sell its underwear everywhere, including Amazon.
- Many consumers would like to buy Hachette underwear at Amazon.
Latest developments:
- Both sides have urged people to contact the CEO of both companies (this request was not one-sided).
- Here is Amazon’s recent letter: http://readersunited.com.
- Here is Hachette’s recent response: http://www.digitalbookworld.com/2014/hachette-ceos-response-to-amazon-advocate-emails-why-we-price-books-the-way-we-do.
In the meantime, all consumers should run around naked! Send a positive message to the corporations. 🙂
Chris McMullen
Copyright © 2014 Chris McMullen, Author of A Detailed Guide to Self-Publishing with Amazon and Other Online Booksellers
- Volume 1 on formatting and publishing
- Volume 2 on marketability and marketing
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