Amazon’s Strong arm Tactics

In the past couple of days, it’s been in the news about lawsuits filed by the United States Department of Justice against Apple and a number of US publishing companies.  The case is related to alleged collusion among these companies to raise and fix the prices of electronic books, or eBooks.  In all of this, it seems that Amazon.com is the hero and Apple and a number of publishers are the villains.

But, is that really the case?  Let’s look at what is going on here.

You see, over the years, since eBooks came into existence, the writer of the book or the publisher has set the price of the eBook.  Several years back, Amazon came out with an eBook reader called the Kindle.  These days, Amazon offers several different models of the Kindle reader, and I must say some rather nice units.  I really like the Kindle a lot.  That said, though, I don’t really like part of Amazon’s strategy when it comes to the Kindle.

You see, the eBooks that can be read on the Kindle are a special format that is only for the Kindle.  It’s easy to publish your book for the Kindle, using software that Amazon will provide for free, but the fact is that you need a different version of the book for the Kindle and for other platforms.  No biggie, just pointing that out.  The kicker, though, is that Amazon dictates how much you can charge for an eBook on the Kindle.  If you want to sell your eBook on the Kindle, you are not allowed to charge a price greater than $9.99.  To me, that is not fair.  In my opinion, you should be able to charge whatever price you want, and whatever price you feel is best for earning you the most profit.  I mean, if you charge $300 for your eBook, your potential audience would be very small.  Certainly, if you keep your price at $9.99, or even lower, you have a larger potential audience, and will attract more buyers for your book.

For example, let’s say that you offer your book at $79.99, and another person has a similar book that they offer at $3.99.  Let’s say that the high price guy sells 300 books over the course of the year, so his gross sales would be $23,997.  Let’s say that the low priced guy sells 5,000 books over the course of a year, his gross sales would be $19,950.  The high price guy would make more money, even though his number of books sold is very small.  Of course, this is an extreme example, no doubt, but it drives home a point.

In the DOJ lawsuit against Apple and the publishers, the Government is saying that Apple and the others are trying to drive up the price of eBooks.  I don’t see it that way.  Apple and the others simply want to be allowed to sell books at the price that they choose, instead of having Amazon force them to sell books at an artificially low price that is being dictated.  Apple just wants to be able to continue marketing books at non-fixed prices as has been done over the years, instead of prices that are being dictated and imposed on the writers and publishers  For me, I’m with Apple, and I am no fan of Apple products.  I, personally, would want to publish my books for the Kindle, for the iPad, iPhone, Smartphone, Windows Phone, whatever platforms are available, and I want to be free to set my own prices.

I looked into publishing for the Kindle some time back, and I didn’t like what I found.  Firstly, Amazon forced me to charge no more than $9.99 for my books.  Not only that, though, they dictated to me all of my other costs as well.  In other words, I had to pay Amazon for this and that.  I had to give Amazon a fixed percentage of profit, etc.  Personally, I would be more comfortable with a system where I say, “here, Amazon, I have this eBook and I am offering it to you for $17.50, you can decide what price to sell it for, set your markup, etc.”  That system makes more sense to me.  Under the system they are using now, I can charge a retail price of $9.99, then after all of the other costs involved, I might make $2 or $3 on the eBook, Amazon gets the rest.  That’s not for me, sorry, so I decided not to publish my eBooks on Amazon.

Some books are worth more than $9.99.  Some are worthless.  If I write a book and I feel it’s worth $30, I should be able to charge $30.  If readers don’t feel the book is worth $30, they won’t buy it, and I won’t sell many copies, but it should be my choice as to what price to charge.  If people don’t buy at my preferred price, I can change the price, I can offer a “sale price,” or I can give some bonus stuff with the purchase.  But, not with Amazon.

Sorry, US Department of Justice, but I think you are barking up the wrong tree with this lawsuit.  And, I’m sorry, Amazon, but I believe that you are losing out on a lot of books for your Kindle by forcing prices on writers and publishers.