Monday, April 2, 2012

Amazon Gores Publishers' Small Profit Margins trying to wring deep discounts from publishers. (Seattle Times, 4/2/2012)

Excerpt:    McFarland and Amazon have shared a mutually beneficial relationship for more than a decade. A well-regarded source of books on baseball and chess, McFarland helped Amazon fulfill its mission of offering "Earth's biggest selection." And Amazon — in contrast to traditional bookstores — listed all of McFarland's titles, no matter how arcane. 

Last year, Amazon generated nearly 70 percent of McFarland's retail sales and 15 percent of its entire business. 

"If we made a change for Amazon, we'd have to do it for everyone, and that would jeopardize our business," Roseman said. "We couldn't exist like that." 

Now, McFarland and others in the book world worry that Amazon will use its pricing pressure to crush publishers. They say Amazon's demands for deeper discounts threaten already-thin profit margins, and some warn about an Amazon monopoly.

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