Amazon tells booksellers: Cut prices to 99p like we do
AMAZON is involved in a new row with publishers after one of its most senior bosses told them that they should simply drop their prices if they want to sell more books.
David Naggar said the books industry must follow the example of self-published authors and slash prices to rock bottom levels to build up interest.
The US giant uses a complex computer algorithm to recommend books to customers, taking account of how many people have looked at a title before, how many have bought it, its price and what sort of reviews it has received.
Mr Naggar, Amazon’s publishing chief, said: ‘I look at price as a tool for visibility. You can either spend a lot of money on marketing or you can invest it in a super-low price until they get the flywheel going of the recommendation engines – and this is just for Amazon. What self-published authors will do is they will publish a book and sell it for 99p right out of the gate… Publishers [with new authors] could much more afford to do that than self-published authors.
‘If I have two books in front of me and I don’t know either author, and one book costs £9.99 and the other is £2.99, which one am I going to take?’
But publishers were furious. Stephen Lotinga, chief executive of The Publishers Association, said that ‘Amazon feel they have us over a barrel’ because it controls so much of the books industry.
‘Amazon have a vested interest in lowering prices as much as they possibly can because it helps them maintain their market share,’ he added. ‘Effectively, they’re saying, “In order to promote your book, we’re going to dictate the price”.
‘Our members are running a different business model than selfpublished authors are. They invest a lot of money in authors and feel that they price their books appropriately. We are not seeking to sell very low [priced] commodities.’
Amazon is the world’s biggest online bookseller, with an estimated 80 per cent share of the ebook market in the UK.
It also has a publishing arm, producing books by bestselling authors such as Catherine Cookson as well as self-published writers. It has frequently clashed with other publishers before. In 2011, the boss of Waterstones, James Daunt, branded Amazon a ‘ruthless, money-making devil’.
And in 2014, Amazon boycotted Hachette in a stand-off over the price of ebooks. It did not stop selling the publishing house’s titles altogether, but it would not let US customers pre-order key books, making it much harder for them to get on the bestseller lists. They later resolved the feud.