Publishers Weekly just shared an article entitled “Life After Amazon,” by Randall White, chairman, CEO, and president of Educational Development Corp. (EDC), on why he has elected to “to stop selling our Kane Miller and Usborne books on Amazon.” His casus belli was that “I had long felt that the rapid growth of Amazon was bad news for the publishing industry. And I believed that Amazon was trying to gain control of publishing and other industries by making it impossible for other retailers to compete effectively.” White’s stated explanations mix, in my view, some very good and very indefensible points. Read on below.
For starters, EDC has its own online store up and running, and buyers can easily sidestep the whole Amazon system and go directly to source. Admittedly, it doesn’t seem to cover ebooks, but EDC seems to have taken one sensible business decision – that it has no reason to go through the Amazon network if it can retail its own books online.
However, this rather undercuts White’s case that he has backed out of Amazon partly for the sake of business associates like the “longtime customer in Mill Valley, Calif.” who he cites as one forced to shutter by the practice of showrooming. If this is so, EDC is doing no different by maintaining an online sales operation. Yes, it appears that EDC works hard on maintaining ties with booksellers and other industry clients, and supporting its relations with them, but if you’re offering the same option as Amazon does, why take them to task on it? Because Amazon does it on a bigger scale and more pervasively?
“I believe that recommendations from friends, mentions in media, and other sources generate more sales than most people think, and that the personal touch still matters a great deal,” states White. Absolutely no quarrel with that. Amazon’s recommendation engines and community-building may be a great boon for book discovery, but it certainly is not the only one. And whether or not the sock-puppet Amazon review (five-star or one-star) is a plague or a myth, there are certainly a few question marks over some aspects of it.
All the same, White’s call to enforce state sales tax on Amazon seems meaningless. I regard territorial sales taxes on this level as pointless anyway in a connected age, and far more about state fiscal problems than the real world. How is a state going to levy sales taxes that can’t be circumvented simply by going over the state line?
Also, as one commenter on the article remarked immediately, it’s no criticism to say that “Amazon lost money in 2012, and in the most recent quarter it reported a virtually meaningless margin relative to its size.” As that commentator pointed out, Amazon is sticking to break-even levels because it is reinvesting hand over fist for business development purposes. It’s up to Amazon’s investors to call Amazon out on this. So far they appear ready to support it, and given Amazon’s buildup in market share, and rising share price, they seem to have called it right.
Also, not to pick a bone with White about this, but EDC is a NASDAQ-listed company. Therefore, when he takes a stand on principle, he is doing so with his shareholders’ money. Again, if they have an objection to what he’s doing, it’s up to them to make it. But a personal view is one thing – staking other people’s money on that personal view is a different thing entirely.