Amazon pulls 5,000 Kindle e-books in contract pricing dispute

ipgWell, there Amazon goes again, throwing its weight around. When it came time to renew its e-book sales contract with the Independent Publishers Group, a distributor for 400 smaller client publishers, Amazon demanded better terms than the previous contract had offered. IPG declined, and today Amazon disabled the “buy” button on the distributor’s 5,000 Kindle e-book titles.

IPG President Mark Suchomel told PaidContent, “We’re offering [the e-book sales terms] we offered last week, and somehow they think it’s not quite good enough.”

Suchomel noted that the print titles from IPG clients are still available on Amazon and that e-books are available from many other retailers. IPG’s terms are “acceptable to everyone else in the book business,” he said. “If half the accounts weren’t buying from us, I’d have to question it, but everyone else is.”

IPG is not planning to back down. In a memo to client publishers, Suchomel advises updating all advertisements and other mentions of their books to mention where else the e-book is currently available, and to maintain editions of e-books in other formats than Kindle for ease of purchasing.

Seriously consider the implications of this action for the long run. If we don’t hold firm on your behalf, your margins will continue to erode. IPG will continue to represent you well to those customers that are happy to buy from us at reasonable terms. If you or your authors were working directly with any large vendor, you would not have the opportunity to push back on or even have a conversation about terms. Your continued support is appreciated.

Of course, as a business, Amazon has the right to ask for the contract terms it desires, and decline to do business with those who do not agree to those terms. But the last time Amazon disabled buy buttons, in the Macmillan agency pricing dispute, it came off looking like a petulant child. Are industry onlookers going to be quite so sanguine anymore as Amazon moves toward demanding more money? Will Kindle owners be happy with Amazon for reducing the number of e-books available to them?

It will be interesting to see how this shakes out.

14 Comments on Amazon pulls 5,000 Kindle e-books in contract pricing dispute

  1. Every time we go through this I roll my eyes.
    It’s simple – The Kindle has been awesome for consumers of Ebooks and for Independent authors.
    To Publishers, it’s the antichrist. Amazon is taking their job (distribution of books), and they’re doing it better, cheaper, faster. Publishers will kick and scream about this until they die their not-in-any-way-untimely death.
    Unfortunately, authors are only slightly less dopey than Musicians, and the people involved in the publishing industry are somewhat more sympathetic than those in the Music publishing biz. Authors are thus still laboring under the misapprehension that these people are on their side – they have literary Stockholm syndrome.
    To authors contracted to these guys, are you aware that Amazon will give you 70% of the cover price for your book, and they’ll do as good or better a job at promo for you? How does that compare to the deal your publisher offered?

  2. I agree with LG above. Every time Amazon gets into a dispute with a supplier we hear this knockabout attack on Amazon.

    EVERY business regularly goes through this kind of negotiation and dispute ! Why do we have to read these nonsense attacks on Amazon ?

    Supermarkets demand better prices from suppliers when they buy in bulk and sell shit loads of their produce. Every wholesaler does the same with their suppliers. Every major retailer the same. It goes on every day in every country in the world.

    Why does Amazon attract this kind of petty criticism on a regular basis ? It seems that books are too precious to be subject to normal business transactions ? It’s ok for the major publishers to have regular disputes with distributors and retailers …but not for Amazon ?

    I am, as I have said many times, no great fan boy of Amazon. I use their services and they have always given me excellent service. But this is really ridiculous.

  3. What I find “really ridiculous” is the inability of so many ebookers to see beyond today. Amazon is squeezing distributors and publishers because its margins are so low it isn’t making enough money to satisfy its shareholders/investors. I agree, that on Amazon’s part, that is simply business.

    But once you have squeezed the distributors and the publishers into oblivion, who is next to squeeze? The authors. The generous 70% will rapidly become less and less as Amazon’s needs grow. And after the authors comes the ebooker. To think that the current treatment of authors and readers by Amazon will continue once Amazon has nothing standing it its way is naive. It has never been the path of monopolists and it is unlikely to ever be the path of monopolists.

    And to think that the individual author has the power to stand up to Amazon is even more naive. Worth reading is Jim Hines’ “Who Controls Your Amazon E-book Price?” found at

  4. Amazon offers 800,000 titles at 9.99 or less. Still plenty of books to choose from. The only ones being hurt hear are the authors.

  5. Richard – It’s all fine and well constructing a scary scenario out of ifs and coulds and might bes and then extrapolating it all to domesday. But that just isn’t good enough imho.
    Why is Amazon being so successful ? Why is there no competition ? who is responsible for the fact that there is no competition ? Where are the publishers ? where are the other eBook eRetailers ?
    Amazon is not preventing competition from entering the market. It is not taking any actions to stop any competitor.
    Amazon is not winning business simply because it is selling eBooks cheaper than anyone else. All you have to do is look at the competition and see that. It is delivering customer service, ease of use, a well designed system and a seamless interface with it’s eReading device. Price is not the most critical factor here.
    So when you visualise the future and see bad things, then take B&N to task. Take the major publishers to task. Take the many remaining eRetailers to task. Take the indies to task for not getting together to create a joint system to offer product to the reading public.
    You also talk about the power of ‘eBookers’ to stand up to Amazon ? if you are referring to Authors or Publishers, then it is clear that they can always take their product away from Amazon, like any other business.

    This constant whining about Amazon is so tiresome and misdirected. (nothing personal … it’s not just you :) )

    The article you link to is perfect illustration of the nonsense some writers like Mr Hines seem to believe. Amazon is a retailer. They get to set their own prices. And this thing about being paid based on List price ? Come on. What an archaic and bizarre system. We live in the 21st century, product is sold and producers get paid a percentage of the sales price. Reality check Mr Hines !

  6. Amazon is not the be all and end all for product sales; whether it’s books, ebooks, consumer electronics or the host of other items they sell. There are partners and channels out there who champion all authors and want to sell their books. Consumers will quickly learn where get access to eBooks with eReaders that are not Kindles. Amazon will make decisions that are best for Amazon, but if they think consumers won’t shift brand preference because of this stance; they have much to learn. As a consumer, I want broad access to content and will buy accordingly. Refusing to kiss up to Amazon isn’t the kiss of death.

  7. Reading Howard’s comments here- and a lot of comments over at CNET- it seems like a lot of people are siding with Amazon here because they just skimmed this and jumped to conclusions.

    Aside from the fact that ebooks have been pulled- this has nothing to do with the earlier Agency model dispute.

    This time: Amazon simply demanded a contractual change that would give Amazon MORE MONEY. They weren’t fighting for a price cut for the consumer- just a higher percentage of the cut to put in their own pockets. And when the smaller publisher didn’t want to pay it, AMAZON (not the publishers) unilaterally pulled the ebooks.

    Perhaps they thought this would bully IPG into accepting Amazon’s new terms? Or maybe they are trying to send a message to other small publishers, or simply hoping to pressure Author’s into signing up with Amazon’s own publishing service? I don’t know what Amazon was hoping would happen.

    A couple of missing ebooks probably won’t deter many people’s ereader decisions. But don’t give Amazon any brownie points for being consumer friendly here, because they weren’t.

    They made a money-grab, it backfired, and now the Kindle is a little worse because of it.

  8. Hi,
    Well, well, well.. Publishers complaining about retailers. I see that a few comments above are along the same lines of my thinking. I’m in Australia, am pleased to have a forum that will speak directly to Publishers. I find the situation I and all Australian eBook purchasers find ourselves in to be almost discriminatory. While searching for eBooks I constantly am rejected from purchasing a product because it is not for sale in my region. WHAT THE!?? If I had registered my device in the US, I would not have a problem. If I falsified my registration, I would not have a problem. My mistake to be honest and up front.

    I fail to see any reason for this activity by the Publishers other than the Australian dollar running at a high rate and therefore would impact by a few cents on the amount they would get back. Ok.. business is business, and we all have to make a profit, but just how many Sales of their product are the Authors missing out on.

    It’s great to have a store full of stock, but if you are limiting the Customers you will accept through the door, then you are limiting the movement of the stock and therefore are impacting on your bottom line sales figures and your ability to support your business door staying open. If anyone is threatening the existence of Publishers, it seems to me that it is the Publishers themselves.

    Maybe I have the wrong end of the stick as to who controls the sellers and where they can sell. Would love for someone to enlighten me on the facts of the matter and why.

    Looking forward to hearing a non-politically correct and watered-down response.


    Peter G.

  9. Peter – I have been reading this stuff for the last two years. I am not an expert in the publishing industry, I have about 30 years of medium sized business management experience and financial experience. I am not skimming anything.

    That is where I am coming from when I say that this is, firstly, totally normal business practice every day in every volume business. My local supermarket chain Tesco does this with suppliers every day. They use the fact that they can shift vastly more product than local shops to leverage that into a lower price from suppliers. The same goes for the huge toy shop chain a few miles away. They do the same. ALL volume retailers leverage their power to shift product to achieve lower prices. If they don’t get them then they say fine … if you don’t like it then go sell through some other outlets. It’s a free market.

    And it’s not only large volume business. A butcher client of mine many years ago started to buy in a new supplier’s sausages. Suddenly they were disappearing off the shelves faster than they could replace them. The owner sat down with the supplier and told him he wanted a 10 % further reduction in the wholesale price. The supplier was seriously pissed. He was making a packet. he refused and the butcher kicked his product. Three weeks later the butcher sourced another supplier in the west of the country who was producing a somewhat similar sausage and offered him the same terms he offered to the original supplier. It was accepted. The new sausages leapt off the shelves in the same way and that producer is now the biggest sausage producer in the country.

    I never claimed they do it for the customers benefit alone. But the customer does benefit. They get a retailer able to make a reasonable profit and product at a better price.

  10. Those who think is is just ‘business as usual’ are forgetting that Amazon has about 70% of the ebook market in the U.S. with very deep pockets from which to squeeze first one set of suppliers until they’re crushed and then another. Comparisons to little supermarket chains like Tesco are silly.

    I also wonder if what’s going on here is illegal. Under federal law, books are a special case, due to their links to the First Amendment. There’s a law from the 1930s that prevents giant book distributors from using their size to get deep discounts that aren’t available to small distributors. I believe B&N got in trouble because of that law about a decade ago.The law applies with particular force to ebooks since no one can argue that a giant’s sales volume earns them a bulk discount due to reduced shipping costs. The smallest ebookstore and giant Amazon each get the same supply item for their inventory–one modest little ebook file.

    Those who live in Seattle just got a particularly revealing bit of news. Amazon has tentative plans to build three additional 1-million square foot headquarters towers just north of downtown. That giant sucking sound in your state and city’s economy is that of all those thousands of better-than-average paying jobs moving to one far-off city. At best, your state may get a giant shipping center whose workers are paid barely above the minimum wage and then only if your state grants Amazon substantial tax advantages. (Steve Bezos hates taxes.) And remember, this isn’t just about ebooks. Amazon sells all sorts of things now. It matters little who you work for.

    I’ve got a feeling this story will end like Standard Oil, AT&T, IBM, and Microsoft did. The feds will step in with anti-trust action and the company will never be the same thereafter. A beaten bully scares no one anymore.

    Of all the giant market-dominating corporations, only GM seemed to have had enough sense not to try to bully and crush their suppliers and competitors. And they were done in by laughing at the first Japanese cars to arrive here. And that’s merely another example of what the ancient Greeks called hubris, of thinking that the rules that govern others don’t apply to you.

    Until that, perhaps the best solution for authors, publishers and distributors is to ban together under an industry-standard ebook contract. Amazon might be able to get away with delisting 5,000 titles. But it would think twice about delisting 100,000 titles, including some popular ones.

  11. This is not unique to amazon. Big businesses don’t even have to do the dirty work themselves. They hire firms specializing in strategic procurement to come in and do the spend analysis and negiotations for them.

  12. Just so we don’t get our Peter’s mixed up.. I am the “Well, Well, Well” Peter and not associated with the comments written by Peter.. (who is not me) .. but that doesn’t mean I have an opinion on what he has said one way or the other.. I just want access to ebooks in Ozz that readers in the US have access to. I hope I’ve managed to make that clear for all those who think it interesting to read what we Peters have written..

    I especially hope that any Publishers have realised that my question is still unanswered and that maybe someone will have the whatsits to have a shot from the Publishing fraternity.. then again.. maybe it’s a question they fear and aren’t game to even pop their head out of the water for.. we’ll see…

    :) Peter of the well,well,well… (with snorkel and flippers) 😉

  13. Michael wrote:
    “Comparisons to little supermarket chains like Tesco are silly.”
    I find this an extraordinary comment. This is exactly what little supermarket chains and big ones, and medium sized businesses do every day. The comparison is direct and factual. How it can be silly is a mystery except when the writer has lost all sense of proportion in the pursuit of an anti Amazon rant.

    “I also wonder if what’s going on here is illegal. Under federal law, books are a special case, due to their links to the First Amendment.”
    Wow … how retrograde and Big Brother is that. Readers are trying to drag the publishing industry into the 21st century and you want to go back to the 1930s to knee cap the market in a grossly and deeply anticompetitive way ? Astonishing.

    “The law applies with particular force to ebooks”
    I would love to know how exactly this conclusion can be drawn from a 1930s law that never even imagined the existence of eBooks.

  14. Well Well Well Peter, the answer to your question about why you can only purchase certain books in Australia is because the publisher who distributes the book would only have acquired US printing & distribution rights to the title. Here is an excellent article that should explain everything to you.

The TeleRead community values your civil and thoughtful comments. We use a cache, so expect a delay. Problems? E-mail

wordpress analytics