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As Competition Wanes, Amazon Cuts Back Discounts

nytimes.com

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Re: As Competition Wanes, Amazon Cuts Back Discounts

#31

Post by _delirium »

manojlds wrote: post #3

The penultimate paragraph compounds my confusion: > For Mr. Hollock, the “Born to Lose” author, the issue is readers, not dollars. His award-winning book, published by Kent State University Press, had a steep list price of $35 to begin with. In the author’s view, Amazon is simply compounding the trouble by raising its price to more than $30 from $23. Why is the author complaining about Amazon, when the list price is…

It's a 14% discount only thanks to the strange way pricing in the publishing industry has developed: it's a 14% discount off of an 100% markup.

For mostly historical reasons, wholesale price has become quasi-fixed at 50% of list. So in this case what's happened is the publisher has chosen to sell the book for $17.50, and the way you do that is by setting an entirely notional "list price" at 2x the intended wholesale price. But the $35 is not a real price; the real price in the publisher-bookstore exchange is $17.50. It's then up to bookstores how much they want to mark the book up above $17.50. Here, Amazon is choosing to sell it for a 70% markup above wholesale, whereas previously they were selling it for a 30% markup.

(This is U.S.-specific; list prices mean different things in different countries. Also, I believe the 'standard' ratio of wholesale-to-list varies in some categories, e.g. it's different for textbooks.)

Re: As Competition Wanes, Amazon Cuts Back Discounts

#33

Post by reiichiroh »

robryan wrote: post #27
rabbitonrails wrote: post #20

"It is difficult to comprehensively track the movement of prices on Amazon, so the evidence is anecdotal and fragmentary." [data upon which entire thesis of article rests] -> stopped reading

It isn't actually all that hard. There is an API call to get the prices for each seller on an item. Not sure if that also works for Amazon as the only seller listings but you can definitely track the marketplace with it.

Is this what http://camelcamelcamel.com/ uses?

Re: As Competition Wanes, Amazon Cuts Back Discounts

#34

Post by JacobJans »

lancewiggs wrote: post #32

I'd argue that the real issue here is not Amazon reacting to less competition, it's Amazon reacting to less demand for printed books. I suspect ebook pricing is still as sharp as ever, and that the affected authors should be looking at their format and market.

Is there actually less demand for print books? According to Amazon, print book sales are still growing.

http://www.publishersweekly.com/pw/by-topic/industry-news/pu...

Re: As Competition Wanes, Amazon Cuts Back Discounts

#35

Post by adventured »

dangrossman wrote: post #11
n00b101 wrote: post #4

> Amazon, which became the biggest force in bookselling by discounting so heavily it often lost money IANAL, but this sounds like a potential anti-trust case to me. "Predatory pricing practices may result in antitrust claims of monopolization or attempts to monopolize. Businesses with dominant or substantial market shares are more vulnerable to antitrust claims. However, because the antitrust laws are ultimately inte…

Amazon's sales are just 29% of the book selling market (2012 share, even after Borders was out of the picture for over a year). B&N's are 20%. If their discount pricing hasn't even gotten them 1/3rd of the market after all these years, it'd be hard to prove that they're soon going to monopolize it.

I agree with your overall premise, but anti-trust law is far broader in scope than monopolization. Indeed, there's nothing about anti-trust law that forbids a monopoly, and there's no specific market share requirement.

Market share is but one market-power consideration when the government looks at whether a company has caused harm.

There are several angles to anti-trust, such as collusion and predatory pricing, that can matter even at modest market share points, if the government can prove consumer harm.

Re: As Competition Wanes, Amazon Cuts Back Discounts

#36

Post by zaroth »

> It is difficult to comprehensively track the movement of prices on Amazon, so the evidence is anecdotal and fragmentary.

I guess this is the difference between award winning journalism and essentially an editorial.

David Streitfeld of the NY Times should be inspired by the work of the Sally Kestin and John Maines of the Florida Sun Sentinel, who won the 2013 Pulitzer for Public Service for their "investigation of off-duty police officers who recklessly speed and endanger the lives of citizens, leading to disciplinary action and other steps to curtail a deadly hazard." The Sun manage to acquire and then data mine the timing data from on and off-duty police officers' toll transponders to reverse engineer their average speed, and in the process blew the lid off some seriously reckless driving by the officers.

By comparison, the data that Streitfeld and the NY Times was looking for to turn their cute anecdotes into hard hitting journalism were only an API call away. I'd love to see journalists collaborating more with hackers and the open source community, or perhaps even big data competition sites like Kaggle to collect and parse this data into a real expose. Like what we saw with Strongbox (http://www.newyorker.com/strongbox/) - the New Yorker's platform for protecting anonymous sources - or Barret Brown's ProjectPM (http://trueslant.com/barrettbrown/2010/03/24/project-pm/) - but targeting specific topics and data sets. Note to reader, you might want to visit those links via Tor...

Nothing like hard evidence to shine a bright light on anti-competitive behavior of a wanna-be monopolist. On the other hand, maybe Amazon is just intelligently pricing their products using their sophisticated proprietary models based on tried and true supply and demand. Based on this article, who can say what's closer to the truth?

Re: As Competition Wanes, Amazon Cuts Back Discounts

#37

Post by kryten »

_pmf_ wrote: post #25
jmduke wrote: post #16

By "as competition wanes," the headline means "Amazon has a 29% market share." By "cuts back discounts", the headline means "Amazon is selling books for slightly more, which is still less than brick and mortar stores."

I'm always looking for the catch with Amazon (from a consumer standpoint, not from a labor conditions standpoint), but there's nothing at all. They're the cheapest and the ones with the easiest return policies. They even replaced some stuff that was missing from a ripped-and-patched-up parcel that I accidentally signed off as being complete.

Agree. Never had a single problem that wasn't immediately resolved in over 300 orders.

Prior to using amazon my options were basically phone up then trek to Foyles in London or go to my local book shop and try and work out how to get them to order something that wasn't top 100 dross.

If you buy used books from them as well, they are actually cheaper than a lot of the charity shops now as well and you get a better hit rate.

And that's just the books side of things. Lenovo parts from China, phone parts from Canada, phones, computer parts, memory cards, camera, laptops. Just the best experience so far.

And you can talk to a human pretty much instantly from experience.

Re: As Competition Wanes, Amazon Cuts Back Discounts

#38

Post by kryten »

ChuckMcM wrote: post #7

This is poor journalism. From the article: "Now, with Borders dead, Barnes & Noble struggling and independent booksellers greatly diminished, for many consumers there is simply no other way to get many books than through Amazon. And for some books, Amazon is, in effect, beginning to raise prices." Now what they are really saying is that Amazon is pricing books closer and closer to "list price" which is the price that…

To be honest, Borders was like a library with built in coffee shop in the UK. People just went in there, checked out the book and bought it on amazon whilst sitting in the shop eating blueberry cheesecake and drinking a nice cappuccino...

Re: As Competition Wanes, Amazon Cuts Back Discounts

#39

Post by cranefly »

staircasebug wrote: post #9

Just seems like typical retailing to me. Non mass-market books don't get discounts. If someone is really searching to purchase "Jim Harrison: A Comprehensive Bibliography, 1964-2008", they're probably going to buy it with or without the discount attached. Btw, Kindle price of "Born to Lose" is $9.34 at the moment. Seems like a good discount to me.

Amazon kindle price here is US$20.35 even though I'm using Amazon.com. Usual excuse for gouging us here is the cost of transport to our small market. Never thought that applied to electrons too :(

Re: As Competition Wanes, Amazon Cuts Back Discounts

#40

Post by ryanpardieck »

n00b101 wrote: post #4

> Amazon, which became the biggest force in bookselling by discounting so heavily it often lost money IANAL, but this sounds like a potential anti-trust case to me. "Predatory pricing practices may result in antitrust claims of monopolization or attempts to monopolize. Businesses with dominant or substantial market shares are more vulnerable to antitrust claims. However, because the antitrust laws are ultimately inte…

Honestly the more I read about predatory pricing, the more it seems like a complete fiction. One of those things that seems to make sense in theory, and maybe makes for a good political screed every now and then.

If low prices drove the competitors out, then high prices will surely see them flood back in.

Any firm that gains monopoly power and hikes the prices without inviting fresh competition probably worked out some sweetheart deal with the government--and even then, they're better off keeping margins fairly low, since a govt-approved monopoly is easier to justify when the firm is not obscenely profitable.

Ultimately I don't think a business born out of deep discounts is suited well to massive price hikes. It destroys the identity they've built with consumers and if they weren't in the game to be deep discounters over the long haul, then I'd say they'll die. They would be better off maintaining the discounts while improving their cost structure.

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