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Our Amazon Scandal
Another reason NOT to deal with Amazon... if you really need one!
SELLING FOR AMAZON: A CAUTIONARY TALE
(written by Kasey Cox, September 2011)
I’m going to let you in on an independent booksellers’ dirty little secret: we have worked with Amazon.com. That may not seem like a big deal to you – when we started the store in 2006, it just seemed like a natural part of book business to us – but when you talk to people who have been in the independent book business for a long time, that association is paramount to treason.
Many people think that the reason we now call Amazon “the Evil Empire” is because we are threatened and jealous of their business successes. It may seem, at times, that the cries of little bookstores against the giant online corporation sound shrill and childish. Allow me, however, to tell you of our personal experience working with Amazon. Our grapes aren’t just sour; they were deliberately poisoned.
Before Kevin and I opened a brick-and-mortar bookstore, we both sold used books online. For each of us, it was a small, part-time income; a fun way to pay for the habit of searching for cool books at library sales and thrift stores; a way to clear off some room on our personal shelves that were always overflowing. When we became a couple, we decided to throw our “inventories” together and take the online sales a little more seriously. At that time, we decided to put our entire inventory up for sale through the Amazon Marketplace. We figured that when people want to shop online for books, their first stop is usually Amazon. com, and I already had my small inventory for sale there. We upgraded to an “Amazon Marketplace store”, for which we were charged a fee of $40 a month, plus a percentage of each sale made through the website.
When we opened the real bookstore here in Wellsboro, we continued to supplement the bookstore’s in-store sales with our online sales. Being an Amazon Marketplace seller, we had to manually enter every book in our inventory, a labor of love that nevertheless gave us the benefit of a computerized list of our inventory. Thus, our online Amazon “store” doubled for us as an inventory management system for the bookstore. Yes, there was that $40 a month fee, whether we sold something or not, but it seemed reasonable compared with the expense of upgrading to a true in-store inventory management system.
For the next two years, as our bookstore firmed up its place in our community, as we filled our little space with more inventory and widened our customer base, our online sales kept us steady. Although our ratio of online to in-store sales was changing, we still depended on the Internet part of our income. We made certain to treat our online customers with the same special care which we gave to our face-to-face sales.
In November of 2008, a little over two years after we’d opened our Main Street store, nearly four years after we’d opened our Amazon Marketplace online store, we got an email from Amazon.com. Our online account was being closed. This was a permanent decision, with no options for appeal, no temporary “time-out”, no slap on the wrist. All of our listings – over 10,000 books, all hand-entered – were cancelled. If we tried to open another account under a different name, the email informed us, that account would be found out and shut down as well.
The only reason given had a vague, form letter feel: “We took this action because despite our previous warnings, you have continued to engage in inappropriate contact with other Amazon.com participants.” There were no previous warnings. There was no inappropriate contact, according to our online customers. Our feedback rating was 99% positive from over 10,000 customers, over a 4 year period.
During the next few weeks, we emailed anyone and everyone we could at Amazon, tried to reach merchant services and customer services by phone, attempted to get more information on why we’d been suddenly and brutally divorced. This happened just as our online orders were ramping up for holiday gift giving and for textbook season. We had just purchased our first house. We still had all our inventory, of course, but for the moment, we were operating blind, without the software system that had organized it.
What we learned was that Amazon.com plays hardball. What they did to us was perfectly legal: when a person becomes an Amazon Marketplace seller, they are given pages and pages of legalese contract that outlines their relationship with Amazon.com. Somewhere in that document – which was pointed out and explained to us only in the aftermath of their decision to close our account – the mumbo-jumbo says that it is a privilege to sell on Amazon. Amazon reserves the right to revoke that privilege for any reason or for no reason at all. (This is also true at ebay, as well as several other online sales marketplace websites, so caveat emptor!)
Certainly, there is a long list of rules as to how a Marketplace Seller should do business. As far as we could tell, we had always followed those rules. We never got any further explanation as to which rules we’d broken, nor did we get specific examples of customers who were dissatisfied. The only reasonable explanation we got was from analysts looking at the climate of the Internet, the publishing and book businesses, and the tactics of corporations. Amazon wants to crush their competition. We started to hear similar stories from other small booksellers. It seems that Amazon does not want people buying books from bookstores, although those sales are often only a drop in the bucket compared to the overall wealth of the corporation. The fact that they actually made money from us – with a monthly fee, and a fat percentage of all our sales – doesn’t seem to matter.
Amazon doesn’t even make much money from their book sales. You may have heard growls last Christmas season as Amazon sold popular, newly-released hardcovers at a loss – sometimes as much as 70% off suggested cover price – just to drive traffic to their website. Amazon makes their real money from their affiliate programs, when customers buy DVDs and toys, downloaded music and the techie gadgets to play it on. But that’s not enough for them.
Their corporate greed speaks loud and clear: they charge a monthly fee to their “Marketplace Sellers”, in addition to collecting a percentage of each sale, although many other sites only take the percentage; they refuse to pay sales tax in U.S. states where they operate “fulfillment warehouses”, although all other brick-and-mortar businesses in these states pay state sales tax; they claim to sell more e-books than paper books, but refuse to back up their claims with any hard numbers; their Kindle is a proprietary e-reader device which will only work with Kindle e-books, unlike every other e-reader on the market, which will work with many applications.
If you think business with Amazon is a great deal, think at what point you might be selling your soul along with your books. Many people in the U.S. feel that the government does not represent the people’s interests, and believe that no matter who they vote for, that their vote doesn’t count. Let me remind you: in the U.S. especially, we vote with our money. We vote with our wallets, and with our feet. Where you spend your money matters. I strongly encourage you to think hard about the ethics of your spending. Amazon.com may give you convenience at times, or lower prices … but at what cost to our communities? At what cost to your neighbors? Who do they employ, and where do their products come from? What kind of business practices are YOUR Amazon dollars supporting?
We hope that you will continue to take a hard look at what you're really buying when you shop online, versus what your dollars are doing for your community, for the brick-and-mortar stores that remain the backbone of neighborhoods and towns, for the living but endangered species that is a real bookstore. Working with us makes you part of a special occurrence, where you are helping to build community, one book at a time, one event at a time.