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Why do publishers put up with Amazon?
ofnimira

10+ Year Member



 
Msg#: 3128100 posted 7:48 am on Oct 20, 2006 (gmt 0)

In the olden days in England there was the Net Book Agreement. Publishers gave booksellers a 30 something percent discount, but ensured a 'level playing field' by forbidding them to sell at less than the cover price. Eventually the NBA fell apart, and booksellers started discounting. Then along came Amazon who said 'give us a 55% discount so that we can pass on a 20 something percent discount to the customers'. So why did the publishers fall for it, seeing as a few years before they had done their utmost to prevent any discounting?

I can see that if they thought of this as 'extra' sales, then it might be worthwhile, but it's hard to believe that publishers could be that daft.

Then again, they might use it to test the online market, with the idea of doing it themselves later on, but from what I've seen things seem to be going the other way.

Recently Amazon has been messing around with the landing pages from affiliate links, suggesting alternatives to the chosen item. As you can imagine, affiliates aren't happy with this, but I would have thought publishers would have gotten more upset about such 'bait and switch' techniques.

[edited by: eljefe3 at 7:54 am (utc) on Oct. 20, 2006]

 

surfgatinho

10+ Year Member



 
Msg#: 3128100 posted 11:50 am on Oct 20, 2006 (gmt 0)

I've always been amazed at how little I've ever made from Amazon.
I had for DVDs on a PR6 film site which was coming up no. 1 for film books for years. Never made a single sale.

Actually, I never really beleived them! Does anybody make enough money to cover their costs from Amazon?
Also I'd prefer to see local bookshops survive rather than do Amazon's dirty work for them!

cmendla

10+ Year Member



 
Msg#: 3128100 posted 12:07 pm on Oct 20, 2006 (gmt 0)

I agree, My amazon earnings are a joke compared with adsense. (More from adsense in a single day than amazon in a quarter)I should point out that I've since given adsense the best heat map positioning. On the other hand I have a fair number of amazon ads on different sites that I think are very well targeted and integrated. Earnings on those have dropped to zilch, nada, zippo, nothingness...

My guess is that there is a serious parasite problem with amazon. I could be wrong on that but that hypothesis would fit what I'm seeing.

I probably should put in a click tracker on one of my sites to compare the actual numnber of click throughs with what amazon says. If anyone does have data like that I'd appreciate hearing about it.

It's a shame because the link building process in amazon is pretty simple and you can put together pretty relevant ads between the books and merchandise.

cmendla

10+ Year Member



 
Msg#: 3128100 posted 12:07 pm on Oct 20, 2006 (gmt 0)

I agree, My amazon earnings are a joke compared with adsense. (More from adsense in a single day than amazon in a quarter)I should point out that I've since given adsense the best heat map positioning. On the other hand I have a fair number of amazon ads on different sites that I think are very well targeted and integrated. Earnings on those have dropped to zilch, nada, zippo, nothingness...

My guess is that there is a serious parasite problem with amazon. I could be wrong on that but that hypothesis would fit what I'm seeing.

I probably should put in a click tracker on one of my sites to compare the actual numnber of click throughs with what amazon says. If anyone does have data like that I'd appreciate hearing about it.

It's a shame because the link building process in amazon is pretty simple and you can put together pretty relevant ads between the books and merchandise.

pcgamez

10+ Year Member



 
Msg#: 3128100 posted 3:55 pm on Oct 20, 2006 (gmt 0)

Everyone saying that Amazon vs AdSense is a joke needs to get a grip on reality. Amazon and AdSense each have their place. Ask someone who has a site in the books category. They will likely make significantly more with Amazon than with AdSense. Why? Because the CPM in that category is really, really low (if you ever want to get depressed, ask for an exact number). OTOH, Amazon is best known for books, meaning that a large number of sales would be expected.

hunderdown

10+ Year Member



 
Msg#: 3128100 posted 4:03 pm on Oct 20, 2006 (gmt 0)

ofnimira, I work in book publishing. The discount Amazon gets is actually about the same as the large chains (Barnes and Noble, Borders, etc.) and wholesalers get. Your comment mixes UK and US conditions, but Amazon started in the US. Discounting was already prevalent in the US when Amazon got off the ground. (and correct me if I remember this wrong, but wasn't the NBA first breached by a bricks and mortar bookseller, not Amazon UK?)

In any case, in the US, large publishers see Amazon as another bookseller, no more, no less.

Also, I believe that the 55% you cite is actually what Amazon insists upon for one particular program they've set up for small publishers, and that the standard discount is more like 50%. Why more for small publishers? Lack of volume, I would guess, and a need for more human attention.

Re Amazon for as an affiliate program: I have a book-friendly site and sell 400-500 items per quarter, most of them being books. I make much less from Amazon than I do from AdSense, but Amazon is certainly worth my time. If it's not worth your time, use a different program.

Oh, and by the way, Amazon has stopped the landing page test for those with ref=nosim links. See the Associates home page at Amazon for more info.

markwelch

10+ Year Member



 
Msg#: 3128100 posted 4:46 pm on Oct 20, 2006 (gmt 0)

Wow, an interesting thread. That British arrangement would have been illegal under US law, but most US booksellers also resisted discounting successfully until the explosion of "bestseller discounts" (was that in the late 1980's?).

Most publishers sell to Amazon at pretty much the same price they sell to Barnes and Noble or Borders or Costco or Wal-Mart. However, Amazon offers smaller publishers additional flexibility, made possible because they have centralized warehouses (not thousands of stores to stock with obscure titles).

As far as the affiliate program: I think I've earned between $500 and $1,000 in Amazon commissions every quarter for the past 3 years, at least. It doesn't pay a lot (typically, I earn 7%), but conversion rates are higher than for competing merchants -- because Amazon has a very high consumer trust level.

Amazon's "multinational" structure is quite annoying to me -- a couple of years ago, I went to the trouble of joining Amazon.co.uk and Amazon.ca, and added links on my sites, but after more than a year, I wasn't near the minimum payment threshhold for either program, so I dropped those links. I assume that many folks go to Amazon.com, find what they want, and then switch over to Amazon.co.uk or Amazon.ca, and Amazon doesn't pay a commission for those orders.

In the Movie/DVD space, I have traditionally linked to both Amazon and Movies Unlimited, and for a long time I earned more from Movies Unlimited because they paid a higher percentage and they carried a wider selection of "discountinued" movies. I've recently begun phasing out the MU links.

Quadrille

WebmasterWorld Senior Member quadrille us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 3128100 posted 5:12 pm on Oct 20, 2006 (gmt 0)

I use both .com and .co.uk, and both earn me regular money; very good, relative to the little time and effort involved.

Since the net book agreement was outlawed, publishers have had to live with a free market, and amazon happens to be one of the biggest booksellers.

But every retailer leans on the publishers; come July, when Harry Potter 7 hits the streets, every vendor in the UK will be selling it at less than cost, and the publshers will make precious little on the first week's sales (then the price will start to rise).

Leaning on wholesalers is 'normal' in every area (just ask tesco or walmart); the publishers don't like it; but what choice do they have? None.

Worth noting that Harry and Amazon between them HAVE produced extra sales; the UK book market was in steady decline, especially children's books; a combination of MUCH reduced prices, Harry P., and greater competition has reversed that.

[edited by: Quadrille at 5:15 pm (utc) on Oct. 20, 2006]

vite_rts

5+ Year Member



 
Msg#: 3128100 posted 5:50 pm on Oct 20, 2006 (gmt 0)

Hi Quadrille

I get the impression that Affiliate selling requires very high traffic levels before one starts to see any return,

I am persisting with them for diversification purposes, but can you

give a hint at the traffic levels one needs to be seeing to get some conversion,

100, 200 , 300, 1000, 2000 page views per day?

or should it be in terms of

50, 100, 300, 1000, unique visitors per day?

Cheers

Quadrille

WebmasterWorld Senior Member quadrille us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 3128100 posted 5:58 pm on Oct 20, 2006 (gmt 0)

I started with very low numbers, but the conversion rate has held fairly steady; as the sites have grown, and visitor numbers have risen, so have the commissions.

I started with a few book ads on a freebie site, and got conversions. I guess that would be more difficult now, as there are so many affiliates.

But last time I looked in on the Amazon forums (many months ago!), there were a good number of 'small sites' being discussed.

I believe success for an Amazon affiliate is about exploiting a nche; having a site that is more informative than the Amazon site. Everywhere I roam, I see sites using Amazon the way MFAs use adsense; no content, just bare ads; my guess is that they fail.

I place ads on a content-rich niche sites, which I update not as often as I should - and they work.

hunderdown

10+ Year Member



 
Msg#: 3128100 posted 6:52 pm on Oct 20, 2006 (gmt 0)

vite, I get about 1,000 visitors a day, and about 100 clicks a day, and sell about 5 or 6 items per day--you won't find Amazon heavily promoted on my site. There aren't even links to it on every page. I'm sure that I could earn more from it if that's all I wanted to do. But I don't. I run an informational site, and use Amazon when I recommend a book, as I may do in context in an article, in a list of books, or in a free-standing review page. There aren't many review pages on my site, but they do generate the bulk of the sales. Feel free to browse around my site, it's the one in my profile.

Beagle

WebmasterWorld Senior Member 5+ Year Member



 
Msg#: 3128100 posted 9:25 pm on Oct 20, 2006 (gmt 0)

I believe success for an Amazon affiliate is about exploiting a nche; having a site that is more informative than the Amazon site.

I'd completely agree. I have the good luck of being active in a niche that Amazon habitually screws up - things are misclassified, mistitled, don't show up in searches where they should, and sometimes are even listed with the wrong author (so, of course, if you're doing a search for the author...) OTOH, if you come to my site, I have things set out clearly, with things named correctly and set out in a way that makes it easy to find what you're looking for; if a book's mentioned in an article, there's a handy link to it right there. And if something new comes out that's important to the niche, it'll be front and center on my "What's New" page as soon as it's available for pre-order, instead of buried somewhere among Amazon's million pages. (I've learned through emails that people have come to trust me to have new items available immediately, and over half of my sales come from that one page.)

I don't have anywhere near the numbers of visitors or sales the other posters do (if I put enough work into it I believe I could, but I do have a day job). But the Amazon ads on that site do pay the costs for that site plus another large one that's very difficult to monetize. Most years, I've ended up with a nice "Christmas bonus" when people shop for presents, and I'm hoping for more this year as I've started with another affiliate program that covers the same niche but concentrates more on "gift-type" items.

BTW, any effort I've made going after non-niche-related sales (I've tried jewelry and chocolate before Valentine's Day, for example, and used Amazon's "Top Ten Christmas Gifts" list), have been total washouts.

iamlost

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3128100 posted 10:59 pm on Oct 20, 2006 (gmt 0)


I believe success for an Amazon affiliate is about exploiting a nche;

Yes. Yes. Yes.

And also beyond the question of the OP: 'I believe success for any affiliate is about exploiting a niche'.

So many people have not only no idea how to fully exploit a niche but also no idea what niches are worth exploiting. They are like miners just digging a hole without actually determining what, if any, valuable minerals are available, how best to extract them, and what markets are available.

Selling books, on or off-line, is not for the faint-of-heart in these digital multimedia days. As has been mentioned it can be done profitably but it requires some thought and some planning. And probably should not be the sole revenue source.

In my experience the best niches for books are specialty subjects that draw literate affluent subject-obsessed people. Well crafted articles referencing books that link to presell review pages tend to do best. The fact that the same content can well link to other product/program presell affiliate pages is just good business.

On those pages pushing books (several hundred to several thousand uniques per day depending on the page) the click to presell page is 15-20% with a conversion rate about a third: sales equal to 5-7% of uniques to those pages. Please note that Amazon is not my only book affiliate program - I target pages and books and programs as much as possible.

So much depends on your business model and how well you know your niche and your visitors. Amazon, or any other ad/affiliate program, is not for every page in every site. Each page should be crafted with one eye on the subject, one on the audience, and one on the marketing options. Yes, you really do need three eyes in this business.

ofnimira

10+ Year Member



 
Msg#: 3128100 posted 10:54 am on Oct 21, 2006 (gmt 0)

Thanks for all the information. Its interesting to hear from those who have more experience than me concerning book publishers. The one example I do have is for a book my wife wrote, for which the publishers arrangement with Amazon was so different to their normal selling route that they felt they needed a different royalty arrangement for the authors.

I am a bit surprised that publishers haven't tried harder to prevent discounting. I feel that they have a stronger case than say cereal manufacturers - if the customers wants a certain book then its harder to persuade them to switch to something else. If the publishers had their own online selling department (with an affiliate program) then I would expect this to strengthen their hand even more.

vite_rts

5+ Year Member



 
Msg#: 3128100 posted 2:31 pm on Oct 21, 2006 (gmt 0)

That would expose them to the risks of retailing/wholesaling,, which are probably not included in their list of competences

hunderdown

10+ Year Member



 
Msg#: 3128100 posted 2:55 am on Oct 23, 2006 (gmt 0)

Many publishers DO sell their books online, but they don't have the economies of scale or the name recognition that Amazon does as a source of books.

So, if you wanted to buy four books published by four publishers, would you buy them at Amazon at a discount and get free shipping, or would you buy them from the individual publishers at full price or close to it and pay shipping four times? More to the point, if you were looking for a book about a particular subject, how would you find it?

There's a lot more to it than that, but there are good reasons why publishers don't seriously attempt to compete with Amazon--and another one is that if they did, they would be competing with bricks and mortar booksellers, who would not be happy about that. So publishers' online efforts are perfunctory, and that's unlikely to change.

Quadrille

WebmasterWorld Senior Member quadrille us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 3128100 posted 11:24 am on Oct 23, 2006 (gmt 0)

No one 'forces' publishers to deal with Amazon; they make a business decision. And however much they may not 'like' Amazon's terms, they like the alternative much less.

It's business; and while the details vary, the same squeeze happens in the food induatry, clothing ... and anywhere it is not already happening can expect it soon.

Efficient retailers, working on a global scale, are putting the squeeze on wholesalers and their rivals equally; and it's a business model at works. No publisher wants their potential bestseller excluded from Amazon, any more than Coke wants to dropped from Walmart / Tesco / Carrefour / Whoever dominates your country! They can argue about the price, but ultimately they'll get less than they wanted. Every time.

imstillatwork

10+ Year Member



 
Msg#: 3128100 posted 5:31 am on Oct 24, 2006 (gmt 0)

books that cost 60-120$ seem to do well. adsense and amazon work. they don't work the same.

rbacal



 
Msg#: 3128100 posted 9:13 pm on Oct 24, 2006 (gmt 0)

sometimes are even listed with the wrong author

Well, I'm an author, and imagine what it's like to see a book you wrote "authored" by someone you never heard of. They aren't alone, though. At least they eventually fixed the problems.

Anyway, we do amazon because it does well for what we invest in it, AND because it's an easy way for people to buy MY books, so I get a little extra out of it.

What REALLY gets me (and if I'd known this would happen, I would never have used them) is those darned third party sellers that price their books at ONE CENT, but make their money via shipping.

What's the 6% commission on ONE cent?

To me that's getting into scamville. If I could just make it so visitors to my site could ONLY buy new, legit books ONLY from amazon direct, I might be convinced to put them on more pages (they really are on a small selection).

I make in the four figures from them a year, no maintenance, not worth taking the stuff off my sites.

Car_Guy

5+ Year Member



 
Msg#: 3128100 posted 9:18 pm on Oct 24, 2006 (gmt 0)

From time to time I have seen auctions on eBay with a "Buy It Now" price of a penny, with the seller charging sixty bucks or so for shipping and handling.

Beagle

WebmasterWorld Senior Member 5+ Year Member



 
Msg#: 3128100 posted 10:57 pm on Oct 24, 2006 (gmt 0)

rbacal - Fortunately (or not) the author my site concentrates on has been dead since 1973 and isn't around to defend his titles on Amazon - so we try to do it for him ;) The latest snafu came when they credited a book about the author to him, and a book by the author to the person who wrote the "about" book. I sent in corrections on both, and they accepted one but not the other...?

As you might suspect, a lot of the author's books (or at least some editions of them) are available only used - but in this case that doesn't necessarily mean cheap. So there's no way I'd want to run without the third-party sellers. Unless things have changed, at least some of the one cent sales on Amazon are out and out attempts to defraud people, although it usually happens with higher ticket items. It's used as a kind of bait-and-switch: "Gee, I just sold that copy. I have another one for just slightly more, but [and this is the scam] I don't have it listed with Amazon, so it'll be easier if the two of us deal directly." If they can get the person to operate outside Amazon's system, the buyer is no longer protected by Amazon's guarantee - or any other help they might get from Amazon. Any time I list a "hot" item that's from third-party sellers (and, yes, in my niche out-of-publication books can be "hot"), I add a reminder to my visitors that they're covered by Amazon's guarantee as long as they stay within the Amazon shopping cart system. I've actually thought of this more as a way to get around anyone being nervous about dealing with a third party, but I suppose it's also something of a warning in case they'd run into a scam.

hunderdown

10+ Year Member



 
Msg#: 3128100 posted 1:39 pm on Oct 25, 2006 (gmt 0)

With books, the one-cent sellers can be legit. There's a standard fee for shipping and handling added to all the 3rd-party purchases, and a book can be sent media mail and leave the seller a small profit, assuming they paid nothing for the book in the first place (which is quite possible). Of course, that doesn't take into account labor, but the seller may be providing it themselves, working from home, clearing out books. Or they may see it as a way to generate leads. Every person they sell a book to can go on their mailing list.

The one good thing for us about one-cent sales is that they count towards the item counts that push up our commission rates.

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