[Image of: RetailWire Logo and Tagline (for print)]

BUSINESS TIPS

IRI:
Shopper-Centric Execution
ChannelAdvisor:
Online Selling Strategies
RR Donnelley:
In-Store Marketing
LoyaltyOne:
Enriching Customer Relationships
 
[11 comments]

Reports: Amazon holds shipments in publisher dispute

May 12, 2014

Involved in a publishing dispute, Amazon.com is discouraging its customers from purchasing popular titles from Hachette Book Group.

That's at least according to Hachette, one of the largest New York houses and operator of Grand Central Publishing, Orbit and Little, Brown as well as many other imprints.

The primary way Amazon is said to be thwarting sales is by telling customers some popular titles are out of stock even though Hachette claims shipments are proceeding as normal.

"We have been asked legitimate questions about why many of our books are at present marked out of stock with relatively long estimated shipping times on the Amazon website, in contrast to immediate availability on other websites and in stores," Hachette said in a statement released to the media late last week.

The statement added, "We are satisfying all Amazon's orders promptly. Amazon is holding minimal stock and restocking some of HBG's books slowly, causing 'available 2-4 weeks' messages,' for reasons of their own."

Generally, most popular books are available from Amazon within two days, reports said.

The New York Times, which broke the story, also indicated Amazon is no longer giving the friendly Amazon discount that can drive sales to many popular Hachette titles. Prices are at least $2.00 lower at Barnes & Noble and elsewhere. Amazon is also suggesting titles from other authors in the same genre that can be bought cheaper.

Publishing spats over terms aren't unusual. Barnes & Noble cut the number of Simon & Schuster titles it sold in an eight-month dispute last year over e-book discounting, in-store promotional costs and other issues, according to The Wall Street Journal. Amazon's disputes with Macmillan books in 2010 and with distributor Independent Publishers Group in 2012 also went public.

In most disputes, however, Amazon typically lowers titles from its recommendation algorithms rather than depriving customers of books. Many saw the latest dispute, also reportedly over e-book pricing, as a sign that Amazon may be looking for ways to beef up margins with pressure growing from Wall Street to show profits.

"This could seem like they're being spiteful and petty," Sucharita Mulpuru, an analyst with Forrester, told The New York Times. "That's typically not Amazon's playbook."

FINANCIALS:     [NASDAQ:AMZN] [ ]

Discussion Questions:

What do you think of Amazon's tactics in its apparent dispute with Hachette Book Group? Should retailers, regardless of product category, be more forthright with customers about what's behind out-of-stocks in stores and on websites?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

Should retailers be more honest with consumers about what's behind out-of-stocks?

Comments:

Follow the money, and Amazon has lots of it. The end.

[Image of: View Braintrust Panelist button]
Tony Orlando, Owner, Tony O's Supermarket & Catering

I think we need more objective information. As to honesty, I believe it's always the best policy.

[Image of: View Braintrust Panelist button]
Ryan Mathews, Founder, ceo, Black Monk Consulting

Involving your customers in disputes with your supplier flies in the face of good customer service. Having your customers realizing you are denying them access to the items they want is never a good thing. Amazon had a number of other tactics such as changing its algorithms that would have yielded the same result without the negative publicity.

[Image of: View Braintrust Panelist button]
Steve Montgomery, President, b2b Solutions, LLC

While the Times story doesn't quote anybody from Amazon, it's true that (even this morning) there is a 2-5 week lag time on shipping of the Robin Roberts book. This seems improbable for one of the best-selling books in the country.

If Amazon is trying to make a point to one of its publishers, it seems ill-considered to catch customers in the middle of a "family feud" like this one. Who are they more likely to blame for the shipping delay? I'm guessing Amazon.

[Image of: View Braintrust Panelist button]
Dick Seesel, Principal, Retailing In Focus LLC

I would like to hear Amazon's answers to the claim. If the story is true, I think in the long run Amazon is making a big mistake. As the saying goes, power corrupts and absolute power corrupts absolutely.

If you don't play fair in the long run, you lose.

[Image of: View Braintrust Panelist button]
Mel Kleiman, President, Humetrics

Amazon is again the big bully on the street. This does not make sense from a sales point of view. Why do something like this to prove a point? Who is the big loser?

[Image of: View Braintrust Panelist button]
Ed Rosenbaum, CEO, The Customer Service Rainmaker, Rainmaker Solutions

I don't see a major difference in Amazon's action compared to Costco's when they ceased selling Coca Cola during a dispute.

'Roadster'

Obviously consumers can go somewhere else to order the product. In this day and age, many consumers are comparing prices and going with the lower price. It would be nice if the retailer provided the reason for the delay, but I doubt if most consumers would take time to read it. They would just go somewhere else to make the purchase if the price was lower or the delivery time shorter.

[Image of: View Braintrust Panelist button]
Camille P. Schuster, Ph.D., President, Global Collaborations, Inc.

This is a slippery slope when you start putting vague messages out as to availability! Is it Amazon, is it the publisher? Why can't I get my order when Amazon is usually very reliable?

Consumers don't care about internal business dealings - they just want their order and they want it now! Their contact is with Amazon, not the supplier. Amazon makes NO revenue or profits on lost sales when a consumer goes elsewhere to purchase. Amazon is like any other retailer, business suffers when customer service slips.

[Image of: View Braintrust Panelist button]
J. Peter Deeb, Managing Partner, Deeb MacDonald & Associates, L.L.C.

So what's the difference between what Amazon's doing and what traditional retailers would do in a similar situation? Probably nothing. Other than the fact that they have a lot more tools with which to execute them. A traditional retailer would've just hidden the books, or you know, just marked them up.

The whole "pick on Amazon" climate is reminiscent of when the media used to climb all over Walmart for just about anything. Still do actually.

IMO, we need to figure out how to compete with Amazon, fight fire with fire vs nit picking their supposedly unscrupulous tactics (which are really just age-old retail competitive 101). After all, Amazon figured out how to compete with Walmart, didn't they?

[Image of: View Braintrust Panelist button]
Lee Peterson, EVP Creative Services, WD Partners

E-commerce consumers are more likely to visit a search engine for what they are looking for rather than an e-store. Amazon is still a powerful consumer supplier, but the trends are showing a recent history of slow growth that hasn't subsided.

The e-commerce customer has two priorities that outweigh all others combined. The first is price and availability and the second is availability and price. With an abundance of e-stores to choose from and a good search engine to assist the consumer, the tolerance for a giant company that wants to play games with vendors is a small to none. Amazon can only hurt themselves in this battle, Walmart and the other giants will see to it very quickly.

'gjarnoldjr'

Search RetailWire
Follow Us...
[Image of:  Twitter Icon] [Image of:  Facebook Icon] [Image of:  LinkedIn Icon] [Image of:  RSS Icon]

RetailWire's
Getting Started video!

View this quick tutorial and learn all the essentials...

RetailWire Newsletters