Amazon vs Walmart

Amazon gets a lot of ink about its innovations and business practices. Deservedly so. Wired magazine’s Tim Carmody has even compared them to Walmart. In a provocatively titled article penned last year, Carmody asked: “If Amazon Out-Walmarts Walmart, Can Anyone Out-Amazon Amazon?”

Good question. Flawed premise. Amazon’s biggest problem, a persistent one, is that after twenty years it still doesn’t know how to manufacture a decent profit. We go to MG Siegler of TechCrunch for the most recent evidence:

  • “Not only did Amazon only make $177 million on sales of $17.4 billion last quarter, they’re warning that they could actually lose money this quarter.”
  • “Last quarter, Walmart pulled in $109.5 billion in revenue, which led to $3.3 billion in profit. As with Amazon, the margins are awful, but at that scale, it doesn’t matter.”
  • “In fact, Amazon’s margins are so slim that Facebook, which just filed to go public [...], recorded nearly double the profit of Amazon last year ($1 billion versus $631 million).”

Notes Siegler: “Compare this to Apple’s most recent quarter in which they posted a record $46.33 billion in revenue and, more importantly, a record $13.06 billion in profit. The margin difference could not be any more stark.”

I write this not to diss Amazon (although paying a little more attention to the bottom line couldn’t hurt) as much as to put Amazon in perspective. On the publishing side, there is great fear of Amazon. A recent article by Nico Vreeland points fingers at the publishing industry for not having their act together as compared to Amazon. Point taken.

Just remember who Vreeland’s talking about when he says:

So publishers: it’s time to embrace technology, put your customers first, and entirely revamp the logistical architecture of your industry, or Amazon’s publishing arm will do it for you (and nobody wants that).

Back to the Audience

As an author, you think about your audience. Your “dear reader.” Or at least you should. Even if it’s only your inner audience. After all, there’s a reason you’re committing all those words to the page. A message, perhaps?

But getting your work published adds another dimension or two, enough so that you start to think perhaps the publisher is your audience. I say this from the perspective of someone for whom it took eight years from inception to publication. Twenty rejection slips. A complete rewrite of the entire work. The publisher held the keys to the kingdom and was, in a very real way, an arbiter between the author and her audience.

The rise of the internet and eBooks is supposed to change all that. Chris Meadows over at TeleRead takes it as a given that writers whose books the Big Six won’t take can sell directly to customers via Amazon, Apple and Barnes & Noble. The counter-thought, here from publisher Teresa Nielsen Hayden, is even more provocative:

Stated axiomatically: If you’ve written a book that people want to buy and read, you stand an excellent chance of getting it published by a real commercial publisher. If you haven’t, no clever workaround publishing scheme is going to help, because there’s no way to force readers to buy and read books they don’t want.

The backdrop here is whether or not publishers — traditional publishers — really care about “dear reader.” The accusation, which some in the industry (like Brett Sandusky) are taking seriously, is that publishers are not as customer-focused at they should be. If not, the argument goes, the customer is being underserved. This creates an opening for others. Are independent publishers more attuned to customers? Will they take over while the giants fail? Is Amazon poised to play a similar role?

The critical question is whether traditional publishers still hold the keys to the kingdom. Or even matter.

Certainly the pressure is being felt on all sides. Publishers are getting hit over agency agreements, which drive up prices. Authors are finding their work potentially highjacked by Amazon, which is pushing wholesale pricing at a cost to author royalties. Some customers are having second thoughts about eBooks themselves (though eBook sales are up 202%).

The tragic thing is what’s being lost in this conversation. All the forgoing “pressure” is focused on customers and the bottom line. Consumers want cheaper books. Authors want higher royalties. Publishers want profits.

But there is an older relationship that, I think, is more important. As an author, writing for your audience is paramount. They are more than mere customers. They’re your first duty. If you just write for the money, you’re a hack. Let me repeat. A hack. Good publishers — great publishers — recognize and support these obligations. And find writers whose work deserves a wider audience because it actually has something to say.

Teresa Nielsen Hayden puts it better than I: “Being focused on readers and their reactions is a marker for people who work in the commercial publishing industry. Reader-fixation is water, and [they spend] decades being a professional fish.”

Is the model that Hayden defends the only way? Heavens no. The internet is there, eBooks aren’t going away. But you better write the best book you can.