Amazon is well known for its aggressive and creative methods for gaining additional margin by finding ways for publishers to pay for more services. The e-tailer's newest effort, apparently aimed primarily at distributors and their publisher clients, is causing more than the usual amount of complaints, however. While other Amazon programs typically offer new services that are available for a price, the new Amazon "Levels of Service" (see partial chart below or click on www.publishersweekly.com/amazonlevels for full chart) will take away some existing services for distributors and publishers who choose not to participate. "There is no question that access to some things will go away if you don't step up," one person familiar with the program said.
While one said the plan makes sense from Amazon's point of view—"they want to sell more books on which they make the most money," he said—others believe Amazon is pushing too hard. Two sources called the plan "extortion"; no one wanted to be quoted by name for this article for fear of offending Amazon. "It's clear they are pushing for more concessions on terms," one said. Under the plan, distributors/publishers that offer the best terms of sale to Amazon will get more access to more services and Amazon personnel, thereby getting more promotion. Access won't come cheap, however, with the move from the "standard" level to "platinum" costing "multiple points," one source said.
It is considered unlikely that clients at most distributors will be able to afford the top level of access. "It would be nice if the quality of book mattered rather than just what you can afford," with respect to exposure on Amazon, one said. While some distributors and publishers are resisting the Amazon approach, others are considering signing on for some level. "We want to optimize our relationship with them," one said. "We have to be pragmatic, and we need to be competitive." Many of the publishers handled by the distributors publish midlist and backlist titles that depend heavily on being discovered in Amazon's "long tail" and can't afford to get buried on the site by not cooperating with Amazon.
In evaluating what to do about Amazon, vendors also are considering what the impact will be on other retailers. "It can be a slippery slope" where other accounts will want something more as well, one said.