Business Basics for AuthorsPublishing Fear Free

If Amazon Goes to the Dark Side

What Will Happen to Indie Authors If Amazon Goes Bad

Every time someone in Amazon’s publishing sector sneezes, indie authors seem to freak out.

Hey, you are entitled to your freak out. Go ahead. Panic! Get it all out.

Okay, that’s done.

Let’s discuss indie authors’ fears and then what will happen if/when they come to pass.

Fears (from an indie author’s perspective)

  • Amazon will become too powerful by gaining too much market share of the book industry.
  • In order to earn a living, authors will be forced to enroll in KDP Select and sell exclusively through Amazon.
  • A majority of authors will sell exclusively through Amazon, allowing the company to gain a monopoly on books.

OR

  • Amazon will put all of its competition out of business and become the only bookseller left in the game.

Either scenario produces the same results:

  • With no competition, Amazon will be free to raise book prices, lower royalty rates, change their algorithm, or take some other action that negatively impacts indie authors.
  • Authors will experience decreased visibility and sales and no longer be able to make a living, but due to Amazon’s monopoly, they will have no other sales options.

In essence, indie authors (and consumers) fear that Amazon will become too powerful and then abuse their power. Book prices will skyrocket, royalties will tank, and Amazon will whistle on its way to the bank.

Look, it could happen. (To clarify, I don’t believe a true monopoly can exist without government intervention. There is no way to destroy ALL competition unless force is involved.) But Amazon could certainly decide to change its policies and/or exploit its resources and put itself, its customers, and its authors in a world of hurt.

So what if Amazon will not exist forever? Lots of big companies have fallen by the wayside without complete societal collapse. IBM used to mean computers. But when PCs started to come about, the company made several mistakes and ended up basically disappearing from the landscape. As a result of their bad choices, IBM shrank at a time when the computer industry as a whole exploded. In 1985, it employed 400,000 people, but by 1995, it had shrunk to 225,000 employees. Lots of people lost their IBM jobs, but they went to other computer companies that sprang up and that did not misjudge the market.

And what about Kodak? Kodak was cameras, but they did not innovate as technology changed. In 1976, Kodak had 90 percent of film sales in the US and 85 percent of camera sales in the US. That’s as close to a monopoly as you can possibly get. Now, they basically peddle photo paper. Its former employees probably went on to work at photo companies who embraced digital advancements. But either way society did not fall, and photography still exists.

No company is eternal. All companies follow a life cycle, but some get more years than others. Company X starts small, maybe in a garage, and even though it doesn’t have the resources of the big guys, it’s innovative and works hard to please customers. Soon, they expand, and they innovate and please even more customers. Then, their hard work is rewarded, and they become popular. In fact, they become one of the big guys. Then, something changes. Maybe someone gets greedy, a new CEO takes over and makes mistakes, they stop innovating or take their customers for granted, or a competitor shows up and does things better. Company X, who is now a huge entity in the market, goes into decline. (This South Park episode has a great montage around the 21 minute mark on this subject.)

So let’s say Amazon goes bad, and authors can no longer make a living selling through them. Yeah, it will suck. It will suck hard. Authors would be essentially losing their jobs. But that’s not going to be the end of the story.

If Amazon exploits authors and raises book prices, it will open the door to competition. Someone somewhere will seize the opportunity. If conditions are so bad at Amazon, all the anxious authors and angry readers will leap at the chance to try out this new enterprise. As a result, we’ll be back to high royalties and low book prices.

And then people will begin to fear what might happen if that company gets too powerful….

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