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Amazon… How Does a Publisher Compete?

Amazon and the Publishing IndustryAmazon has and continues to invest millions on systems, readers, selling books at the cheapest price, and the biggest selection. Every day, it seems like there is another article talking about how Amazon is dominating the publishing industry and their goal to put publishers out of business. Amazon has decimated retail book stores, established a clear dominance in the e-book market (and growing stronger), has become a publisher and now they have set their sites on destroying local retail with same day delivery.

The strange part about this equation is that the publishing industry has funded Amazon’s growth and continues to do so with advocating their book sales to them. Amazon receives the highest discount (55%) of any of the publishing trading partners, they have been given the authority to set prices for books and e-books, publishers pay Amazon marketing fees and yet, publishers have not developed an effective counter service offering.

Publishers, what can you do?

We suggest the first place you need to give a good look is your website. Do you sell your books on your website? If not, why? The rewards are great. You keep an additional 55% of each sale and more importantly, you keep control over pricing and you decide if and when to discount and by how much.

I believe as publishers, you know your readers better than anyone. Not only are you in a unique position to build your community by being an expert, as the community grows you will be improving your direct-to-consumer relationship. As a result, you’ll have a better understanding of customer behavior, which should lead to an increase in future sales. Another way to build website traffic and direct-to-consumer communication is to continuously provide unique content. You could offer free chapters to read, discounted book bundles, exclusive author interviews, and previews of upcoming new books. It’s all about building community and conversation.

There has been so much written about product reviews lately. Adding a trustworthy review and opinion will greatly enhance the relationship with your reading community. It will go a long way to building trust.

Have you considered subscription sales? Allow people to buy the book in chapters. Our industry is changing and business models are evolving. Experiment with different models to see what works for you and your community. What makes you different? So many books get lost on Amazon. A subscription model may help some of your authors get discovered.

After looking at your website, you must look at your method of distribution.

How quickly does your warehouse fulfill an order? The days of taking 3 to 5 days to fulfill an order are over. You simply cannot effectively compete taking that much time. Customers are not that patient. When I place an order, my expectation is that I receive it in a couple of days; anything over a week is just not acceptable. How does your fulfillment center measure up? What is their same day shipping performance? What is the percentage of orders that take longer than 24 hours to ship?

The next question to answer is where is your warehouse located compared to where your readers are? Or, what is the transit time for your parcel to get to the end consumer? Do you know what percentage of your readers can be reached in 24 hours, 48 hours, or 72 hours? Remember, Amazon is offering next day service.

You will no longer be able to rely on the old model – where it is acceptable for product to ship in 3 to 5 days, with another 3 to 5 days of transit time or a total of 6 to 10 days from the time an order is placed to receipt of the product. You must re-evaluate your warehouse service provider, their location, and delivery times to the customer.

Choosing the right warehouse and fulfillment partner will be key to your success in competing with Amazon. Two of the attributes you must have are (1) speed with order fulfillment and (2) a central location. Combine Ware-Pak’s speed of processing (90% of the orders are completed same day and 98% are shipped within 24 hours) with our central Chicago location, and you can reach 58% of the US population in 2 days, 81% in 3 days, and 99.6% in 4 days.

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