I don’t know if Jeff Bezos ever sold used cars. But the Amazonfounder and CEO would probably have been darn good at it, as long as he got hold of a car he really believed in.
He’s a master of spin, after all. All you have to do is listen when he talks about Amazon and its sale of used books to see that he seems to truly believe what he’s saying. The only problem is that he’s wrong — at least, this time. And so, for that matter, are the people he’s arguing with.
The Sound of the Fury
The recent outcry over used book sales on Amazon, where a shopper can find a used book for a fraction of the cover price on the same page as the new book, is the ultimate tempest in a teapot.
The Author’s Guild, which started the brouhaha by urging its members to protest the practice by boycotting Amazon, might complain and threaten, but its members need Amazon, maybe even more than Amazon needs them.
Any author who pulls a book off Amazon will be cutting off his nose — and both ears — to spite his face. Sure, used books don’t pay royalties, but neither do unsold books.
But Bezos and Amazon also need good public relations, not controversy. And Amazon has been making a big, big deal of its ability to sell a customer either used or new goods at the same time with the same fixed costs and therefore fatter profit margins.
Of Price and Men
So, the used book issue has to be dealt with at some point. Why not now? Retail isn’t ready to handle this question yet. But it will be soon, thanks to online auctions and the cool technology that has helped make Amazon the force that it is.
Here’s what the future will look like: Booksellers will be able to determine that Mr. Jones has a used copy of the latest Stephen King book up for sale on Amazon. And the publishing house will be able to make a snap decision — or, more to the point, its computers will make a snap decision — about how much to lower the cover price to convince customers to buy the new book, not the used one.
Right now, the difference may be, say, US$10. For ten bucks, I’m going to take the used copy and ignore the coffee stains on page 12. But if the dynamic pricing program behind the scenes at Amazon lowers that gap to, say, six bucks, I might just suck it up. And if I still go used, the system can remember that and cut the gap to $5 for the next shopper. And so on.
Sold Mountain
Of course, this dynamic pricing, though sped along by the arrival of online auctions, is still a long way off. In the meantime, Bezos gets cast as the heavy. A group of writers at a conference in New York City recently groaned at the mention of his name and cheered loudly when his main online bookselling competition was lauded for not selling used books alongside new ones.
Meanwhile, Bezos’ argument in favor of used books is about as weak as they get. Sure, book buyers might be more inclined to return and buy books, but if they buy the used version of Author X’s book the first time and return to buy another writer’s work the next time, Author X is still out royalty money.
The whole argument is moot anyway. No one is going to change, so they should all just agree to disagree until technology takes them all off the hook in the future. It’s the simplest solution and the time-honored economist’s approach: Let the market decide.
Better yet, let the computers decide. We could use the extra brain power to read more books.
What do you think? Let’s talk about it.
Note: The opinions expressed by our columnists are their own and do not necessarily reflect the views of the E-Commerce Times or its management.
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I’m afraid Mr. Regan’s logic is flawed. An excerpt from his article:
"Meanwhile, Bezos’ argument in favor of used books is about as weak as they get. Sure, book buyers might be more inclined to return and buy books, but if they buy the used version of Author X’s book the first time and return to buy another writer’s work the next time, Author X is still out royalty money."
The idea is that there are MILLIONS of customers out there! Maybe Author X misses out with this one customer– but there are a bunch of other people buying new copies of his/her book that wouldn’t have otherwise. Mr. Regan ADMITS in the excerpt above that people are returning to buy more books– the flaw is his focus on a single customer’s behavior– rather than looking at the net effect of all customers together. I, for one, believe that the goal is *not* to just re-slice the total book-sale pie between used & new, but rather to make a bigger pie! That way everyone wins. Books are accessible to a broader range of customers at various price points, and in turn, people purchase more books– new & used. Quibbling over royalties in the short term misses the big, long-term opportunity.
Please, Mr. Regan, think this one through.