How to beat Amazon

By Greg Turnquist

Greg L. Turnquist worked on the Spring team for over thirteen years and is a senior staff technical content engineer at Cockroach Labs. He was the lead for Spring Data JPA and Spring Web Services. He wrote Packt's best-selling title, Learning Spring Boot 2.0 2nd Edition, and its 3rd Edition follow-up along many others.

April 3, 2018

Something everyone has noticed over the past couple years is how Amazon has pushed its way into retail space. And most notably, the publishing industry. Listening to a new podcast (the Sell More Books Show), it appears Barnes & Noble may be on their last legs. They are implementing cost cutting measures that reduce staffing. These type of cuts are the things companies do when they have no idea how to innovate and generate interest. It appears to be a similar thing that has led to Toys’R’Us planning to close ALL THE STORES. These are NOT the moves of someone ready to beat Amazon and actually make money.

So exactly what COULD B&N, or any other company trying to sell books do to rival Amazon? Surprise answer: it’s not hard. But it takes effort.

The secret sauce is in Amazon’s royalty rates. If you dig into their tables, you’ll find that anything between $2.99 and $9.99 earns you a 70% royalty. Above or below, you are knocked back to only 35%. Amazon does this for a reason – consumer training. They want customers to get used to paying only $2.99-$9.99 for an e-book.

So what is this advantage we have access to? Amazon’s 30% cut off the top. Someone like B&N could offer to pay authors 90% instead of 70%.

Imagine if the CEO of Barnes & Noble started doing something useful, like phoning the top 100 big time authors with this deal.

CEO: “Mr. Patterson, we’ve got a deal for you. If you come over here, we’re willing to give you 90% of the take on e-book sales as long as you talk it up through your channels.”

James Patterson: “90%? My own publisher has been talking for months with Amazon trying to get special dispensation to move off that 70% rate, and Amazon won’t budge. I’m in!”

CEO: “Thanks!”

Rinse. Repeat. The next 99 calls could turn the corner on the popularity of B&N.

Another effort would be to reach out over the most popular indie channels. Call up the head of the ACFW. Reach out to the Top 50 Romance indie authors of 2017. In fact, sic the whole board to find the Top 1000 indie authors and call each of them.

I say board members because the authenticity of B&N’s top management reaching out would really move the needle. You can say “Wow! Pretty expensive to have some board member calling individual authors, ehh?” Sure, but it would increase the number of people willing to take such a leap of faith.

And a leap of faith is what B&N may need. Otherwise, they’re dead. I give them 12-24 months. Are they going to do it? I doubt it. But some outfit is going to have to figure out this move. Otherwise Amazon will blast EVERYONE. Except maybe Walmart. Still watching to see how their partnership with Kobo unfolds.

NOTE: This idea isn’t wholly my own. Much of this was inspired by Jim Kukral on the Sell More Books Show.


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