Taking On Amazon

Friday, November 23, 2012

Transcript

Most big publishers fear running afoul of Amazon, but one very small publisher has proven to be fearless. Bob talks to Randall White, who pulled all of his company's books from Amazon's web site.

Quartetto d’Archi Dell’Orchestra Sinfonica di Milano Giuseppe Verdi - Paperback Writer

Guests:

Randall White

Hosted by:

Bob Garfield

Comments [5]

Matunos from Seattle

To summarize what I've written below, I think a suitable analogy would be a dairy that refuses to sell their product in grocery stores in order to protect the milk man business model. The milk man model is certainly going to involve higher prices for the customers.

That can certainly work... if you're selling some super-fantastic milk for which customers are willing to pay a premium. (Luckily for EDC, book contents are much less commodities than is milk.)

Nov. 28 2012 02:32 AM
Matunos from Seattle

Interesting story about Randall White's decision, but I think calling it "Taking on Amazon", and characterizing White's action as a "protest" of Amazon's business practices is not supported by the substance of the story.

The story didn't mention any business practices of Amazon that White objected to, other than underselling his associates. There's nothing wrong with an associate-based model per se, but I can certainly see how that would conflict with Amazon's business model, which is to drive down wholesale prices through sheer size, and offer steep discounts to customers via much more efficient inventory management than retail establishments could offer.

Or, you could pose the dilemma this way: think of Amazon as an extremely large associate that's willing to buy large quantities of your book up front, and thus wants to pay a lot less in wholesale for it, and then sell those books to a massive customer base at deep discounts from the MSRP. An army of human associates going to door to door selling these books is just not going to be able to compete with that on price. So, the dilemma becomes which partners do you side with? When both are competing with each other in the market, the end result is clear: customers will choose the guy who is selling the books at a lower price. You can either adapt to the market decision, or you can do what EDC has chosen to do, and end your relationship with the discounter in order to protect the other channel.

Randall White is taking a bet that through a combination of continued brick and mortar accounts and his independent associates, both of whom have to sell at around MSRP due to their cost structure, and thus are not able to compete with each other on price, he can as much or more money than if he sold the books at wholesale to Amazon. He may be right, or he may be wrong about that when it comes to selling EDC's relatively small catalog of childrens' books (about 150 titles, I think?); that's why he's the CEO. But that is hardly the David vs. Goliath story you've billed it to be. He has simply chosen a business model that does not integrate well with the model that Amazon offers.

Who really suffers from EDC's decision? Not Amazon, for whom I'm sure the profits from EDC's catalog was but a small drop in the ocean, but rather its his customers, who now have to pay more for his company's books than if they could order them through Amazon.

Nov. 28 2012 02:28 AM
mary from CNY

took some searching but I found it!

http://www.usbornebooksandmore.com/

Nov. 24 2012 03:50 PM
ropty

Try clicking on the link in the article.

Nov. 24 2012 03:04 PM
john Meyer from Boston, MA

I just heard the On the Media piece about a man who has sales people selling books all around the country, direct to friends, through parties, etc and he no longer sells through Amazon. Could anyone tell me his name and the name of his company. I am very interested in what he had to say and learning more about his company. Please respond asap. The show was around 2 pm on Nov 24th. Thanks in advance for your help.

Nov. 24 2012 02:32 PM

Leave a Comment

Email addresses are required but never displayed.