Selling Your Soul to the Company Store: Amazon’s Mistreatment of Its Employees, Partners, Developers, Publishers, and Content Creators

Tens of thousands of current and former employees of a prominent Fortune 500 company know the deal they made with the devil—a smiling faced devil named Amazon.com. And you may already know the lyrics to the “Devil Went Down To Georgia” by the Charlie Daniels Band, but just in case you don't here's a verse for you:

Well the Devil went down to Georgia; he was lookin' for a soul to steal.

He was in a bind 'cause he was way behind; and he was willin' to make a deal.

Although the song has a happy ending with Johnny besting the devil, the devil in Seattle continues to steal souls. As for my part in the devil’s rise, I regret being one of the movers and shakers who helped put the company on the map when I featured Amazon.com in my bestselling books and high-profile articles read by millions throughout the 1990s. I regret it because Amazon has become a heartless, soulless beast whose primary mission is not to create but rather to disrupt and destroy. The Amazon executive team states such things openly, that what they disrupt and destroy are marketplaces and outdated models, but what they’re really disrupting and destroying are livelihoods, careers, lives, and families.

There’s a reason Amazon offices and distribution centers are referred to as Meat Grinder by those who work there. It is a meat grinder, and at times it is akin to a sweatshop too. Many of Amazon’s own employees have come forward over the years to decry poor working conditions, substandard wages, and mistreatment at the hands of greedy company executives.

News outlets, including BBC Channel 4, have been telling the story of overworked, underpaid, and exploited Amazon workers and their extreme anger over timed toilet breaks, punishments for talking in the workplace, zero-hour contracts and more. Business Insider and others have reported on the miserable working conditions inside Amazon. Labor strikes in Germany have exposed Amazon’s dependence on exploitive labor practices. A BBC investigation into a UK-based Amazon warehouse found conditions that could cause mental and physical illness.

Meanwhile, Amazon management is greedily snapping up stock-based compensation, enriching themselves and lining their pockets with extreme wealth they are unwilling to share with the rest of their own workforce. As Amazon’s valuation remains lofty, however, public good will toward the company and its management team may wear thin. The company remains vastly overvalued given actual return on investments over its life as a publicly traded company. Whether this overvaluation is 300%, 500%, or 1500% is up to the stock markets to decide today, tomorrow or some day in the future.

What is up to the public decide is whether the human cost—the toll in livelihoods, careers, lives, and families—is much too much and whether any consumer with any sense of a moral conscience wants to continue to make purchases from such a company.

Employees aren’t the only ones being mistreated by Amazon. Amazon also mistreats those who do business with the company, including its partners, developers, publishers, and content creators. If you think this is where I’m going to dive into the recent Amazon – Hachette debacle as an example of Amazon’s mistreatment of its business partners, including publishers and authors, you’d be right and wrong.

Amazon does use its marketplaces as blunt instruments to achieve its goals, no matter the impact on livelihoods, careers, lives, and families. Amazon does use its proximate monopoly position to force partners, developers, publishers, and content creators to accept less than palatable terms. Amazon does want the buying public to believe that it has the right to set prices and that such price fixing is actually good for consumers.

What Amazon doesn’t want anyone to know is that the consumer public has already spoken, that the $9.99 price point for fiction ebooks is functionally irrelevant. Many fiction ebooks are, in fact, already priced well below $9.99. Why? Publishers have been lowering prices to stay competitive in a hyper-competitive industry. This trend of lower prices has been ongoing for years and it’s why you often can pick up last year’s bestseller for not $9.99, $8.99 or even $7.99 but often $6.99, $5.99 or even $2.99.

While we’re talking about how irrelevant $9.99 as a price point is for fiction ebooks, let’s look at list price and sale price. To Amazon.com, list price is the price set for a product by a business partner, such as a publisher. Sale price is the price a product actually sells for and that price is set by Amazon itself.

Consumers buy products based on sale price, not list price. Sale price is often a discount to list price. When you buy an ebook at Amazon you may not pay list price. That’s because many products are sold at a discount from list price. For example, instead of paying the list price of $12.99 for an ebook, you pay $8.88. Amazon, however, wants the publisher to list the ebook at $9.99 so they can sell you the ebook for $9.99, or even $8.88 in a pinch.

Why? Amazon has to pay traditional publishers 45% of the list price. When an ebook has a list price of $12.99 and sells for $8.88, Amazon has to pay the publisher $5.85 and keeps only $3.03. When that same ebook has a list price of $9.99 and sells for $8.88, Amazon has to pay the publisher $4.50 and keeps $4.38—a profit for Amazon that is 145% of what it was previously.

It’s worth noting also that Amazon typically only discounts $9.99 ebooks when a competitor’s site lists that ebook for less. Thus, the ebook with a list price of $9.99 is more likely to sell for $9.99. If so, Amazon keeps $5.49 and pays the publisher $4.50—a profit for Amazon that is 182% of what it was previously.

So is the consumer really saving anything? No. For the consumer, there’s no difference. For Amazon, there’s a major profit incentive.

Additionally, with the continued introduction and adoption of subscription services that let consumers read as many books as they want for $9.99, $8.99 or $7.99 a month, the list price of books will have decreasing relevance as well. With a subscription service, the list price and sale price of a product are irrelevant. The consumer pays a flat fee every month. Publishers and Amazon split this flat fee, with Amazon typically getting 55% and publishers sharing the remaining 45%.

Like a fight with your spouse that begins with a disagreement over whose turn it is to take the family dog for a walk, the fight for $9.99 isn’t really about the price and helping consumers at all. It’s about profits and who keeps what share of them.

Don’t ever forget that it’s Amazon that controls the sale price. Anytime Amazon wants to sell a $12.99 ebook for $9.99 or even $8.88, it can do so and does do so. The company would just prefer to keep more money for itself while leaving less for those who create a product in the first place.

Okay, so that’s a lot about a fight between two corporate heavy weights that you may or may not care about. Odds are anyway, if you’re a content provider, developer or publisher, you’ve made up your mind about this particular debacle one way or the other.

While public fisticuffs like this make headlines, you likely won’t be reading anytime soon about the tactics Amazon uses on those who don’t have public relations teams, corporate lawyers, and celebrated media connections. I’m talking about the little guys. Small developers, small publishers, individual content creators. Small businesses and people that Amazon crushes every single day simply because it wants more complete control over the content creation industry and those who work in it.

You won’t hear from these little guys because they are the voiceless, and just as often these days, the ones who have had their voices, livelihoods, and lives taken away by Amazon. Speak up for your rights, say something Amazon doesn’t want to hear, and you risk becoming one of the voiceless too.

Speak out and you’ll be told you don’t have to work with or for Amazon. You’ll be told to go somewhere else. You’ll be told many other things that anyone who ever cried out for what’s right and just has been told.

In the old days of corporate robber barons, a company like Amazon would have just sent crooked cops or hired goons with billy clubs to break legs and bash in skulls, promptly putting an end to any public outcry. These days, Amazon seems to do the virtual equivalent with as little care. 

Do you really think anyone who works in a sweatshop wants to work in a sweatshop? Do you really think teachers or machinists or engineers or anyone else want to work for substandard wages? Do you really think any Amazon employee wants to have a stopwatch tracking how long it takes them to pee?

Is it appropriate for a single company to have proximate monopoly control over the livelihoods, careers, and lives of millions? When will the US, UK, German and other governments step in and do what’s right and what’s needed. What’s needed not only for the employees of Amazon, but for content creators and everyone else who has no choice and no voice.

Amazon supporters don’t confuse your passion for ebooks, your love of the new opportunities of the digital age, or even your fondness for kindle, with a sense of loyalty to Amazon. Amazon didn’t invent ebooks, eink or even ereaders. Amazon doesn’t empower this social, connected age. We, the people, empower this social, connected age. We, the people, have earned the right to our voices. And we, the people, have earned the right to decry injustice and mistreatment.

As for me, you can consider me an Amazon expat if you want. I was for twenty years one of Amazon’s strongest supporters. But my support, your support, the support of your friends, family, neighbors, coworkers, and associates means nothing to a company that operates the way Amazon operates. Amazon controls public opinion with public relations teams, corporate lawyers, and media connections. What Amazon can’t control it buys, as was the case with the purchase of the Washington Post and as is the case with Amazon’s many political contributions to curry favor with governments around the world.

Thanks for reading,

Robert Stanek

Bestseller Lists Can Lie (Or Alternatively Finding Your Happy Place While Perusing the Bestseller Lists)

I'm Robert Stanek and I founded Go Indie and Read Indies to help and support independent authors. Today, I want to break down a mistruth in this industry: the one that says bestseller lists show the actual bestsellers in the industry. The simple truth is that bestseller lists don't necessarily show the books that actually are bestselling in any category or any genre at any particular time. More accurately, bestseller lists are reflective of the bestselling books at any particular time in any particular category or genre.
  

Bestseller lists, like those in the New York Times, can lie. Every year books appear on the New York Times lists that have relatively few sales, especially when you get into the extended portions of particular lists. Every year books appear on the New York Times lists that have fewer sales relative to other titles in a particular genre that aren’t on the list. Every year books appear higher on the New York Times lists that actually have fewer sales than titles ranked lower on the list. And none of this is specific to the New York Times lists, rather this is specific to all lists of this nature.

Bestseller lists capture a portion of sales in particular markets and locations. Some bestseller lists incorporate numbers reported to them by publishers as well, which is sort of like inviting the fox into the hen house.

Publishers can become craftsman at working the bestseller lists to ensure important titles land on them. Ways some publishers do this: one-day laydowns, strict street dates and distribution focused on locations tracked by the lists. So if you’re Publisher XYZ and you have a book that you want on a particular New York Times list, you ensure the boxes of books arrive at specific stores on a specific date, can’t go on sale until a specific “street” date and you ensure those stores tracked by the list are your priority focus—you may even ship at different times to markets not tracked by the list to ensure buyers have to go to locations tracked by the list to make purchases.

Publishers organize marketing, drive pre-orders, give tracked stores incentives—whatever it takes—to ensure buyers go out and buy the book on a specific date or dates and especially at tracked stores—and those targeted sales at the right locations put the book on that important list. For some of the most important lists, depending on time of year and category, that tactic can be used to put a book on that all important list with only a few thousand actual sales in a particular week. For other lists, depending on the time of year and category, that tactic can be used to put a book on a list with less than several thousand actual sales in a particular week. Go into the extended lists and that tactic can be used to put a book on an extended list with even fewer sales. Yet when publishers proclaim a book a New York Times bestseller, they rarely state the list the book was on and I don't think I've ever seen one make the distinction between a primary list and an extended list.

Being on a bestseller list is, of course,  very cool for authors and publishers alike. I just would prefer specificity and you may as well. When possible and practical, a USA Today Bestseller should be listed as such and by category, as should a Publisher's Weekly or other print media bestseller. Likewise for online bestsellers, which should list the website and category. Preferably the category will be a top level or competitive second-level category, as this will have more relevance than lower level categories.

With my books, when possible and practical, I always try to state exactly where my book was a bestseller and in what category and in the relative position within a category. I believe that's the only honest approach. As examples:

'The Pieces of the Puzzle' was #1 Fiction for 4 weeks, Top 10 Mystery for 11 weeks and Top 20 Mystery for 16 weeks at Audible.com. 

'The Kingdoms and the Elves of the Reaches' was #1 in Fiction at Audible and soon #1 on the entire site and not long after one of the Top 100 grossing titles in Audible’s history.

When you are specific, whether on a media list or online list, you let readers determine relevance for themselves. As online categories at specific sites are straight forward and based on actual sales numbers, rather than being weighted or based in part on a publisher's reported numbers, I believe online lists when specified precisely can be more honest than media bestseller lists.

The New York Times in particular has many bestseller lists. These lists change over time and currently, at the time of this writing, are as follows:

Combined Print & E-book Fiction (Top 15, extended to Top 35)

Combined Print & E-book Nonfiction (Top 15, extended to Top 35)

Hardcover Fiction (Top 15, extended to Top 35)

Hardcover Nonfiction (Top 15, extended to Top 35)

Paperback Trade Fiction  (Top 20, extended to Top 35)

Paperback Mass-Market Fiction (Top 20, extended to Top 35)

Paperback Nonfiction (Top 20, extended to Top 35)

E-book Fiction  (Top 25, extended to Top 35)

E-book Nonfiction  (Top 25, extended to Top 35)

Hardcover Advice & Misc.  (Top 10, extended to Top 15)

Paperback Advice & Misc.  (Top 10, extended to Top 15)

Children’s Picture Books   (Top 10, extended to Top 25)

Children’s Middle Grade    (Top 10, extended to Top 15)

Young Adult    (Top 10, not-printed extended)

Children’s Series   (Top 10, not-printed extended)

Hardcover Graphic Books   (Top 10, not-printed extended)

Paperback Graphic Books   (Top 10, not-printed extended)

Manga  (Top 10, not-printed extended)

Combined Hardcover & Paperback Fiction (Top 35, not-printed extended)

Combined Hardcover & Paperback Nonfiction (Top 35, not-printed extended)

Each list has a primary and an extended portion. Some of these lists are harder to get on and more competitive than others. Generally, the number of titles on each list is reflective of how competitive the list is. Generally, unit sales, or the number of books sold, is what lists look at vs. the cost of a book and its total earnings. However, the lists depend on tracked store reporting, on publisher reporting and relative weighting. These things virtually guarantee certain types of books will never appear on certain media bestseller lists--at least until the rules are changed to be more reflective of the entire marketplace (and I won't hold my breath waiting for that to happen anytime soon).

If you're an indie author, while you likely won't get on such a list with printed books, you may get on such a list with ebooks. Inclusion of ebooks is something that's happened only in the last few years. Ebooks were included when the list creators started realizing that many e-only books had unit sales above those of what they were calling bestsellers at a particular time. For the authors whose books peaked before such reporting, they simply missed the opportunity to have those books appear on the media lists--and there were many authors who lost such opportunities. 

View any of these lists online and you’ll be able to read a full explanation of their methodology for creating each list. When you read the fine print, you find that the lists are weighted like I've mentioned: “The universe of print book dealers is well established, and sales of print titles are statistically weighted to represent all outlets nationwide.” 

In other words, the lists for printed books are representative of sales at tracked stores and then multiplied by and/or padded with a modifier value to represent sales across the US. (And there's other fine print as well, such as with regard to publisher reported numbers, etc, etc.)

Reading this you may wonder if a list like this is sort of like Nielsen ratings for books. With Nielsen ratings, the television viewing habits of a relatively small cross-section of households are statistically extrapolated to be representative of millions of viewers across the US. Nielsen ratings are carefully controlled. The bestseller lists are not. With the bestseller lists, publishers know what stores and markets are tracked and what stores and markets aren’t tracked. Using statistical weighting, a few thousand sales at tracked stores can be interpreted as many, many thousands of sales across the US.

It's important to point out that if a list includes publisher reported numbers, as many lists did and some continue to do, the honor system was/is relied upon. The publisher reported numbers were/are simply relied upon as fact--something that some publishers took advantage of by shipping out huge numbers of books at steep discounts and than calling the books "sold."

As with print books, ebook-related lists are representative of the industry while not necessarily all inclusive.  At the time of this writing, the New York Times states they don't weight ebook sales yet--but may in the future--while also stating they track only certain ebook markets. It could be list creators simply want to find ways of being relevant when everyone else is looking to the primary online marketplaces themselves to determine what book is a bestseller at any given time. It's also important to point out that e-audio isn't included in such numbers, nor are ebook sales from websites not considered primary markets.

Finally, keep in mind, it’s not just traditional publishers who work bestseller lists. Over the past year or so, I’ve seen indies working online lists and I don’t like the trend.

Additionally, as cool as it can be for an author to see their free giveaway soar up the Amazon free list and maybe get to #1 Free in a category or even #1 Free on the entire site, a book given away isn't a bestseller. During my giveaways at Amazon every one of the books I had in KDP Select landed at #1 in a top-level category at some point in time. I gave away over 250,000 books and I don't count any of it as anything. Why? I gave the books away for free. Readers weren't purchasing them. Reaching #1 Free multiple times was fun but ultimately meaningless (and I do of course, as always, reserve the right to change my opinion about this).

If you're an author and you disagree with my thoughts on free, and that's your choice to do so, I hope you'll always qualify in any reference that your book was being given away at the time. You can use the same qualifiers I discussed earlier with regard to website, category and position within category. For example:

A #1 Free Mystery at Amazon

Further, true bestsellers stay on print bestseller lists not for a single week but for multiple weeks. True bestsellers stay on online bestseller lists not for a few hours on a particular day or for a particular day but for many days. Here's an example:

'The Kingdoms and the Elves of the Reaches was #1 on Audible for FOURTEEN consecutive weeks and then a Kids & YA Top 10 bestseller for the next THREE YEARS.

Now that's bestselling power and it was reflected in the massive sales and millions in retail earnings for my books at Audible.

Thanks for reading,

Robert Stanek

World's Greatest Rejection Letters, a Few Catch 22’s of the Trade and One Glorious Ride

I’ve been writing stories for 35 years—ever since I started writing for the school newspaper as a kid. In honor of my 150^th book, due out this year from my publishers, I’m taking a look back at where I began. I never stopped writing once I started all those years ago, I got really serious about the craft in Summer 1983 but it wasn’t until 1986 that I finished something I no longer considered a draft or an unfinished work—that being my first full-length novel. A done-novel and not a draft-novel. At the time, I was in the military and stationed in Japan. When I left Japan at the beginning of 1989, I had four finished novels and was on my way to Survival Training, followed by Air Combat School, and finally to a posting in Germany as a combat flyer.

Somewhere in there I met and married my wife of 22 years. Germany though was a tough posting for newlyweds as I was deployed somewhere or on temporary duty elsewhere most of the time, including two tours of combat in Iraq. I did manage to write from time to time, finishing a 5^th novel by the time I left Germany in the fall of 1991 for a new posting in Hawaii. It was in Hawaii that I decided to get serious about my job/career path. I enrolled in college as a full-time nights/weekend student and also started educating myself about how to get my work published.

1993-1995 were my years though, and years of many firsts. I sent out my first queries for publication. I learned about the rejection letter—that dreamkiller, that insensible article, that form letter often given out without a care (or even a manuscript ever having been read).

I learned all about how multiple submissions were frowned on because you should preferably send a manuscript only to one publisher at a time so you could wait 3 to 6 months for your form letter rejection instructing you your manuscript wasn’t read/wasn’t what they wanted or that you needed an agent to even make it out of the slush pile—the slush pile being the giant mail bins where manuscripts are/were dumped until someone took a manuscript out of its envelope and put it (typically) unread into the obligatory SASE (self-address stamped envelope you provided) for return.

I learned all about the Catch 22 of have agent / get published. You needed an agent to get through the slush piles (or so I was told quite a few times) only to be told by agents that I needed to be published to be considered by the agency so that I could get published. Neither publishers nor agents ever seemed to get the irony of that.

I learned all about fee-charging and non-fee-charging agents too. Some agents charged a fee simply to agree to read your work so they could—drum roll please—send you a rejection letter. They never seemed to get the incongruity of such a thing either.

I also made it through the slush piles at multiple publishers flying solo (er, having given up on agents… though not completely… ;-). Del Rey wanted to see my full manuscripts and the full series synopsis (this was for Ruin Mist Chronicles), so did Tor. Both the Del Rey and Tor requests came from executive editors. The one I was most hopeful about was from Betsy Mitchell, who would go on to become Editor-in-Chief at Del Rey.

It was a breathless sort of wait during the weeks that followed, only to end with dashed hopes. Betsy Mitchell’s letter was nicely written saying "The fantasy world you have created is truly wonderful and rich. Your characters seem real and full of life. It's a creative, provoking, and above all, thoughtful story! ... Unfortunately, your book is not the right fit for Del Rey."

The rejection letter from the executive editor at Tor was equally as fun: "The writing style is strong... the ideas are interesting and the writing good! ... The story isn't right for our line of books. We feel it's too hard to launch a new series by a new author at this time."

I didn’t buy into the idea that it was too hard to launch a new series by a new author. There were new books by new authors being published all the time. Undaunted, I made the rounds again, sending out samples and queries. A few months later when both Ace and Bantam asked to see my full manuscripts and series (Ruin Mist Chronicles) I completely forgot about the boatload of form rejection letters from all the other publishers I’d sent my queries too... ;-).

While I waited for responses, I also started looking at new areas to write in and how I could tie that into the career path I had chosen: Computer Science. I completed my Bachelor’s of Science in Computer Science degree program in 1994, and was working to complete my Master of Science degree program. In my job in the military I was working deep in mainframes, Unix computing and this thing called the World Wide Web. The Web was new at the time and relatively few outside the military and academia had ever used it.

Cramming 6 years of school into 4 years while working full-time hadn’t left much time for breathing let alone writing, so by this time I was rather exhausted of the whole affair. I could’ve easily thrown in the towel. It’d been a long journey. It’d been an eventful journey.

On a whim, I drafted an outline for a book about publishing on the World Wide Web. I found the name of an editor at a publisher called Macmillan and sent the outline along with a query. I’m not sure why I picked that one editor at that one publisher, but I did. I expected it would be months before I got a response. I focused on completing my courses so I could graduate from my Master’s program.

Unexpectedly, I got a response from the editor almost immediately. A phone call, received by my wife, that I was to return. This was right before Thanksgiving (November 1994). I’d come home from a swing shift so it was about 2 AM when I got the news. I don’t recall sleeping that night, if I did I don’t remember. What I do remember is the phone call the next day—the call that changed my life.

Within days of that call I had a contract in my hand and a week later I was writing a “little” book called Electronic Publishing Unleashed. Originally, I was supposed to just be a contributor to the book but the publisher liked my work so much I ended up as the lead writer, writing ~800 pages of the 1050 pages.

The book was written and published to a break-neck schedule. I started in December finished by May and the book was published in September. Before I had even finished, the publisher signed me to a second book, Web Publishing Unleashed—a 950-page monster. I wrote right through graduation and into the fall, finishing ~750 pages by late October. That book was published in March 1996. Both books were huge bestsellers.

Web and Internet technologies moved, so fast that by the end of 1997 I had 10 published books to my credit. I never had time to breathe in those years, but I know one thing for certain. I know none of it ever would have happened if I’d given up. If I’d thrown in the towel back in 1994, I’d’ve missed out on the ride of a lifetime (and all the great rides that followed too).

Hanging in there for a decade is not something everyone can do. For many it’s simply not practical, but you have to believe in yourself, even if no one else does. Not everyone will make it. But if you love the craft, even if you never make a living at writing, it should be time well spent.

So, if you're a writer, enjoy the writer's ride. Triumph in the small joys. Words written. Pages finished. Characters and worlds created. A reader reached. A world changed, if only in the smallest of ways.