A Letter From ABA's CEO
As I am sure you have noted, the usual summertime lull in book industry news seems to have totally evaporated this year. We’ve seen a bad decision in federal court on e-book pricing; the world’s best-known author revealed as having adopted a pseudonym; President Obama using an Amazon distribution facility as an ill-advised backdrop for a speech on job creation; and, just this past Monday, the story breaking about Amazon founder Jeff Bezos’ purchase of the Washington Post for $250 million.
Amidst this blizzard of coverage, I thought it might be helpful to provide a bit of perspective, not just for this week but for the weeks and months ahead.
As the ABA Board and I wrote last week in a letter to the president, attempting to cast Amazon as a champion of local economies and a net jobs creator ignores the facts. Amazon is anything but a jobs creator. Studies by the Institute for Local Self-Reliance and others have shown that Amazon’s practices are detrimental to the nation’s economy. Indeed, macro analysis shows that for 2012 alone — using Amazon’s own numbers about its increase in sales — Amazon cost the U.S. economy more than 42,000 jobs.
The ironies in the president’s trip were astonishing. To hear President Obama tout his administration’s efforts to reform the tax code while standing in a massive distribution center of a company that has fought long and hard to evade its responsibility to collect state sales taxes — which generate the needed revenue to fund such essential services as schools and first responders — was, to say the least, disheartening, let alone ironic. Especially since, as Stacy Mitchell, senior researcher with the Institute for Local Self-Reliance, has pointed out, Amazon received more than $10 million worth of tax breaks to open that Chattanooga facility, which is but one example of the massive corporate subsidies they have received in recent years.
It was encouraging to note that ABA’s criticism of the president’s speech was included in some of the news coverage of the event. But we should be honest with ourselves: Amazon has established a strong relationship with many consumers, coming in second in a top 10 ranking of national brands, according to BrandIndex. In addition, Amazon is rated number one by parents with children under the age of 18, young people aged 18-34, and consumers who identify themselves as members of the Democratic party. (Try to figure that one out!) And, notably, the Kindle occupied the ninth spot in the BrandIndex top 10.
You and your bookselling colleagues know the real narrative of the Amazon story, but it’s important that we keep in mind the viewpoint and experience of our customers. Amazon’s public message of low prices and wide selection are, regrettably, the only story that many consumers know.
Luckily, Amazon does not operate in a vacuum, and there is a growing record of their questionable business practices, thanks to, among others, the work of Stacy Mitchell, organizations such as AMIBA, and such news organizations as the Seattle Times, Fortune magazine, and the Financial Times, not to mention industry voices such as novelist and bookseller Ann Patchett and Melville House publisher Dennis Johnson.
But I believe that the most influential and trusted voice in helping to tell the true story to your customers is you. Armed with the facts — and those facts are extraordinarily persuasive — your outreach to your customers is critically important. With that in mind, I wanted this month to share some important resources of information and analysis.
All the materials linked to below make clear that Amazon’s narrative of growth, value, and productive contribution to communities is highly distorted. These resources suggest that the real story is a combination of complex strategic machinations, brass-knuckles capitalism, and a myopic disregard of the consequences for any stakeholders save itself. As the company concentrates its power and influence in a nexus of commerce, government, and media, Amazon’s actions should draw even more scrutiny. I believe it’s our job to help encourage and promote that increased scrutiny.
These, I know, are strong words, and might sound self-serving. But as John Adams wrote, “facts are stubborn things,” and the sources below will arm you with plenty of facts, which tell the real story.
I know that every store needs to determine for itself what it chooses to say about Amazon. What may work in one part of the country may not work in another, and your judgment and instinct about your community is, inevitably, the best.
As your trade association, while we think it’s appropriate to provide you with these resources, we also continue to believe that their ultimate utility is in framing the best story you have to tell — which is about the remarkable and invaluable contributions to your community that indie bookstores make every day.
Keep up the fight!
CEO, American Booksellers Association
Amazon's Business Practices
“Behind the Amazon.com smile”: a four-part series providing a glimpse inside the company (Seattle Times)
“The Amazon Effect” (The Nation)
“Amazon a Virtual No-show in Hometown Philanthropy” (Seattle Times)
Amazon and Job Creation
“Amazon.com and the President’s Blind Spot on Job Creation” (Jeff Milchen, Bloomberg Businessweek)
“The Truth About Amazon and Job Creation” (Stacy Mitchell, ILSR)
Amazon and the Book Industry
“As Competition Wanes, Amazon Cuts Back Discounts” (New York Times)
“Amazon Yanks 5,000 titles from Independent Publishers Group, a Chicago Book Distributor” (Chicago Tribune)
“Amazon.com Trying to Wring Deep Discounts from Publishers” (Seattle Times)
“Publishing’s Ecosystem on the Brink: The Backstory” (Authors Guild)
“The Antidote to Algorithms: A Real Bookstore” (Ann Patchett, Wall Street Journal, subscription required)
“Amazon Bullies Independent Publishers” (Dennis Johnson, Melville House)
“Hold the Applause for Amazon.com” (Jeff Milchen, AlterNet)
Tax Avoidance and Government Subsidies
“Amazon’s (Not So Secret) War on Taxes” (Fortune, subscription required)
“After 20 Years, Congress May Finally Pass Internet Sales Tax. Is it Too Late?” (Stacy Mitchell, ILSR)
“States Fight Back Against Amazon.com’s Tax Deals” (Seattle Times)
“Amazon’s Billion-Dollar Tax Shield” (Reuters)
“To Help Main Street, Close the Internet Sales Tax Loophole” (Jeff Milchen, Bloomberg Businessweek)
Amazon as an Employer — Working Conditions
“Amazon Warehouse Jobs Push Workers to Physical Limit” (Seattle Times)
“I Was a Warehouse Wage Slave” (Mother Jones)
“Inside Amazon’s Warehouse” (Allentown Morning Call)
“Amazon Faces Strike Threat in Germany Over Pay, Conditions” (Reuters)
Jeff Bezos/Amazon and the Washington Post
“Amazon CEO Jeff Bezos to Buy Washington Post” (Washington Post)
“How Jeff Bezos Will Change Washington” (Joshua Green, Bloomberg Businessweek)
“Bezos and the Washington Post: A Skeptical View” (John Cassidy, The New Yorker)
“What Amazon Lobbies for in D.C.” (Ezra Klein, Washington Post)
“Amazon: How a Single Company Gained a Stranglehold over Online Shopping and the Future of Retail” (ILSR)
“Ten Charts: Why Wall Street Loves Amazon and Hates Apple” (CNN Money)
Grateful acknowledgements to Stacy Mitchell, senior researcher with the Institute for Local Self-Reliance, and Jeff Milchen, co-director of the American Independent Business Alliance, in compililng these links. Further information from both organizations on Amazon is available here [http://www.ilsr.org/understanding-amazon-com-reading-list/] and here [http://www.amiba.net/resources/all-about-amazon].