Julie asked me to elaborate on why I don't like Amazon's book business - I totally thought I had done a post on that, but it turns out I haven't!
Before I get started, please keep in mind that I work in publishing and my opinions are coming from the perspective that the book business is big and has a lot of room for many players. It's also a luxury business (in that books are not essential purchases), and every day we compete more and more with other forms of entertainment, and every year we hear that rates of reading for pleasure are plummeting. The recent closing of all Borders stores bodes ill for the industry as a whole, and Amazon's actions over the years I've been working with books concern me both as a professional and as a consumer. Basically, I'm all about saving money, but I also believe in voting with my dollars and supporting businesses that I think act ethically and responsibly, and I don't think that nice customer service and low prices are the only criteria for that. Obviously, I'd love to convince you to agree with me and do as I do, but I realize that these things don't bother anyone. All I ask is that you take a second to think about whether Amazon is doing this to an industry that you work in or really love - and if Amazon sells their products, I am betting that they DO.
One of Amazon's best practices is to use loss-leader pricing - deep-discounting products to develop a loyal following. This is great for customers but not so great for producers, since it can depress the perceived value of a product. This is a whole topic unto itself, which I'll maybe do a post on at a later date, but this is the crux of my problem with them as a professional.
My big problem with them really came about with the Kindle in 2007. Amazon introduced a proprietary format as opposed to using the standard epub file that the rest of the industry had adopted. This required customers to purchase e-book files from them and no one else, one way of creating customer loyalty. Then they began pricing e-books below their own cost - encouraging readers to purchase their $400 device in order to get books for cheaper than $10. Sort of a reverse of the old "Gillette marketing plan" - give the razor away and charge for blades for life. It seriously depressed the perceived value of e-books, which are not in fact "free" to create for publishers who are also publishing a print book. (I can expound on this in a separate post or series of posts, if anyone's interested - let me know in the comments.)
Since Amazon was poised to become a seriously dominant force in the e-reading industry, publishers were concerned that eventually they would back publishers into a corner on pricing - demanding lower wholesale prices that couldn't be sustained, thus driving publishers out of business. When the publishers fought back with the announcement of the iPad and Apple's "agency pricing" model, Amazon retaliated by turning off the "buy buttons" for a number of publishers at different points during the negotiations (it started in February and went throughout the summer, with various publishers excluded from Amazon at different points in time. I talked about it briefly at that time). This didn't just affect the e-books, since they also turned off the buy buttons for all print books - and really, they were punishing authors, which any decent bookseller would never do.
It seems that now, there's a tenuous peace with publishers and Amazon regarding pricing. "Agency publishers" use the agency pricing model, where they can set a fair price for the books and Amazon gets a cut - it's basically an "authorized dealer" set-up. Some smaller publishers allow Amazon to set prices and remit a percentage back to them. The agency agreement is up in April of 2012, so it's going to be in upheaval again soon.
There are lots of other behind the scenes publishing things, like sales and merchandising opportunities and e-book sales reporting, that rub me the wrong way about Amazon as well, but that would get pretty boring pretty quickly. So I'll move on to why, as a consumer, I don't trust Amazon either.
In 2009, I beta tested a Kindle DX for school, and was unimpressed with the quality of the device and Amazon's capabilities of looking at everything I purchased and read - they can tell how far you've read into any given book. When the class was over, I gave back the Kindle and purchased a Sony Reader for myself, which I still use every day.
In the summer of 2009, Amazon deleted 1984 off of users devices, including all annotations, notes, highlights, etc. (This happened in 2008 as well, with Ayn Rand titles, but wasn't widely publicized.) Aside from the unfortunate choice of title/subject, this act drove home the fact that the terms of service users agreed to meant that they actually are not purchasing the e-book files they bought in droves from Amazon - instead, they are essentially renting the files, which are removable by Amazon at any time and for any reason. I don't know about you, but if I want to borrow a book, I do it at the library or from a friend - I sure don't pay for the privilege. (Amazon is now starting a lending system within the Kindle network but I'm unimpressed; Barnes & Noble's Nook has had this in place for a long time and other e-reader devices work with public library systems using Overdrive or other rental services, since they all use the industry standard epub format.)
One could argue that in the Orwell and Rand cases above, Amazon had the right to delete the material because it shouldn't have been up there in the first place - in both cases, sellers who were not legitimate copyright holders had posted the material for sale. However, I believe Amazon should be policing that BEFOREHAND, rather than reaching in and deleting material (including the original content by the end user)? Both authors were well-known and their copyrights are established. But as it turns out, Amazon doesn't particularly care about the content that gets posted on their site for sale - as long as they get their cut. (More on that in a minute.)
Another case of Amazon's deletion of customer data without explanation is this guy who lost his entire Amazon account, including his wishlist, annotated Kindle books, sales history, etc. It is true that a company can close your account without warning, but a common and concerning thread that I'm seeing here is the annotations being deleted without warning and without restitution. Those annotations are original content; they don't belong to Amazon and Amazon has no right to remove them from your device. You don't actually have to go through any steps to copyright your writing - so Amazon is destroying copyrighted works without permission. Yikes.
Back to Amazon policing content: A self-published author uploaded a nonsense book to Amazon to see if she could figure out how their royalty scheme works, and discovered that even after supposedly being reviewed by an Amazon editor her nonsensical book was published and available for sale. To me, this indicates that Amazon is not remotely concerned with content and only cares about the almighty dollar -- which, okay fine, they're a business, but then why bother trying to assure readers that they review the files when they obviously don't?
Then there are the things about Amazon that are actually making public news, like their sales tax fights with California and Tennessee, wherein they argue that they should not have to pay sales tax because they sell on the internet, which is this giant thing that doesn't exist in the real world. Except why should such a huge, mega-profitable company be exempt from sales tax? How on earth is that fair? And their response to various states' attempts to collect that tax results with Amazon punishing the little guy, by ending their affiliate program in any state that dares try to make them comply with tax law. Those individuals aren't even the problem, but Amazon would rather disallow affiliate relationships than to pay the taxes they owe.
This week, reports leaked out about the terrible conditions at one of Amazon's warehouses. I know warehouse work is awful (I've done it myself) but with all the money they're pulling in, can't they treat their workers a little better?
Publishing insiders have been concerned about Amazon's status in the industry for some time - this 2010 post from An American Editor asks whether Amazon has too much power. I say definitely yes, both over the publishing industry and over their own consumers, and I don't think they're wielding it in a friendly manner. I'll say this - for the future of the publishing business, I am more scared of Amazon than I am of digital piracy.
So that's why I don't shop at Amazon. Any questions?