NPL Publishing Consultants

One more from my file of ‘things that have been around a while’.

When PW interviewed Peter Olson, retired chairman of Random House and headed to Harvard to teach at HBS, Mr. Olson stated that “publishers would find it difficult to compete with Amazon at the retail level…” referring to what he sees as Amazon’s undue influence on the future of publishing. He further stuck his neck out by suggesting “Publishers might be able to draw some customers (meaning retail customers) by selling special titles…” .

While this fine gentleman spends his golden years at Harvard… may I suggest one of his classes does a famous Harvard case study on what he said. Have you figured out the oddity of his comments?

He has forfeited the entire consumer market to Amazon, because, as far as his experience took him, publishers don’t market directly to consumers. They market to bookstores and chains and distributors, but not to end user consumers. It is, of course, one model for doing business in the industry, but, please, Mr. Olson, some of us actually DO compete with Amazon. We do have the kahones to sell books directly to people who buy them. I know it may seem like quite an amazing concept, but it works.

And here are two dirty little secrets that makes it work.

One-because we can. We can run a ’sale’ on a title or hundreds of titles and compete the heck out of Amazon. Amazon has a limit under which it can’t profitably sell books. As a publisher, my bottom line is far lower than theirs. I can sell books all day long on my website for 50% off retail and make plenty of money… Amazon can’t.

Two-while Amazon has some amazing powers, markets like an 800 pound gorilla, and has ‘the long tail’ of over 90% of the books in print available, it is the 800 pound gorilla part that makes them vulnerable. They still, like Ingram in wholesale, make you come to them. Smart marketers actually go out and SOLICIT customers. You are allowed to go to the customer, you know. And since you can choose which titles to promote, you can go and sell to the strong potential markets for books that have them, and make plenty of sales, tens to hundreds of thousands of sales.

As I said, just have one of your HBS classes do a case study… they’ll help you figure this one out.

Wow… that was tough.