Amazon Accused Of Killing Competitors, Then Raising Prices

Amazon (NASDAQ:AMZN) is being accused of a classic monopolist practice by some small-press publishers and authors, according to The New York Times: Now that its biggest competitors are gone or struggling, the online book giant is raising prices, the writers and publishers say.

The Times quotes an author concerned about how his first book's sales have slowed two years after it was published, and instead of further discounting the book Amazon is reducing the discount. "At this point, people need an inducement," said first-time author Jim Hollock. "But instead of lowering the price, Amazon is raising it."

Publishers are also grumbling about the prospect that scholarly and small-press books might be "priced beyond an audience's reach," as the newspaper puts it, although no one in the business is offering anything but anecdotal evidence that Amazon is playing monopolist.

Anything that puts pressure on Amazon is likely to sound like good news to all retailers who aren't Amazon, and the monopolist accusations certainly fall into that category. But in practice, much of this is nonsense—and retailers who have competed against Amazon for years know it.

Remember back when Amazon offered a discount on every book, even if Amazon had to buy it from the publisher at full price? Small publishers loved that, but it was never going to last, and it didn't. Neither do the big discounts that Amazon, Barnes & Noble (NYSE:BKS) and other booksellers slap on bestsellers when they're first published. Once the books' buzz cools and sales begin to slow, Amazon cuts the discounts—there's no point in promotional pricing at that point except for a closeout.

And the small publishers' complaint that Amazon may be pricing their books beyond an audience's reach? That would sound especially cynical if it weren't easy to dismiss as naivete. After all, as The Times notes, books are one of the few items Amazon sells where the price is printed right on the merchandise. But that means it's the publisher who chooses the price that's beyond the audience's reach.

For more:

- See this New York Times story

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