David versus Goliath: Children’s book publisher pulls its titles from Amazon and what it means for you

AmazonLogo-mainBooks have long been a relatively conservative medium; since Gutenberg published his first Bible, the mass produced printed word has relied on relatively small frills — sure, technologies such as pop-up and scratch and sniff have come and gone, but for the most part, the concept hasn’t changed much in half a millennia: concentrate, use your imagination, be rewarded. From a technological standpoint, the ebook isn’t even much different — it may pave the way for a more innovative and interactive reading experience — but the formula that makes a book a book is not likely to change anytime soon. Which is why the current and increasingly public battle over the book is so fascinating: Tech giants such as Amazon and Apple pitted against each other and the federal government, venerable publishing houses — long thought to be the Kings of the realm — fending for themselves in an uncertain world.

The latest chapter is that of The Educational Development Corporation, publisher of children’s books such as the award winning “Fox,” and “Anna Hibiscus,” removing its entire catalogue — 1,800 titles — from Amazon’s virtual shelves.

Last February IPG, America’s second largest independent book distributor, had its own 5,000 ebook titles pulled from Amazon after it failed to negotiate new terms more favorable to the online retail giant — those books have not yet returned to Amazon. EDC’s move is expected to cost the company an estimated $1.5 million in annual sales.

“Amazon is squeezing everyone out of business,” Randall White, EDC’s chief executive, told The New York Times. “I don’t like that. They’re a predator. We’re better off without them.”

EDC has 77 employees and a market capitalization of $18 million. Amazon employs over 56,000 workers at the time of this writing, with a market cap of roughly $86 billion — nearly 5,000 times larger than the small publisher. Although EDC does not currently sell ebooks, it has seen its physical inventory bought in bulk from distributors by Amazon and then heavily discounted — a common tactic for the online retailer of the type that may have caused major book publishers and Apple to band together in developing a new pricing system for ebooks last year — a deal that has resulted in a high-profile lawsuit brought by the US Justice Department.

Fox EDCLow prices above all else

It is clear simply from the vast disparity in size that EDC pulling its titles will have little impact on Amazon’s bottom-line; but the gesture is also symbolic of a retailing Goliath that has become more ruthless in its singular mission to drive down prices, many times at the expense of smaller retailers. Last December, Amazon offered a holiday promotion in which consumers could use the retailer’s mobile app to scan an item at a brick and mortar store, and then receive a $5 dollar discount to purchase that item through Amazon, a controversial tactic that incensed many store owners.

Amazon argues that book publishers in particular must adapt to a changing marketplace or face extinction; indeed, many major publishers have seen Amazon as both a blessing and curse — a vast new method of distribution and a honeypot in ebooks, at the risk of doing business with a notoriously cut-throat company that could demand cheaper prices or change the terms of sale at any time, due to its relative monopoly.

And consumers have benefited from Amazon as well — the very basis of the Justice Department’s lawsuit against Apple is that if the Cupertino company hadn’t brokered an agreement with major publishers and effectively “fixed” prices of some titles, consumers could have probably been able to purchase those books more cheaply through Amazon. It doesn’t exactly help Amazon’s credibility in the matter, however, that the law firm that originated the complaint against Apple actually happens to share a Seattle address with Amazon.

But the most alarming aspect of Amazon’s current aggressive pricing is that it just doesn’t seem sustainable. As The New York Times puts it, “Amazon has $48 billion in revenue but hardly any profit.” Take a look at current revenue metrics, and you’ll see that the company’s profit margin is around 1.3 percent, low even for retail. Amazon sells its flagship tablet, the Kindle Fire, at a loss of about $3 per unit.

The tactic is a well-worn one: Undercut your competition as long as you can or until they are out of business, and then drive prices up. The problem, of course, is that by the time consumers become keen to Amazon’s methods, there may be no competition left.

Image Credit: Whatswerves

Smart Home

The C By GE Smart LED Bulbs Work Seamlessly With Google Home

The Smart Light Starter Kit contains a smart lightbulb and a Google Home Mini. For those seeking to try out smart lights in their home, it's a great option and is currently on sale for just $35 through Google.
Deals

Breathe easy, stay warm with Amazon’s one-day deal on a Dyson air purifier fan

Dyson is a leader in bringing consumers the latest in heating, cooling, and air purification. Its Pure Hot + Cool Link HP02 does all three — and for today only, it’s on sale on Amazon for $359. That’s $241 off the suggested retail…
Deals

The best 4K TV deals under $500 and over 50 inches

Big-screen TVs with high-resolution displays and 4K color have dropped so far in price that you can find highly rated 50 to 55-inch models under $500. We searched major retailers for the best deals on 4K UHD TVs.
Deals

Today’s best Amazon deals: Sony, Netgear, and Samsung

Black Friday and Cyber Monday may be over, but for retail giants like Amazon, the savings are only getting started. We've scoured the depths of Amazon to find you the very best deals going on right now.
Cars

Volkswagen may be planning a tougher challenge for its all-electric I.D. R

The Volkswagen I.D. R electric race car may head to the Nürburgring in 2019 for a lap-record attempt, according to a new report. Volkswagen will reportedly aim to set the quickest lap time ever by an electric car.
Smart Home

Instant Pots! Get your Instant Pot! 5 models are on sale now at Amazon

Consumers win big when Amazon pops deals on popular products like Instant Pots. Five Instant Pot models on sale range from $30 to $60 off. If you've been waiting to buy an Instant Pot for a holiday gift, this could be the time.
Emerging Tech

Awesome Tech You Can’t Buy Yet: Folding canoes and ultra-fast water filters

Check out our roundup of the best new crowdfunding projects and product announcements that hit the web this week. You may not be able to buy this stuff yet, but it sure is fun to gawk!
Smart Home

The best washing machines make laundry day a little less of a chore

It takes a special kind of person to love doing laundry, but the right machine can help make this chore a little easier. Check out our picks for the best washing machines on the market right now.
Deals

Best deals on home security cameras to save you from package thieves

Home security camera systems can help keep your home and your family safe. Amazon's deals on Blink security cameras and Ring Video Doorbells also help you save money on devices you can access regardless of your current location.
Smart Home

Google Store sale is on now through December 24!

Black Friday and Cyber Monday 2018 may be history, but fans of Google hardware including the popular Google Home Hub, Pixel 3 and 3XL mobile phones still have lots of deals in store -- the Google Store, that is.
Smart Home

Put away that sponge and let us help you pick the best dishwasher for your buck

Tired of doing dishes by hand? Take a look at our picks of the four best dishwashers currently available and let a machine do the dirty work for you. They’ll do a much better job, anyway.
Smart Home

Porch pirate problems? Keep them away with these tips and tricks

The holiday season is fast approaching and the packages are arriving on our doorsteps. Are you worried about porch pirates stealing your gifts this holiday season? Here are some tips to help protect your purchases.
Deals

Walmart is offering Google Home starter kits for under $50

If you're hoping to save big on Google Home devices before all the holiday deals come to an end, there's no better time than right now. Walmart is slashing prices on smart home starter kits for a limited time.
Cars

This freewheeling Army truck-turned-tiny home is a labor of love

Most tiny homes are models of efficiency but one British metal worker has redefined the idea, converting an old Army truck into a mobile tiny home that comes with a bed, a sofa, a shower, and a beer garden.