retail news in context, analysis with attitude

Regarding the Amazon-Hachette battle, one MNB user wrote:

The Walmart pricing model is so much better than Amazon.   Category margin goals are set and all products marked up to the margin goal (pre-price comparison).  Let suppliers figure out what price point they want achieve.  If the Amazon margin on eBooks is 30% then whatever Hachette charges Amazon the retail price reflects Amazon’s margin goal.

I think this issue is about Amazon.  They want a lower price from Hachette and they want a guaranteed profit margin of 30%+++ AND for Hachette to cover some temporary promotion markdowns/sales.

Reminds me of the old Sears model.  I’m disappointed to see Amazon digress, going down this path.  It’s a waste of management attention.  They should be focused on logistics, pleasing the customers, and new technology.  The old buyer-pressure and dealing is so old school.


From MNB reader Lonn Whitmill:

I do not claim to understand the economics of the publishing business but it appears to me that Amazon is attempting to make more money selling books than the publisher does in publishing them.  The entire weight of risk falls on the publisher.  Why does Amazon feel that they deserve to make as much or more just to fill an order.  And secondly I assume, with some trepidation as when you assume we all know where that leads you, that Amazon is attempting to gain competitive advantage over other resellers again at the expense of the publisher.  They should face the idea of making money on the sell and not on the buy. 

Call me old fashioned, well at least old, but I will go to the book store to buy my Hachette books, and probably more than that, and leave Amazon to the rest of you.


And from another reader:

Value propositions are complex equations. Price is always an important factor in them. However, if there is one is one lesson e-commerce merchants should draw from Brick and mortar retailing, it is that defaulting to lowest price as the primary component of a competitive position is a risky choice. By definition, there is only one lowest price and there is no guarantee any retailer can always occupy that position. For example, even WalMart struggles versus dollar stores when it comes to pricing competitiveness. But perhaps more importantly, over emphasis on price trains the shopper to under-appreciate other aspects of value which can be more sustainable differentiators.

Finally, I agree that Amazon's battle with publishers over pricing is not unique....and that is the tragedy. They are missing a huge opportunity to create more collaborative relationships with suppliers.

The rationale that it is justifiable to block shoppers' access to products on a timely basis because that is what retailers have always done to create leverage is ridiculous. Amazon is making a big mistake that will likely be to their detriment long term.





On another subject…

Yesterday, in noting the suicide of Robin Williams, I wrote:

All I could think about yesterday, after hearing about Williams' apparent suicide, was how this was a guy with access to every possible resource, and with the proven love and respect of his industry and millions of fans … and he could not climb out of that emotional hole in which he found himself. There must be so many people out there who are suffering to the same degree, but who feel that they have nobody to talk to, no options, no prospects for happiness, nobody cheering them on. Many of us know such people, and this reminds us how tenuous a hold they have on life.

One MNB reader wrote:

just read your comments on Robin Williams' passing and wanted to say that I think you conveyed the sadness (and unfortunate truth) of the situation in one of the most sincere and honest ways I’ve read. He did have endless amounts of love, support, and resources – but unfortunately that wasn’t enough…. 

Thanks for always sharing your insightful observations.


But another reader was, shall we say, less impressed…

I’m sure you’ve offended lots of people by characterizing Robin’s illness as emotional, that he was sad and lonely.  People cheering him on would not an effective treatment for cancer nor is it for depression as it is a physical brain disorder.  I think you should retract your comments on this one.…

I don't think I was suggesting that his problem was just emotional neediness, as opposed to mental illness and depression, which are far more serious and can have tragic consequences. If I left that impression with anyone, I apologize.

Like a lot of people, I suspect, I've watched a number of Robin Williams clips over the past 24 hours, most of them from concert appearances, and I've often found myself dissolved in tears of laughter … and I cannot imagine the kind of pain that must have been going on there for him to be suffering so much while making people so happy. This is just so unbelievably sad.




Finally, reacting to my piece last week about novelist Ace Atkins, MNB reader Clay P. Dockery wrote:

Thanks for linking this article.  As an alum of Ole Miss, I always enjoy stories about the university, town of Oxford and many of the unique residents!  If you have never attended a football game in Oxford and seen the pageantry that is the finest tailgating in America, you should put that on your bucket list.  Hotty toddy!

Is that an invitation?
KC's View: