The ethics of Amazon

Great discussion, Matt. The NYTimes just reported on the trend indie brick & mortar book stores report of customers shopping in their stores, "taking advantage of the stores’ careful selection of books, staff recommendations and warm atmosphere — all while spending their money elsewhere." They watch the customer using their phone to text the title or photograph the cover the book, then leave the store. What will they try next? Ban phones while shopping?

The price check app doesn't hurt businesses, it's just a tool that makes the practice of "shopping" local but buying online, easier.

I don't have any answers. I agree that Kurt is an independent business owner -- as an author -- he just wants to sell books. The indie brick & mortar shops just want to sell books too.

What does the future hold? I just bought my first Kindle and I own an iPad too (which runs the iBook, Nook and Kindle apps). I love paper books, but how many paper books will I actually purchase in 2012?

Great question. Every year in mid-april, I receive a ton of phone calls on how to input information into Turbo Tax. I've met a lot of great people by having them come in and talking to them about Turbo Tax.

I think of it as an opportunity, not a problem. :)

http://slog.thestranger.com/slog/archives/2011/12/07/amazons-latest-dick-move

It now appears that Amazon is going to be issuing discounts if you price check at a brick and mortar shop. The above is a link to article in the Stranger. (NOTE: SALTY LANGUAGE IN ARTICLE.)

@Laura, love it! Just tweeted it: "Using small businesses as unpaid showrooms" - Amazon's latest dick move: http://ow.ly/7TpJB via @strangerpromo

@Lara: That's been happening for quite a while—for me, at least. When it comes to most items found in shops that aren't grocery stores, I regularly consider how much something would cost me if I were to order it online.

Part of the problem is that wholesale pricing policies often leave retailers with no choice but to sell at "suggested" retail prices if they are to earn any profit. For example, the record industry "officially" abolished list prices years ago, but they still are able to set retail prices by manipulating their wholesale prices. I'm reasonably sure that book publishers have a similar modus operandi.

Fortunately, for me Amazon is a local company, so I am still helping to support the local economy by shopping with them.

I hear you, Kevin. Being a Seattlite too, Amazon is not only a local company, it employs people I know.

Matt,

Do you think there is more of an advantage for local business if they provide a product that isn't bar coded for the masses?

Online is killing the local shop. These types of price comparision shopping apps just make it easier to buy online. They aren't unethical just unfair, like the rest of the world. The retail shop of the future needs to do more. They can't just put widgits on a shelf and wait for the public to buy. Bike shops will need to be fittness centers. Book stores will need to be schools. Right now any one in Washington state gets an automatic 10% discount for shopping online. (no sales tax) Why do we buy retail right now? We've been trained to do that. The consumer of the future is being trained to shop online right now in elementery school. Some things will survive but not anything that you can wait a week to get.

"Some things will survive but not anything that you can wait a week to get." Good point.

Matt: Would you have been able to sell that product at the same price to both the Ballard shop and Amazon?

I saw yesterday where there is a lawsuit being filed against Amazon and well as some other legal action to try to stop their latest strategy.

I hadn't heard of the lawsuit. This article in the NY Times today shared some nice insights:

A few miles down the road from where I live on the coast of Maine, a talented young bookseller named Lacy Simons recently opened a small bookshop called Hello Hello, and in her blog she wrote eloquently about her relationship to “everyone who comes in my store. If you let me, I’ll get to know you through your reading life and strive to find books that resonate with you. Amazon asks you to take advantage of my knowledge & my education (which I’m still paying for) and treat the space I rent, the heat & light I pay for, the insurance policies I need to be here, the sales tax I gather for the state, the gathering place I offer, the books and book culture I believe in so much that I’ve wagered everything on it” as if it were “a showroom for goods you can just get more cheaply through them.”

Book dealers have been some of the worst hit. I do believe its a shame. It sounds like Lacy is developing an angle that might work. It will only work on a small scale though.

As someone who co-owns a small press, where we publish POD books, I have to say that amazon has benefited us. Bookstores won't stock POD books unless there is a return policy, but for a small press getting all those books returned can do it in. My point? Amazon benefits a small business that otherwise wouldn't get that much business due to restrictive policies that retailers have in place.

Right but this policy benefits the printer and the author but not a small retailer. That's the question; how do retailers survive the future of the internet. I don't believe this is unethical behavior by Amazon but it is unfair.

It's unfair when large retailers penalize small publishers for how they choose to publish books. My company does work with small retailers and we encourage our market to buy from small retailers, but the truth is that pre-amazon we likely wouldn't have succeeded, because of how book retailers view POD books.

Re-visited this topic today. I actually think the ability to check the price of something using the Amazon app is a bit of a red herring. We already know that, in most instances, the item is going to cost less online.

What it really boils down to is comparison shopping. In the past, it was much more difficult for consumers to compare the cost of an item at different shops without actually travelling to all of those shops. But it was still possible for someone to check out a particular item (books, in this particular thread) at one shop, then buy it for less at another shop.

The main change is that now, with smartphones and wi-fi enabled tablets and iPods, the process is actually much easier.

And sometimes, it does work in favor of the brick-and-mortar retailer. I recently spotted a CD (101 Soul Anthems—a 5-disc set) at Half Price Books. Brand-new, and sealed. And an UK import. Unfortunately, their price sticker was affixed to the back, obscuring a chunk of the track listing (and, with the content of all 5 discs listed on the back, it was quite a chunk). So, I took out my iPod, and, thanks to the presence of the Starbucks next door, was able to access Amazon's web site so I could view the complete track listing.

Not only was I able to see the entire track listing, but I was also able to see Amazon's price. It was some $10 more.

Now, I didn't buy the CD just yet. The so-called Loudness Wars are still part of the music industry landscape, so I wanted to get some idea of what the thing sounded like. Even at the lower price, if the CDs had been unlistenable, I would have been disappointed, which would have made me less likely to decide to purchase similar items—from anybody—in the future.

Enter iTunes Music Store, which I logged onto when I got home. I had to switch to the UK store, but was able to listen to enough samples to discern that the audio hadn't been processed to death, so the bargain price for the 5-disc set would indeed be a bargain.

Next time I went to that Half Price Books, I bought a copy of the set. Meanwhile, Amazon is now offering that same set for $23 more than I paid for it at Half Price Books.

Now, admittedly, comparing prices for items sold at what is basically a thrift shop may not be a typical circumstance. But I mention it to point out that a price comparison between a brick-and-mortar shop and an online retailer is not automatically going to favor the online retailer. Sometimes the utility cost (the cost of having access to that item or service right now) is going to be low enough that the consumer will go ahead and pay extra to buy it at the brick-and-mortar shop. And sometimes the online price will actually be higher.

I'd like to think that the number of people that the nuber of people that will take advantage of the added services available at at small brick and mortar store and then buy online to save money are roughly equivalent to the number of hapless consumers that will walk into a brick and mortar store needing no service and pay a premium. That would make it all kinda fair.

Capitalism is not about fair necessarily. Conventional marketers need to develop hooks to keep their customers. If you want help doing that call me. Otherwise, let the seller beware.

As an Advanced Certified QuickBooks ProAdvisor and Authorized Premier Reseller for Intuit, I have a similar problem with national (Costco), Big Box (Office Depot, Max, Staples) or local (Amazon) companies selling the same accounting and bookkeeping software products that I carry for (far) less.

Unless I am willing to lose money, I can't compete.

So I compete by offering to sell both the product (QuickBooks Pro, Mac, Premier, Point of Sale, Enterprise, Payroll) and my services to help them get properly set up, review what they have done, and/or trained one-on-one in one package.

And of course, making house calls helps.

Keith,

I've often wondered if a really smart Accounting Software company could pull the market away from Intuit, just by treating the Product Trainers like business partners instead of revenue streams.

:)

Laura