Amazon has removed any e-book offerings from Independent Publishers Group (IPG) until some new terms can be reached regarding compensation. Though print editions of the distributors books are still available, the new terms Amazon has proposed would significantly cut revenue on both print and electronic titles for IPG. Currently IPG is the second largest independent book distributor.
Mark Suchomel, President of IPG sent out an alert email yesterday commenting on his dealings with Amazon:
"Amazon.com is putting pressure on publishers and distributors to change their terms for electronic and print books to be more favorable toward Amazon. Our electronic book agreement recently came up for renewal, and Amazon took the opportunity to propose new terms for electronic and print purchases that would have substantially changed your revenue from the sale of both. It's obvious that publishers can't continue to agree to terms that increasingly reduce already narrow margins."
Suchomel thinks that it is important that his clients stand behind him as he attempts to regain favorable terms with Amazon. He elaborates further:
"Remember that Amazon continues to be an important account that sells a lot of units. This is a business decision on Amazon's part, and hopefully they will soon decide to reverse it and buy at our standard terms."
"I have spoken directly with many of our clients and every one of them agrees that we need to hold firm with the terms we now offer. I'm not sure what has changed at Amazon over the last few months that they now find it unacceptable to buy from IPG at terms that are acceptable to our other customers."
I think it is great that Amazon is negotiating better deals for their customers, and it is their job to do so, but ideally it would not come at the expense of the artists and businesspeople who make the publications a reality at the retailer. A disturbing trend that I see in big business today is negotiation that goes beyond win-win and represents a substantial loss to one of the parties involved.
Walmart is famous for its cut-throat negotiations with suppliers and there is no doubt in my mind that penny pinching is behind the abuses at Foxconn when it comes to delivering low costs to Apple. It is not always a best practice to deliver recording breaking profits to your shareholders when your partners are suffering on the fringes of staying in business. Perhaps Amazon needs to take this into account from a PR standpoint if not from a sustainability perspective.