AmazonGiven that Amazon released its 2014 results last Friday, you may by now be familiar with the figures: Just under 89 billion US-Dollars in sales (up 20 per cent), and a net loss of 241 million US-Dollars, compared with net income of 274 million US-Dollars in 2013. Given that Amazon managed to achieve an operating profit of 178 millione US-Dollars, the money people were bowled over: Amazon’s stock shot up 14 per cent on the news. Most commentators hailed a „new era“ of profitability. Well, don’t hold your breath. Most financial journalists would even believe in the Easter bunny if it came with a stock market quotation.
What is more interesting for us is to look at where the money came from: Electronics and other merchandise accounted for almost 61 billion US-Dollars, up 25 per cent, media sales – which is where you find books and e-books – made 22,5 billion US-Dollars, up a meagre 3.6 per cent. In North America, media sales went up 7 per cent to just under 11 billion US-Dollars while international media sales flatlined at 10.9 billion US-Dollars. In Q4, with the all important christmas sales, international media sales even nose-dived dramatically by 8 per cent to 3.4 billion US-Dollars.
Once again, Germany was Amazon’s most important market outside North America. Total sales in this country were just under 12 billion US-Dollars, up 14 per cent. While this is impressive, one might aso note that in the past years, Amazon had averaged growth of around 20 per cent. Media sales were not broken out by Amazon.
What does that mean? Media sales have really taken a back seat at Amazon, even though this is the segment through which the company gets almost all attention. And given the fact that Amazon has taken severe public beatings for its combative attitude towards suppliers and staff, it looks as if customers outside North America are going for alternatives in great numbers.
I mentioned that most commentators waxed enthusiastic about Amazon’s new outlook on profitability, and that I do not believe what they believe: Amazon’s business model does not give a hoot for profitabilty. If you don’t believe me, read this analysis which was published on Business Insider, the „news“ gathering vehicle owned in part by Jeff Bezos‘ personal investment company. For once, I agree with BI on Amazon. Which is a sentence you are not likely to read here very often.

Oh, one thing that has not been mentioned too often: If you break down Amazon’s sales to revenue per employee, you get a staggering figure of just under 760.000 US-Dollars.

Tired of dusting off your books? Well, Amazon has a new product for you which helps you getting rid of all that dead wood: Kindle Convert. It allows you to scan your paper books and convert them into electronic ones. Of course you will need a Kindle to read them. Or at least the Kindle reading app.
Is that legal? Yup. At least as long as you stick to your own books and don’t distribute the electronic copies to everybody and his or her cats and dogs.
For the time being, Kindle Convert is only available to customers in the USA. And you better have some time to spare: you need a standard flatbed scanner to get your books copied. Which should make you think whether this is really such a good idea – maybe your time would be better spent hanging out with a coffee and actually doing some reading? But then, maybe you are really a cheapskate. Or a clown with no friends and nothing to do in your life.

Quite a lot of people would go quite a long way to avoid buying things from Amazon. But everyone hast o admit that there is hardly another retailer who makes shopping as easy as Amazon does. At least when it comes to books, and at least if you are in the USA, a nifty little plugin for your Chrome browser will let you do your searching on the Amazon catalogue site – and your buying, well: lending, from Oyster. With around one million titles to lend, Oyster’s subscription service cannot boast the enourmous variety that Amazon has on offer. But lending from Oyster is of course cheaper than buying an e-book. And, with major US publishers such as Simon & Schuster, HarperCollins and Macmillan offering their titles through Oyster, the amount of current frontlist bestsellers is certainly much greater than on Amazon’s Kindle Unlimited service, which still has to make do for the most part with selfpublished titles and those published by its Amazon Publishing imprints.
The Chrome plugin is not the first of its kind: there have always been bits of software leading you to pirate websites, and a group of French booksellers have also developed a pluging that lets you browse the Amazon catalogue and shop from you local bookseller.

We stay in France, where we hear that Amazon Publishing is about to launch. At least that is what our friends at ActuaLitté make of the recent job advert for an editor. Amazon calls for a person with a „sense of humour“ to fill the post. With French booksellers more than likely to coldshoulder any approach at selling Amazon Publishing’s titles, this might indeed come in handy.

You may have noticed over the past weeks that I have not called Amazon a greedy, hard-nosed monster that squeezes its suppliers until the pips squeak. If you relish such descriptions, why not take a look at a recent piece in the Guardian. „Greedy giant with small publishers in its grip“.
Yup, that’s the talk…

What does Amazon see in bricks and mortar shops? After all, it has done its utmost to put them out of business over the past 20 years. Now the company starts operating college bookstores and it is reportedly in talks to take over some of the shops of insolvent electronics retailer RadioShack. It would make sense to use the shops as pick-up and storage centres, and obviously Amazon could showcase its hardware products. RadioShack operates some 4.000 shops throughout the USA and has said that it wants to sell as many of these as possible. Around 2.000 may end up with telecoms company Sprint, and there is also talk about gadget retailer Brookstone being interested. Whether a deal with Amazon is imminent could not be confirmed as yet.

And finally: What’s the use of Kindle Unlimited, apart from ripping apart the business models of indie publishers and selfpublishers? So far, customers seem to keep their distance, and Amazon doesn’t give us any useable data. But those that have taken the plunge seem to be good for Amazon’s bottom line. According to Nielsen BookScan, KU subscribers spend more on books than other people: 58 US-Dollars per month as compared to a mere 34 US-Dollars per month spent by non-subscribers. As TechCrunch says, Kindle Unlimited is a great service on the surface. It needs to become a great service at its core.

 

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