Thursday, August 06, 2015

How to Compete with Amazon

In a nutshell: You can't.

Amazon is the Eveything Store, and the most customer centric company on the planet. They innovate. They have the widest selection. They have the lowest prices. They have unsurpassed customer service. They keep striving to improve.

They're unbeatable.

But that doesn't mean that a savvy startup can't exist in the same publishing sphere and do very well.

I've noticed six areas that Amazon doesn't seem to care about. Crumbs they're leaving on the table. But these crumbs could be worth billions to some smart S-Corp willing to put in some time and money.

1. Ads. Ads make the Internet, and all media, go round. I've got a business plan that would make all ebooks free, funded by ads. I've had this plan for years, and it goes into excruciating detail on how to make it reader-friendly, as well as giving advertisers unprecedented target opportunities. Eventually I'll do it, but right now my focus has been on:

2. Libraries. Amazon doesn't seem interested in this market. I am. And slowly but surely we're figuring out a way to not only get ebooks into libraries, but to do so for free while authors continue to make money. Eventually, both of these ideas will encompass:

3. User aggregated content. Goodreads and Amazon reviews and fan fic are just the tip of what readers can bring to the party. I see global book clubs. I see a hub where readers can connect with authors, get signed ebooks, and ask live questions. I see a community that is as much fun for readers as reading is. Which leads to:

4. The active ebook. In a nutshell, the book becomes the killer app. Each ebook is its own forum, chatroom, review archive, and fan fic collection. It's constantly updating. Ebook 2.0 isn't video, or better font. It's a community.

5. Free. Amazon hasn't figured out how to monetize free. KU seems to be a success, but that's a paid service. In order to offer free books on Amazon an author has to go exclusive with Select and they're only allowed 5 free days every three months. Or they have to jump through hoops to get a book permafree. There is money to be made on free (via ads).

6. Erotica. Amazon treats it like a red-headed stepchild. Selena Kitt's Excitica is picking up the slack there. Readers want this content. If they can get it fast, cheap, and easily, someone is going to make a fortune giving it to them.

Amazon isn't interested in these six things. But any of them, or combinations of them, would attract readers.

If you want an alternative to Amazon, you're not going to gain traction by trying to compete. Focus on the things Amazon isn't doing, rather than try to beat them at what they already do.

Now who wants to give me ten million dollars so I can start hiring people to implement some of these ideas?

Also, I have three ebooks free right now on Kindle. Grab them while they're hot.


Alicia Butcher Ehrhardt said...

The dirty word is 'ads.'

I already do everything in my power to block them, and the thought of having them pay for ebooks makes my spine curdle.

Good luck with that, if you must, but I hope I still have the option to PAY for my books with money. I HAVE money enough for my vice; I don't have time and energy enough to block ads.



Jonathan said...

I also think free e-books financed by ads will be coming in the future. Amazon actually tried to get some patents for technology relating to advertisements in books back in 2009:

Joe Konrath said...

and the thought of having them pay for ebooks makes my spine curdle.

My business plan calls for ten ads per title, each costing the advertiser $0.02. So each free ebook generates twenty cents in income.

But the fun part is that the ads are targeted. Don't think facebook ads or pop ups. Think groupon.

Every ebook you download will have ads tailored for you specifically. Let's say you live in zip code 90210, like gardening, and are planning a wedding. You ebook will have ads for gardening supplies, pizza coupons for your neighborhood, links to book about wedding planning, etc.

As a reader, you decide what kind of ads you like and don't like. You can rate them, vote for them, and share them.

Advertisers have never been able to target a demographic so precisely, and you'll be able to get only the ads that interest you, and block the rest.

AnonymousWriter said...

JAK...was just about to say how crap all six of these ideas are...but then i got where you're coming from with the books in the old days had several pages of ads for other books or products that their readers could be interested in....are we cross promoting each others books enough like they used to do in the old days...that could boost sales and you're right people may pay to advertise in your i changed my mind, the ad idea is good. Not sure about the others though..

AnonymousWriter said...

this is an example......

Ryan said...

You know what would be cool to see (from Amazon, or an upstart competitor, or a potential competitor like Apple or Google)? Offer advances to bestselling indie authors in exchange for temporary exclusivity of their next title. Like, Apple could start a subscription service similar to Kindle Unlimited, identify the 50 highest selling indie authors in a particular genre (romance, crime, whatever), then offer those authors a nice chunk of money for 2 years of exclusivity on their next title. The author still works with 100% autonomy as always, and when the exclusivity term expires in 2 years, they retain 100% of the rights; they can go upload the title to Amazon, keep it exclusive to Apple (at 90 day periods similar to KU), or offer it everywhere.

Subscription based TV & movie content providers (like HBO, Showtime, Netflix) are successful because they maintain a large (and constantly augmented/rotating) catalog of movie titles, but also because they provide exclusive content that viewers really want and can’t get anywhere else (Game of Thrones, House of Cards, etc). If someone wants to compete with Amazon, they’ll have to provide readers with reliably great content that is worth paying for, and that Amazon can’t provide.


Joe what's your turn around time for Ebooksareforever author submissions?

Dave Neal said...

Two recent ad sponsored ebooks: "Find Me, I'm Yours" by Hillary Carlip (not free, $6.49 on Amazon, but heavily web linked & ad-nausiumed, #505,501 Paid in Kindle Store) and "The Vanishing Game" by William Boyd (#2,687 Free in Kindle Store) are not huge successes. Although the concept is an interesting one, would it really fly in today's cyberspace? But something will disrupt publishing as we know it now. I am continually amazed that e-books are not yet tending to free like journalism, games, and music. Especially amazed that public domain books are being sold by Amazon e.g. ($0.99 #13,813 Paid in Kindle Store) when they can be obtained from project Gutenberg for nothing but the download . But then this is a wild new frontier!

Blake Lamar said...

I play free, ad-supported games all the time with an option to buy the ad-free version. I'm surprised this method isn't more prominent with eBooks by now.

darrensapp said...

Cross selling. 1) When you buy a paperback, get the eBook for $1.99 or free or whatever. Get the audio half off, etc. 2) When you buy a book and they show “frequently bought together.” “Offer those at a discount. 3) Get a free book for every ten you buy. 4) Get a free book for ten verified purchase reviews.


Joe you need to go on Shark Tank LOL!

Jeff Ezell said...

What/Who is that fin cutting a wake through the water? It's Konrath gobbling up the chum crumbs left over from Amazon's overlooked ebook market segments!

You are right, Joe, why try to beat the best there is when you can flourish on the crumbs! The raw product builders (authors) revenue sources are not totally clear to me if ALL ebooks are FREE. OK, $0.20/book sold, whoops given away, no reading required. Current Amazon royalty for 99c sale at $0.30 is 50% more. How else will authors benefit other than $0.20/book? Book owners benefit from free. "Bring this ebook with coupon to Starbucks, read in style and get a free cup on us!" Or similar.

If your gonna beat Amazon out of these crumbs as the little guys, will your company be called Pygmies? ;-)

Ceri Clark said...

You can already do this with Amazon. I do this with all my books. The ebooks are freer when the paperbacks are bought.

Ceri Clark said...

Exclusivity also leads to piracy. If someone can't get something cheaply and easily they'll look elsewhere. Wasn't Game of Thrones one of the most pirated shows around?

D. C. Chester said...

Ten million dollars? Hell, Joe, just publish another novel and you're on your way. :)


Brian said...

Amazon is definitely the place to be right now. I joined KDP Select today because ALL of my business has come from Amazon.

Of course, history almost never takes a linear path. It's plausible that somebody will unseat Amazon as king of the mountain--possibly exploiting some or all of the weaknesses Joe pointed out.

I think the top priority for writers needs to be protecting our rights. We finally cast off legacy publishing's heavy yoke, so let's steer clear of exploitative business relationships in the future. That means remembering, as Joe has repeatedly said, that indie is a business decision; not an ideology. Empowered entrepreneurs can and will walk the minute they realize they're getting a raw deal.

Don't get me wrong. I'm quite satisfied with Amazon. I hope that satisfaction continues indefinitely. But the nature of humans--and big organizations run by humans--being what it is, I'm open to the possibility that Amazon might someday go the way of legacy pub, or that some other outfit might beat them at their own game.

Nathaniel Hoffelder said...

@ darrensapp

Amazon already offers this, and you can also find it direct from a couple publishers. The Amazon program is called Kindle matchbook.

Nathaniel Hoffelder said...

1, there's less money in adverts than you think, and the payout is shrinking all the time.

3, User aggregated content exists. It's called Goodreads.

4, The active ebook exists. It's called Wattpad.

Selena Kitt said...

Thanks for the mention, Joe! Excitica was born because Amazon (and other retailers, although that's becoming less important as time goes on and Amazon captures more marketshare) makes it difficult for erotica to gain visibility. And trust me, there are plenty of readers out there who want it. I appreciate your view on censorship and the support.

Interesting new statistic I saw today. 28% of Americans now believe it's okay to ban certain books completely. That's up 11 points since 2011! And 24% were "unsure." That makes over 50% of American who believe censorship is ok - or are on the fence about it. That is very bad news for my genre. We always get hit first (before they start going after Huck Finn or serial killer fiction like Hannibal...) and books, apparently, are hit hardest. Movies, television and video games all garnered lower numbers of people believing there were certain ones that should be banned outright. And even more scary to me is that the numbers from 2011 shifted mostly from "No" to "Yes." The "unsures" went from 26% to 24%. But the number of people who thought certain books should be outright banned went from 18% to 28%. In just FOUR years. EL James brought erotica/erotic romance into the limelight - but this may be the rubberband snap back reaction to its mainstream availability? This, coupled with the new KU 2.0, may go a long way toward curbing the flood of the erotica market.

Although, I just recently heard from someone who said they found the erotica scammers have developed a new scam already for KU 2.0. Instead of publishing gibberish with click-bait covers and blurbs to get that 10% borrow immediately upon opening for a $1.30 payment... they are now culling other authors' stories, changing the names and minute details, and bundling them in giant collections for KU 2.0. This makes it very difficult for erotica authors to find who is plagiarizing their work (if we ever DO find our work buried in those giant collections) so these scammers will likely get away with it for a lot longer than they did in KU 1.0. And instead of Amazon losing money? I'm losing money. Erotica authors are losing money. Not only are we hit hard because our shorts are now worth $0.30 instead of $1.30 - scammers are now taking that away from us too. Thanks, Bezos. :P Did Amazon really think they were going to stop scammers? The other problem with this new scam is that, when this has happened in the past, Amazon has been reluctant to take down these books, even when we find them and report them, because scammers are changing names and rewriting "just enough" to make it appear that the story is now different, even when it's clearly copied. It may not be an exact "cut and paste" (that would trigger Amazon's copyright warning) but it's close enough to recognize. Once again, erotica authors get shafted.

That's why, for me, Excitica is, well, exciting. It's a place for erotica to be everything it can and should be, by adults for adults. Without having to look over our shoulders waiting for the hammer to drop!

Joe Konrath said...

1, there's less money in adverts than you think, and the payout is shrinking all the time.

Not the CPM I envision, Nate. I have some scenarios at 3 cents, and advertisers will pay it.

3, User aggregated content exists. It's called Goodreads.

Goodreads is limited. Where are the authors chats? The signings? Organized threads according to topic? Fan fiction? Bestseller lists?

4, The active ebook exists. It's called Wattpad.

You didn't follow my link. Wattpad isn't even close.

Delilah Fawkes said...

Goodreads does offer author chats, forum discussions (in comments beneath various books), discussion groups with threads based on that group's interest, and links to fanfiction, too, I believe, over at Literotica.

I do like the idea of the individual book as a place for that type of content, but who will be responsible for moderating it and maintaining it? The author?

If I'm already reduced to making pennies on the dollar due to either KU or your ad scenario, then this seems like a ton of work for much, much less pay.

It may be the future, and I'm all about adapting based on the changes in the industry, but I would, ya know, still like to be paid for my work. If I wanted to make 6 cents per book, I'd go work for Harlequin ;) (and then get a day job!)

Adam Lawson said...

As I understand it, the erotica market is a pretty huge market. I would be surprised if Amazon didn't start to monetize that fairly soon -- they're currently leaving a significant amount of money on the table.

Joe Konrath said...

28% of Americans now believe it's okay to ban certain books completely.

Well, technically it's 28% of the 2200 people surveyed. That's hardly conclusive.

But even if it really is indicative of our country, I'm not really surprised. We're pretty stupid as a species.

they are now culling other authors' stories, changing the names and minute details, and bundling them in giant collections

I'm okay with piracy. I'm not okay with plagiarism. There has to be some kind of software that can spot this. Selena, if you can give me a dozen examples, I'll blog about it and talk to Amazon.

Anonymous said...

Joe, thank you. I downloaded a copy.

My Novel, Gamal's Assassin is free today through Friday.

J Randall