Seriously, we live in bizarro world given the price fixing anti-trust case that ended up going against Apple where they lost (which I believe was something that had good intentions (prices that would allow everyone to actually make money), but its entire execution in terms of how Steve Jobs handled it, resulted in the the kind of technicalities which caused Apple to lose the case; even though it was clear that the business model that Amazon was promoting (using loss leaders resulting in razor thin margins), would create the kind of problems the authors (and publishers) are having to deal with.
Amazon is a company I have an odd relationship with. I mean I buy a lot of stuff from them due to that pricing power they have with a lot of the stuff that I do buy from them. Note that not everything they sell is the lowest price. Where they make it up though is in their lower shipping costs (if not a Prime member, all it takes is $35 to get free shipping).
Likewise, I have absolutely almost zero loyalty to them either. I’m not a Amazon Prime customer for example. Almost all their recommendations that pop up on their site, I ignore. Out of curiosity, I let their e-mail spam come through to see what kind of crap their algorithms pick up for me based on my prior transactions; there was never any follow on sell through on my part for those recommendations. This isn’t surprising; I’ve developed this ability to tune out from the targeted marketing BS.
I know that in the long run, all of this is not going to be sustainable. I remember back in the 90’s when e-commerce was taking off; there was intense competition and many companies offered free shipping. One of the companies I did a lot of business with was Cyberian Outpost (aka Outpost.com). After the tech bubble burst though, Outpost ended up having to move away from that, and began only offering free shipping on purchases of over $100 in 2001. The company was eventually acquired by Frys Electronics.
But Jeff Bezos (Amazon’s founder and CEO) has been given a long leash as far as not having to show profits which is why he can continue with this razor thin margins approach of losing money while spending money to build out the company into all kinds of different areas (that includes the purchase of game streaming company Twitch for nearly $1 billion). Bezo’s was formerly an investment hedge manager on Wall Street prior to founding Amazon so he knows exactly what to say (and probably also knows the right people such that they kind of turns their heads the other way).
The whole issue with the e-books price collusion case though with Apple losing, where Amazon is actual the one causing a lot of damage the authors/publishers are going through, wasn’t difficult to see coming. They had their chance to explain in detail why they sided with Apple but when push came to shove, most of them settled out of court with nary a word except after the fact (they settled because they couldn’t afford to fight it). There’a a phrase that I like to use in cases like this; you reap what you sow. As much as I feel for how much wrong many authors are going through, they had a chance to fight this when one of the biggest companies on the planet, was trying to provide a business model that would work for all parties. Most everyone ran for the hills though with the earlier antitrust case.
