What’s happening to Amazon’s core principles?

What’s happening to Amazon’s core principles?

I have loved Amazon.

There has never been a company with which I have had a better relationship, and I can’t imagine another one that is out there right now which would be as good.

However, for the first time, I’m getting a little concerned about the future.

I’ve staked a lot on having an ongoing connection to Amazon. I’ve said before that I think it is more likely that my descendants will have access to my Kindle books than to my paperbooks.

One reason I thought that is that Amazon has three core principles:

  • Price
  • Service
  • Selection

Jeff Bezos has mentioned how those three are the same all over the world. While delivery methods might be different in different countries, you aren’t going to find someone who says, “I wish you had fewer choices that cost me more and got them to me more slowly.”

Recently, though, Amazon has done some things which seem to me to be moving away from those principles…and that concerns me.

Let’s start with one particularly clear example.

One of my regular readers and commenters, Lady Galaxy, alerted me to this…and I had flipped a couple of articles about it into my

Free ILMK magazine at Flipboard

Here’s one that gives an interesting perspective:

The Bookseller post by Sarah Shaffi

I’ve already written about an apparent dispute between Amazon and the publisher Hachette:

Is Amazon delaying Hachette books?

but this new development seems a clearcut violation of the three principles.

The story is that Amazon is removing the ability to pre-order some Hachette Kindle books, including J.K. Rowling’s (writing as Robert Galbraith) next novel.

Well, at this point, I don’t see that novel listed at all in Kindle format…and you can’t pre-order the hardback (that may be a change since the article was written). It simply says the hardback is unavailable, and that you can sign up to be e-mailed when it is.

I’ve always pictured people in a meeting in Amazon being challenged by any proposal with the three principles. In other words, they would have to justify how the new idea fits at least one of them (without, presumably, throwing the balance off by making the other two much worse).

Does having the book be unavailable help with selection? No, it hurts selection. Selection has to mean “what is available to the customer now”, not what will be available at some point, at least if your competitors have it. I could pre-order that book right now, as a hardback or an e-book, from Barnes & Noble.

Does having the book be unavailable help price? No. It doesn’t offer something at a lower price to fail to offer it at all. I suppose you could argue that the customer isn’t spending the money, but it doesn’t work that way emotionally for people.

Does having the book be unavailable help service? No. If a customer does want the book, they would have to wait to get an e-mail, then click (presumably) on a link in the e-mail…as opposed to just 1-clicking a pre-order button on the book’s product page.

So, if the idea was brought up in a committee, I would have hoped it would be rejected on those grounds.

Now, is it possible that it actually serves the principles in some way we can’t see?

Could it be that Hachette’s terms were so difficult that agreeing to them would have hurt future selection, service, and/or price? Maybe…but if we can’t see it, it’s hard to not feel the loss of the book’s availability…and that can affect customer loyalty. I’ve said before that I think market leaders can lose that position when they overestimate customer loyalty (as opposed to when they underestimate the competition, which is what many people think happens).

According to a book I’m just finishing (I’m in the end matter):

Thinking, Fast and Slow (at AmazonSmile: benefit a non-profit of your choice by shopping*)

people consider a loss to be much more impactful than a gain. Losing ten dollars hurts more than gaining ten dollars feels good.

This is a loss. We would have to gain something many times as good before we felt that this move on Amazon’s part was a plus for us.

If this was the only such action on Amazon’s part, I could construct some sort of “prospiracy theory” (a prospiracy is the opposite of a conspiracy…a secret plan to do something good) that would explain it.

However, as I wrote in

Kindle New York Times bestsellers shockingly up almost $1 a month so far this year

and as another of my regular readers and commenters, Roger Knights, predicted, prices have been rising rapidly (at least on New York Times bestseller hardback equivalents).

That doesn’t serve the price principle, and I can’t see how it benefits selection (unless the publishers were going to withdraw the books if Amazon didn’t raise the price) or service (you don’t get them any faster or have a better return policy).

Then, and this will seem minor to many, there has been a major overhaul of the

Kindle Help Community (at AmazonSmile)

I have tried and tried to see how the changes are better…but so far (and I’m quite imaginative) I have failed at the task.

I am a “Kindle Forum Pro”. We aren’t Amazon employees, but we have been designated by Amazon as being particularly helpful to other people who use Amazon’s customer forums. That has also been something where I thought Amazon was doing an incredible service. They freely allow criticism of Amazon in these forums, and they allow great speculation and helping of each other. Sure, that can save Amazon some Customer Service cost, but most companies’ forums just aren’t this free.

What changes did they make?

  • You used to be able to tell to which threads you had posted recently…that made it much easier to get back to help someone who asked a question, you asked a clarifying question (such as which model they have) and then they answered it
  • You used to be able to preview the thread without opening it…that was a quick way to tell if the question had already been answered. Now, I have to open each thread just to tell if they need help. I used to love going that forum to help people…I recently mentioned that I now approach it with the same feeling I have going in for a teeth cleaning at the dentist. I still now it’s a good thing, but it’s not comfortable…
  • They took away our Kindle Forum Pro badges (which was something which officially identified us to customers). I was helping people long before I had the badge, and will continue to do without…but for customers, it raises the signal to noise ratio. We certainly see people give answers which are wrong, and sometimes harmful. While we “Pros” didn’t always know everything, we were a pretty reliable source. In a way, I suppose it was like those “Volunteer” vests you sometimes see people wearing at conventions…it lets you know you can trust them, even if they aren’t employees

I know I would have to prove that these actions are different from what Amazon did in the past. After all, Amazon did remove the Macmillan buy buttons back in 2010, when they were fighting the Agency Model. That one, though, really felt like it was about us, the customers. I don’t know what Amazon and Hachette are tussling over, but this one just…feels like it is about Amazon.

Some of you may also bring up the price raise in Prime. That one didn’t bother me much, given the amount of raise and how long it had been since it had been raised before. It’s logical that costs have gone up considerably for Amazon during that time for that part of the business.

Why do I think this is happening?

If Roger (see above) is right, this could certainly be due to pressure to show more of a profit.

I don’t think that Jeff Bezos is short-sighted, though…quite the opposite. It needs to be true that everyone making these sorts of decisions takes the long view…not just Jeff. Jeff may certainly be turning some attention elsewhere, and eventually (hopefully a long time from now…knock virtual wood) someone else will be the CEO.

That’s assuming Amazon outlasts its defining founder.

I think it will.

My (perhaps incurably optimistic) thought is that this is a temporary aberration. Someone is going to glance up at the wall (or on the screensaver, perhaps…I don’t know) and see those three principles displayed:

“Price…Service…Selection…Price…Service…Selection…Price…”

They’ll look at someone else, look at the principles, tilt their head and raise one eyebrow.

I expect a lot of good things in Amazon’s future…as long as they listen to themselves, and follow their three North stars.

I welcome the thoughts you share with me and my readers by commenting on this post.

===

Bonus deal:

This is good at time of writing, but do check. You can

Get 200 Amazon Coins (at AmazonSmile)

for each of these five free apps you license (“buy”). That’s up to $10 worth to spend on apps in the Amazon Appstore and in-app purchases.

If you already have one of these apps (I did), I don’t think you can get the  200 coins for that.

Otherwise, why not?🙂

New! Join hundreds of readers and try the free ILMK magazine at Flipboard!

* I am linking to the same thing at the regular Amazon site, and at AmazonSmile. When you shop at AmazonSmile, half a percent of your purchase price on eligible items goes to a non-profit you choose. It will feel just like shopping at Amazon: you’ll be using your same account. The one thing for you that is different is that you pick a non-profit the first time you go (which you can change whenever you want)…and the good feeling you’ll get. :) Shop ’til you help! :) 

This post by Bufo Calvin originally appeared in the I Love My Kindle blog. To support this or other blogs/organizations, buy  Amazon Gift Cards from a link on the site, then use those to buy your items. There will be no cost to you, and a benefit to them.

 

26 Responses to “What’s happening to Amazon’s core principles?”

  1. clintbradford Says:

    I “invest” and recommend Kindles to all. Anyone who desires to have about every book title in digital form for us in his lifetime … plus the fact that I can talk/chat with a real person for assistance within 60 seconds no matter the time of day or date – I do not sense that those “core values” have changed for the betterment of us all. -Clint Bradford

    • Bufo Calvin Says:

      Thanks for writing, Clint!

      Oh, I’ve recommended Kindles to lots of people, including family and co-workers. Part of that has certainly been on the basis of Amazon’s highly-rated Customer Service, and my personal experience with them. 60 seconds? With Mayday on my Fire, it’s within fifteen seconds.🙂 As I said in the post I’ve never had a better relationship with another company.

      I’m curious, though: if you don’t see that the core values have changed, how do you see their recent actions with Hachette?

  2. Mary Says:

    The pre-orders of Hachette books which have been withdrawn by Amazon were previously there. Now they are not. Customers who pre-ordered when these Kindle titles were available are still seeing them in their pending orders in MYK, but until the date of release we will not know if the order will be fulfilled or not. I went to B&N’s site to see if one of the titles could be pre-ordered for the Nook. It can, also the physical book. All of this makes me extremely uneasy. I am used to Amazon operating smoothly. Now it’s not.

    • Bufo Calvin Says:

      Thanks for writing, Mary!

      Well, since they don’t charge you until an order “ships”, the worst that would happen is they would cancel it and you wouldn’t get it. That would be bad, of course, but you wouldn’t be out any cash.

      Out a certain degree of trust, though? Perhaps.

  3. Lady Galaxy Says:

    I’ve been reading the Sharon McCone mystery series by Marcia Muller since the beginning. I’ve gone back and purchased all of her books that are available for Kindle. Her newest is due out in July. I have it on my “wish list.” It is now in “limbo” because it will be published by Hachette. The note says, “Currently unavailable. We don’t know when or if this item will be back in stock.” I’m going to be writing to Jeff Bezos to explain just what losing access to Kindle editions means for those of us who cannot read the print editions. I wonder if his mailbox will be full?

    • Bufo Calvin Says:

      Thanks for writing, Lady!

      I appreciate you sharing the note!

      Since print editions also appear to be part of this “inconvenience campaign”, at least it isn’t just hitting those with print challenges.

      I think e-mailing Jeff Bezos is a good idea:

      jeff@amazon.com

      • Lady Galaxy Says:

        But folks who want the print edition still have alternatives. I won’t be buying a Nook just to read one book. I’m hoping it will be settled by the July release date. Time will tell.

      • Bufo Calvin Says:

        Thanks for writing, Lady!

        Excellent point! I wasn’t thinking about format dependency, which, you are correct, makes it impact e-book readers more than print readers.

        My guess is that this gets settled pretty quickly. It’s not good for either side for it continue, and some sort of compromise will be reached…or at least, a resolution of some kind will be.

  4. Louis Says:

    You are starting to sound the same as the NYT. Sad. Loving your Kindle vis a vis Amazon should be mutually exclusive……….. well maybe not to Blog writers??

    • Bufo Calvin Says:

      Thanks for writing, Louis!

      I think you may have left out a word, and intended “versus” rather than vis a vis? My sense here is that you are trying to say that my saying I love my Kindle is one position, and that my post suggests I have antipathy towards Amazon, which would be incompatible?

      I apologize if my post wasn’t clear enough that I don’t “hate” Amazon…I consciously thought about how I was saying that, hoping to make my position apparent. For example, I kept the question in the title open-ended…I didn’t say that they were abandoning the core principles, and I tried to make it clear in the post that while there may be indicators of actions that are unsupported by selection, service, and price, we don’t know what the real motivations are.

      Uncritical acceptance isn’t love: that’s indifference. Worse, perhaps, it is dismissal. It suggests that you think that the entity is incapable of self-awareness and change. Do you give strangers the same sort of advice you give loved ones? Most likely not…and one possibility is that you care more about your loved ones. You’d probably tell a loved one that their shirt was inside out more quickly than you would tell someone on the bus.🙂

      As to blog writers…they are human beings with a wide variety of opinions (and motivations). I would think it would be unlikely that the same concept would apply to all of them equally…

      • Louis Says:

        Thanks for citing my omission (senior moment.) I guess I keep forgetting that most (not all) blogs are mainly the opinions, (dismissing the obscene cliche) of the writers. I’ve always read ILMK as an informative piece helping Kindle users abreast of Kindle relative items. When you stray, I guess I just bray. Sorry.
        Louis

      • Bufo Calvin Says:

        Thanks for writing, Louis!

        Not a problem…I leave words out from time to time myself.🙂

        I do genuinely appreciate you expressing your opinion. I try to keep ILMK eclectic. I sometimes write what I call “thoughtabouts”.🙂

        https://ilmk.wordpress.com/category/thoughtabouts/

        I also have a category for opinion:

        https://ilmk.wordpress.com/category/opinion/

        However, I also have posts on tips, humor, news…quite a few categories. My goal is that everybody has something they like every month (and hopefully, every few days). I should say so that “all of my readers” have that, since I know there are people who just are never going to read the blog.

        I poll my readers from time to time on what they like in the blog…I’ll make sure to include Thoughtabouts next time.🙂

      • Louis Says:

        i see that the WSJ weighed in this morning. The difference in tenor with the NYT, while not surprising is quite interesting. No degradation, just the business issues between H and A and that the companies are trying to work out the problem.

      • Bufo Calvin Says:

        Thanks for writing, Louis!

        Here it is, for folks who are interested:

        http://online.wsj.com/news/articles/SB10001424052702303749904579580052135901452

        I’ve also flipped it into the ILMK Flipboard magazine, so people who read that can see it.

        It’s by Jeffrey Trachtenberg, who I’ve cited several times as my favorite mainstream writer on e-books.

      • Lady Galaxy Says:

        FYI. When I tried clicking on your link to the WSJ article, I got the first paragraph then a notice that I need to subscribe in order to see the rest of the article.

      • Bufo Calvin Says:

        Thanks for writing, Lady!

        Yes, they have a mighty paywall.🙂 It’s their choice, but it can be frustrating. I may not be able to read the whole article in one browser (with it telling me I’ve exceeded my limit for the month…sometimes, that’s unlikely), but be able to read it in another one…

  5. Mary Says:

    Likely there are others upcoming, but the earliest of the “limbo” books I know of is the June 24th release of The Silkworm under JK Rowling’s pseudonym of Robert Galbraith. It will likely occur to others who have more than one device that they can buy it in iBooks or for a Nook or Kobo. I would like to read it, and my preference would be to buy it for my Kindle but iBooks would be a choice. One’s response to all this depends on the amount of patience one has. It would be helpful if there were some transparency about the Amazon-Hachette negotiations so that we could have an educated opinion. At this point, I feel nothing but unease at the withdrawal of books for sale. Having a Kindle has usually meant I could read anything I wanted on it, and now I can’t. At least not at the moment.

    • Bufo Calvin Says:

      Thanks for writing, Mary!

      I’ve criticized others (such as Barnes & Noble) for choosing not to sell certain books because they are in dispute with the publisher or supplier (Amazon published books, for example).

      How could Amazon offer “every book ever published”, as they used to say in the beginning of the Kindle, if they elect not to offer some?

      I’m often told how patient I am…to the point of it being a fault, sometimes.🙂 Like you, I would love the transparency. With the Macmillan incident, it was clearly about the Agency Model, which was about Amazon’s ability to discount books. That one was tied to the core principle of price. Without knowing what this one concerns, we can’t know if it is for the good of the customer or not.

      I don’t buy e-books from the other book retailers…I get them from Amazon. I could get them other places, but in my case, I can skip a particular book and read a different one, if that’s how it works out. I would say that’s easier for me than getting something from somewhere else…it’s easier to track if all of my books are in one place, and I do think Amazon’s services have been considerably superior.

  6. John Says:

    I guess I am just not bothered by this hardball competition between Amazon and Hachette. Considering the past histories of both, I tend to give more credence to Amazon instead of Hatchette. Besides conflicts between retailers and vendors are as old as retailers and vendors. It is not surprising that a retailer treats a vendor they have reached agreement with better than a vendor they are in conflict with. These conflicts with vendors will crop up from time to time as long as Amazon continues to exist as a retailer. I tend to believe that Amazon’s negotiations in the long run are designed to support their strategic core principles of “price, selection and service”. With that said short term tactics can effect the long term goals in the short run to achieve a greater long term good.

  7. D. Knight Says:

    Hi, Bufo!
    Here’s a different point of view from the author of Wool:http://www.hughhowey.com/amazon-and-hachette-go-to-war/

    He said he went through the same thing with Barnes and Noble some time ago, and he is on Amazon’s side.

    I’m not sure where I stand yet, but I trust Amazon more than Hachette.

    • Bufo Calvin Says:

      Thanks for writing, D.!

      Yes, interesting! I’ve flipped that one into my Flipboard magazine, too, thanks to you!

      Howey still is just speculating about the disagreement. The author thinks it might be about discounting…but I doubt Hachette can tell Amazon how much they can discount the books. Oh, I suppose they might legally be able to propose that in a contract, and that might be what is happening.

      Do I trust Amazon more than Hachette? I’d say that before this, I’ve been on Amazon’s side in every tradpub (traditional publisher) versus Amazon dispute.

      Regardless, I don’t like Amazon’s tactics here…even if it is to prevent a “worse evil”.

  8. rogerknights Says:

    Why do I think this [bad changes at the Amazon Help Community] is happening?

    If Roger (see above) is right, this could certainly be due to pressure to show more of a profit.

    I don’t think that Jeff Bezos is short-sighted, though…quite the opposite. It needs to be true that everyone making these sorts of decisions takes the long view…not just Jeff. Jeff may certainly be turning some attention elsewhere, . . . .

    Here’s a guess. An edict went out to all departments to look for ways to cut costs that couldn’t be justified with hard-and-fast data. (Amazon is big on measuring everything.) The exec in charge of the Amazon Help Community didn’t have numbers to back up the intangible benefits he cut. I.e., he was in beancounter mode.

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