Amazon is the Past not the Future

Amazon has made the self-publishing revolution possible; no question. They have also enabled a number of publishers, especially those in esoteric areas or those specializing in low-volume titles, to survive and potentially thrive.

The company provides a huge number and range of goods for sale and services, including data, cloud services, entertainment and shipping. It's hard to visit Amazon's busy website and not think "Are they *everything* to everybody?"

The recent NY Times exposé of working circumstances for the company's white collar workers (tech, marketing, management) has raised a lot of questions. It's certainly true that there are wretched companies to work for out there, many worse than Amazon. However, Amazon doesn't appear anywhere on the top 50 companies for Executives from CEO Magazine in the past 5 years; numerous others do - and there's high variability in rankings.  You will not find Amazon on any of Training Mag's Top 125 awardees for 2015. You will find, from the tech and retail sector, Best Buy, CarMax, Cisco and Walgreens.

The people who so callously said that Amazon's policies were fine used the excuse that the company earns a profit; indeed - according to Investopedia, "Amazon’s profits for its entire existence are still less than what ExxonMobil (NYSE:XOM) takes home every 2.5 weeks." The company earned NO PROFIT AT ALL until 2009 (founded 1994).

According to BusinessInsider, which is partly owned by Amazon's Jeff Bezos, "Get it into your heads: Amazon is not going to become a big-margin company. Never has, never will — it's not in the model." Of course not. Most retail is not high profit margin; however, most retail cannot go for years with no profits.

The very day of the NY Times Amazon expose, a laudatory article about Amazon's Jeff Bezos appeared in the UK Telegraph (a conservative or Tory publication). Last week, investment publications reported that Bezos sold over $550 million of his Amazon stock. Possibly, to buy the NY Times and prevent future negative articles.

The company is not without competitors. Jet.com is just one of them.

WalMart also does more sales volume in books than Amazon does.

So, what's the difference and who cares? Chances are if you're reading this, you're a writer or other professional. You're an educated, sophisticated person and do not shop at stores like WalMart.

Therefore: no one does, right? Amazon may have advanced in revenue size but it's still weak and tiny and resource-poor compared to WalMart. Amazon isn't Apple. It's not Microsoft. It's not Cisco. It's a retailer. An online retailer that ships and has realized it has resources that could compete with UPS or FedEx. It's still using trucks and gasoline. It still has physical warehouses.

This extremely optimistic chart projects that Amazon will surpass WalMart in revenue by . . . 2024. Even with this hinky curve - there's a better revenue curve there. It's the blue one on top. If you'll notice the raise there for the red one starts after 2015. It hasn't happened yet.

So to the people who work for Amazon, it's a game with uncertain results.

To the rest of us, especially those of us who are creative professionals, in working with Amazon, we are working with ... wait for it ... and I *do* work with them and they are human beings just like everybody else. I am never discourteous to others in interactions, but let's just say Apple customer service is celestial compared to Amazon's.

If you read that NY Times article and didn't come up with "the powers that be at Amazon are crazier than a barrel of spider monkeys guzzling a fifth of whisky," then you should read it again. You should read Nick Ciubotariu's "Data driven response" to the article. The only data in his long, full of hurt feelings response is "On average, the ratio of positive feedback to negative feedback was over 5:1." That's it. Thousands of words, ZERO data. Nick even says "I don't know what the employee retention (or turnover/burn) rate is."

Is it about good vs. evil?

It's about poor management and decision making. I don't care that Nick Ciubotariu's "mentor" told him that Amazon was the "best company in the world."

I can see from my own limited perspective that the impact on our publishing company and to a larger extent, our world that could benefit from better books (not more books - better books) from everything about Amazon's e-book hardware, software, sales, delivery and marketing, is harmful to the long-term growth and development of excellence in books. Amazon is doing nothing but doubling and tripling down on that.

Do you see the same growth curve in this chart of customer demographics as that optimistic "Amazon will surpass WalMart by 2028 chart"? Oh, those algorithms. There must be a secret Amazon anti-aging project. It will deliver "instant youth" in one hour, guaranteed. Only to Amazon Prime members.

I don't know how many times I can tell people, "The reason Amazon Kindle sales do not match 'regular' book sales is that the Kindle owner customer base doesn't match everybody else/the general population." Far less than 10% of all books sold are via the Amazon Kindle e-book platform. It's the Readers Digest Condensed Books crowd!

Now they've got Kindle Scout, which is basically a Kickstarter-type crowdsourcing program designed to acquire longterm content for a whopping $1,500, some of which might end up being a great investment.

There's not an original piece of work on the entire Kindle Scout page. People can upvote/downvote/game to their heart's content. It's crap made by people devoted to making crap they believe to be marvelous. Oldtimers know this as Sturgeon's law (90% of everything is crap). Or - "imitation fast food." Like this (Fast Food You Can Make at Home).

Maybe a year from now if this keeps going, the titles will be better, the covers a little slicker. It will still be DIY Fast Food.

Am I saying independent authors only write crap?

No. I'm just saying schemes like Kindle Scout or various "author communities" have as much point as McDonalds opening its stores up to local cooks trying to duplicate dishes the restaurant has sold for years. It is the same whether Amazon does this or legacy publishers do it.

Ron Collins says that lots of big companies are using advanced math to determine the cost-benefit analysis of treating employees as if they are worthless and interchangeable, vs. treating them as if they have some value to the business. Amazon's math doesn't add up all around. Low/no profits for years. High rate of employee turnover and burnout. Endless schemes, dozens of new business ventures, few of which pan out. Low growth in new business sectors.

All the algorithms and analysis in the world will not tell a business the truth about a customer who is remote (i.e. not "in the store"). And just because somebody buys something one day, does not mean they want or need the exact same thing the next.

Just because a reader stops reading a Kindle book on a certain page doesn't mean they do not like, value or would not purchase a book by that author in the future.

And above all, these things cannot tell Amazon what people will want in the future. They cannot tell them why people didn't adopt the Kindle Fire phone (I was told "it sucks" by an ATT representative who turned down a commission to give that advice - "Get the iPhone instead.") An Apple and a GooglePlay store representative both said that the Amazon display in another office/tech store was "never attended." One of them described how he bought his aunt a Kindle Fire this past Christmas. He said she returned it and used the money toward a new tablet. Her age and gender put her right in the middle of the Kindle demographic.

I had no negative feelings regarding Amazon until a few months ago. I just thought they were too fast-growing and somewhat impersonal. Then I noticed how nasty, unprofessional and a-creative many of the extreme self-publishing Amazon proponents were. These people were not actual employees or executives. Yet their culture was horrifying and I wondered why Amazon didn't do something to counteract their negative activities. "This doesn't go with creativity or good business," I thought.

These vicious, rude, crude, unimaginative people are just unpaid versions of the brutes at Amazon HQ in Seattle. Maybe some people think this is winning.

I do not.

Note: A version of this post first appeared on my personal website 18 August 2015. Amazon stock was at an historic high of $538.80.

If you find some value here, please visit us at Chameleon Publishing. You may read our FAQ and sign up for our newsletter here (no pop-up/call to action).