Another Explanation for the Hachette Delays
Has anyone paused to consider how difficult and expensive it would be for Amazon to delay the shipment of certain books by certain publishers? It would be a massive pain in the ass!
What is almost certainly happening with the delivery time of Hachette’s books is that Amazon isn’t keeping its predicted sales quantity in stock. One of the major advancements in retail over the past several decades has been the move to on-time delivery. It means an order for new product is made before it’s needed, so the product spends as little time warehoused as possible. This ability is worth billions; it is expensive to develop and hone; and it’s a service that Amazon provides to all of its retail partners. Hachette and the rest of the Big 5 can’t possibly appreciate what this skill entails nor how much they benefit from Amazon’s expertise in this area.
When Amazon stopped stocking predicted sales quantities, that put the shipping burden on Hachette, a company that’s dreadful at delivering at high speeds. They haven’t had to master this skill. Amazon has done it for them. Hachette author Michael Sullivan suspected the shipment delays were from Hachette’s end and not Amazon’s. He asked his publisher for shipping invoices. Hachette refused to provide this information to its author. The delays are far more likely to be Hachette’s fault, not Amazon’s.
A bit of an aside here to tell you what ordering books was like at the last bookstore I worked for. We had several sources for books. We could order from one of the major distributors like Ingram or Baker & Taylor and get the books within three days. The discount was generally around 40%. We could also use NACS (the National Association of College Stores). This was like shopping on Amazon, with a great website (but horrible search ability). These books might come in two days. The discount was also around 40%. Most of our orders went directly to publishers.* This got us the best discount by far — from 45% to 50%, depending on the publisher, title, and quantity. These books took at least a week to arrive, usually longer. Often, it was two weeks. By the time these books arrived, I barely remembered having ordered them.
The ordering process was also bizarre. To order books, you called an actual person and read off the ISBN and quantity for each book you wanted. Seriously. It was my least favorite task at the bookstore. It could take half an hour to place a large order. Half an hour of saying numbers to a stranger. And every tenth book, they’d say that the book was no longer available. You didn’t know until you ordered. Two or three years ago, publishers started moving toward an online ordering system, which I worked to get us on, but this wasn’t much easier. It meant typing out all the numbers and delimiting them with commas. You’d have to see this process to believe it. I certainly didn’t. I assumed we were the only bookstore in the world that still did this. I couldn’t believe there were full-time jobs for people to sit there and take phone orders for books.
Back to Hachette and Amazon: Imagine what it would mean for Amazon to purposefully delay orders. You have an entire network of distribution centers, warehouse pickers, packing/shipping/trucking processes, and in order to spite a company you’re in negotiations with, you begin artificially delaying shipment of only certain copies. So into this complex machinery of sending out products all over the world, you toss this wrench: “Yo, keep moving products as quickly as humanly possible. Unless it’s a book by Hachette, in which case slow the process down.”
Someone pointed out that this could be done digitally, but why go through the trouble? Why not show the publisher what the customer experience would be if Amazon wasn’t there to predict the orders and handle the shipping? That’s what my boss and I did at our bookstore. We watched inventory levels and made our publisher orders a week in advance to minimize our out-of-stock time. Rather than an artificial delay, it’s far more likely that Amazon adjusted the predicted demand for Hachette titles, maybe even to zero. So here’s a hypothesis that explains both the delayed shipping and the removal of pre-order buttons: Amazon isn’t certain it will be selling Hachette books in the near future.
Think about it. A pre-order is a guarantee of a future transaction. It would be remiss for Amazon to offer pre-orders for items it won’t legally be able to sell when they eventually become available. It would also be remiss for Amazon to stock millions of dollars worth of inventory it won’t legally be able to sell in the near future and would have to return at great expense. The moment Amazon realized negotiations were breaking down (as their press release recently intimated), they had to reduce their exposure to Hachette inventory. That means reducing future sales, which is what pre-orders and predicted warehouse quantities represent.
These moves by Amazon might be less about spite and more about pragmatism. Even legality. That book you pre-ordered from us two months ago? We no longer have a sales relationship with that manufacturer. Here’s your refund.
Both major moves explained by a probable and unbelievable reality: Soon, there may not be any Hachette books on Amazon at all.
*Two reasons for placing most of our orders directly with publishers: The first is that bookstores make most of their margin in that 3-5% they save. The second is that returns to publishers for unsold frontlist titles can be as high as 50%, but you can only return a percentage of what you order. Placing all backlist and re-stock orders through the publisher padded this number to make sure we never fell outside of our returns margin.