Why Amazon Is Not A Monopoly (Yet)

This Amazon and Hachette negotiation has people all wound up in a tizzy.

Some, who seem to “side” with Hachette in these negotiations (NOTE:  there are NO sides, this isn’t a “war” except in the media), trot out the following line (or some variation of it):

Amazon is a monopoly, so watch out, they are going to take over the book industry.

The quick version is … no, they aren’t a monopoly, and I don’t think they are going to be one any time soon.

There are plenty of alternatives to Amazon in terms of books (Powells, Barnes and Noble, independent bookstores etc…), but Amazon doesn’t just sell books.

Amazon is a retailer that uses digital technologies better than most companies, and applies them to its business with a model similar to (not exactly like) Wal-Mart.

So if you think Amazon is a monopoly, are you going to call Wal-Mart a monopoly too?

Amazon isn’t a monopoly because they haven’t even come close to “eliminating” all competition so they can completely control (raise, not lower) pricing.

The legal definition of monopoly from here: http://legal-dictionary.thefre…

An economic advantage held by one or more persons or companies deriving from the exclusive power to carry on a particular business or trade or to manufacture and sell a particular item, thereby suppressing competition and allowing such persons or companies to raise the price of a product or service substantially above the price that would be established by a free market.

Amazon doesn’t have any “economic advantage” as it pertains to this legal definition yet, not even close. I don’t see them ever getting this advantage, because, well, Wal-Mart is also a competitor for them as well on retail items.

So can we stop this “Amazon is a monopoly and a great big bully, WAH!” nonsense?

Amazon’s Recent Statement Proves Hachette’s True Motive

Amazon’s recent statement is here.

Barry Eisler’s comments on it are here.

Hugh Howey’s comments on it are here.

Read all of the above (links open in a new window) … then come back.

My comments (on the general nature of this whole Amazon and Hachette thing) are below:

Is Amazon in business to make a profit? Yep. Investors cursed with short-term thinking don’t think so, based on recent losses being reported, but that’s their problem.

Amazon is a corporation, they are in business to make a profit, and they have what is (for most companies) a “missing” ingredient…

… they truly understand where those profits come from. The fact this post by their book team had the words “price elasticity” in it, should tell every single Big 5 publisher to go back to business school.

Amazon might mess with the terms for authors in the future, sure. They won’t make all authors happy, all the time … okay… so what?

What publisher or retailer has?

Amazon has a LONG way to go before they enter the realm of “screwing” authors. And Amazon also knows that if they do that, it would hurt business, because authors would probably go through other distribution channels.

Amazon won’t do that. The “asset” created by treating authors fairly is too valuable to their business for now. Until that changes, I don’t see any future where Amazon will just outright screw authors over. They might “fudge” the numbers, like they have recently … but nothing more.

That’s a LONG way from what Big 5 publishers are doing to their authors (except for the top percentage of their authors).

If anyone from a big 5 publisher can read Amazon’s recent post … and with a straight face tell people (in public) that ebook prices should be kept on the high side (that is, above $9.99 in general) … there is no hope for them.

Because math is math, no matter HOW you look at it.

The Internet Is Just A Distraction

I’ve been doing some deep thinking about business again…and I’ve come to a rather interesting conclusion this time…

The Internet is a distraction to actually doing business.

But not in the sense you might be thinking…I just think that we place too much importance on the Internet for business.  Way too much importance in fact.

Here’s part of the reason why I think this (otherwise this post will get WAY too long, so I might have to break it up)…

Before the Internet became popular, we had the conversation between two people.  Then, we had radio, which allowed us to broadcast that conversation one way to a person or family.  Then, we had TV which allowed us to broadcast IMAGES along with that same one-way conversation.

So radio and TV started the distraction, then the Internet came along and at first accelerated the one-way conversation to an uncontrollable level as banner ads, direct mail letters converted to websites, brochure style websites, etc… evolved (this is before blogs).

But then, something very important happened, the social networks and bookmarking devices came along.  This allowed the two-way conversation between people to return, but with an unfortunate consequence…

There is too much conversation for the individual human being (that means all of us) to digest and take part in. And, the funny thing is, that’s exactly what we as human beings really wanted all along with technology like this…is to be able to carry a two-way conversation across boundaries.

Think about this for a second, in a normal day…

  • There are Twitter conversations.
  • There are Facebook conversations.
  • There are Email conversations.
  • There are cell phone conversations (and over the Internet).
  • And on, and on, and on…including texting.

So, we are seeking simple conversations…but because of the Internet distraction there are way too many ways to carry that conversation (ever had someone stop a face to face conversation with you to get a text?  Unreal.).

So how does all of this apply to business?

We used to do business face to face, with two-way conversation between people.  Then, when we liked a particular business enough to do business with it continuously, we referred it to others asking about the same type of business.

Then it seems we got away from that, and the Internet accelerated that process…but then also provided the means for two-way conversation between people to return to business.

Business is, and always will be about people…period. That will never change no matter what medium we use to communicate.

The Internet provides so many ways to communicate…it has become a distraction, because it allows business people to cheat…reaching more people faster, cheaper, and more frequently.

But when The Great Filtering happens…when people get sick of being interrupted and seek to return to more “normal” and digestible conversation between two people (which WILL happen at some point by the way)…they will find ways to do that, and the Internet provides those means.

So…if you’re using the Internet to market a business without being social…you’ll miss the opportunity because you’re distracted by the illusion that is “regular marketing on the Internet”…and you’ll be out of business.  You’ll have been distracted by the Internet.

Don’t let this happen to you.

A Disturbing Evolution In Internet Marketing

Something is bothering me recently…

There has been a term thrown around recently on the blogs of several well-known marketers and pro-consumer advocates…

The Internet Marketing Syndicate

A group of Internet Marketers allegedly forming a “closed door” endorsed marketing and product launch sequence that results in sales of high-ticket info-products being sold (most for  $1997 each).

My view on this trend, disturbing.  Very sad and very disturbing.

When you endorse a product, it’s extremely important that you’ve used that product, or reviewed that product so you can make a justified determination in your endorsement for the reader of your email or blog post.

This doesn’t seem to be happening in this close-knit circle of marketers.

Now, I’m no lawyer, so the legal aspects of this are best left to them to discuss…but ethically, this needs to be challenged.

In reading some of the blog posts circulating about this subject, I’m finding that to join this Internet Marketing Syndicate, you must promote a schedule of products, no matter what.  Yours then gets promoted once as a result of being part of this group…no matter what.

What…the…hell?

So…products are being promoted randomly, without a second thought to the person forking over their hard-earned $1997 to buy them?

Are these individuals that desperate for income or something?

At what point do you make the leap from teaching a market of people to do something (keyword: people), to simply trying to extract money from that market without regard to the quality of products being sold?

To me, you don’t cross that bridge.  To me, if you do cross that bridge, you cross into the dark underbelly of the marketing world, and even worse… by example as a “leader” in the market (a term I use loosely), you justify these actions as “ok” for new people entering the marketing business.

And that’s NOT ok.

Now, I’m going to admit I haven’t been 100% perfect when it comes to endorsed marketing (I don’t think anyone has), but I always strive to be as close to that 100% perfect as I possibly can.

This alleged Syndicate is far from perfect at all, or so it seems.  Do they think they’re above common business ethics?

I’m starting to wonder.

Well Yes And No

Yes…

  • Yes online marketing is a valid business model…
  • Yes it does require that you work hard…
  • Yes it requires marketing skill…
  • Yes it requires the ability to sell and persuade (not illegally, unethically, or immorally however)…
  • Yes it does take some time to build an affiliate marketing business…
  • Yes you will have competition in niches that make money…
  • Yes you will have to do things better from time to time…
  • Yes smart competitors will be watching what you do…
  • Yes you could make excuses, whine, or worry about “how hard this is”…and yes you could give it all up.

So…

Can you do this? Yes.

Will you do what it takes?

And no…

  • No marketing does not create overnight riches.
  • No there is no magic button to fill your bank account with cash.
  • No there aren’t many “untapped niches” where you will dominate anymore.
  • No marketing isn’t easy.
  • No there are no shortcuts.
  • No you shouldn’t try to figure this business out beforehand.
  • No you shouldn’t over-analyze opportunities, that will paralyze you.
  • No the Internet isn’t some big shiny object anymore, so “make money online” isn’t a new topic anymore…

So…

No you’re not going to succeed without the right mindset…

…will you do what it takes to develop that mindset?

If the answer is No, maybe you should keep your day job.

Now…will you share this article with others?  Yes, or no? 🙂