"How Much Will You Pay for This Book?," by AG President Roxana Robinson. Reprinted from the Winter 2017 issue of the Authors Guild Bulletin.
I’ve been doing research for a new book lately, and I’ve hired a graduate student to help me. Last winter I was drawing on a Civil War book, and I wanted my assistant, Abigail, to be able to read it too. The book, Reminiscences of Confederate Service, by Francis Warrington Dawson, had been privately published in the nineteenth century, and then published more recently for the general public by LSU Press. I asked Abigail to buy a copy for herself; I was sure it would be easily available through Amazon.
I checked to see. On January 3, 2016, Amazon offered me a long list of sources for new and used paperbacks. A used copy of the paperback, in good condition, was $37.50. A used copy that, I was warned, might contain highlighting, was $44.58. I was surprised by the high prices. I emailed Abigail and told her not to buy a copy. I didn’t want her to have to pay so much.
She said she’d already ordered one. Hers had cost less than ten dollars.
Where did you find it? I asked.
Amazon, she said.
I went back and looked again. The sites offering the books sounded like wholesalers, and all their prices were identical, or nearly so. They were probably jobbers, who had bought their copies cheap when the publisher cleared stock from its warehouse. But they were offering it at sky-high prices. These were the sources that Amazon offered me. So where had Abigail found her book?
On January 11, at 9:52 AM, the price of a new paperback was $56.97. On January 17, at 12:08 am, the used paperback was $47.74.
Curious, I went to the LSU Press site. On that same day, January 17, I found the book was still in print. A new paperback was $16.95. So why hadn’t Amazon included LSU Press—which in fact distributes through Amazon—in the sources it showed me?
We know what Amazon has done to the American book market. It has deliberately forced down the prices of all books by demanding steep discounts from publishers. By choosing to lose money on every low-priced book they sell, they have artificially depreciated book prices until the public has come to believe that books actually have very little monetary value. They’ve lowered prices to a point at which bricks-and-mortar stores can’t compete, and many of those have gone out of business.
Amazon has become a monopoly as a seller of books, but that in itself is not against the law. Laws change, but at the moment it seems that being a monopoly isn’t in itself illegal, as long as you don’t cause harm to your customers. You can engage in price-gouging and predatory pricing, causing economic harm to your competitors, as long as you give your customer lower prices and faster delivery than your competition does.
But those prices I was shown for Reminiscences were clearly not the lowest prices available. Amazon was offering me the book for very high prices, at the same time that they were offering it to Abigail at a very low price.
I rarely use Amazon, but I do so when I’m looking for books for my research. Since they’ve taken over the Used and Antiquarian markets, I’ve had to go to them for these books, and I’ve been known to pay a good deal for a hard-to-find volume. Amazon, of course, remembers this: their algorithms keep track of everything. They know I’ve been known to pay $50 or $60 for a book, so I guess they thought they’d show me that sort of price.
This is what’s called price-discrimination. It’s a pricing strategy based on the fact that different people will pay different prices for products. We all understand that this is true in theory: of course you know that you might be willing to pay more for shoes than your neighbor does. But are you willing to pay more than your neighbor does for the same pair of shoes?
Price discrimination isn’t illegal, but how does it make you feel about Amazon? Now, every time you’re about to click on “Buy,” you may wonder if someone else is getting the same book for less. Why should you pay more?
I kept checking the prices on Amazon. And Amazon kept checking on me. After two weeks, they had noticed that I wasn’t buying the book for $57.27. Suddenly, on January 17, a used paperback was only $3.88. Maybe they’d decided that I wasn’t going to be a buyer at that level, so they thought they’d offer me a different deal.
It’s the algorithms, I suppose, hard at work. It’s the algorithm that decides what the price will be, at all those wholesalers. There may not be any “real” price, only prices determined by my buying habits, proposed to me by Amazon, while waiting to see my reaction.
Amazon was not offering me the best price available; in fact its offerings were excluding the best prices available. So how does this particular monopoly function to help the customer? Might it not actually cause me economic harm?
Amazon is now one of the largest companies in the world. It wants to be all things to all people, or at least it wants to sell all things to all people. But if it wants to sell the same things at different prices, and wants to sell me books for $50 that it offers to Abigail for $10, then I’d rather find a different source. That feels like harm.