by Jay Hartman
Q: I read recently that Amazon laid off 18,000 employees. Does that have any effect on the publishing end of things, or is it mostly just corporate jobs?
A: Bad news. It definitely affects publishing.
When the new CEO Andy Jassy took over from Jeff Bezos, he made it pretty clear he wasn’t a fan of the book side of the business. He implemented many buying changes that greatly reduced the amount of books stored in Amazon’s warehouses. Most of the big NYC publishers reported poor earnings at the end of the year, and all attributed it to smaller orders coming from Amazon.
It gets worse.
Amazon went public with a bunch of the various categories that would see downsizing (i.e.: Grocery, Health, Amazon Air) but most savvy folks noticed those were pretty small departments. Turns out the lion’s share of those 18,000 jobs eliminated were, per CEO Jassy, predominantly in a department known as PXT, which stands for “People, Experience, and Technology.” This category contains everything having to do with Alexa and Alexa-related products, ebooks, print-on-demand, AuthorCentral, textbooks, publisher ordering and anything dealing with Kindle. Basically, if it’s a book in any format (except audio), watch out.
The layoffs had an immediate effect. Agents I’ve spoken with report they’re not seeing their authors’ reviews from Publisher’s Weekly showing up on book description pages. KDP orders now take ten business days to print when they used to take only three to five. And watch those orders—they aren’t even printing until the last possible moment to meet the deadline. Amazon orders for books to warehouse are down. A giant chunk of Kindle support is gone. Amazon has cut their advertising budgets for their own in-house publishing arms.
Is this the end of KDP and publishing through Amazon? Not yet, but if you ignore the signs, you’re doing yourself a disservice. Amazon lost millions of dollars on ebooks and Kindle over the years, and the new CEO isn’t interested in continuing that trend. I’ve warned folks for years they should be diverse in where they make their books available for purchase. This should be the wake-up call that everyone pays attention to.
Q: It seems like every few months Ingram increases the cost of producing a print book. Why does this keep going up?
A: Blame it on all those folks who hoarded toilet paper in the early days of the pandemic.
Okay, not completely, but that definitely had an impact. The demand for paper towels and toilet paper in the early days of the pandemic greatly reduced the amount of tree pulp available for producing other paper-related products. In fact, many of the regular paper manufacturers who would normally produce for the book industry switched over to producing toilet paper and towels to fill the demand. It’s not exactly the same type of paper, so many factories converted their production lines from book paper to TP. There’s some significant costs in doing this, so switching back isn’t all that easy.
On top of this, the U.S. imports a lot of its wood pulp from other countries. With the massive snarls in cargo shipping, pulp became a precious commodity that couldn’t be imported at the same rate as the demand. Add to this high COVID infection rates in pulp-producing countries and you have an even bigger problem.
Although we’ve moved into a much better world health-wise, the squeeze for wood pulp continues and doesn’t seem to be abating. As a result, it’s costing printers such as Ingram a lot more money to get the printing materials they need, leaving them no choice but to pass that on to you.
“But Jay,” I hear you ask, “I haven’t seen a giant increase at KDP. Why not?” Great question. Amazon has the ability to purchase with much greater buying power than smaller printers. You basically have Amazon at the top, followed by Ingram, followed by mom-and-pop shops. Amazon gets to negotiate and gets that paper supply before anyone else. Ingram comes along and gets what they can, but it’s not a lot. The mom-and-pop shops really hurt, because by the time they try to buy paper it’s pretty much all bought up. I’ve heard horror stories galore of small print shops unable to do book runs for their authors due to the inability to source paper.
BTW, if you’re printing through Ingram or IngramSpark, make sure you adjust\ your retail price accordingly as they raise their printing charges; otherwise, you’re going to be left with pennies in royalties on any print-on-demand titles created. Also, don’t put the price of your book in your barcode at Ingram/IngramSpark, because you’ll have to pay to reupload a new cover when they raise their prices again.
Looking to get The Publisher Perspective? Send your questions to jhartman@untreedreads.com with TPP in your subject line. If your question is used, we’ll send you a free ebook from Untreed Reads.
Jay A. Hartman, editor-in-chief at Untreed Reads Publishing, founded Untreed Reads to promote ebooks with an emphasis on independent authors and publishers. He’s written about the ebook industry for fifteen years and previously served as content editor for KnowBetter.com, one of the internet’s oldest sites reporting on ebooks and epublishing.
Very informative. I’m sharing on Twitter And with author friends.
I agree, a very informative article–also discouraging in relation to the publishing industry in regard to Amazon.
There’s a lot to think about here. I had made zero connection between TP and printing paper, but I see it now. Thanks.
Excellent subject to cover, I don’t know why others I read haven’t done it way before now. Thanks.
The industry is changing… the whole bloody world is changing. Insights like these help us adapt and move with the changes and not cling to old strategies that have “always worked” (like for a few years).
Thanks Jay.
Very informative. I was aware of Amazon layoffs but knew nothing about the new CEO disparaging their book selling
How can we keep up! Thanks for your info and the will to follow it all. Amazing.