Mar 31 2008
Amazon’s Take on POD
Open letter to interested parties:
We wanted to make sure those who are interested have an opportunity to understand what we’re changing with print on demand and why we’re doing so.
One question that we’ve seen is a simple one.
Is Amazon requiring that print-on-demand books be printed inside Amazon’s own fulfillment centers, and if so why?
Yes. Modern POD printing machines can print and bind a book in less than two hours. If the POD printing machines reside inside our own fulfillment centers, we can more quickly ship the POD book to customers — including in those cases where the POD book needs to be married together with another item. If a customer orders a POD item together with an item that we’re holding in inventory — a common case — we can quickly print and bind the POD item, pick the inventoried item, and ship the two together in one box, and we can do so quickly. If the POD item were to be printed at a third party, we’d have to wait for it to be transhipped to our fulfillment center before it could be married together with the inventoried item.
Speed of shipping is a key customer experience focus for us and it has been for many years. Amazon Prime is an example of a successful and growing program that is driving up our speed of shipment with customers. POD items printed inside our own fulfillment centers can make our Amazon Prime cutoff times. POD items printed outside cannot.
Simply put, we can provide a better, more timely customer experience if the POD titles are printed inside our own fulfillment centers. In addition, printing these titles in our own fulfillment centers saves transportation costs and transportation fuel.
Another question we’ve seen: Do I need to switch completely to having my POD titles printed at Amazon?
No, there is no request for exclusivity. Any publisher can use Amazon’s POD service just for those units that ship from Amazon and continue to use a different POD service provider for distribution through other channels.
Alternatively, you can use a different POD service provider for all your units. In that case, we ask that you pre-produce a small number of copies of each title (typically five copies), and send those to us in advance (Amazon Advantage Program-successfully used by thousands of big and small publishers). We will inventory those copies. That small cache of inventory allows us to provide the same rapid fulfillment capability to our customers that we would have if we were printing the titles ourselves on POD printing machines located inside our fulfillment centers. Unlike POD, this alternative is not completely “inventoryless.” However, as a practical matter, five copies is a small enough quantity that it is economically close to an inventoryless model.
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Very interesting news. Thanks for bringing this to our attention.
I take it that since you posted this, you don’t think this is a good thing?
Okay, never mind … I’m a couple of days behind in catching up on my reading, hadn’t yet read your earlier post, which explains why you don’t think it a good thing. I read from the top down. You have to admit, based on simply reading this one letter I didn’t see a problem with it, but my question has been answered … further down the page. Get it. Never mind.
I’ll answer anyway.
I’m nuetral at the moment. Yesterday I wondered if Amazon’s decision could be seen as a monopoly. I didn’t know the answer but questioned the possibility.
After reading Amazon’s letter, they are giving POD’s an opportunity to provide five books that can be inventoried for sale. So in essence, they are saying that they will sell POD books from other printers IF they are given books to stock. So now, I’m even less sure about the monopoly agrument.
That said, a POD’s business model is that it’s “inventoryless” so they only print books at the time of order. That is why bookstores don’t carry POD books because they can’t return them to the POD printer if they do not sell.
Though Amazon has stated in their letter that five books is virtually “inventoryless” the fact of the matter remains that each POD has hundreds if not thousands of POD books. So five copies of each book can lead to tens of thousands of dollars. Who foots the bill for this? The POD? Or the writer?
Since writers are paying for the POD service, my take is that the writer will end up paying for the five copies. Which I think is okay because as I said they are paying for the POD services anyway.
ETA: My initial reason to post the Amazon/POD news was because some of my visitors use POD or will have a POD book printed soon. I want to provide visitors with industry news that will affect their ability to market their books.