Amazon is more than a fixture on the Internet’s high street and it’s long been more than an online bookstore. With a market value in excess of $109 billion, the company, which started selling books online at discounted rates, is now a grocer, a tech firm, a publishing company and just about everything in between. But despite its size, its importance and the vital role the firm plays in almost every aspect of online life — from the books you download to your iPad to the servers that deliver the content you read on a browser — Amazon does next to nothing well. In fact, its failures are worrying and they’re particularly worrying for freelancers and entrepreneurs.
Start with the role that Amazon plays underpinning some of the Web’s most important online services. Instagram, Pinterest and Netflix are just three of the many giant companies with millions of users who make use of Amazon’s Web Services (AWS). The company’s mixture of cloud-based storage, computing and databasing is supposed to handle the information work, leaving the tech firms to focus on the front-end usability and service provision.
It’s a system that’s great in theory and unnoticeable when everything goes to plan. But too often, it doesn’t. In late June, a storm took out an Amazon data center in Ashburn, Virginia. According to Wired, Amazon’s Elastic Load Balancing (ELB) service, which should have spread the processing loads of firms such as Netflix across data centers when one center goes offline, also failed. Netflix was unavailable for three hours, including the peak hours of 8pm to 11pm. That was the second outage to hit Amazon, and its clients, that month.
Outages like those affect plenty of people. But they might be forgivable — at least from the point of view of developers — if AWS were actually a solution to a real problem: the delivery and management of data online. In fact though, AWS may create at least as many problems as it solves. A look at the long list of the most common mistakes made by firms using AWS suggests a system that’s overly complicated and which leads to inefficiencies and wastage, especially for small businesses on tight budgets. And that’s when it works.
Developers looking for a way to host their back-end services may consider Amazon a solution, but they need to be aware of both its complexities and the vulnerabilities that can take it offline.
Kindle Burns Writers
Amazon’s Web Services are valuable, even if they’re less useful or reliable than they should be. But tech services aren’t the company’s main offering. Amazon’s most important service is still retail sales, and in particular its Kindle Store, the ever-growing outlet of electronic books. According to one recent report, Amazon.co.uk now sells 114 ebooks for every 100 print books the store delivers — and that doesn’t include the downloading of free ebooks.
For writers though, whether they’re pitching their epic sci-fi series or offering a work of non-fiction written to establish their expertise, those ebook sales represent a risk and a loss of control as well as an opportunity.
The loss of control comes in the pricing. Self-published books tend to sell through Kindle at a price significantly lower than the cost of ebooks published through traditional publishers. According to Piotr Kowalczyk at ebookfriendly.com, the average price of a self-published ebook in 2011 was just $1.40. The average price overall for books in the Top 100 was $8.26.
The need to cut your price to such low levels is bad enough, but sell on Kindle and you allow Amazon to lower the price even further if it wants to. Fantasy writer Jim C. Hines, for example, placed a collection of short stories on Amazon for $2.99, a price that give him a 70 percent royalty, or $2 for every copy sold. He was pretty shocked to discover that Amazon had cut the price, without telling him, to just 99 cents. That was low enough to trigger a lower royalty rate of just 35 percent.
Amazon was entitled to make that change because its terms and conditions allow it to set the retail price of ebooks sold through Kindle. The company later informed that Hines that it had lowered the price because it had noticed that Kobo had sold the same book for 99 cents “at some point ‘over the last couple of months.’”
Of course, bookstores can also lower their retail prices, but the author’s royalties are still calculated on the list price, not the retail price. As Hines pointed out, Amazon was offering a 50 percent pre-order discount on his book Libriomancer. But because that book was published by Penguin imprint DAW, the royalty that he received was based on the full price set by the publisher, not the bargain price offered by Amazon.
Jim C. Hines is exceptional though in that he’s a published author who also sells some of his work himself through Kindle. For many writers though, Amazon’s self-publishing platform is the place to put books that have failed to make it past the publishing world’s gatekeepers at publishing firms. That means buyers have to trawl their way through piles of spam, digitally compiled productions and even books plagiarized from other authors. Writers of quality works have to put up with seeing their books paired with unedited content that no one in the publishing industry would touch, and buyers have try to sort the titles worth reading from the three-dollar ebooks that cost more than they’re worth.
The Kindle Store might be a convenient way to download reading material to a tablet or a smartphone but the combination of an open platform and tight corporate control over items on that platform make it a difficult environment for both buyers and sellers.
In the end, Amazon’s price (and royalty) slashing didn’t cost Jim C. Hines much. He estimated his losses at a little over $20 and he doesn’t recommend that writers turn their backs on Amazon. They just need to know what to expect and to understand that “Amazon is not pro-author. They’re pro-Amazon.” That’s worth remembering whether you’re looking for a company to handle your data or a platform to sell your book.