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If You Live By The Rules, You Die By The Rules

I love Amazon, I really do.

I have no idea how much I spend there in a year, but it’s a lot. I love the fact that I can read reviews on books before I buy, that when I do buy they’ll turn up on time thanks to the awesome Amazon Prime.

That I can buy a gift and have it delivered directly to the person, gift wrapped if necessary, and that I can send stuff back without any quibbling whatsoever.

I hate Amazon, I really do.

I hate the fact they take such a large percentage off authors for their books, that they pay pitiful levels of commission to their affiliates and they charge me $79 for Amazon Prime, a service that has me buying books on a whim when before I’d wait until I got up to the free order threshold by which time I’d often changed my mind.

Most of all though I hate the fact they have the power to dictate what books are and are not successful.

John my co-author on How To Be Rich and Happy hates Amazon for another reason and one that’s created a stalemate. Until now that is.

John like many successful authors has been pirated and those books have shown up on Amazon for sale. Also, like myself, he has his own books showing up second hand on Amazon, sometimes in the first week of release.

So people that may be about to buy a new copy of the brilliant ‘The Big Five For Life’ suddenly realize they can get a second hand copy for half the price, or even a lot less than that.

Amazon makes money out of that, the seller makes money out of that, the shipping company makes money out of that, the author doesn’t.

It’s not easy to shed a tear for writers like Stephen King, J K Rolling and John Grisham, because it’s doubtful they’ll be worried about where their next meal is coming from, but what about the many thousands of authors that are barely scraping an existence?

When we get the first 3,000 copies of How To Be Rich and Happy in June we’ll be looking to generate a lot of media publicity as we give them away.

We want to create a snowball effect that means we sell more of the e-book on the back of the publicity, which generates more money to buy more physical books and so on and so forth.

The Dilemma

Traditional media will generate traditional responses.

You’re still fairly unusual in so much as you read blogs. Most people don’t. As such you probably use the Internet as your primary source of news and you’re less likely to buy newspapers or watch TV news.

People that watch local TV are far less likely to be webcentric and as such will be much less inclined to buy e-books.

The dilemma is, we could end up generating a shit load of publicity for a physical book that is only available as a giveaway to good causes and can’t be bought.

With this in mind I’ve been pushing John to agree to get some copies printed for sale so we could raise the cash we need much more quickly,

But he was resistant. His line of thinking was, if we’re trying to help people and give up our own time and money he was damned if Amazon were going to take 55%.

The Solution

We were at an en passe and struggling to work out a compromise.

In the book we talk about not getting ‘ Mad How Disease’ Sometimes it’s better to stop thinking about how you can do something and shift your mindset as to who can help you do it

The who doesn’t necessarily mean you to have to literally speak or interact with that person, you may just learn from their work or model their actions.

I found our ‘who’ almost by accident and it’s Chris Brogan and Julien Smith.

I was reading their excellent book ‘Trust Agents’ and was introduced to their rather cool term ‘Gatejumpers’

A gatejumper is a person, business or organization that doesn’t try to take the normal route to success, they cheat (or hack as it’s known in online gaming parlance) by changing the rules of the game to fit their strengths.

Amazon changed the rules of the game with book distribution and as such now dominate the market place like it has never been dominated before.

What if Amazon had the rules changed on them?

To sell a book on Amazon (or in Barnes and Noble or any other major book seller) it has to have an ISBN (International Standard Book Number). That’s the bar code that you see on the back cover of every book you have ever bought that wasn’t self-published.

Without that they cannot control inventory, pay people, track distribution and do all that good stuff that businesses need to do.

The really cool thing is pirates need the ISBN number too, and so do re-sellers, because without it  they are royally screwed and cannot use Amazon.

  • What if we refused to apply for an ISBN number?
  • What if we only sold the book from the How To Be Rich and Happy site?
  • What if we generated so much publicity that we could raise a finger to Amazon?

If we sell books from our site at $25 as an example we could probably have in the region of $20+ of every sale going to print more books and raise the money we need in a lot less time. A similar book sold on Amazon would be lucky to net us $7 after our costs and it would be pirated in not time.

Of course it’s fraught with difficulties challenges, because most people default to Amazon when they want to buy a book. But people defaulted to Encyclopedia Britannica until Microsoft kicked their but with Encarta, and then they defaulted to Encarta until Wikipedia kicked its but. Things change.

Trust Agents helped me see things differently and it was then driven home even further yesterday.

I was talking with a friend the other day and she was saying she gets irritated by the expressions ‘thinking outside the box’. As she put it:

“Why don’t they just get rid of the box, why even accept there is a box there in the first place, instead of thinking you have to step outside something? It’s ridiculous”

We’re getting rid of the box and I suppose we could crash and burn and have to go back to Amazon cap in hand.

We hope people will see the reasons behind this and get behind us as a way of supporting good causes and saying to companies like Amazon;

“If you live by the rules, you die by the rules”

What do you think? Are we setting ourselves up for a fall? How can you Gatejump some project you are currently involved in and set your own rules?

22 comments to If You Live By The Rules, You Die By The Rules

  • Ed Gaile

    Love it Tim! I also have the love/hate relationship with Amazon. Love Prime, hate the commissions for affiliate sales (almost not worth it). I read Brogan’s book as well and I really think that the “gatejumpers” are going to be the ones that can differentiate themselves from the rest of the crowd/noise. Here’s to your success!

  • Tony

    I have a love-love relationship with Amazon. I don’t bother with Prime. I get great discounts on books and always use Super Saver (read FREE) delivery. I also buy quite a few second hand books. That is the reality. Sometimes that is out of necessity (the books are no longer available new), and sometimes it is for the price. For example, I bought Pavlina’s book second hand in mint condition for pennies in the pound (curiosity got the better of me, and that was all I was prepared to pay). However, I bought a couple of John’s books, new and heavily discounted, on Amazon.

    On the matter of your book. I don’t think not having an ISBN will save you much. And I doubt it will stop the pirates. I think you could market and sell the book through your own site AND sell through Amazon. Not sure it has to be one or the other. Yes, you have to pay commission, but those are sales you wouldn’t otherwise have made. I would try to work with Amazon to your advantage rather than trying to defeat them (you won’t).

    If the book is really worth having, people will find a way to get their hands on it – through legitimate channels. I think you are just going to have to accept that your book is going to be pirated. Unfortunately, that is a fact of life in the Internet publishing/ebook world. It sucks, but you aren’t going to stop it, and most authors who publish on the Net accept that these days.

    In summary, I think your best bet is to sell through as many channels as possible, and that will be easier with an ISBN.

  • @ Ed – Thanks a lot mate, I know it’s a huge goal, but I love huge goals ;-)

    @ Pace – When it comes to doing things differently you and Kyeli wrote the book – literally!

    @ Tony – Most pirated books are sold through Amazon and you cannot sell through Amazon without an ISBN. Sure they could go on eBay or Craigs List, but Amazon dwarfs everything else.

    I love this:

    I would try to work with Amazon to your advantage rather than trying to defeat them (you won’t).

    We actually know of one company that did use ISBN’s but refused to sell through Amazon and pay the 55% commission. Eventually Amazon went to THEM and negotiated a better deal after Amazon users complained.

    I’ll see if this story is ‘out there’ and I can share the company name with you. If that happened to us all bets would be off, but being told I can’t do something inspires me even more ;-)

  • @ Tony – To give you an idea of how Amazon works (apologies if you know I don’t want to sound patronizing).

    Don’t Ask Stupid Question retails for $19.99, but is discounted on Amazon to $14.99. I get $6.70 for every sale, but I have to pay shipping.

    Sometimes they’ll order one, sometimes two and sometimes five. If it’s just one it costs me $2.50 postage minimum. So that leaves me $4.20. The cost of the books was about $3.50 with shipping, so that leaves me 70 cents and that doesn’t include the packaging, printing of shipping notes or taking them to the nearest post office.

    In effect Amazon makes $8.25 and I make nothing.

    I have no option though if I want to sell them because running a merchant account to sell myself costs even more.

    It is possible to get better deals than that and I could use a company like Lightening Source to remove shipping from the equation, but the set up wouldn’t make it cost effective now as I don’t sell enough books.

    There are thousands and thousands of authors in my position.

    BTW, I’m not blaming Amazon per se, they have a business to run, but I’m also not throwing garlands at their feet ;-0

  • Wow. First off, thank you for shedding more light on how Amazon works. They sure do take a lot of money off from the authors.

    I think your idea is brilliant. I think you can take it by the horn and play it your way. Why does every book have to go on Amazon? It doesn’t if so you choose. Better yet…you are doing it for an awesome cause too!!! (BTW did you contact Amazon and tell them about your project? Maybe they would want in?)

    I would apply for the bar code for future dates, after you guys reach your goals or even see a slow down moment. This way you can jump onto it when needed without losing momentum.

    Honestly, I rather buy from the author’s website then Amazon. You can make your website more interactive (sort of what Bob Bug does) and have people come back and add their stories/reviews.

    But I so do agree to get rid of the box and do it YOUR WAY.

  • Tony

    @Tim: thanks for that insight. Yes it’s tough. But I don’t think what you’ve said changes my main points does it?

    1. You aren’t going to gain much but *not* having an ISBN. OK you might stop some pirates, but pirates are pretty much a fact of life these days – just ask the music industry.

    2. Yes, you don’t make a lot on an Amazon sale, but you do make something.

    3. You can still sell through your site at more profit if you want.

    OK, so if you can go to Amazon and get a better deal that’d be great, and you should try that. And that is working *with* them, not cutting them out of the loop and “showing them the finger”. I think they would probably be prepared to negotiate. I think they would be very open to discussion if there was a track record in place on sales – perhaps John’s or your previous sales data could be used to support a case for a better rate on Amazon.

    Having said that I feel for you, and you need to go with what you think is best. You and John have a better insight on this than me as published authors already selling through Amazon. Just throwing out my thoughts for what they are worth.

  • @ Tony – They initially refused to negotiate with a much bigger company than us, this is a publishing house I’m talking about, albeit it a relative specialist and small one. It was only when they were backed into a corner they relented.

    It’s not just the pirates we stop it’s the HUGE market in second hand sales that can’t then go back through Amazon.

    Do you know anybody that has ever spoken to somebody at Amazon? Try and find a contact us page on their site. They don’t want to talk to people, they want to talk at them.

    I get your points and they’re valid. I really don’t hate Amazon I was being provocative *gasp*, but I do hate the thought of feeling like I have to go through them to succeed.

    I want a go at rewriting the rules. If it doesn’t work and we then have to publish on Amazon, it’s no big deal and I’m always happy to admit when I screwed up.

  • Ken Gregg

    Tim,

    How about including a special intro page that explains the million book project and that by purchasing the book from a source other than your web site, no proceeds were contributed to the project. The purchaser can remedy this by either making a contribution (say, equal to the
    Amazon discount) or working to make sure the copy is read by at least 5 people in your million book demographic.

    Wouldn’t that page also be in any pirated copies?

    As for your having to do fulfillment, I would tell Amazon if they wanted to order 1,000 books for stock, this is the per copy price and thank you for contributing to our mission.

  • Social comments and analytics for this post…

    This post was mentioned on Twitter by 7breaths_: RT @TimBrownson: If you live by the rules, you die by the rules (how we’re gonna kick Amazons but!) http://snipurl.com/uzyyq > I like it….

  • Interesting insight into Amazon that I had no idea about, cheers. I guess if you never try something different, you’ll never find out if it works – and I’m not sure you have anything to lose.

    I wonder if a service like Scribd might help you reach a wider audience (instead of Amazon) – http://www.scribd.com/store/about

  • This is only a half baked idea but it might work in principle. Sell how to be rich and happy ‘lite’ on amazon for $1 or whatever the lowest price is you can without making a loss. Make it a summary of the book, 10 or 20 pages maybe. Pack the best bits in, the real selling points of the book or of the first couple of chapters and get people hooked. Within the book, make constant reminders about the full edition, extended edition, case studies edition or whatever and as part of the lite book, tell them where to buy it from. Sell that direct and sell at a premium price. Don’t have an isbn. Sell lots of premium material around it too. Use the affordable initial product as advertising. Flip the script and get people to pay you for your advertising. If it’s really good, you might even get free publicity from it.

    A couple of examples: Rich Dad Poor Dad was a New York Times Bestseller. Cost £6 (in the UK) and was basically a sales pitch for the board game that sold for a few hundred $$$s. The book had a lot of value in it and changed my way of looking at finance

    Another example: The book ‘The Game’ by Neil Strauss basically blew open the pickup / seduction market for countless businesses to make a lot of money on premium products. The original book costs the same as any other paper back. Strauss wrote another less well known book called the annihilation method which is very very limited and (hence) very very expensive. Not to mention all the other companies who’ve sprung up (A friend of mine paid >£4000 to puatraining for a week long residential) and this is mainly due to the success of The Game

  • Hi Tim. We nominated your blog for the Sunshine award . Please come to our blog at http://www.emotionalaffair.org and get the award so you can display it here and let everyone know that your words bring sunshine and inspiration to others. Doug & Linda

  • @ Ken – Too late it’s already done for the first 3,000, although we do have something similar in there, but at the back of the book.

    Having said that I would imagine the pirates would simply not scan that particular page in and then renumber accordingly. Thanks for your thoughts.

    @ Mark – Good point. I actually got pirated there with my first e-book, but when I complained they removed it in 2 hours! I’d not thought of it for this, so I’ll check it out.

    @ Chris – Some really good stuff there, thanks. I’m going to pitch it to John. I do get your point about The Game though because that launched a few millionaires! Really excellent book too.

    @ D & L – I had one of those a week or so ago. Thanks a lot, but I’m in the process of streamlining my blog which is why I have removed all advertising and there are lots of changes happening. I do appreciate it though, thanks.

  • Sanford

    I think you have a great idea after the bugs get worked out.
    And David & Goliath stories are great for PR.

  • Hi Tim,

    VOW! Exceptional thoughts you have mentioned here.

    I shall have to think about the solutions you have mentioned here.

    Bye for now,
    Cheryl Paris

  • [...] to change the rules when the books arrive in June. If you’d like to know how, check out “If You Live By The Rules, You Die By The Rules” a post inspired after reading Trust Agents by Chris Brogan and Julien [...]

  • @ Sanford – Yeh it’s very much a David and Goliath, but we’re living in the age where David has access to AK47′s to Goliath but get his act together ;-)

    @ Cheryl – Thanks

  • Hey Tim,

    What about this off the wall idea:
    1) The the Amazon thing as usual.
    2) *ALSO* be your own “pirate”, and sell the book in the Amazon used/store marketplace yourself. You benefit from getting the customer info for later up-sells (coaching flier?), make a bit more, and maybe hate Amazon a little less (not that that matters much).

    Make sure it’s listed as “new”, and at a price that get’s you much more than amazon’s cut…

    It’s probably the [cheap] wine talking, but could be worth experimenting with at some point.

    -Tim

    -Tim

  • @ Tim – Must confess I never thought of that. I don’t even know how much Amazon take from each sale. I’ll do some digging.

  • The only drawback I see for not having an isbn is it will never be seen in a public library, at least I’m pretty sure not. Some of writers biggest fans start being fans by discovering them at their local library maybe because of cost or not particularly fond of a collection of books around the house.

    P.S.Love your graphics, who does those for you?

  • Christian

    Hi Tim,

    I’d say, go for it. You have nothing to lose. If it doesn’t work out like you want, you can always apply for an ISBN number later. On the other hand, “un-applying” for an ISBN number later if you got one now is probably… significantly more difficult. :-)