All about Amazon Transparency

Amazon has rolled out a new program for brand owners, manufacturers, and Amazon Sellers called Amazon Transparency. I’ve explained what Amazon Transparency is and the requirements for getting started over on the Lean Media blog.

In a nutshell, Amazon Transparency is the answer to a very vexing problem: How to crack down on counterfeiters who are using the Amazon Seller program to flood Amazon with counterfeit goods. My post touches upon some of the legal aspects involved (First-Sale Doctrine and U.S. trademarks) but also gets into some of the practical requirements for Amazon Transparency, including production, packaging, UPC/GTIN registration, and more.Amazon Transparency.

The Supreme Court shifts and businesses suffer

For more than 25 years, Internet businesses in the United States have enjoyed a big break: If a customer in another state buys something online, the company doesn’t need to collect state sales tax or file taxes in that state unless they have operations in that state such as a warehouse or branch office.

That is about to change, thanks to the recent South Dakota v. Wayfair ruling from the Supreme Court. This essay by a tax expert explains the situation and the impact pretty clearly. I draw your attention to the concluding paragraph (note: nexus is the ability of a state to require businesses to be responsible for taxes):

Many states have enacted economic nexus rules for income taxes that create a filing responsibility based on the amount of sales in a state. These amounts have generally been set at $500,000 and above. Now, states may seek to lower those thresholds to impact more sellers, and states that have not sought income tax nexus may move forward with new legislation.

I own a small business and use the Internet to sell goods to customers all over the country. The Supreme Court ruling is going to be a big headache. I don’t have a problem with paying taxes, but I do have a problem with dealing with 50+ entities (including states and territories) that have different filing requirements that will likely entail a lot of red tape. I don’t have a full-time accountant or staff that can deal with this stuff, so it falls on me to implement systems and processes to handle state taxes outside of Massachusetts.

I blogged my thoughts on this topic in As a small business owner, this is what I fear post-South Dakota vs. Wayfair, but the end result may mean not selling to customers in states whose red tape is too much of a pain … which hands even more power to big Internet businesses like Amazon.

Acid reflux and heartburn: Going beyond reflux diet books

An interesting thing happens if you go to Amazon and search for “acid reflux” in the books section. Twelve of the 13 titles on the first page of Amazon’s organic search results are about acid reflux diets. They include everything from Acid Reflux Diet and Cookbook For Dummies to Dropping Acid: The Reflux Diet Cookbook & Cure. The 13th title is not explicitly about acid reflux diets, but rather covers homeopathic treatments (“Natural Alternatives to Nexium, Maalox, Tagamet, Prilosec & Other Acid Blockers: What to Use to Relieve Acid Reflux, Heartburn, and Gastric Ailments“).

Amazingly, there are no books on that first page of search results that talk about modern medical treatments that tens or even hundreds of millions of people across the globe seek out every year. With the release of Acid Reflux & Heartburn In 30 Minutes: A guide to acid reflux, heartburn, and GERD for patients and families earlier this month, my publishing company hopes to change this state of affairs, by giving readers an authoritative yet easy-to-understand source of information about reflux, heartburn, and gastroesophageal reflux disease (GERD).

The author is none other than my father, J. Thomas Lamont, M.D., a gastroenterologist and Harvard Medical School professor who wrote a similar book about Clostridium difficile (an infectuous disease commonly known as C. diff) five years ago. That book has since helped thousands of people, and currently has an average rating of 4.5 out of 5 stars on Amazon, with dozens of reviews describing how the book helped inform and reassure (Examples: “It gave me a lot of information to better enable me to ask the right questions to my doctor” or “nice to find by an experienced MD amid all the gut health hype on the Internet”). Reflux is even more widespread than C. diff, and is another area that he specializes in.

After I noticed that most acid reflux books in the books marketplace deal with diets as opposed to causes and treatments, I agreed that an IN 30 MINUTES book about acid reflux made sense. He submitted a first draft last April, and less than one year later, Acid Reflux & Heartburn In 30 Minutes was ready.

Early reviews have been positive. One reader said:

I wish this had been published years ago. Dr. Lamont has done an outstanding job of refining the tedious medical terminology down to a layman’s level. This is one of the primary advantages of this publication – plain English discussions about GERD and heartburn (HB) in general.

One area that we really tried to get right were illustrations that show the stomach and esophagus, what happens when GERD strikes, and how certain treatments (including surgeries to treat severe reflux) can be applied. I worked closely with the author and an experienced graphic designer, who made some really helpful diagrams, such as this one, showing how reflux occurs:

How reflux occurs, excerpted from Acid Reflux & Heartburn In 30 Minutes. See also our acid reflux FAQ

One thing that’s important to stress: This acid reflux book is not a DIY medical guide. Certain tests and treatments require professional evaluation and medicines available only by prescription, so the information in the book is provided to help patients understand what their doctors are recommending and why.

To learn more about the book, check out the companion website, which also includes an acid reflux FAQ as well as a glossary of acid reflux terms.

 

 

 

 

Amazon Advertising has a metrics problem

Over on the Lean Media blog, I’ve written a post titled Why you can’t trust ACoS metrics in Amazon Advertising (and two alternatives). Amazon Advertising (formerly Amazon Marketing Services) is the powerful self-serve advertising platform that vendors can use to advertise their wares next to Amazon search results, on Amazon product pages, and even on the lock screens for Kindle e-readers.

The problem with Amazon Advertising is the metrics are terrible. In the blog post I specifically noted the problem with “ACoS” (Average Cost of Sales) and even made a video that demonstrates how a seemingly innocuous ACoS rate may be hiding a money losing campaign. Other problems include poor reporting capabilities, including no easy way to compare a campaign’s performance from one period to the next. By comparison, Google AdWords certainly has its own problems with misleading small businesses about the locations of people clicking ads and click fraud, but at least it’s possible to do a deep-dive into AdWords metrics to compare campaigns and time periods.

What’s the solution to misleading ACoS metrics? As described on the Lean Media blog, I created two other indicators, ACoN (Average Cost of Net) and ACoP (Average Cost of Profit). The problem with these metrics, however, is they have to be manually created. Here’s a sample from the actual Google Sheets page that I use for the task:

AMS Tracker for ACoN and ACoP screenshot
The spreadsheet I use to create alternate Amazon Advertising metrics (ACoN and ACoP)

Amazon could actually create one of the metrics with the data that it has. Average Cost of Net refers to net revenue remitted to vendors, so if the company swapped out “Sales” (gross sales on Amazon) with projected net revenues to the vendor, that would give a much better idea of performance.

Pros and cons of traditional book distributors

Getting books onto bookshelves with traditional book distributors

Amazon has been disrupting the book industry for more than two decades. Sometimes the public hears the complaints as disputes boil into the open, but much of the restructuring of the industry is taking place quietly, without much public angst. In the post, I will discuss one of the casualties of the new world order for publishing, book distributors.

Distributors are an unseen force in many industries. They are responsible for bringing products to retailers. In the grocery and liquor industries, distributors are the companies whose trucks pull up to the loading dock in the back early in the morning to drop off a wide variety of goods that shop managers have ordered. In the book industry, distributors are the companies that arrange for certain titles to be available in Barnes & Noble, airport bookstores, and independent bookstores. Other services are available, too – there’s a good overview from the Independent Book Publishers Association (IBPA) titled “Working with Distributors.”

It’s important to note that distributors don’t represent everybody. They choose which producers they want to include in their catalogs, and take a cut from any sales that occur. They also demand exclusivity – if you sign a deal with a distributor, that’s the only outlet for your product in a particular geographic area. Obviously, if you have a distributor, you can get onto shelves in retail outlets, which increases your chance for retail sales. If you don’t have traditional distribution, you’re probably out of luck, unless you can work out a deal on your own with a shop or chain of stores.

In the book industry, distributors used to wield a great amount of power. Nearly every publisher had a book traditional distribution deal, or had a sales force to sell directly to the big book retailers. Amazon pulled the rug out from under that model, allowing publishers to offer books for sale directly to consumers. Retailers were hurt, and distributors were decimated. The book distributors who are left are now far more picky about the publishers they work with.

Do you need a distributor for your books?

At one time, I thought I needed a traditional book distribution deal for my company. This was not only to get access to new retail markets, it also seemed like a mark of industry respectability, which is important to growing companies. I did the dance with several distributors, but they didn’t work out. One bailed when it decided it didn’t like the way I managed ebook ISBNs. I pulled out of another offer when I realized the terms wouldn’t work out unless each title sold thousands of copies (many do, but some don’t). A third company completely ignored some of my requests for information, and just shoved a contract in front of my face to sign.

Ultimately, as I thought things through, it became clear to me that I didn’t need book distributors as much as I thought. It wasn’t just the cut they demanded, or the less-than-ideal business relationship. Other factors included:

  1. Once I went with a distributor, I would no longer consider readers to be my customers — it would be the distributor and their clients, the bookstore managers and buying teams.
  2. Distributors demanded a cut of ebook sales, even though they added no value to working with Amazon or other channels.
  3. There were also changes I would be forced to make to accommodate book distributors. My IBPA board colleague Leslie Browning outlines some of them here, including the necessity to have ARCs (advance review copies) ready at least six months before the publication date.

I don’t have a distributor now, and I don’t see it as holding back my business. In fact, I had the best year ever for my company last year, thanks to strong sales via Amazon and other online channels.

It would certainly be great to have my company’s books show up in big-box retailers or airport gift shops or B&N, but the sacrifices I would have to make dealing with book distributors — not to mention dealing with retailers returns — lessen the attraction of traditional book distribution.

 

 

 

 

Monitoring sales of Dropbox In 30 Minutes

Dropbox user guideDropbox In 30 Minutes has now been available for about nine months. For nearly as long, I have been monitoring interest in the Dropbox user guide, by closely watching sales. At first the book was only available as an ebook for the Amazon Kindle, but by the start of 2013 it was available for multiple e-reader, screen, and paper formats, including:

  • PDF (first via e-junkie, now gumroad)
  • Barnes&Noble/Nook
  • Apple/iTunes
  • Kobo
  • Paperback (via print-on-demand distributor CreateSpace)
  • Direct purchases of .mobi and .epub (which bypasses Amazon.com, iTunes, and other corporate ebook stores)

It was fascinating watching the evolution of the readership, especially after the paperback edition of Dropbox In 30 Minutes was released last November. While the Kindle edition has been a strong seller from the start, sales have plateaued. Meanwhile, the paperback rapidly gained  fans and by February 2013 had overtaken the Kindle and all other versions. Note, however, that Amazon is also responsible for all paperback sales — it owns the POD service CreateSpace, so the paperback listing is automatically fed into an Amazon product page (which is now linked with the Kindle product page).

Monitoring a sales slowdown in ebooks

Getting back to the Kindle version hitting a sales plateau: I’ve been thinking a lot about what could be happening. Certainly, there is more competition for readers, both on Amazon itself and online. But there are other possibilities, including falling interest in Dropbox among my target audience. What could cause a once red-hot technology to slow down in popularity? Factors could include competition from giants in the space (for instance, Microsoft Skydrive OneDrive or Google Drive), negative publicity (such as security concerns), or a maxing out of the potential audience. For now, I am discounting the idea that Dropbox is dropping in popularity, and am more focused on the competition — and how to make Dropbox In 30 Minutes and the free online resources such as videos and blog posts even better.