In Bid To Expand Margins, Amazon Risks Reputation

Discussion in 'Stock Market Forum' started by PaulSchinider, May 29, 2014.

  1. PaulSchinider

    PaulSchinider Well-Known Member

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    As a tussle between Amazon and Hachette Book Group heats up, a barrage of criticism targeted at the former may prove the greatest threat


    There seems to be no end in sight to Amazon.com, Inc.’s (AMZN) tiff with Hachette Book Group USA, and its detractors are ratcheting up their pitch.
    The Seattle-based online retail giant has already been accused of using its upper hand to pressure publishers into giving in to its demands, which include increasing book prices and slashing discounts to maximize profits. Last week, Hachette also accused Amazon of deliberately delaying shipments and manipulating the recommendations it offers buyers on its website in a bid to drive them away from titles published by Hachette as it refuses to toe Amazon’s line. Hachette claims Amazon is also using tactics like keeping lower-than-normal inventories of Hachette books to limit pre-order sales of popular titles.
     
  2. JR Ewing

    JR Ewing Super Moderator Staff Member

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    I've had a small long position on this one for years, and I've also had a put on it for a few months.
     
  3. Leeroy_MY

    Leeroy_MY Well-Known Member

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    Well, sadly this type of bullying is all well and right in the eyes of the law as whatever Amazon chooses to sell, recommend or stock up are well within their rights.

    But Hachette can easily switch to a different online marketplace and offer special incentives to buyers who buys at sites other than Amazon (Free bookmark, maybe?) to counter this bullying behavior. Actually, their public accusations are already a plan to raise sympathy and a call for people to buy their books through other online marketplaces.

    As businesses are motivated by profit, I doubt Amazon will continue this behavior long if it damages their profits.
     
  4. Aprax

    Aprax Active Member

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    While this may hurt Amazon's profits, really it hurts Hachette more. Amazon is the largest retailer in the world and Hachette can continue to get bullied, or suck it up and deal with it. It doesn't make much of a difference to Amazon, who will continue to dominate the market.
     
  5. hnatalieann

    hnatalieann Guest

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    Amazon won't continue damaging their profits, they will smarten up and move on. It's business and one naturally wants to dominate over the other.
     
  6. ami560

    ami560 Member

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    But is it though? I feel that they could, as a major retailer, be found in conjunction with the publishing companies for price fixing. I don't know a lot about laws on this, so I could be very wrong, but it just seems that way.
     
  7. nashvilleshelby

    nashvilleshelby Active Member

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    Wow, I would not have known this about Amazon. Thank you for sharing that. I just completed a book of my own that I was going to publish to Kindle. This makes you question their loyalty.
     
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