A change in its sourcing policy that Amazon says it has made to meet its sustainability goals is raising costs and leading to lost sales in European markets, several publishers told PW. Until this spring, Amazon imported books from various American publishers and distributors to its European and U.K. warehouses in order to fulfill orders in those regions coming from the e-tailer’s international marketplaces. Instead of importing books directly from the U.S., Amazon is now requiring U.S. publishers to make their books available closer to the point of sale in Europe, rather than shipping them from where they are printed.
Acknowledging that the shift in sourcing has occurred, an Amazon spokesperson said that the company had told many publishers 18 months ago that this change was taking place. “We began notifying publishers over a year and a half ago that beginning this spring we would no longer be ordering books from the U.S. to ship to the U.K. and E.U. to fulfill sales,” Amazon’s Lindsay Hamilton said. “We asked publishers to look into locally sourced options and provided a number of solutions for publishers to choose from including local printing, print on demand, and alternative shipping.”
Publishers, whose representatives spoke to PW on condition of anonymity, have various concerns about these options, however. All of them, they say, will raise costs and make it harder to keep popular books in stock. The publishers note that POD printers, whether they are Amazon itself or another manufacturer, can typically only print trade paperbacks, which means a lower cover price and higher per-unit cost, resulting not only in lower revenue but lower margins. Short run printing in the U.K. and/or Europe also can require new processes and possible local European inventory-holding, one publisher observed—another factor that raises costs.
One person with knowledge of the issue called Amazon’s sustainability explanation “suspect,” pointing out that the biggest tangible impact is that most of the supply chain costs have moved from Amazon to publishers. Other negatives from Americans publishers' point of view is that Amazon Europe is increasing its sourcing from U.K. publishers and relying much more heavily on third-party marketplace sellers to fill orders. This contributes, the publishers said, to fewer sales for U.S houses.
The amount of business being lost due to the shift is hard to quantify, but the guesstimates put the sales numbers on books that had previously been imported to Europe via Amazon as having fallen by as much as 50% for U.S. publishers. Some of that decline is beginning to be picked up by companies that have maintained "more traditional sourcing strategies," a source said—“but not all.”
