Changes by Amazon.com in a number of its co-op and discount terms caught the attention of not only mainstream independent publishers but religion publishers as well. Religion houses expressed a mixture of anxiety and optimism about Amazon.com's decision last month to discontinue its participation in Ingram's vendor-of-record program. (Ingram's Jim Chandler confirmed that decision, adding that it was across the board, not just for religion product.) Almost all the publishers who talked about it asked to remain anonymous, but PW heard from many that Amazon has been quietly approaching the smaller houses "that run a half million [dollars] or so annually with them," according to one source, asking them to contract directly with the e-tailer. As another source explained, "This means that unless we contract—which we very much want to do—our books flowing only through Ingram/Spring Arbor would show up only on Amazon's Marketplace listing and never get seen, essentially."

There is consensus on two downsides to Amazon.com's direct buying initiative. "We'll have thousands of dollars of inventory tied up in two places now, instead of just at Ingram," said one publisher. Secondly, as another noted, "If 18 or 20 of us take a half-million dollars or so each directly to Amazon without going through Spring Arbor, what happens to Spring Arbor? Does that kind of blow mean they'll cut back and I'll lose my Catholic buyer? I can't afford to lose that kind of market-specific buyer."

One company that had 2003 sales of approximately $600,000 through Amazon told PW that it had been "pursued aggressively" this spring by the online retailer, but that it had not yet decided to sign on with Amazon's proposed 52% discount, which is higher than the 47% the publishing company gives to all retailers. (The higher discount is something Amazon is asking from most publishers.) And like some independent general trade houses, this religion publisher is expected to pony up a 5% co-op fee for advertising. "That's probably a deal-breaker for us," said a marketing executive at the company.

Others were firm in their refusal. Dave Lewis, director of sales and marketing for Baker Publishing Group, said that his house was approached with a deal from Amazon but said no. "We're definitely not in the fulfillment business," said Lewis, who noted that "healthy, growing distributors" are beneficial for the entire industry and help Baker's business run more efficiently by taking care of small accounts and orders. In addition, Baker thought Amazon's nonreturnable discount was too steep. "Basically, we just sent them the terms that we would give any retailer," said Lewis.

The upside seems to be that Amazon is offering a consignment arrangement for those who want it, something that Ingram has been unwilling to do. (This is sometimes the only way for very small or highly specialized "emerging" publishers to get their books catalogued on the site.) Amazon also is offering greater flexibility in publisher options on site advertising and product support. "Overall, we're pleased," said another publisher, "but we'll have to wait and see how some of it shakes out to know for sure." More than one publisher who had agreed or was thinking of agreeing to the new terms admitted that part of the motivation was the potential to get "a real, live, human person" on the phone when problems arise; several publishers complained about Amazon's customer service.

One publisher who signed with Amazon and went on the record about it, Nancy Rothschild, marketing and publicity director for Rowman & Littlefield Publishing Group, said that Amazon has tiered its paid package options to publishers based on how much business they do through its online store. She decided to spend her Amazon co-op dollars (3% to 5%, based on the previous year's revenues) on trade books, giving them a boost in the marketplace, rather than her specialty books, which she feels customers are willing to pay full price for. Still, she's unhappy with the e-tailer's tactics. "Unless you agree to do this, they seem to have threatened to take away all the discounts they give to customers on your books," she said. "I really felt that we didn't have much of a choice, which I don't like."

Amazon spokesperson Kristin Schaefer Mariani responded to PW's request for comment with the e-tailer's standard statement that it does not discuss the details of its negotiations with publishers and that it works "with all vendors, large and small, in the same way, with the goal of maximizing sales through Amazon.com."