PUBLISHED MAY/JUNE 2018

by Ian Lamont, Founder, i30 Media --

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Can Amazon Advantage give you a competitive advantage? IBPA Board Member Ian Lamont walks you through the pros and cons.

Last year, I wrote an article for IBPA Independent about Amazon Marketing Services. It got a huge response—people were clearly interested in learning more about this special Amazon marketing program. In this issue, I will share information about another Amazon program that can help publishers sell books: Amazon Advantage. Amazon Advantage is a program for publishers of physical media, such as books, DVDs, and CDs. As a book publisher, you can use Amazon Advantage to distribute paperback and hardcover books directly to Amazon, but there are also opportunities to sell any of the allowed media types with an ISBN or UPC code. There is an annual $99 fee to participate, and Amazon demands a 55 percent wholesale discount from publishers. Amazon Advantage is appropriate for publishers who have an inventory of books to sell, usually made using offset printing technology or perhaps through a digital short run arrangement with a printer. This is how the process works:

1. A publisher with printed stock logs on to Amazon Advantage.
2. For a new title, the publisher enters book metadata (ISBN, description, price, etc.) and uploads images of the front and back cover. This information will be used to create an Amazon product page for that title.
3. About a week later, Amazon Advantage will notify the publisher of a new order.
4. Within one day, the publisher must log in to Amazon Advantage to confirm the order.
5. Within 37 days, the publisher must file an advance shipping notice on the Advantage website and ship the confirmed amounts to the designated Amazon warehouse.
6. Once the shipment is processed, the title will be available for ordering from the Amazon product page.
7. Amazon handles payments and fulfilment to customers.
8. Publishers receive payments for sold copies every month.

How many books will Amazon order? That depends on the available stock at Amazon’s warehouses and predicted demand, based on sales patterns and Amazon’s algorithms. For instance, my company has about a half-dozen ISBNs in the Advantage system. I receive orders every Monday and Wednesday, usually in small to medium-sized lots of between one and 25 copies. I combine small orders to save on shipping costs and make shipments every two weeks or so. However, there are ways to boost demand using some of the marketing programs available through Amazon Advantage. You may already be aware of Amazon Marketing Services' self-serve advertisements. But there are other programs that are only available to Amazon Advantage accounts or users of other professional Amazon services, such as Amazon Seller Central. They include:

• Coupons: Set a percentage or dollar discount. The coupon value will be highlighted on the product page and search results, helping to increase sales. Clicking the coupon lowers the price in the shopping cart.
• Vine Voices: This is a paid program that can get your book into the hands of Amazon’s network of trusted reviewers, via the exclusive Vine monthly newsletter.
• A+ Detail Pages: This is a free self-serve that lets publishers create detailed product pages for books and other media on Amazon.com.
• Special AMS ad types: If you use Kindle Direct Publishing to publish e-books, the types of AMS ads are limited to Sponsored Product and Product Display ads. If you access AMS through your Advantage account, two additional ad types are available: headline ads and Kindle lock screen ads.

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Is Amazon Advantage Worth It?

Amazon Advantage is not for everyone. Some of the marketing programs described above are costly and/or difficult to optimize. For instance, to participate in “Vine Voices,” I was quoted a price of $1,500 for a single title and no guarantee that any reviews would result. There are other review services that are far cheaper, including the NetGalley benefit offered through IBPA. More importantly, participating in Amazon Advantage requires an investment in physical inventory, which can be a big expense—even a small offset order for 500 copies can cost thousands, and adding multiple ISBNs to Amazon Advantage will require a significant up-front investment. As a publisher, you may find yourself sitting on lots of inventory, either at your own business or in Amazon’s warehouses. Moreover, publishers don’t get paid until a sale is made. With Amazon demanding a 55 percent discount, margins after printing, shipping, royalties, marketing, and other costs will be thin. Finally, it’s important to remember that Amazon Advantage is intended for publishers that want to deal directly with Amazon on a wholesale basis. If your company has a distributor, or plans on getting one, Amazon Advantage doesn’t make sense. Distributors make their own arrangements to get books from their warehouses to Amazon and also require control over remittances, metadata, and other aspects of the relationship. Some publishers try Advantage and find that it doesn’t work for them. Last March, Adam McLane of The Youth Cartel published a letter in IBPA Independent announcing he was “breaking up” with Amazon Advantage. He wrote: “What was once a clever way to reach our customers has turned into a one-sided partnership where you [Amazon] get all the money and we get stuck with the bill.” As with any business arrangement that involves such a heavy discount and other requirements, pricing and costs have to be carefully managed. It may make more sense to leverage print-on-demand technology using a platform that feeds into the Amazon ecosystem. On the other hand, if your company already has inventory or plans on doing offset print runs in the future, Amazon Advantage may be appropriate for your needs.

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Ian Lamont is the publisher behind IN 30 MINUTES Guides (in30minutes.com) and the author of Lean Media: How to Focus Creativity, Streamline Production, and Create Media That Audiences Love. He also serves on the IBPA Board of Directors as treasurer and a member of the Executive Committee. Follow him on Twitter at @ilamont.

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To read another in-depth look at Amazon's services, check out IBPA Independent's Reactions to Amazon's Policy Change by IBPA CEO Angela Bole.

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