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Breaking Up With Amazon

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by Adam McLane, Partner, The Youth Cartel —

Adam McLane

In January, we informed our customers that we would no longer sell our books on Amazon. We sent a letter to our customers and posted a broader open letter, “Hasta La Vista, Amazon.” View the full letter here: tinyurl.com/jndbjjf.

Here’s an excerpt:

Your charm isn’t quite as charming as it used to be. What we once thought was powerful we’ve learned is just manipulative and isn’t working for us anymore. Did you know we literally lose a little bit of ourselves each time a book sells? ($2.29 per book sold in 2016, to be exact) We bet you didn’t know that. You were so caught up in making an average of $7.72 per book off of our relationship that you never bothered to ask how it was working for us. We loved you. But you don’t love us back.

What was once a clever way to reach our customers has turned into a one-sided partnership where you get all the money and we get stuck with the bill.

There’s no other way to say it. We’re breaking up and we’ve found someone new: Our customers.

For us, this was a strategy decision far beyond anything else. Since we launched in 2010, we’ve always sold books directly to our customers. We added the Amazon Advantage program because their reach is infinitely larger than our own and people love the convenience.

In late 2015, I started to suspect that Advantage wasn’t working for us anymore. First, they bumped the price point on all of our books to full retail and then shortly began pushing their new marketing platform. Our sales nosedived. They’d place orders for thousands of dollars in product at a steep discount, but to sell them, realistically, we had to paid to advertise on their site. This felt like ransom.

By mid-2016, I could see we were losing money. And internally we began discussing, “How could we make dumping Amazon a win for us organizationally?”

Publishing is 25 percent of our business model. As we sold books through Amazon, we realized that we both losing money and a relationship with our customers that, if fostered, would benefit other areas of our business.

In December 2016, we decided to break up with Amazon.

Looking forward, we are taking the steep discount offered to Advantage and investing that in cultivating customer relationships, increasing outbound marketing, and slashing shipping rates.

Our goal is simple: Sell as many books directly and through like-minded independent booksellers as we did through Amazon. If we can do that, we’ll flip that $2.29 per book loss from 2016 into at least $2.29 per book net profit in 2017 while also fostering stronger relationships with our customers.

Adam McLane is a partner at The Youth Cartel, a San Diego-based company instigating a revolution in youth ministry. Connect with Adam on Twitter: @mclanea.

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