Amazon.com Explains Special Order Surcharges

I noticed today that Amazon.com has modified and raised its special order surcharge for books that require direct-from-publisher orders. Typically, these books are listed with 4-6 week availability on their site. I have written (and been quoted) extensively on the subject during Amazon.com's confusing pricing tests this summer, since which the company calmed down. My colleagues at the firm expressed their surprise and concern that I was critical of the pricing test, but ultimately I think I convinced them that consumers wouldn't be able to navigate the several changes in price, shipping, and surcharges.

The latest change comes after months of stability, and addresses all of my concerns. In the interim between summer and this change, Amazon.com has charged a 99-cent surcharge for special order titles, but did not note this information anywhere except as a surcharge on their shipping charges page. When you reached the checkout page, the surcharge was included in shipping and handling without an additional explanation.

When I noticed the change today, it was profoundly improved: each page that has a surcharge not only notes it (see this book, for instance), but explains it with some depth and links to a page with even more information. Since Amazon.com is the best and biggest fulfiller of special order titles - being the largest bookstore that orders non-mainstream titles direct from individual publishers - I find it perfectly reasonable that they're charging something that reflects their costs involved.

Consumers may shy away and try to buy from cheaper sources, but will return when they find the wait, expectation, and follow-through is substantially worse than Amazon.com. In my talks with bricks and mortar booksellers, it's clear that they just hate special order books. Booksellers love to help their customers find the titles they want, and they generally love smaller presses. But ordering single books from publishers often involves a lot of paperwork, a short discount (20% or less instead of a more normal 40% or more), shipping fees (shipping is waived on large orders), and a reasonable delay (as they tend to have to aggregate orders or handle them on a batched weekly basis for the reasons above).

Small bookstores don't make much money, or even lose money on special order titles. Amazon.com has always had a high volume of these titles, allowing them to get the highest discounts most of the time and have waived shipping. But it still involves a lot of human involvement except with the largest publishers. The surcharge is reasonable, and should increase their margins. If Amazon.com ships, say, 200,000 special order books in 2002 out of the millions of books they handle, that's an additional nearly $4 million in revenue that's "free" to them. It benefits consumers in that consumers get the advantage of a sophisticated order and tracking system. (It may even benefit independent booksellers in offloading these more difficult, margin-reducing titles from them.)