Has Amazon decided it's time to start making a profit?

The company has raised prices for small-press books and introduced delivery fees.

Amazon has reinstated delivery charges on orders worth less than £10, signalling a renewed attention to profit margins at the company. The change won't affect books, films, music, video games and software, which between them are the vast majority of the goods the company sells; but it means if you use the site to buy cheap electronics or household goods, you'll soon be hit by delivery charges again.

For the last four years, all orders fulfilled by Amazon have had free shipping provided the customer was prepared to wait up to five days, but before that, the site had a threshold to qualify for its "super saver delivery". That threshold progressively declined from £25 in the years leading up to its abolition. At the same time, the company introduced its Amazon Prime service, which gave unlimited next-day delivery for a flat charge of £49 a year.

Reinstating delivery charges, even in such a limited way, suggests that the company is backing away from its strategy of loss-leaders and revenue growth above all else. The absence of delivery charges makes sense in the context of a company which wants to dominate all shopping, because it's important to establish in customers' minds that they can buy any good at all. But at some point, Amazon may wish to focus on sales which make it money. That's hardly an outrageous proposition for most companies, but it's very different from how they've behaved up until now.

This isn't the first indication of such a change in the company's strategy. Earlier this month, the New York Times reported that small publishers were seeing increases in the sale price of their books on Amazon. David Streitfeld wrote:

Other writers and publishers have the same complaint. They say Amazon, which became the biggest force in bookselling by discounting so heavily it often lost money, has been cutting back its deals for scholarly and small-press books. That creates the uneasy prospect of a two-tier system where some books are priced beyond an audience’s reach.

Bruce Joshua Miller, president of Miller Trade Book Marketing, a Chicago firm representing university and independent presses, said he recently surveyed 18 publishers. “Fourteen responded and said that Amazon had over the last few years either lowered discounts on scholarly books or, in the case of older or slow-selling titles, completely eliminated them,” he said.

When the University of Nebraska Press brought out a bibliography of the novelist Jim Harrison four years ago, Amazon charged $43.87. The price this week: $59.87.

Does the company feel like it has grown enough, and is now ready to start making some profit? Or does it perhaps think instead that the competition has been sufficiently cowed that customers now have nowhere else to go?

Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

Getty
Show Hide image

Metro mayors can help Labour return to government

Labour champions in the new city regions can help their party at the national level too.

2017 will mark the inaugural elections of directly-elected metro mayors across England. In all cases, these mayor and cabinet combined authorities are situated in Labour heartlands, and as such Labour should look confidently at winning the whole slate.

Beyond the good press winning again will generate, these offices provide an avenue for Labour to showcase good governance, and imperatively, provide vocal opposition to the constraints of local government by Tory cuts.

The introduction of the Mayor of London in 2000 has provided a blueprint for how the media can provide a platform for media-friendly leadership. It has also demonstrated the ease that the office allows for attribution of successes to that individual and party – or misappropriated in context of Boris Bikes and to a lesser extent the London Olympics.

While without the same extent of the powers of the sui generis mayor of the capital, the prospect of additional metro-mayors provide an opportunity for replicating these successes while providing experience for Labour big-hitters to develop themselves in government. This opportunity hasn’t gone unnoticed, and after Sadiq Khan’s victory in London has shown that the role can grow beyond the limitations – perceived or otherwise - of the Corbyn shadow cabinet while strengthening team Labour’s credibility by actually being in power.

Shadow Health Secretary and former leadership candidate Andy Burnham’s announcement last week for Greater Manchester was the first big hitter to make his intention known. The rising star of Luciana Berger, another member of Labour’s health team, is known to be considering a run in the Liverpool City Region. Could we also see them joined by the juggernaut of Liam Byrne in the West Midlands, or next-generation Catherine McKinnell in the North East?

If we can get a pantheon of champions elected across these city regions, to what extent can this have an influence on national elections? These new metro areas represent around 11.5 million people, rising to over 20 million if you include Sadiq’s Greater London. While no doubt that is an impressive audience that our Labour pantheon are able to demonstrate leadership to, there are limitations. 80 of the 94 existing Westminster seats who are covered under the jurisdiction of the new metro-mayors are already Labour seats. While imperative to solidify our current base for any potential further electoral decline, in order to maximise the impact that this team can have on Labour’s resurgence there needs to be visibility beyond residents.

The impact of business is one example where such influence can be extended. Andy Burnham for example has outlined his case to make Greater Manchester the creative capital of the UK. According to the ONS about 150,000 people commute into Greater Manchester, which is two constituency’s worth of people that can be directly influenced by the Mayor of Greater Manchester.

Despite these calculations and similar ones that can be made in other city-regions, the real opportunity with selecting the right Labour candidates is the media impact these champion mayors can make on the national debate. This projects the influence from the relatively-safe Labour regions across the country. This is particularly important to press the blame of any tightening of belts in local fiscal policy on the national Tory government’s cuts. We need individuals who have characteristics of cabinet-level experience, inspiring leadership, high profile campaigning experience and tough talking opposition credentials to support the national party leadership put the Tory’s on the narrative back foot.

That is not to say there are not fine local council leaders and technocrats who’s experience and governance experience at vital to Labour producing local successes. But the media don’t really care who number two is, and these individuals are best serving the national agenda for the party if they support A-listers who can shine a bright spotlight on our successes and Tory mismanagement.

If Jeremy Corbyn and the party are able to topple the Conservatives come next election, then all the better that we have a diverse team playing their part both on the front bench and in the pantheon of metro-mayors. If despite our best efforts Jeremy’s leadership falls short, then we will have experienced leaders in waiting who have been able to afford some distance from the front-bench, untainted and able to take the party’s plan B forward.