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January 10, 2014 05:07 pm GMT
The cultural exception strikes again — France’s National Assembly will most probably pass the so-called ‘anti-Amazon’ law in the coming days. In a few months, Amazon won’t be able to offer free shipping for books in order to protect independent bookstores. It’s a logical evolution of the Lang Law. Book prices in France are hard to understand from a foreigner’s perspective. Back in 1981, French Minister of Culture Jack Lang established a fixed price for books sold in France. Since then, publishers have been fixing the price, printing it on the back of the book. Retailers from supermarkets to independent book sellers have had no choice but to sell those books at the official price. If you really wanted to compete on price, you could discount the book 5 percent below the publisher’s price — many bookstores chose to take advantage of this exception, but 5 percent was a reasonable price difference. When it was created in 1981, the government wanted to protect independent bookstores against supermarket chains. It worked really well, and independent bookstores are still around, for the most part. In fact, similar fixed book price laws started popping up in other European countries, such as Italy, Portugal, Spain or Germany. But bookstores had no idea that the most serious threat had yet to come — Amazon, Fnac and a few others opened their online stores. Despite having to wait a couple days before getting your book, the two heavyweights Amazon and Fnac found a way to remain competitive: they priced the books 5 percent below the publisher’s price and they offered free shipping, all the time, for all book orders. Independent bookstores saw that as unfair competition. As Amazon bills from Luxemburg where sales tax is very low, this model was sustainable and allowed the company to gain market share. The company is playing its usual market share game in France as well — profit and margins are not as important as increasing sales. Theoretically, the company can flip a switch any day now, increase prices and start the money-making machine. Today’s French Minister of Culture Aurlie Filippetti says that she has nothing against Amazon despite the law’s informal name — but free shipping has to stop. In a few months, online retailers will have to choose between free shipping and the 5 percent discount. If they choose the 5 percent discount, it won’t deduct 5 percent
Original Link: http://feedproxy.google.com/~r/Techcrunch/~3/q8YCsr_YIi4/
The Anti-Amazon Law Is About To Become A Reality In France, But Its Not A Bad Thing
The cultural exception strikes again — France’s National Assembly will most probably pass the so-called ‘anti-Amazon’ law in the coming days. In a few months, Amazon won’t be able to offer free shipping for books in order to protect independent bookstores. It’s a logical evolution of the Lang Law. Book prices in France are hard to understand from a foreigner’s perspective. Back in 1981, French Minister of Culture Jack Lang established a fixed price for books sold in France. Since then, publishers have been fixing the price, printing it on the back of the book. Retailers from supermarkets to independent book sellers have had no choice but to sell those books at the official price. If you really wanted to compete on price, you could discount the book 5 percent below the publisher’s price — many bookstores chose to take advantage of this exception, but 5 percent was a reasonable price difference. When it was created in 1981, the government wanted to protect independent bookstores against supermarket chains. It worked really well, and independent bookstores are still around, for the most part. In fact, similar fixed book price laws started popping up in other European countries, such as Italy, Portugal, Spain or Germany. But bookstores had no idea that the most serious threat had yet to come — Amazon, Fnac and a few others opened their online stores. Despite having to wait a couple days before getting your book, the two heavyweights Amazon and Fnac found a way to remain competitive: they priced the books 5 percent below the publisher’s price and they offered free shipping, all the time, for all book orders. Independent bookstores saw that as unfair competition. As Amazon bills from Luxemburg where sales tax is very low, this model was sustainable and allowed the company to gain market share. The company is playing its usual market share game in France as well — profit and margins are not as important as increasing sales. Theoretically, the company can flip a switch any day now, increase prices and start the money-making machine. Today’s French Minister of Culture Aurlie Filippetti says that she has nothing against Amazon despite the law’s informal name — but free shipping has to stop. In a few months, online retailers will have to choose between free shipping and the 5 percent discount. If they choose the 5 percent discount, it won’t deduct 5 percentOriginal Link: http://feedproxy.google.com/~r/Techcrunch/~3/q8YCsr_YIi4/
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