Barry Collins observes that customers are now paying for Amazon’s dominance
No business has done more to cultivate a cuddly, consumerfriendly reputation than Amazon. The company is the Ant and Dec of online retail: almost nobody has a bad word to say about it. Prices are low, deliveries are fast and when something does go wrong, Amazon usually resolves the problem without any fuss.
Amazon’s customer service is so exemplary that we’ve even been convinced to turn a blind eye to some of its dodgier practices, such as tax avoidance, or forcing its warehouse staff to work such long hours that they make junior doctors look like part-timers.
Now, however, we’re seeing the first signs of Amazon turning the thumbscrews on customers, too. A few weeks ago, Amazon released the Kindle Oasis. Visit the handy Kindle comparison page on the Amazon website and it’s hard to tell the difference between the Oasis and the Paperwhite, which has been on the market for some time: both have a 6in screen, both share a resolution of 300ppi, both have the same connectivity options and hold “thousands of books”. Yes, the Oasis brings back physical buttons to turn pages and has a sleeker design that comes with a natty leather cover, but the main difference is the price: the cheapest Paperwhite costs £110 while the Oasis starts from £270.
I should stress that I’ve not yet had the chance to evaluate the Oasis first-hand, but the thick end of £300 for a single-purpose ebook reader that shares a near identical spec to models less than half its price seems more than a bit rich. But then, where else are you going to go for an ebook reader? Most of the competition has wilted away, largely because Amazon makes it nigh-on impossible to transfer books from its store to other devices, and it kills everyone else for range and price. You’d be mad to buy anything other than a Kindle, and Amazon knows it, which is why I suspect we’re going to see the cost of Kindles climb now that Amazon has an unassailable monopoly.
Kindles aren’t the only product that Amazon is using to milk customers. The retailer has been aggressively pushing its Prime subscription service for the past couple of years, adding features such as music streaming and vastly expanding its range of video streams, on top of the unlimited next-day delivery that Prime originally offered. Now, it’s beginning to sell certain products only to those with a Prime subscription.
Currently, the Prime-only products amount to little more than selected versions of a couple of video games and the Blu-ray version of the Oscar-winning film Birdman. But this is Amazon dipping its toe in the water. I’m convinced it won’t be long before premium products are only offered to £79-per-year subscribers – indeed, many of the special offers on the site, such as the discounted Xbox One console I bought last year, are already Prime exclusives.
Amazon makes notoriously slim profits, if it even makes a profit at all. But now that it’s got a stranglehold on ebooks and suckered millions of us into becoming paying subscribers, the time has come to plump up those profit margins. Like those shady shops you used to get on Oxford Street, we’ve been lulled in by the cheap goods and the doors have closed behind us. Now we’re about to find out how much we’re really going to pay.