Just ahead of its March 2013 publication date, a modest hardback print run of a new novel, Traps, under the Weidenfeld & Nicholson imprint, spilled off the production line at the Clays book plant, a near-200-year-old business in the Suffolk market town of Bungay.
The plant has a reputation for quality that has helped it hold on to more trade than some of its competitors in a shrinking market. This is where the majority of the UK's bestselling titles are pressed.
Traps' first run represents a small fraction of 170m books freshly minted at Clays each year. Other titles printed and bound at Clays here have included works by Stieg Larsson and JK Rowling.
Boxed up alongside other titles, copies of Traps were swiftly dispatched, some to the warehouse of Orion Publishing, the firm behind the imprint, others direct to Waterstones' dstribution hub or an Amazon warehouse. Clays lorries make daily trips to all eight of Amazon's UK warehouses.
The visits to Amazon depots are so frequent because online book orders now account for 41% of the £1.8bn market for books in the UK, according to data from research firm Kantar. Publishers typically negotiate contracts with Amazon representatives from the firm's offices in Slough, according to one industry source.
Set over just four days, Traps is about four women in contrasting circumstances. As the dustjacket explains: "How their fates collide – and how that collision offers each of them a chance at redemption and renewal". It carries a recommended retail price for the UK of £12.99. It is on sale for that price in Foyles bookshop.
The book is also available on Amazon.co.uk, where shoppers are reminded of the £12.99 RRP, though that price is crossed through and compared with Amazon's price of £8.96: "You save: £4.03 (31%)", says the website. The price includes delivery and the book will land on the doormat in two days' time.
Traps' author, MacKenzie Bezos – described by her former professor, the author Toni Morrison, as "one of the best students I've ever had in my creative-writing classes" – is pictured on the inside flap of the dustjacket, at the back of the book, above a short biography. It is her second novel, after The Testing of Luther Albright, for which she won an American Book award in 2006. "MacKenzie Bezos was raised in San Francisco and graduated from Princeton University. She lives in Seattle, Washington, with her husband and their four children." Her husband is not named, but he is Jeff Bezos, the 49-year-old founder of Amazon (pictured below with Mackenzie), whose 19% stake in the world's largest online retailer puts him at number 19 on Forbes' rankings of the world's richest people, with a fortune estimated at $25.2bn. In 1995, he quit his job with a New York hedge fund, where he met MacKenzie, and moved to Seattle to start a web business from his home, selling books by post.
Today, books represent only a small fraction of Amazon's $61bn sales, more than 10% of which come from UK customers. However, although Amazon tells investors in the US that $6.48bn (£4.17bn) is "attributed to" the UK, there is no evidence of sales to online shoppers in Britain to be found in the official accounts for Amazon.co.uk Ltd at Companies House.
The website of the same name is in fact registered to Amazon Europe Holding Technologies SCS, a company in Luxembourg. Meanwhile, the small print on receipts enclosed along with copies of every item sold by Amazon in the UK identify the seller as a second Luxembourg company, Amazon EU Sarl. As odd as it sounds, any online shopper in Britain buying Traps from Amazon is creating a sale for the internet group in Luxembourg. And it is there that any resulting profit is taxed. Accounts published yesterday show the Luxembourg company with revenues of more than £11bn and a tax bill of just £1.8m.
The arrangement is altogether more straightforward if a customer buys Traps from Foyles. The 110-year-old high-street bookshop chain will recognise the sale through the accounts of W&G Foyle, a company registered in Charing Cross Road, London. The latest filings show annual sales of £23.4m. It made a profit of £152,552, and there is a corporation tax charge to HMRC for the year of £72,670.
Traps has been printed in the UK, shipped to UK warehouses and sold to UK customers, but whether it generates any income for the exchequer depends entirely on where it is bought.
If sales of MacKenzie Bezos' book do well for Foyles, the business will post higher profits and pay more tax.
But if readers instead buy the book on Amazon, the HMRC's corporation tax receipts will be that little bit poorer.
UK and Luxembourg arms
Amazon.co.uk Limited
• A UK company • Does not own the website of the same name • Runs eight UK warehouses with plans for three more
• Employs 4,191 staff
• 2012 revenue: £320m
• 2012 tax in the UK: £3.2m
• Cash in the bank: £6,000
Amazon EU Sarl
• A Luxembourg company
• Invoices UK customers for goods – although bills are printed and dispatched from the UK
• Employs 380 staff
• 2012 revenue: £11.3bn (£4.2bn from UK)
• 2012 tax: £1.8m.
• Cash in the bank: £2.2bn
