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Old 07-06-2013, 10:26 AM   #31
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Originally Posted by HarryT View Post
The author claims to be worried about the price that the customer is paying. He surely doesn't expect to be able to have his cake and eat it - if he wants the book to sell for less, he should also be willing to get less money for it himself.
Exactly.
But the irrationality of their whinge goes one step beyond: it is a known fact that books sell better at lower prices. (Surprising, no?)

If they dropped the price, sales would go up and they might actually be taking in *more* money and the book would definitely reach more people. But that would be "devaluing" literature.

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Old 07-06-2013, 10:56 AM   #32
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It doesn't have to be, but it usually is because that's what customers are most interested in.
Certainly price is a primary factor in any buying decision, particularly so when a product such as a book is to all intents and purposes identical between different resellers. However, as mentioned previously there are other factors that can and are taken into consideration. Quality of service, delivery time, availability etc being some of them.

I have myself, been out to a bricks and mortar bookshop and bought a book that was the next in a series I was reading. I paid more for the book than I might have done had I bought it on online for the simple reason that I wanted to purchase it that day and not have to wait for delivery as I would have, had I bought on from an online reseller.

That is just one of the factors that consumers will consider when making purchases.

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No, you don't understand predatory pricing. It is perfectly fine and 100% legal to have prices so low that they drive the competition out of business.
Having a Masters Degree in Business Administration I think I understand enough of pricing strategy to be able to make an informed assessment of it. I would not in any way set myself up as an expert in this area, but I do have sufficient knowledge and understanding to be able to comment on it.

I have not made any comment on the legality of the the strategy Amazon are currently following, so I'm not quite sure why you've even raised this. The legality of predatory pricing is not at question here—the ethical and moral business practice of doing it are, whether it's provable or not, and I believe I made comment to that effect in a previous post.

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What predatory pricing actually is is selling your products *at a loss* to unfairly hurt your competition. (And this expressly doesn't include loss leaders, which retailers have used for a century). There's plenty of evidence that Amazon has not engaged in predatory pricing, and no evidence that they have.
Whilst it is entirely your prerogative to believe whatever you want to, I would disagree somewhat that there is no evidence to suggest that Amazon are not engaging in the practice of predatory pricing with the distinct intention of putting competitors out of business. It appears I am not the only one who seems to think this:

With the launch of the Kindle, Amazon promoted a low baseline price of $9.99 for most e-books. That meant that Amazon was selling virtually all newly published e-books at a loss. For example: A new book with a hardcover list price of $29.95 would be given an e-book price of $23.95 — 20 percent less to account for the publisher’s savings in printing, binding and distribution. The publisher would sell that e-book to Amazon for $12, and Amazon would retail it for $9.99, taking a $2 loss.

Why would Amazon do this? Observers have proposed several motives. Perhaps Amazon aimed to entice heavy readers to the newfangled Kindle; the customer could tell herself she’d make up the cost of the device in savings on the books themselves. Others have suggested that cheap e-books were loss leaders that drew customers back to Amazon over and over again, presumably so they’d go on to purchase high-margin items like TVs.

The most popular theory by far holds that Amazon intended from the start to totally dominate the e-book marketplace. By using its wealth to subsidize the sale of e-books at a loss, it could drive any competitors out of the market. Bricks-and-mortar chains like Barnes and Noble and online start-ups like Kobo (both of which would introduce their own e-reader devices) or device-neutral rivals like Google would simply not be willing or able to bleed cash as long as Amazon could. And because the Kindle is a “closed platform” — Kindle e-books can only be read on Kindle devices or apps — the more Kindle e-books a customer owned, the more reluctant she’d be to switch to a different device.

Source: http://www.salon.com/2013/07/01/ever...ook_price_war/
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Old 07-06-2013, 11:06 AM   #33
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With the launch of the Kindle, Amazon promoted a low baseline price of $9.99 for most e-books.
This is just plain wrong. The only newly-released books that were sold at $9.99 were those on the NYT "Bestsellers" list, and not even all of those.
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Old 07-06-2013, 11:16 AM   #34
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Forgive the obvious question, but if the author wants Amazon to lower the price, why doesn't the author simply lower the price?
Because the publisher sets the price, not the author. Amazon buys the books from the publisher and sets its own price for them—a price I might add that neither author nor the publisher can control.
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Old 07-06-2013, 11:23 AM   #35
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Because the publisher sets the price, not the author. Amazon buys the books from the publisher and sets its own price for them—a price I might add that neither author nor the publisher can control.
Sorry, I thought this was a self-published book.

Yes, Amazon set the price, but I've never heard of them selling at a price which is MORE than the publisher (or author) specifies, so if the publisher reduces the price, then so will Amazon.
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Old 07-06-2013, 11:53 AM   #36
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The book in question is a US Trade Paperback with a suggested list of $34.95. Amazon is currently offering it for $25.01 (a 28% discount, for a saving of $9.94). It is also available on Kindle for $9.34.

According to the article, Amazon raised the price to over $30, from $23, and now seems to have lowered it back down somewhat. The real issue here, though, is that the book is grossly overpriced. Even at $25 it's still well over the average price I'll pay for a trade paperback, as most of the ones we've bought in the last year ran under $20.

Last I heard, Amazon was under no obligation to subsidize the publishers of overpriced books by discounting them back to competitive levels, especially when almost every book listed in the NYT article is available on Kindle for around ten dollars. The glaring exception is the $65 bibliography of Jim Harrison, which is not available on Kindle at all.

Yes, competition from Amazon has made things difficult for other booksellers, but these examples don't show unfair competition or predatory pricing. It's the natural result of publishing overpriced books.
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Old 07-06-2013, 12:37 PM   #37
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Yes, Amazon set the price, but I've never heard of them selling at a price which is MORE than the publisher (or author) specifies, so if the publisher reduces the price, then so will Amazon.
Well, the publisher has to make some profit on the book if it’s a conventional paper based one.

As far as I understand it, publishers sell those books to resellers on a ‘sale or return basis’, usually at something like 50% of the publishers recommended retail price. So if the publisher sets a book RRP at say 29.99, that will usually be sold to the reseller at 14.99. That would usually dictate a resale price for that book at between 14.99 and 29.99, but it’s solely at the resellers discretion as to what price they set.

So, to suggest that the publisher should reduce their price wouldn’t necessarily translate into a reduced selling price by the reseller. They may just decide to keep more of the profit for themselves and keep the resale price at the same level.
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Old 07-06-2013, 12:53 PM   #38
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Yes, competition from Amazon has made things difficult for other booksellers, but these examples don't show unfair competition or predatory pricing. It's the natural result of publishing overpriced books.
As far as I'm aware, Amazon still buy their e-books on the same basis they buy conventional paper based books—on the sale or return system rather than the agency commission system.

So if that trade paperback you mention has a RRP of 34.95, Amazon would be buying that for 34.95 minus the 20% cost of paper book printing and distribution, minus 50%. So 34.95 minus 6.99 = 27.96, minus 50% = 13.98.

So Amazon buy that e-book from the publisher at 13.98. You don't think selling that e-book at 9.34, making a loss of 4.64 is predatory pricing in any way?
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Old 07-06-2013, 01:03 PM   #39
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As far as I'm aware, Amazon still buy their e-books on the same basis they buy conventional paper based books—on the sale or return system rather than the agency commission system.
Are you sure? I thought that Amazon paid a simple percentage royalty for eBooks. What would "sale or return" even mean for an ebook? How would you "return" it?
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Old 07-06-2013, 01:03 PM   #40
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So Amazon buy that e-book from the publisher at 13.98. You don't think selling that e-book at 9.34, making a loss of 4.64 is predatory pricing in any way?
Only if they did it across the board. Which they don't.

And no... Amazon doesn't buy ebooks on a wholesale/return basis like they do with physical books. No one does.

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Old 07-06-2013, 01:10 PM   #41
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Isn't the ultimate point that Amazon "promised" book buyers large discounts all the time as it campaigned to get your business and deny it to the indie bookstores and B&N and is now breaking faith with that "promise" as it gives in to pressure from shareholders to provide higher quarterly profits and returns?
Do you have any PROOF of this statement?

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My answer is simple: at no point am I willing to inconvenience myself (or spend more money) to "support" competition. I'm the consumer; that's not my job. It's up to the competing businesses to entice me to be a patron. If they (the business) need to rely on assistance from their customers--in the form of being willing to spend even slightly more money than they have to (for no added service), or going out of their way a little more than they might have to--then they're already out of business... they just haven't accepted it yet.

The only exemption to my own philosophy would be if I personally knew the proprietor of a business. But even in that instance, my altruism only goes so far: meaning I'm only willing to help ... not perform CPR on a dying business model at the expense of my own financial common-sense.

Bottom line is this: I feel no loyalty|sympathy|obligation to businesses (or industries). Especially those businesses who were free to make the same decisions--to recognize the same future business potential--that Amazon did long ago. I'm not going to reward anyone for getting beat at their own game.
THANK YOU! I didn't realize that there were SO many altruistic people in the world who's main concern was to worry about all businesses staying in business no matter how much money they have to spend to insure that that happens!

I am not making purchases to keep businesses going. I am making purchases of the things I want and need at the best prices that I can get them for. I make purchases based on what I consider is a good value to me. If I think it is worth a higher price then I will pay it, if not I won't.

There will always be a new business to pop up to fill in the gaps, that's business. Businesses operate to make a profit usually by selling OVERPRICED goods to rip off customers.

B&N purchased Fictionwise for the sole purpose of eliminating their competition and they succeeded, now they themselves are in the same boat. Cry me a river, they are getting exactly what they deserve!

Aside from a lot of speculation, NOBODY has yet proven that Amazon is/has broken any laws. When it does then you will have something to whine about.

The book industry is changing thanks to the invention of ereaders/ebooks. Publishers & big bookstores are refusing to accept the new reality. So if they die they have no one to blame but themselves.

If the whiner of an author wanted to control the price of his book he should have self published it. But he wanted the "prestige" of having a publisher thereby giving away his rights to his own work. Too bad, so sad live and learn.
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Old 07-06-2013, 01:13 PM   #42
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Originally Posted by HoraceWimp View Post
So if that trade paperback you mention has a RRP of 34.95, Amazon would be buying that for 34.95 minus the 20% cost of paper book printing and distribution, minus 50%. So 34.95 minus 6.99 = 27.96, minus 50% = 13.98.

So Amazon buy that e-book from the publisher at 13.98. You don't think selling that e-book at 9.34, making a loss of 4.64 is predatory pricing in any way?
If that deeply discounted title is balanced by a bunch of ebooks that aren't discounted as deeply, then no it is not an example of predation.
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Old 07-06-2013, 01:22 PM   #43
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Originally Posted by Nate the great View Post
If that deeply discounted title is balanced by a bunch of ebooks that aren't discounted as deeply, then no it is not an example of predation.
HoraceWimp seems to have not encountered the concept of Loss Leaders. You know, $0.25 loaves of bread to get you into the store so you'll buy something else. I don't think I've ever seen a grocery store being accused of predation.
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Old 07-06-2013, 01:27 PM   #44
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I have not made any comment on the legality of the the strategy Amazon are currently following, so I'm not quite sure why you've even raised this. The legality of predatory pricing is not at question here—the ethical and moral business practice of doing it are, whether it's provable or not, and I believe I made comment to that effect in a previous post.
"Predatory pricing" is a specifically legal term. http://en.wikipedia.org/wiki/Predatory_pricing It's not a synonym for having an aggressive pricing strategy.
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Whilst it is entirely your prerogative to believe whatever you want to, I would disagree somewhat that there is no evidence to suggest that Amazon are not engaging in the practice of predatory pricing with the distinct intention of putting competitors out of business. It appears I am not the only one who seems to think this:

With the launch of the Kindle, Amazon promoted a low baseline price of $9.99 for most e-books. That meant that Amazon was selling virtually all newly published e-books at a loss. For example: A new book with a hardcover list price of $29.95 would be given an e-book price of $23.95 — 20 percent less to account for the publisher’s savings in printing, binding and distribution. The publisher would sell that e-book to Amazon for $12, and Amazon would retail it for $9.99, taking a $2 loss.

Why would Amazon do this? Observers have proposed several motives. Perhaps Amazon aimed to entice heavy readers to the newfangled Kindle; the customer could tell herself she’d make up the cost of the device in savings on the books themselves. Others have suggested that cheap e-books were loss leaders that drew customers back to Amazon over and over again, presumably so they’d go on to purchase high-margin items like TVs.

The most popular theory by far holds that Amazon intended from the start to totally dominate the e-book marketplace. By using its wealth to subsidize the sale of e-books at a loss, it could drive any competitors out of the market. Bricks-and-mortar chains like Barnes and Noble and online start-ups like Kobo (both of which would introduce their own e-reader devices) or device-neutral rivals like Google would simply not be willing or able to bleed cash as long as Amazon could. And because the Kindle is a “closed platform” — Kindle e-books can only be read on Kindle devices or apps — the more Kindle e-books a customer owned, the more reluctant she’d be to switch to a different device.

Source: http://www.salon.com/2013/07/01/ever...ook_price_war/
As others have pointed out, Amazon's $9.99 price applied only to NY Times bestsellers, of which there are maybe 40-50 at a time.
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Old 07-06-2013, 01:28 PM   #45
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Are you sure? I thought that Amazon paid a simple percentage royalty for eBooks. What would "sale or return" even mean for an ebook? How would you "return" it?
Sale or return is just an old expression for only paying for what you sell. With regards to conventional paper based books, they’d buy in x number of them at a set 50% discount on RRP and return the ones that hadn’t been sold to the publisher. It’s the old system for the way in which conventional physical books were bought from the publisher.

Most other resellers of e-books use the agency system pioneered by Apple in their iTunes store whereby they simply take x% commission on whatever items were sold.

When Amazon started out selling e-books they most definitely negotiated with publishers to use the old ‘sale or return system’ as opposed to the newer ‘agency system’ for the specific purpose that it allowed Amazon to undercut their competitors and sell e-books at a loss, rather than simply take a % off the top of the sale.

This is how Amazon were initially able to sell so many e-books at a loss and grow their Kindle market (a smaller loss than the agency system would have produced)—because Amazon themselves were able to set the price and not be dictated to by what price the publisher set.

Whether Amazon have now switched to the newer agency system I couldn’t say because I don’t know. I believe they may still be fighting this with the publishers who want them to switch to the agency system.
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