Quote:
Originally Posted by DMcCunney
I don't believe they were taking losses on sales when they were originally ramping up the Kindle and ebook business in the US. I don't see why they would do so elsewhere.
Yes, the Kindle platform had development costs, and it would have been a while before they recouped those in Kindle sales, but the ebooks intended to be read by the Kindle are another matter.
Let's drop loaded words like "ripping off". Producers and retailers set prices they think they can get.
Producers will have minimum prices they must charge, simply to cover production costs. They will sell to wholesalers/retailers at a discount, with the amount of discount normally depending on the volume of the sale. The more you buy, the lower your unit cost will be.
The retailer will have a Manufacturer's Suggested Retail Price, which will be the cover price in the case of a book. To boost sales and compete with other retailers, a retailer may choose to charge less than MSRP. The difference will come out of their margin. The retailer makes a guess at how many copies they can sell at full price, and makes a bet that they will sell enough additional copies at the lower price to make up for making less money on any individual sale, and make more total revenue and profit overall.
Amazon probably does have a better deal with the publishers. What is paid by Amazon to the publisher for each sale is determined by contract. Amazon is the world's largest catalog retailer, and sells a hell of a lot of books, so you can assume Amazon will get the most favorable terms from publishers.
This sort of cutthroat retail competition has been a factor in US bookselling for decades. Smaller bookstores and "Mom and Pop" operations are dying like flies. They can't get the level of discount someone like Barnes and Noble can get, can't match B&N on pricing, and fold, because buyers shop for the lowest price. Warehouse stores like CostCo and Sam's Club have even greater economies of scale, and put pressure on B&N. Amazon puts pressure on everybody.
But pricing is always "What the market will bear". If the retailer can get enough sales of an item at a particular price to meet their targets and make the desired amount of money, they'll charge that price. The fact that you don't like it is your problem. Enough other folks don't think it's a rip off to keep retailer and producer happy.
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Dennis
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Dennis:
ABSOLUTELY dead on right...I do not understand the people who feel a product priced at some amount beyond their comfort zone immediately go to the "rip off" card. Having been in the business of buying and selling since I was just 7-yrs old, so 43-yrs ago now...I accept and understand that a product is worth what someone is willing to spend. There is no such thing as a retailer "ripping someone off" when they have a set retail price....EVER.
If you don't like the price don't buy. Sure I understand if you feel it is too high, that is fine, in my area of selling often my price is simply a starting point and a best-case scenario. If someone buys at that price I am happy and they are happy.
I also find irony that 99.999999% of those who decry RIP-OFF will never, and I mean NEVER question a price that is accidentally too low, instead they will buy as many as they can before the seller realizes the mistake. And, for those who do not know, a seller can withdraw an item at ANYTIME even after payment is received online, as long as it's an honest mistake. People are greedy and think it is their right to exploit an error on the part of the seller of items but it's never OK for the seller to expect the right to price items where they want to...people are very duplicitous this way. After 43-yrs of dealing with them, it is a very consistent attitude...
So, nice observations...it goes both ways. I don't care what the prices are as long the pricing is left to the retailer. Of course there is the whole idea of consignment selling...so maybe this is a loophole the Price-Fix-Five are exploiting. I am not sure how the laws actually govern this situation if the deal is positioned as a consignment arrangement.
We are seeing this more and more in many areas. Starting a few years back DSLR camera makers began moving in this direction. Hoya is well known for their price fixing on lense filters by forcing retailers into a MAP agreement (minimum advertised price) preventing retailers from any sort of advertised competition, even online. This has now been extended into the more expensive hardware for several brands of DSLR's and lenses. Pretty much these agreements have all but eliminated the well stocked camera store in all but the biggest cities in the US. Even in those stores the selection has been reduced to only the big two and maybe toss in Sony as well but not so much, it's pretty much only Canon and Nikon...other brands have basically pushed themselves out of the stores with their agreements. The reason for that lengthy observation is I see similar things happening with books. I see there may soon some a time when retailers must sell ONLY at the cover price, what is to stop them if they all have colluded on this agreement already?
Again, it matters not at all to me, I have more than enough books to read on a day for the rest of my life...seriously I do not need to ever buy another book. Still it would be nice to not feel like I need the Astroglide and a dozen people to hold me down in order to buy a new title....or a new lense for that matter....hehehehe....