Quote:
Originally Posted by HamsterRage
The theory is about lowering the price is that the sales will go up more than than the price goes down. There seems to be something to that....
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I think you're slightly missing my point here. I stated several times that I view it as entirely plausible that dropping the price
can result in more revenues and more profits.
I'm simply pointing out that in order for that to be the case, you need to sell
significantly more copies than most people assume to be the case.
On a side note, authors are in fact demanding bigger royalties because they expect ebook cover prices to be lower than paper. Keep in mind that the author's royalty is not calculated off of the price the customer finally pays -- sales and discounts and coupons do not affect the royalty rates. So cutting the cover price results in a
further deterioration of margins for the publishers.
So when the Harry Potter books were first released, if they put it out in paperbacks at a $12 cover price and sold them dirt cheap, there is no question they would have sold more copies. However, it is highly unlikely that even the HP books could've sold enough to make up for the revenues and profits lost by skipping the higher-margin hardcover sales.
Or, to put it another way: As you lower the ebook's price, you are also negatively affecting your margins. As a result, in more cases than most people presume (but definitely not all cases), you are better off selling
fewer copies at higher margins.