Quote:
Originally Posted by Worldwalker
If the authors are selling books -- or pens -- from their website, they're acting as retailers and they can charge whatever they feel like. But when they're selling through a third party, who then resells the items to the public, they're wholesalers, and they should, like any wholesaler, be determining the wholesale price (what they sell the book to Amazon for), but not the retail price (what Amazon sells the book to you for).
It scares me that so many people who laud the free market have no understanding of how it works.
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This retailer/wholesaler argument holds with goods that are purchased in bulk (in advanced of the retail sale), shipped, warehoused, unpacked on shelves and then resold to the public. All of this requires an investment in people and transportation so that needs to be wrapped into the mark-up price. In the case of Amazon they aren’t doing this they are buying the book at the point of sale and sending it to the consumer. If the consumer sends it back they don’t take the loss the author does and the refund is deducted from his total check. It’s almost like they are taking 30% for their distribution net work or social networking site.
Indie publishing is more like… marketing or an add-on service that you can get if you buy a Kindle, which is where their real concern lies. Amazon isn’t interested in managing Indie work or guessing at what the best price is for the product. The author has an incentive to figure out a price that will maximize his profit and Amazon has an incentive to keep the price low because they want people to buy Kindles (hence their $2.99-$9.99 range). I don’t think Amazon has any interest in the Indies because frankly there is a lot of work to manage them and not much money there. They do have an interest in getting Indie to publish with them though, it looks cool at it draws attention to the Kindle – which is something that they actually can make money on.
The bigger problem with applying traditional retailer/wholesaler economics to this is that the downloaded model had pretty much destroyed the retail-consumer relationship. Retails don’t have the power they once did and it is very easy to set up a similar e-shop and sell your book so Amazon doesn’t have the same power that a traditional retailer might. If they push, the authors leave and then the Kindle looks less cool.
As far as pricing, indie books will typically be lower than standard publishing because there is a tendency in small markets toward some collusion and the major publishers are pushing for higher prices, a little like OPEC and price fixing. No one wants a price war, with a large amount of sellers collusion isn’t possible… now you could ague that books are unique works and one can’t be substituted for another the way that oil or diamonds can but I’m not sure I buy that… I’ve read too many romances that seemed interchangeable.