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Originally Posted by abookreader
Sure we do. Amazon and Kobo have both indicated that post Agency pricing their sales shifted toward lower priced eBooks.
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And the question is how much credence to place in those statements. Agency Pricing was aimed at Amazon in the first place. They'll certainly shout to the housetops that sales of books priced under the Agency Model are failing. How true this is is another matter, but it's part of an ongoing struggle between Amazon and the big publishers. That was happening before the Agency Model got imposed.
Amazon wants market share, and uses pricing to get it. They were getting a better than 50% discount from the publishers on print books (I've seen claims that are reasonable their actual discount was 55%), and wanted an even bigger one. Larger discounts to Amazon mean less revenue to publishers, so you can assume they'd be unhappy at such demands.
Retail margins are normally very thin, and may amount to pennies on a dollar. That's why market share is coveted: the bigger your market share, the more dollars you make pennies on. The appropriate measuring stick for retail is usually inventory turns and return on assets, not profit margin.
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Dennis