Quote:
Originally Posted by jbjb
Businesses don't, in general, price based on cost + margin. They will charge whatever maximises their profit, using what they know about their margins and their PED ("Price Elasticity of Demand").
I suspect where ebook publishers are going wrong is that I'd guess their product is much more elastic than they think - a drop in price will dramatically increase sales which, given the very low Cost of Goods for an ebook sale will lead to increased profits.
/JB
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Oddly I think with ebooks the limiting factor is on the demand side not the
cost of production or your PED. For most books, there are only so many
that are interested in purchasing the book, at any price. Generally people
who read have demands on their time and where they have a choice of
reading material they are often looking for something that they know they
will enjoy. They have a limited number of authors or genre that they will
even consider reading. Without some mass appeal, generated outside the
circle of the normal reading addicts, by TV personalities or a Movie, there
is a real limited demand.
Luck;
Ken