Quote:
Originally Posted by Kali Yuga
A big retailer may order 20,000 copies of a new book and demand a wholesale price of $9.00. An indie shop, on the other hand, may only need 2 copies. That results in either paying the publisher full price ($11 perhaps), or working through a distributor who in turn takes a cut.
As a result, the bigger stores can charge less for the same title -- an advantage which results in the big stores getting bigger, and the indie stores closing shop. (Which is exactly what has been going on for the last few years.) Are you sure this is good for competition?
Similarly, Walmart has enough power to "negotiate" (i.e. dictate) prices to its vendors, including major corporations, and demand excruciatingly efficient and precise delivery schedules. In doing so they can dramatically undercut other stores. Is this beneficial or anti-competitive? Or both? Or neither?
Plus, as mentioned, nothing about this prevents smaller publishers from undercutting agency publishers on price.
I do agree that in some cases prices can be too high for some buyers, but that is not a federal crime.
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Walmart is a special case. Their market power is so high it practically borders on monopolistic. If for some reason Target went under, they'd have virtually no competition left on a national level.
The biggest problem with the agency scheme is that it is allowing all of the big publishing houses to set higher prices on books. They are basically agreeing between each other to charge higher prices to customers, while their agency schemes prevent any flexibility on the part of retailers, and restrict the retailer's right to sell product however they can make a profit. So they are agreeing between themselves to set up a scheme that keeps prices artificially high and that prevents free-market competition on the part of retailers. Sounds like a price-fixing ring to me.
It's the MAP scheme all over again. It's like living in a world where every company is Apple or (shudder) Bose. Imagine every product at MSRP and retailers are unable to adjust prices.
If they want to do away with retailers and become the retailer themselves, fine. But setting up a scheme where the manufacturer (or publisher) can tell the retailer what they can sell, how they can sell it, and at what prices, is not my idea of a free market economics.