Quote:
Originally Posted by altworld
Okay, let me rephrase this.
There are times you have to to try a loss leader to garner interest in a product. In this case selling the Kobo at $79 which at a guess is still $10 per unit profit, would help increase Borders sale in ebooks.
Now, you also have to remember that there was a Border in virtually ever mall, giving them a huge advantage of putting eBook Kiosks in each store and push that as well. They really could of been on the cutting edge here, instead they choose to ignore it, and then at the end decided there model would be to charge authors a large upfront fee to publish in their store.
It is all might of beens, the balls been dropped now.
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How would it be $10 profit? Like I said, display alone is $60. Are you saying that the rest of the reader only cost $10 to develop, make, package and ship to the retailer? Also, loss leaders are generally done by larger companies that can afford it. Kobo isn't a big company, and as we all know even if Borders decided to take the loss on their end, they couldn't afford it either. Borders especially had no interest in doing that since Borders doesn't run the eBook store with their name on it (never have, Kobo runs it for them now, and Sonye ran it before Kobo).
Borders could have done things better, like running their own eBook store so they get a larger cut, and pushing things more to compete against the Kindle and Nook. Even if they couldn't afford to fund development and production of their own reader, they could have still done more to entice people to buy books from them. With 6 main publishers now on the agency model, profits are slim and differing on pricing is removed as a way to compete against their rivals. That leaves marketing and customer service, which is where they could have picked up the ball and ran with it.
As far as Kobo goes, considering the size of their company, they've done a great job on their reader, and have pushed it out to an impressive amount of stores. Usually, companies of that size are unable to do things on that scale, especially when you consider that they were simply retailers before hand.