Servers... increasing cost as catalogues expanded... and rarely owned but usually leased...
Electricity... increasing especially with the greens aim of pricing us all out of using energy...
CC fees paid by retailer... so, still comes out of final price... consumer pays not retailer (they don't have any money other than what we give them)
Staff... probably relatively fixed...
As far as "You will always make a unit profit on an ebook sale..." Where does that come from, there is no such thing as always making a profit... it depends on end unit price (never heard of loss leaders), the state of the market and many other economic variables...
And these days the the current goal is to stay in business never mind maximising profit from sales... never seen BOGOF offers etc... mainly to offset supermarket sales and get customers in... personally the current marketplace model is doomed, killed as much by the customer as the publisher/retailer... just like small shops on every high street and in every village, we all want the convenience but as everyone wants to pay the least possible then it's goodbye to small shops and current booksellers... specialists used to rely on bestsellers to help support the longer tail in their specialities but not possible any more...
Quote:
Originally Posted by CleverClothe
Servers = Fixed Cost (compared to sales), and payed for by the retailer
Staff = Fixed Cost
Electricity = See Servers
CC Fees = Variable Cost, but payed for by retailer
Royalties distribution = See Staff
Artwork = Fixed Cost
So, lets take a look at what the list really looks like:
Ebook Variable Costs:
DRM (%) (Not applicable if selling through Amazon)
Royalties (%)
Paper Variable Costs:
Royalties (%)
Materials ($)
Printing Labor ($)
Storage ($)
Shipping ($)
What you can see from the two lists is that ebook variable costs are a percentage of the price you sell an ebook for. Therefore, you will always make a unit profit on an ebook sale. So the goal is to maximize the overall profit from those sales to cover the fixed costs that are mostly shared between paper and ebook.
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