Quote:
Originally Posted by 6charlong
The thread has moved on but it should be noted that we already knew that Amazon was unlikely to be losing money selling best-sellers for $9.99. The new price for best-sellers that the Agency group wanted was $12.99. We already knew that 30% of the sales price went to the retailer. If we assume the agency model's new price for releases:
12.99 minus (30% of 12.99) = 9.093. Even under the agency model's higher prices Amazon would earn $0.897 per book if they were allowed to sell for $9.99. However, Apple's profit margin would be cut by almost $3 if they had to compete with Amazon's $9.99 price.
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Prior to Agency Amazon was losing a few dollars on many bestsellers. This is public knowledge and not disputed by Amazon.
Wholesale prices were half of list about $12-15. So Amazon was selling below their cost for some titles. It's possible they were making up the difference on other titles.
But what about Kindle R&D, support, and marketing. Also, the KDP Select funds of $600,000/mos?