Quote:
Originally Posted by plib
It's virtually impossible to have a monopoly in retail, so comparisons to other high barrier to entry industries, or even transportation, are pretty meaningless.
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I have thought a bit more about this.
The best point of comparison is WalMart. The book I've read that I'll be cribbing off a bit is
The Wal-Mart Effect: How the World's Most Powerful Company Really Works - and How It's Transforming the American Economy.
WalMart does not dominate in general merchandise anywhere close to the degree that Amazon will dominate in books once the eBook revolution is more or less complete. And WalMart is just retail, whereas Amazon is more and more a publisher. But WalMart does have enough market share to hint at what could happen in a more extreme retail high-market-share situation.
WalMart can choose between raising prices a bit, or threatening suppliers with ruin unless they lower the wholesale price. Low prices are so ingrained in the WalMart culture that they mostly do the latter. And that's forced some good changes, such as an end to putting bottles of pills in unnecessary boxes.
But, in the case of books, continually pressuring suppliers to lower wholesale prices will not be so benign. Looking at Amazon as a publisher, I don't see them nurturing complex non-fiction projects. Instead, they are publishing the kind of books that could just as well be self-published. And publishers will be told to match that cost structure. I realize that this may or may not be a bad thing depending on what kind of books you read.
By the way, even WalMart dramatically raise prices from time to time. Does anyone remember how cheap it used to be get a cold soda there?