Quote:
Originally Posted by Ninjalawyer
A fixed price is the antithesis of innovation, you can't have your cake and eat it to; innovating is costly and carries a lot of risk, there's no point in doing it if resting on your laurels can guarantee a steady stream of income with no risk.
|
No, that's now how the fixed price works. The fixed price means that shop A must sell that book at €10* and shop B must do the same. Only after a certain amount of time has passed (I believe it's 6 months) can shop B put the book on sale (or send it back to the publisher). Both shops will pay €6 to the publisher
Without a fixed price, shop A would try to sell the book at €10 (and have a €4 profit) But shop B gets its profit from selling groceries and only wants to use the books to lure people to the shop, so shop B sells that exact same book for €5. And loses €1 per book. But that doesn't matter as the majority of buyers will spend more than that for the rest of the stock.
The fixed price simply makes sure that shop A can stay in business with only books and shop B can't mistreat books simply to lure people to the shop. The publisher will get the same amount of money in both circumstances.
*all prices are made up!