Quote:
Originally Posted by leebase
It goes like this. You have a product you price at $30...and wholesale at $15...expecting the retailers to sell at $25. All is good. The customers know that the $30 retail price is never the one they pay and expect to pay approx $25 give or take a bit.
Retailer A decides to buy marketshare by pricing the book at $10 taking a bath on each book sold but they do so to drive the competition out of business. Or perhaps they have other merchandize they are making money on and losing money on books is made up on profits selling shampoo.
Why do the Publishers care? Are they not getting their $15 either way? Well, what happens when Company A runs Company B, C, and D out of business such that the Publishers becomes dependent on the only Company A to sell it's products?
What happens now that consumers are trained to expect brand new hard backs to come out for only $10. They become unwilling to pay the $25 they used to be willing to pay.
Then Company A, now that the competition is out of business...goes back to the publishers and says "we are no longer willing to pay a wholesale price of $15....but $7 for books".
The publisher can't just say "no" because the publishers other retailers are out of business....and it's customers have stopped being willing to pay $25.
Lee
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As HarryT said there are Antitrust laws and of course public opinion. But failing those I there are other options that publishers can pursue.
A big name publisher could set up there own store if they haven't already and match their prices. If they have to sell for $10 and get only $7, why not sell for $7-9. Sell individual copies only and make the undercutter buy from their site one copy at a time.
I am not saying that retailers will not try to cut out competition with loss leaders etc. but not unique to 'Company A'
Publishers have already demonstrated that they have power, they just chose a poor way to exercise it and got caught. Bet they enjoyed the ride while iit lsted though.
And many small companies have chosen to pull some or all of their products without noticeable harm from 'Company A'.
My opinion is that the reason people sell through 'Company A' is that they make more money, but if small wholesalers/retailers can stop at their wish, so can the bigger publishers at least.
Helen