Quote:
Originally Posted by pwalker8
I'm pretty sure that Amazon wasn't getting a better deal than everyone else. They pretty much paid the same price as the other major retailers (I've heard 50% of retail thrown out), however, they were willing to take a lose on those specific ebooks to establish a market.
The agency model didn't break the publishers business model. The publishers were able to set the price to whatever fit their business model. What caused the publishers grief was that Amazon had already set the price in the public's mind, so basically the publishers waited too long.
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If you think that you are pretty sure, do the math to check.
Remember that you said:
Quote:
Originally Posted by pwalker8
it was selling a small subset of ebooks at a loss or very small profit
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At 50% of the prices of the books in question that were between $24 and $28, Amazon would have had to pay the publishers $12-$14 per book and would have taken a loss on all the $9.99 bestsellers.
But Amazon got a better deal: 60%, meaning that they only needed to pay the publishers 40% of the cover price: $9.6-$11.2 so they would make a small profit of $0.39 on the books with a cover price of $24 and take a loss on every book with a cover price above $25.