Quote:
Originally Posted by crossi
If I was an author I would be very unhappy with any publishing house that insisted on Agency pricing. Imagine having my book selling at 3/4th the price but getting PAID like they were sold at full price AND selling more books, then having that cash bonanza taken away by my publisher. Enough to make me want to take my books and leave.
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The reason lots of publishing houses insist on agency pricing is that it is currently the only way to not lose a lot of money from your Amazon and Apple sales. The problem is, as long as any major vendor requires agency pricing (which from what I've seen, both Apple and Amazon do unless you're big enough to force them to negotiate a special contract), you have to use agency everywhere. Otherwise, if you sell to someone at a wholesale price and they lower the price, the most-favored-nation clause kicks in, and Apple and Amazon pay you less—potentially a lot less if it causes your book to cross into a different price class.
For example, Google Play basically uses a wholesale scheme (though they don't call it that). It's a real pain in the backside, because they discount things arbitrarily off of retail. They can cut the price by up to 48% without losing money. And if you list your books there at the same SRP, you'll quickly find your prices from Amazon and Apple cut by up to 48%. So instead of making 70% of the cover price from Amazon and Apple, you're making 52% of 70%, or 36.4% of the cover price.
And because Amazon and Apple are the two biggest sales channels, you'd have to be a little nuts not to be wary of wholesale schemes, at least until such time as the courts and/or legislation mandates that all sales channels give you the choice of agency or wholesale models (or until MFN clauses are ruled illegal).