Quote:
Originally Posted by ApK
It's reasonable that costs per unit are negligible when in sufficiently large quantity, and if the number of units shrinks, the impact is more acutely felt.
As the commercials say, shipping a ton of cargo across country by freight train is dirt cheap. That's AS LONG AS THE TRAIN IS FULL with a couple thousand tons of cargo! If that same train had to take just ONE TON of cargo, it would not be cheap!
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Exactly. Fixed costs are non-negotiable. It costs the same to run a warehouse that works at full capacity as one working at half-capacity or less.
It is that kind of overhead that is killing pbook competitivenes.
Pbook units sales were declining even before ebooks came on the scene and when ebooks came along the decline became more noticeable. For the past few years pbooks have been at best a breakeven proposition for the BPHs and that is why they have been merging like crazy, trying to aggregate enough volume to keep their facilities running at something close to profitability. Absent enough volume to cover their overhead they need to reduce the capacity of their facilities and staff.
Which means closures and layoffs.