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Originally Posted by LeeH
garygibsonsf hit the nail on the head with his breakdown of cost areas. Just because a book is being published electronically, the other associated costs are still there. 50% to the retailer is a good rule of thumb - sometimes it's lower, usually it's higher. Then there's the editor, copy-editor, several layers of proofreader, advance to the author, office space, artwork, etc. Other than warehousing (which should be relatively low for a small imprint like ours) and the cost of printing (which is pretty much the lowest cost involved in the whole process), the cost of producing an eBook is identical to the cost of a paperback.
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I guess you disagree with my cost breakdown, then, though it's in the same ballpark. One thing to keep in mind is that many of those costs are fixed. So for a *small* print run, it's a large part of each book, but as more copies are sold, it becomes less and less. So if in order to keep prices low a publishers has to accept little to no profit on the first 50,000 copies, I'm not going to cry for them.
Quote:
Originally Posted by LeeH
However, it is perceived that the cost is lower, so we need to address this misconception and set the cost of the eBook, accordingly.
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Again, the cost is lower, although I suggested it was about $3.00 lower and you're suggesting for you it's more like $1.00. Nevertheless, the survey included text suggesting that a few dollars less than the paperback was not an answer you wanted; all the choices were between free and $10, I think.
You can't really address the misconception; the consumer won't believe you. Furthermore, if you DRM your books, it will only add to the perception that ebooks are "less" than physical ones; you can't loan friends copies. So that will drive the perceived value down further.
The biggest thing you can do is force the retailer to accept smaller margins, and also eliminate those margins fully by selling them yourself. Beyond that, the only way you're going to get consumers to accept higher prices is to trumpet the fact you're giving authors higher royalties at the same time. If you do that, give the author $1.50 for every ebook, a $1.50 profit for you, and the rest of the price covering the costs of the ebook, you should still be able to sell ebooks in the $5 - $7 range which is lower than Amazon's $10 price point. Other retailers might charge $10 in order to make their margins.
I'm not complaining about a $10 price point; I've bought ebooks for more than that. But anyone can look at the numbers are see that both the retailer and the publisher are getting good profit margins on that number, and the author is getting very little. There's no reason why all parties can't make money on a $3 or $5 ebook; it's just they won't make as much as they are used to with paperbacks. A $10 ebook? You'd better be giving the author a bigger royalty than the usual 4 - 12%.