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How do we know that Amazon is actually taking a loss on the best sellers? I've heard this premise stated on several occassions, but is this a documented fact or is it just conjecture?
New York Times bestsellers in hardback run around $16. These books have costs not associated with ebooks. An ebook doesn't have materials, transportation, and storage costs. There is also the industry practice of allowing book stores to order more books than will likely sell and then return the unsold portion. This practice definately inflates the cost of the hardback books that do sell, and this practice doesn't apply to ebooks.
However, let's assume that Amazon is offering ebook bestsellers for less margin than hardback bestsellers. This still doesn't mean that they are losing money on these items. The publishers also have an incentive to increase overall ebook sales, so they may be sharing the cost of the price reduction with Amazon.
Amazon and the publisher will also continue to make sales even after the publishers stop publishing the book. This too must be factored in to determining the price for an ebook when compared to a hardback.
If Amazon and the publishers were truly losing money on book sales then I'd understand if they decided to raise prices. However, I'm not so certain that is the case.
When the factors I laid out above are concidered, how much does Amazon, the Publisher, and the Author make on a hardback book? How much do they make on an ebook? I don't think any of us really know, but there is certainly no proof that Amazon is losing money at $9.99 a book.
Would I support a boycott? Well, I'm not going to picket in front of Amazon's headquarters, but as long as most books remain at $9.99 or less then I don't plan on buying any books that cost more than that.
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