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Originally Posted by NatCh
I respectfully disagree, rlauzon. For a business, 100% of the revenue comes from the customers, therefore, 100% of the costs have to be paid with money that comes from the customers -- that includes the owner's 'salary.'
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It seems that I'm not being clear. Let me try again with a simple example:
We start with a widget. The cost to produce it is $10. It sells for $20.
So, as a customer, I pay $10 (the cost of the item) plus another $10 for profit of the producer.
Now, someone comes out with a new process that will chrome plate the widget. It costs $2 to chrome plate it. As a consumer, a chrome plated widget is only worth $21. I won't pay $22 for a chrome plated widget. So the producer must make a choice.
Option 1: Don't chrome plate the widget (avoiding the extra $2 cost).
Option 2: Chrome plate the widget, eat the extra $1 cost, dropping the profit to $9 - in the hopes that more widgets will be sold now that they are chrome plated.
My point is that as a consumer, the full cost of chrome plating is NOT passed on to me simply because I won't pay for it and I will go get my (better value) widgets someplace else.
Bringing the discussion back to eBooks: The cost of producing an eBook is extremely small. If the author decides to employ a proofreader, that's fine. But in passing the full cost of that on to me, I may decide that his eBooks are no longer a good value and go someplace else. Therefore, he may not be able to pass the full cost on to me and has to make the same decision as above.
I predict that eBooks are going to be very cost sensitive simply because they are so cheap to produce. Extra costs will have a very large impact on sales.