Quote:
Originally Posted by rhadin
I can't give you exact figures, each publisher is different. But I ran a publishing company (and I'm still involved in publishing), so I can give you some generalizations.
1. Amazon is losing money on the $9.99 bestsellers. Books are "sold" to retailers with a percentage discount based on the listed retail price. The discount is generally 50 to 55 percent. Even with a 60 percent discount, Amazon would need to pay the publisher $10.38 on a book that has a suggested retail price of $25.95. Probably the breakeven point is a suggested retail price of $19.95, but few new bestsellers in hardcover have such a price point.
Why this question keeps surfacing, I do not understand. The publishers themselves have said that Amazon is taking a loss and none of the analysts have disputed this. Seems to me that that this question should be laid to rest permanently.
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Amazon charges 65% of suggested retail (seller gets 35%). On a $25 ebook, I calculate a possitive revenue for a best seller:
$25.00 * 35% = $8.75 (Amazon's cost [to seller])
$9.99 - $8.75 = $1.24
Now consider that Amazon has very tiny warehouse and delivery costs. This is what allows them to give such deep discounts.