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eBook pricing
As a small eBook retailer, I have no problem honestly laying out the pricing structures that are in place for us small fish.
Firstly, the publisher sets the Suggested Retail Price (SRP) of the eBook. Obviously, some publishers are more realistic than others! They then take 45-50% of this price no matter what. Some publishers take as much as 70%, based on their agreement, but 45-50 is the morm.
The Wholesaler takes 10% of the srp. They host, encrypt and deliver the eBooks.
The retailer is then left with approx 40-45% of srp. While this figure seems relatively ok, bear in mind a couple of things. Firstly, any discount applied to the eBook which is often neccessary and desirable from both the retailer and consumers point of view, comes directly out of the retailers share. Often this is neccessary just to counteract the publishers unrealistic pricing!
Also, as we are based in Ireland, we must pay VAT on our sales of 21.5% as well as the ususal associated costs, so as you can see, the margins get smaller and smaller.
We are working on a project that will enable authors and publisher to sell virtually direct to the customer, at 80-90% profit, which we feel is the way forward. By getting more of the pie, the publishers should be able to radically lower the price of eBooks while maintaining their profit - good news for all!
Any questions about the above, just shout!
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