Quote:
Originally Posted by Leep
If a paperbook sells for $25 which includes paper, cover, printing, shipping, overstock and point of purchase personnel and an ebook sells for $9.99, how can they possibly be losing money on the ebook which is on demand and only uses an existing website?
Cannot understand the economics unless every paper book sold also loses money. Publishers (and Amazon) cannot be that dumb that they would agree on an unrealistic price that the market has indicated it will not pay. Maybe a couple of publishers and a couple of authors will try to hold out, but if you can deliver and sell a product for a profit, that's good business.
cheers
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You are missing the basic economics of book publishing. If the paperbook has a suggested publisher's price of $25, Amazon has to pay the publisher $12.50 (maybe a little less or a little more depending on the negotiated discount) for each copy of the book that it sells -- REGARDLESS of the price at which Amazon sells the book. Thus if Amazon sells the book for $15, it grosses $2.50 in profit; it sells the book for $10 is has a loss or $2.50.
The same holds true for an ebook. It doesn't matter that the ebook has no paper costs or warehousing costs or some other cost that is associated with a physical item. If the publisher sets a retail price of $25 for the ebook, then Amazon is in the same boat as if it were a physical book and if Amazon sets the price at $10, it loses $2.50.
Remember, Amazon pays a wholesale price that is a percentage of the publisher's retail price; Amazon does not set the publisher's price.