Quote:
Originally Posted by rhadin
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.
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I know you are just spit balling here but having once been in the book business...no seller pays 50% of cover price...a seller like Amazon pays 30% MAX probably more like 20-25%. I used to pay 30-40% in the late 80s. And i was a lower volume seller at around $200k/yr in wholesale purchases spread aorund 4-6 publishers.
So I see no chance they are losing, even on best sellers. Maybe breaking even on best sellers considering overhead.