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Originally Posted by HarryT
Could you explain what "agency pricing" is, and why it's bad?
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Instead of acting as a distributor/retailer, where Amazon buys books from Macmillan at a set price (~50% of suggested retail) and sells them at whatever price they choose, taking more profit if they go with the suggested full retail, and less if they run sales, Macmillan is insisting that Amazon act as their "agent," taking a 30% commission from the price that Macmillan sets.
It means (1) Amazon won't be able to have special promotional sales (without special negotiations with Macm, which aren't likely); (2) Amazon won't be allowed to lower the price of a poor seller to get more sales at lower profit-per-ebook; (3) Macmillan is the seller, not just the producer, of the ebooks, which may have weird legal ramifications. (If there's bad/glitchy formatting requiring returns, it's possible that Amazon can send those complaints along to Macmillan to fix; agents may not have the same responsibility over the product as retailers.)
With physical goods, agents stop carrying products that don't sell well enough; they're not worth the resources it takes to stock them. In Amazon's case, the resources to "stock" an ebook are miniscule--but I wouldn't be surprised if part of the backlash included changing the listings system, telling Macmillan (and any other publisher who insists on a similar model), "We're sorry, but we just can't justify front-page listings of things we can't be sure of selling at that price. If we had the option of lowering the price to boost sales, it would be different."
Certainly physical stores often put "commission" items in a different area from their "main" merchandise; it's less important for the store to sell the commissions.
Quote:
Originally Posted by kilron
who's the bad guy here? amazon or macmillian? i'm sorry, but its amazon.
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You say that like it has to be one or the other.
There aren't any good guys in this conflict.