Quote:
Originally Posted by tompe
I tried to be a bit sarcastic... I find it inconsistent that Amazon gets the credit for selling bestsellers for 9.99 at a loss but do not get the blame for higher prices.
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In the merchant model that Amazon is currently operating under, the publisher sets a wholesale price, and Amazon sets a retail price. Theoretically, all those $9.99 hardcover bestsellers and $9.99 ebooks of the bestsellers have a retail price of $28 (or whatever), so the wholesale price is typically about $14, and Amazon is selling them at a lost of $4 (in this example). If the ebook is listed at $14, then Amazon is paying about $7, and can set the price at $9.99 and still make a small profit. If MacMillan sets the ebook price at $28 and leaves it there forever, and Amazon decides to sell it at the same price as the mass market paperback, they're taking the loss to encourage Kindle sales. If they price it higher to break even, the Kindle owners blame Amazon, even though if they were to go to the publishers own ebook store, they'd see that the gouge starts at the publisher.