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Originally Posted by DMcCunney
It's not that simple.
Agency pricing is about protecting the hardcover best seller. Those are the crown jewels of publishing. Those are where they get the highest revenue and make the most profit.
Amazon is the retailer. They get a cut of the sale. They make out regardless. The publisher is a different story. Amazon gets books from publishers and resells them. They give the publisher a contractually agreed upon cut of the sale.
How much do you think the publisher gets from Amazon from the sale of a $25 - $30 hardcover? How much do you think they get for the sale of a $9.99 Kindle edition? How much less total revenue do you think they get on a hardcover best seller if a large number of buyers decide to buy the cheaper ebook version?
The answer to the last question is "enough to cause them to take drastic action and impose agency pricing." The hardcover best sellers may be the difference between whether a publisher makes or loses money in any particular year. Most books at best break even, and many don't do that. The publisher is betting enough books will do well to cover the losses on the ones that don't.
There are reasons why mass market paperback editions don't hit the stands till a year after the hardback, to give the hardback time to sell. The same reasons will affect the pricing and/or release timing of ebook editions.
For the publishers, this is about survival. Dennis
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But doesn’t the publisher get their cut regardless? I would think that whatever premium they are charging for a hardcover would be the same as for the ebook hence my example. By this I mean the price we pay to read it now instead of later. I can understand protecting their “crown jewels” but it is not the book itself but the premium they are charging. I am not saying to sell the ebooks at a fixed $9.99 price but to pass on the savings (most anyway) to the customer. If this can’t be done in a reasonable way then ebooks should come out with a delay like the paperbacks.
Quote:
Originally Posted by DMcCunney
The publisher gets more than $5. The wholesale price will vary by publisher and contract, but the publisher's cut of the sale is likely to be in the area of 40% of the cover price. Dennis
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The $5 was just an example. Per your figure a $25 book would give a publisher $10. If Amazon sells that for $15 I am sure that they still have to pay the $10 to the publisher. However an ebook costs about 10% less than retail price according to the publishers so that would mean $2.50 less than $25 in my example. But that is only from the publishers point and doesn’t include the saving on storage and distribution from Amazon’s point. If Amazon wants to pass those savings to us then why not let them? I have read figures of about 10% also. That would be about another $2.5 in my example. So for the $25 book example an ebook could be $10 giving $7.5 to the publisher and $2.5 to Amazon. Yes the $7.5 is less than the $10 but it makes no diff as the publisher has $2.5 less in cost also.
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Originally Posted by DMcCunney
It makes perfect sense. A friend of mine who is an editor for a major house estimated printing, binding, warehousing, and distribution accounted for about 10% of the total budget of the average book. I think his estimate is low, but he sees the numbers and I don't, and he has no reason to lie about it. Even if he's off by 100%, the savings in not having a physical book is far less than what a lot of folks would like to believe, and won't permit the sort of pricing folks would like. Dennis
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I have a real hard time understanding that only 10% goes into the printing etc. I have read 10% for printing and 10% for storage and shipping. This last I believe more. That being said even with the 10% it could be feasible for an ebook at $9.99 and still make money as per my example above.
Quote:
Originally Posted by DMcCunney
The problem is what will automate it. Dennis
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Prior authorization that when the paperback hits the shelf to automatically lower the price.