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Originally Posted by pwalker8
Spoiler:
No what I am saying is that under the wholesale model, Amazon is able to charge whatever they want. Once Amazon established the $9.99 price point in the customers' mind, it's a natural progression that Amazon would then push the publishers to reduce their wholesale price to below $9.99.
So just to throw out made up prices to make the example clearer, if the suggested retail price for an ebook is $20, and the wholesale price is $12, then when Amazon sells that ebook for $10, they eat a $2 loss. What Amazon is now doing is saying, "we can't make any money at $12 wholesale, so publishers need to reduce the wholesale price to $7 so we can make some profit". It was both predictable and predicted.
My point is that while Amazon's pricing practices may maximize profit for Amazon, it doesn't necessarily maximize profit for the publishers or for the established authors that I like to read.
The current publishers business model is to sale books at hardback prices for those customers who are willing to pay hardback prices and then a year later, release the book at paperback prices for those who want the book but aren't willing to pay hardback prices. Skipping that step leaves a lot of money on the table that the publishers and authors never get.
I'm perfectly willing to pay hardback prices to support authors that I like to read. I do not view books as generic product and that one author/book is as good as another.
The reason that publishers want agency rather than wholesale is because Amazon's ploy is so transparent and predictable. Ebooks currently don't have a established price point in the consumer's mind as evidenced by the back and forth debate here.
The publishers want to set the price point in the consumer's mind at whatever the current deadtree version is. They do not think that Amazon's $9.99 price point makes their business viable long term. I favor long term viability for authors and publishers over Amazon's quest for market share.
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That I can understand and is reasonable. I personally do not share the same opinion about it as you do, but how boring would life be if everybody had the same opinion.