It's IMPOSSIBLE to price ebooks too high

[leebase]

Originally Posted by abookreader

You are so caught up in being 100% correct that you are refusing to define your standards. You don't really mean "Impossible" that was just attention grabbing. So what do you really mean?

Enough for them to stay in business. Obviously, if they don't sell enough ebooks to stay in business...then they can't be said to have successfully sold at the price the asked.

If they stay in business, then it can't be said that the price was "too high".

Between those two extremes comes "profit maximization", which is a completely wonderful but a different topic.

This topic was about recognizing the vast competition that remains even when the publishers take control of their own pricing and that reality keeps them from being able to price too high.

Lee

[hal2814]

Originally Posted by leebase

Enough for them to stay in business. Obviously, if they don't sell enough ebooks to stay in business...then they can't be said to have successfully sold at the price the asked.

If they stay in business, then it can't be said that the price was "too high".

Between those two extremes comes "profit maximization", which is a completely wonderful but a different topic.

This topic was about recognizing the vast competition that remains even when the publishers take control of their own pricing and that reality keeps them from being able to price too high.

Lee

So it's impossible for a company to price eBooks too high to stay in business if they're still in business? Gotcha.

[leebase]

Originally Posted by hal2814

So it's impossible for a company to price eBooks too high to stay in business

If you'd have stopped there, you'd have been right. There is nothing about agency pricing that is going to allow the publishers to set prices beyond what the market will bear. It is not price competition between different online stores that limits what publishers can charge. It is the competition from the physical books, used books, library and every other form of entertainment that limits what publishers can charge. Well, that and the desirability of their product.

Lee

[abookreader]

Well I don't think anybody will argue with that Leebase other than it is a very simplistic one size fits all statement. Those concepts are included in Econ 101 textbooks because in a generalized manner they are true and they fit most industries well when viewed without much attention to detail and exceptions.

I'm fairly firm in my belief however that if you start nitpicking apart the details and try for a goal a little more grand than "We want to stay in business" you will find it certainly is possible to price too high/as well as price too low and still stay in business. Its even possible to do both of those at the same time.

For instance - say you are willing to pay $12.99 for an eBook and I'm willing to pay $8.99 and the costs associated with the book are $7.99.

Price at $8.99 and sell two books. Company makes $2
Price at $12.99 and sell one book. Company makes $5

However, find a way to sell you the book at $12.99 and me the book at $8.99 and make $6. Amazon actually played around with that a couple of years ago - showing different prices on the screen for different customers based on customer data. They got caught and faced a huge PR scandal over it.

There are statistical wizards who make fortunes studying these pricing models and I can pretty much guarantee you that any Publisher who is declaring every new release hardback book should be priced at $12.99 for every customer is at times priced too high.

But you've already admitted that when you said impossible you didn't mean impossible - so I guess you know that.

[leebase]

Originally Posted by abookreader

Well I don't think anybody will argue with that Leebase other than it is a very simplistic one size fits all statement. There are statistical wizards who make fortunes studying these pricing models and I can pretty much guarantee you that any Publisher who is declaring every new release hardback book should be priced at $12.99 for every customer is at times priced too high.

The "too high" will depend on the Publisher's success at makes sales at that price. Just as "too high" is a concept that varies from individual to individual, so too "success" will vary from publisher to publisher.

HOWEVER -- that's ok and doesn't impact this discussion materially. To wit:

Whatever "too high" is in your opinion (fully recognizing that's a number that changes from person to person) -- it is impossible for a publisher to set such a price and still "succeed" (with suceed's definition in flux from publisher to publisher).

Whether it's $2.99 or $12.99 or $129.99 -- a publisher can only succeed (by their own definition) if there is a MARKET for the ebook at that price.

Plug any number or definition into the equation and the equation is still true.

Let's say the publisher desires to price the ebooks at $99.99 -- you and I and the rest of this board may declare "that's too high". If there are not enough sales to satisfy the PUBLISHER'S view of success, then they will have to drop the price or drop the business.

You may say "that's simple economics" as if that somehow makes the statement not worth saying. AND YET -- we have folks VERY upset that somehow the publishers NOW have this ability to price their ebooks "too high" -- because the publishers, not Amazon, is setting the price.

When ALL ALONG -- a simple understanding of economics would have been enough to understand that publishers have no power to price their products beyond what the market will bear if they hope to stay in business.

Lee

[queentess]

Originally Posted by leebase

There is no difference between folks thinking $14.99 is to high for an ebook and folks thinking $25 is too high for a hard back book. How were publishers able to get away with such pricing? Because there were enough people who WOULD pay that price.

The same will be true for ebooks. It's demand pricing. When demand wanes, the prices will be lowered.

...or the product will be discontinued entirely.

[leebase]

Originally Posted by queentess

...or the product will be discontinued entirely.

That could happen, but given that ebooks are the only part of the publishing industry that's seeing sales growth, I find that outcome unlikely.

But yes, it is completely possible for buyers and sellers to not agree on any price resulting in the removal of said product from the market.

Lee

[DJHARKAVY]

Originally Posted by HansTWN

That is what I have been saying all along. The idea of a user saying "you don't charge me the price I want to pay, therefore I will get it from the darknet" seems ludicrous to me. What if the employers of those persons did the same thing and said "either you work for me for 2 bucks an hour or I will get an illegal worker to replace you"?

Nobody has a right to buy something at the price he or she wants to pay for the item. You have the right to refuse to buy, buy something else, and to tell everybody why.

And just as the paperback pile in a cheap bookstore may be a choice of someone who doesn't like the DTB prices, the darknet, legal or not, is often the choice of someone who doesn't like ebook prices.

[HansTWN]

Originally Posted by DJHARKAVY

And just as the paperback pile in a cheap bookstore may be a choice of someone who doesn't like the DTB prices, the darknet, legal or not, is often the choice of someone who doesn't like ebook prices.

I agree, but to come back to one of Leebase's other provocative statements: those who turn to the darknet don't matter for publishers' pricing considerations. And quite frankly, I don't believe the protestations of those who say "I am turning to the darknet because the price is too high". I venture a guess that the vast majority of those people would never pay for the book unless it was priced ridiculously low. It will be hard to convince publishers that a price reduction from $12 or 14 to $9.99 would suddenly turn all those who download for free into paying users. But such a reduction would convince the rest of us -- those who just buy something else instead.