Frasier Speirs: On eBook Pricing

[speakingtohe]

Yes, but that cost disparity is not that huge -- around 15%

Book retailers (stores) mark up books by 40% average. The price is the one quoted on the cover but they buy the books for 40% less than an individual does.
They have to make a profit to stay in business.

This discount is in pretty well addition to the aforementioned 15% as the ebook sellers profit if not bought directly from the publisher is typically 10% or lower.

Some retailers discount all paperback books including new and bestsellers by up to 25%

Distribution of pbooks costs are preproduction, promotion, printing, shipping, sellers profit, getting paid.
Distribution of ebooks costs do not have shipping, printing, and provide a much lower profit margin to a reseller.

Helen

[AnemicOak]

Originally Posted by speakingtohe

Distribution of pbooks costs are preproduction, promotion, printing, shipping, sellers profit, getting paid.

and warehousing and returns (for paperbacks they don't even get the book back to remainder).

[crossi]

I pretty much feel the same way. Which is why my Wish List of Overpriced books is over 200 and growing but I'm still buying books faster than I'm reading them. Just not the ones that insult me by overpricing. In the unlikely event that I ever run out of books I want in a reasonable price range I might reconsider but I don't really expect that to happen.

[frank22]

In cost accounting they have what they call contribution margin. This is the amount of revenue that is left to pay for the fixed cost after the variable costs are paid for. Selling more at a lower price can end up making you more money because after the fixed cost is reached any of this contribution margin is pure profit. I think this is what makes Netflix so profitable, they sell much more because the costs is so reasonable.

Yes, the fixed cost are the same for the writer and other things, but selling a book at $5 could sell many more copies, just like Netflix is able to "rent" more DVD's, this analogy works even better when you get to their streaming model. There are many books that interest me, I just couldn't justify spending $20 on each one. I need to be very selective and go to the library or if possible borrow the book from someone I know. Many times I bought used. A lower price will mean I borrow less, go to the library less, and buy more. This smaller amount could end up contributing more money to the author and these fixed cost. The variable costs are less, especially if the the middleman involved aren't out to make a killing. When talking about DVD's I used to only rent on weekends if I really liked the movie, after joiinging Netflix I was able to watch much more, and I ended even spending more. I could take a chance. The average price of watching a movie went from $4 to around $1. Netflix made tons.

If done right eBooks can mean everyone is able to read more, and the lower costs mean lower prices and higher profits. I may buy one or two a week instead of one a month.

[crossi]

frank22, you are so right. For a reasonable price I am willing to rebuy all my paper keepers, for a higher price I simply won't netting the publishers and authors nothing.

[rogue_librarian]

Originally Posted by TheJohnNewton

Why are people always going on about cost when talking about retail pricing?

Because that's part of the perceived value. If there's a product you know costs, I don't know, half of the other one to make few people would be willing to pay the same price.

[astrodad]

Originally Posted by jbcohen

I am generally not willing to pay additional for a well written novel becuase i have found zero correlation between price and quality [...]

So let me get this straight. Say there's a story you want to buy from an author you respect, whose works you have already purchased. This book is priced higher because of whatever reason (popularity, interest, etc). You don't buy it? You don't buy it because you're not willing to pay the higher price? Because you can go get a cheaper, crappier version of the story from an unknown author? So you're saying you want a gourmet burger but because you're not willing to pay for it, you'd rather have a Big Mac?

[TheSFReader]

Yes, exactly, every time I go to McDonalds it' because even though I know I would have greater value for my money in a better restaurant, I can't/won't spend that much on it, because I'd have to pass on other "luxuries". Not everybody can afford to buy everytime the "better". Between 1 "good" and 5 "good enough", my choice is not easy to make, and depending on the circonstances, may vary...

[Sil_liS]

Originally Posted by TheSFReader

Yes, exactly, every time I go to McDonalds it' because even though I know I would have greater value for my money in a better restaurant, I can't/won't spend that much on it, because I'd have to pass on other "luxuries". Not everybody can afford to buy everytime the "better". Between 1 "good" and 5 "good enough", my choice is not easy to make, and depending on the circonstances, may vary...

But for food you have the option to cook at home, and for books you have the option of libraries.

[TheSFReader]

Originally Posted by Sil_liS

But for food you have the option to cook at home, and for books you have the option of libraries.

And I also have the option to order takeaway, or to go eat something else...
Sometimes I go to the "luxury item", and sometimes I go on the cheap one, and sometimes I don't buy anything at all.
With books it's the same.

Yet last month I bought the Hardcover version of one such books, and I'll do it again in a few months, but in the meantime, I much prefer discovering indie authors, and buying their books, knowing that a higher part of my money will go to them, rather than for paper, transport, warejhousing ...

[astrodad]

Originally Posted by TheSFReader

Yes, exactly, every time I go to McDonalds it' because even though I know I would have greater value for my money in a better restaurant, I can't/won't spend that much on it, because I'd have to pass on other "luxuries". Not everybody can afford to buy everytime the "better". Between 1 "good" and 5 "good enough", my choice is not easy to make, and depending on the circonstances, may vary...

Well you probably wouldn't be getting better "value" at a more expensive restaurant but it's a luxury you can live without. That's a fair and honest statement of how everyone must make their own choices. For books, I'd rather spend the money and get a book I know I will enjoy or will provide information that I need. For me, cars and clothes are fairly low luxuries on my totem pole.

[Sil_liS]

Originally Posted by TheSFReader

And I also have the option to order takeaway, or to go eat something else...
Sometimes I go to the "luxury item", and sometimes I go on the cheap one, and sometimes I don't buy anything at all.
With books it's the same.

My point was that it doesn't have to be a luxury item. You can go to a library and read the book for free. This is what libraries are for, so that people who can't afford books (or more books as the case may be) could still read them.

Originally Posted by TheSFReader

Yet last month I bought the Hardcover version of one such books, and I'll do it again in a few months, but in the meantime, I much prefer discovering indie authors, and buying their books, knowing that a higher part of my money will go to them, rather than for paper, transport, warejhousing ...

Is there a reason why you bought the hardcover and didn't wait for the paperback?

[TheSFReader]

Originally Posted by Sil_liS

Is there a reason why you bought the hardcover and didn't wait for the paperback?

Yes, because I had read (and own HC copiues of the majority of ) the entire series preceding this book, and knew for a certainty that I would value this one above others, as well as want to support the author (C.J. Cherryh) by buying her latest book. Let's it call it my luxury item of the month ...
( which makes jplumley's point).

However, it doesn't follow that I understand why ebooks prices wouldn't drop at the same price as the book (when the book's format changes).

[crossi]

I'm a fast reader. If the price is too high I'll read the book in the bookstore and maybe buy it later if I still want it and the price drops.

[Sil_liS]

Originally Posted by TheSFReader

However, it doesn't follow that I understand why ebooks prices wouldn't drop at the same price as the book (when the book's format changes).

Because they want to see how long they can last at that price. And if there are people that are still willing to pay...