Publishers still missing the point on e-book prices

[NickyWithNook]

My inlaws live in Australia, and I usually buy them all books for Christmas. I was going to just buy them online in Australia and have them shipped locally, but it was cheaper to buy them here and pay the $90 or whatever it was to ship them internationally. Books are crazy expensive there. I bet usually twice as much. The cost of living is higher so everything is a bit more expensive there, but not as more more expensive as books. I'd send them DVDs too if our DVDs could be played there.

[spindlegirl]

Originally Posted by HarryT

You're not alone in that. I buy all my CDs from Amazon, because physical music shops in the UK charge such silly prices.

I found the same thing with some of the knitting/ yarn craft books I bought at amazon (those are the few things I prefer dtb to e-book for). I'd see books I paid $9.99 at amazon (with free shipping too), being priced at yarn shops for $25...

I go where it's more affordable.

[JD Gumby]

Originally Posted by HarryT

Is that not because, historically, the Canadian dollar has been worth less than the US dollar?

Only for about 20 years (mid-80s to mid-00s), mainly caused by the first "free trade" agreement with the USA and the introduction of the GST (national sales tax which applies at most stages of goods' production, including the retail level, and which applied to far more things than the existing provincial sales taxes did). ie, it took about 20 years to get back to its natural state of being within about $0.05 of par with the US Dollar.

[pdurrant]

Originally Posted by pdurrant

I was very pleased to hear that Barbara Hambley's work was now available as ebooks. Until I saw the price... RRP of £11.49 discounted to about £7.50!

At £4.99 I would have bought one or two of the ones I haven't read in paper. At £3.99 I might have bought half a dozen. At £2.99 I would have probably bought her entire backlist.

At £7.50 I won't be buying any.

I took another look at these today. It seems that Amazon haven't implemented a price drop for discounted ebooks.

The Time of the Dark used to be RRP or £11.49, discounted to £7.43, a 35% discount.

With the change to 3% VAT from 15% VAT, I'd have expected the price to be about £6.66. In fact, it's still £7.43. The List Price is now given as £10.29, but it's not the price, but the discount that has changed. Now just 28%.

[pdurrant]

Originally Posted by pdurrant

As I've mentioned before, I think a reasonable ebook price for something that's out in paperback for £7.99 is about £3.99, certainly less than £4.99.

Here's my example re-worked with 3% VAT:

Reasoning: paperback discount to retails is between 50 and 60%. Say 55%. Cost of production of paperback (when including returns) is probably £1.00 per copy sold. Paperback royalty is usually 8% rising to 10% or even 12%, but let's say 8%.

Income from paperback sale = 45% of £7.99 = £3.60
Less cost of printing/storing/shipping/returns PER COPY SOLD: £1.00
Less author's royalty: £0.64
Gross profit per paperback: £1.94

For ebooks, retail discount is 30%. VAT is 3%.
Income from ebook sale at £3.99: £2.71
Less author's royalty: £0.68 (25% of net)
Gross profit per ebook: £2.03

[Dimwit]

The bottom line is that we can blame the Internet and int'l shipping for this debacle. Before, there had to be an agent to be able to buy in foreign markets with the ability to arrange shipping or bring it back themselves. You were lucky if it was a relative or friend who didn't charge for the service. And you had to be aware. The manufacturers were not going to publish such info.

Now, it's just a mouse click away. The markets are becoming more homogenous every day much to the retailers chagrin. All the business books rally around the efficient markets philosophy but when it comes to reality, the real world is not so enamoured it seems. Too bad, so sad.

[Fbone]

Originally Posted by sabredog

Read Blue Tyson's articles on Teleread and Mobileread.

A 140% markup is nothing to do with the cost of living.

The health care system is broken here and it is NOT free unless you are considered low income. Even then the wait for an operation could exceed TWO years.

Our dollar is over parity with the US dollar, imports are far cheaper now than before. Prices should have gone down, instead they are artificially ramped up by money grubbing publishing and entertainment industry companies to gouge Australian consumers.

I was specifically referring to an Australian published and produced paperback to one similar made in the US. Prices will be different because production costs are different. Salaries, raw materials and other costs of doing business must be factored in, if you try to compare. I just took a quick look at salaries. The clerk at B&N is not earning anywhere near $15.83/hr but yet a shop assistant in Australia is and possibly more. Exchange rates are irrelevant.

The dysfunction occurs when an Australian purchases an American produced product instead of a similar one in Australia. The Australian naturally becomes upset at the price difference but remember the American products are designed and sold primarily for local consumption. Costs and pricing schemes have American salaries, competition, and habits in mind. If you want American prices, then you should theoretically have American salaries and costs; which you don't. Here is when exchange rates matter.

As I said before, you want to benefit from lower prices but retain your higher salaries and favorable exchange rates. This raises your standard of living. This is desirable but it is only possible because you can purchase and retailers will ship goods to Australia.

And I notice no one preferred to be the American earning $7.25/hr even with lower cost paperbacks.

[Fbone]

Originally Posted by Blue Tyson

But an ebook published in the UK by an UK author and a UK company on an American server sold by an American retailer has exactly zero to do with Australia. So none of that is relevant. You can add in house prices in major metropolitan areas pushing towards half a million dollars, too, if you like.

I was referring to an Australian published paperback not ebooks.

Although my paragraph regarding affordability does apply. Due to higher minimum wage salaries ebooks even if priced higher are generally more affordable to Australians. Exceptions apply but I am positive you would rather keep your salary and pay a few dollars more per book than have American prices with reduced income and higher cost-of-living.

[sabredog]

Originally Posted by Dimwit

Now, it's just a mouse click away. The markets are becoming more homogenous every day much to the retailers chagrin. All the business books rally around the efficient markets philosophy but when it comes to reality, the real world is not so enamoured it seems. Too bad, so sad.

So very true.

This is a main factor in all the whining and bleatings of retail billionaires demanding the government here start taxing imported goods under $1000. One of them, Gerry Harvey, whose business empire has and continues to destroy dozens of smaller businesses, has made the art of price rip-off an art form. The CHOICE report was the final eye opener for consumers.

With the cost of living soaring in Australia now, increased taxes (a new one, a carbon tax, introduced in 2011, new government levies to add to the Medicare one (adding close to 3% of pay direct to government coffers), huge increases in house prices (now around 9x yearly pay), rent, power, water, and gas, little wonder that savvy shoppers are turning to online purchasing to stop being ripped off.

All the above and the fact that price gouging has been revealed to be the norm here has really caused a ground swell of anger amongst consumers who simply want the rip-offs to stop.

In the meantime, online shopping has never been better and more economical.

[Dimwit]

To play Devil's Advocate for a moment...

Are American books printed in the Queen's English in Aus.? Like S. King? If so, then your books are localized for your market. That costs. We are suddenly comparing McIntosh to Royal Galas. Yeah, they're apples but they're different apples and that changes everything.
And adding insult, that would also mean that there's a good probabilty that the publishing house could also be different. Different cost structures spread over smaller per units would lead to higher pricing. Add to that aggro would be the effect of undermining your own industry to lower your costs. It's all well and good to get the lowest price, we all want a "deal", but at the expense of home grown industry seems a high price to pay indeed.

[Dimwit]

In Canada we have clearer but harder. The US publishers send their product to us. No changes. It makes the "enemy" very easy to identify. OTOH, given the relative sizes, it also means that they are powerful, pernicious and ultimately, indifferent to our caterwaulings. *sigh*

To bring this back around, this is why the e-pub side is becoming such a battleground. I can see though, in the not too distant future, that the biz will need to change. For the big 6, they will probably have to set up internally an e imprint that only handles files. Different cost structure, much, much leaner, with the attendant pricing different. Torstar's Harlequin has it now and it seems to be quite successful. With that said, I can also see the amount of publishers shrinking drastically.

[murraypaul]

Originally Posted by stonetools

A. The book will go back out of publication because it's not worth the publisher's time and expense to publish it at lesser price.

???
How much 'time and expense' does having an eBook available on Amazon take?
(Not producing one, that has already been done)
Hard to see why any eBook should ever go 'out of print' except for rights issues.

[sabredog]

American books come in "as is" No reprint to reflect Queens English.

As mentioned earlier grey or parallel importing of books is opposed by both local publishers. authors AND bookstores. There even was a recent investigative committee set up by the Federal government to investigate the whole issue, bought about by huge complaints by consumers regarding the whole sordid issue.

Well, Borders and Angus and Robertson are footprints in history now, leaving Dymocks and Collins the largest brick and mortar chains in Australia.

Of these two, Dymocks actually supported parallel importing. However Dymocks is the most expensive and the most dimwitted book chain I have ever come across. Their stock lines are pathetic, overpriced and the staff have no idea about their line of business.

Please look at these links to articles written by Blue Tyson outlining the great Australian book price gouge.

http://www.teleread.com/paul-biba/ha...by-blue-tyson/
http://www.teleread.com/paul-biba/ma...by-blue-tyson/
http://www.teleread.com/paul-biba/ha...by-blue-tyson/
http://www.teleread.com/paul-biba/de...by-blue-tyson/

[Blue Tyson]

Borders was way more expensive than Dymocks, here.

But they are toast.

[HarryT]

Originally Posted by Blue Tyson

Borders was way more expensive than Dymocks, here.

But they are toast.

Same here. Borders went bust in the UK about 18 months ago. I don't think that many people actually noticed.