C|Net: Why e-books cost so much

[Barcey]

The c/net article is the same disinformation that the publishing perception management teams have been trying to spread. Keep spreading the same lie through different channels and the "stupid customer" will believe it must be true. It ignores the obvious fact that they are comparing a $24.99 list price to a $12.99 list price and the fact that the $24.99 list price was artificial and unsustainable. No real reporter would regurgitate this crap but I guess if you work for c/net who is owned by CBS, who happens to own Simon & Schuster well then it doesn't matter.

How about comparing a $12.99 list price under the wholesale model to a $12.99 list price under the agency model but recognize that nobody (including B&M stores) are making a 50% margin on books. Lets base the list price on 30% instead.

Wholesale Model
List $12.99
Publisher $9.09
e-book retailer $0.90 (based on $9.99 selling price)

Agency Model
List $12.99
Publisher 9.09
e-book retailer $3.90 (based on a $12.99 price because they can' t discount)

Of course this ignores the fact that Amazon would have kept lowering the price like they've done with music. Oh wait Amazon hasn't done that with music.

Of course it ignores the fact that Amazon would have kept lowering the price like they've done with movies. Oh wait Amazon hasn't done that with movies.

Well it ignores the fact that Amazon would have acted like Apple did and keep lowering the price of music below 99 cents a song. Oh wait Apple hasn't done that either.

Well obviously Amazon would have kept lowering the price because it's an unsustainable model and they were trying to corner the market on virtual goods. Even though there is no logical reason for them to do so.

Oh well the publishers decided they had to take make less money out of the goodness of their hearts.

[ATimson]

Originally Posted by Barcey

How about comparing a $12.99 list price under the wholesale model to a $12.99 list price under the agency model but recognize that nobody (including B&M stores) are making a 50% margin on books.

And with that false assumption, your entire argument becomes invalid.

[Barcey]

Originally Posted by ATimson

And with that false assumption, your entire argument becomes invalid.

Please explain how your disagreeing with this assumption totally invalidates my argument that a comparison of two pricing scenarios should use the same list price and the same starting profit margin.

[DuckieTigger]

Originally Posted by Barcey

Please explain how your disagreeing with this assumption totally invalidates my argument that a comparison of two pricing scenarios should use the same list price and the same starting profit margin.

Depending on the way they used to deal with discounts before they might make less money now, not per book, but overall. But I am not sure if they sold books in bulk to Amazon before or not. Do they sell books in bulk now?

[ATimson]

Originally Posted by Barcey

Please explain how your disagreeing with this assumption totally invalidates my argument that a comparison of two pricing scenarios should use the same list price and the same starting profit margin.

You're using profit margin incorrectly. Stores may have an overall profit margin of about 30%, but the number you actually need to be using for your comparisons is the discount the publisher/wholesaler offers to the retailer. And that discount is about 50%, your assertion to the contrary.

(The difference between the discount and the profit margin is eaten up by the retailer's various costs - staff, leases, etc.)

Because you're using invalid numbers and invalid terms, your argument has no basis in fact.

[elcreative]

And you're using things interchangeably to confuse... take $15 book... one third discount gives $10 BUT if you buy at $10 from pub/wholesaler then sell at $15 then retailer has 50% gross profit margin ($5 is half of $10) as they take 50% more than they spent... just work it for various numbers to get facts e.g. $10 book with 50% discount equals 100% gross profit margin etc.