Classic B&N ebooks still more expensive than Kindle. Will they lower prices?

[riemann42]

Originally Posted by dugong

I would like to know if anyone has any insight into why some B&N ebook prices do not come down when a book comes out in the paperback edition. They remain at the level set when the hardbound edition was release. This seems to be a frequent case among Sci Fi titles. For example for two books, Weaver by Stephen Baxter and Maelstrom by Taylor Anderson, the paperbacks are in B&N stores for $7.99, but the ebook prices are still $18.99. I've watched the prices on these books for three weeks now.

Supposedly the problem is that the paperback is published by a different publisher than the hardback.

In the case of Weaver:

Hardback is published by Gollancz, which is owned by Orion
Paperback is published by Ace (part of Penguin group).
Ebook is published by Penguin
Not available for the Kindle at any price.

So the paperback is sold by Ace, who uses the Agency model and sets the price at a particular point.

HOWEVER, it looks like it is available at the Sony store for $6.99. Very confusing. The sony store version WILL WORK on your nook without violating the DMCA.

In the case of Maelstrom by Taylor Anderson

Roc publishes all copies. Roc is once again, Penguin.

Amazon does have this for the kindle, at a greatly reduced cost. Go figure. If I were not a law abiding U.S. citizen, I would buy it from Amazon and then convert it.

I wrote an email inquiry to Ebooks.com about this and they said they couldn't make changes because the prices are set by the publisher. Could it also be the case that they Ebooks.com does not have a mechanism to flag titles when they come out in paperback to bring it to the attention of the publisher.

This is likely true. However, the fact that the price is different at every store suggest that the agency model is BROKEN. They must not have a way of informing the bookstores in an automatic way that the price needs to be changed. BLAME THE PUBLISHERS FOR THIS.

Amazon generally brings down the prices sooner than B&N. Are they taking a loss, or are they negotiating better prices from the publisher?

In cases like this, I won't buy an ebook if there is a cheaper paperback price. If necessary, I will abandon the Nook and buy a Kindle.

This is the case for Random House and independents. The other big publishers are either forcing Amazon to raise the price, or in the case of Penguin, refusing to allow them to sell many books.

In the end, there are very few books that Amazon has significantly cheaper than everyone else. Maelstrom is an example of this. In other cases, like with Weaver, Amazon doesn't have the book at all.

It's a wild ride for ebooks right now. I thought that agency model pricing would make it more consistent, and more affordable. I was very wrong. They have made a mess out of everything.

[Sabardeyn]

A part of the problem is that while volume of sales will make a difference, what all of these publishers are looking at is how much profit they can make.

So right now, if "Store X" sells an ebook at .05 profit per unit sold x 20 units sold = $1.00. That is much better than, say "Amazon" selling at .01 profit/unit x 70 units = .70 cents. At least, it is for the publishing company.

[riemann42]

Originally Posted by Sabardeyn

A part of the problem is that while volume of sales will make a difference, what all of these publishers are looking at is how much profit they can make.

So right now, if "Store X" sells an ebook at .05 profit per unit sold x 20 units sold = $1.00. That is much better than, say "Amazon" selling at .01 profit/unit x 70 units = .70 cents. At least, it is for the publishing company.

Interesting.

What was happening is that Amazon was buying a book for $13.00, and selling it for $9.99 at a loss of about $3 for Amazon, and $13.00 of revenue for the Penguin.

Now with the agency model, it goes like this: Amazon brokers the sale of a book on behalf of the Penguin for $14.99. The Penguin pays Amazon a commission of $5.25. Amazon profits $5.25, and the Penguin gets $9.74 of revenue.

Under the old model, say, a 100 people buy the book. That's $1,300 profit for the Penguin and a loss of $300 for Amazon.

Now, 40 people buy the book, and the rest go buy the hardback from Amazon for $9.99 (which is Amazon's way of saying FU to the Penguin). That's $389.60 profit for the Penguin and Amazon's profits are all eaten up by the loss they are taking on the hardback.

In the end, the publisher loses big, but they won a battle, forcing Amazon to charge more for the ebook and fighting the idea of the $9.99 best seller. Clearly it is pyrrhic victory for the evil Penguin, and a big loss for the rest of us.

[Sabardeyn]

Amazon may have been willing to take a loss today as a means of gaining market share tomorrow. Last I heard 90% of all sales in the book selling industry were from 10% of consumers. Capture the early adopters and Amazon might have captured the lion's share of the ebook consumer market.

Also keep in mind that the issue here was only partially about profit. The other aspect was who was going to control pricing. Dune, by Frank Herbert, has a line I remember: "He who can destroy a thing, controls it." (I could be misquoting it, but that is how I remember it.) If retailers were allowed to set prices it would wrest control away from the publishers.

[dugong]

Riemann42 wrote, "In the case of Maelstrom by Taylor Anderson Roc publishes all copies. Roc is once again, Penguin."

This means that Penguin is selling both the ebook ($18.99) and the paperback ($7.99). For myself as a buyer, either I delay my gratification and wait until the ebook price comes down (if it ever does), or buy a paperback for $7.99 minus the B&N membership discount (10%).

How does Penguin gain from this business arrangement (if it is intentional)? It seems there are a enough of these disparities that to save money, I either buy ebooks mainly from other sources such as Websubscription, or put my Nook away and go back to buying paperbacks at the B&N store (which I can lend out to my friends when I'm done with them.)

In the front of the B&N store in El Cerrito, is a booth displaying the Nook. When I pass it by, I wonder if the prospective buyers know what they are getting into.

[pilotbob]

Originally Posted by riemann42

Now with the agency model, it goes like this: Amazon brokers the sale of a book on behalf of the Penguin for $14.99. The Penguin pays Amazon a commission of $5.25. Amazon profits $5.25, and the Penguin gets $9.74 of revenue.

Under the old model, say, a 100 people buy the book. That's $1,300 profit for the Penguin and a loss of $300 for Amazon.

Now, 40 people buy the book, and the rest go buy the hardback from Amazon for $9.99 (which is Amazon's way of saying FU to the Penguin). That's $389.60 profit for the Penguin and Amazon's profits are all eaten up by the loss they are taking on the hardback.

Just to clarify above that you use the term "profit" in several cases when you should use the term revenue. The amount that the publisher gets is their revenue and the amount Amazon gets it their revenue. Profit is calculated after deducting expenses from the revenue. (simplistic)

BOb

[DMcCunney]

Originally Posted by Sabardeyn

Amazon may have been willing to take a loss today as a means of gaining market share tomorrow. Last I heard 90% of all sales in the book selling industry were from 10% of consumers. Capture the early adopters and Amazon might have captured the lion's share of the ebook consumer market.

Also keep in mind that the issue here was only partially about profit. The other aspect was who was going to control pricing. Dune, by Frank Herbert, has a line I remember: "He who can destroy a thing, controls it." (I could be misquoting it, but that is how I remember it.) If retailers were allowed to set prices it would wrest control away from the publishers.

It is about price control.

The fundamental point to recall about the contretemps between Simon & Schuster, Hachette, and Macmillan vs Amazon that resulted in the agency pricing model was protecting the hardcover best seller. Those are the crown jewels of the industry. They sell for the highest prices, have the highest margins, and make the most profit.

Most books probably don't make money. Publishing is a crap shoot. The publisher publishes X titles per year, and is essentially betting that some will sell well enough to cover the losses on the majority that don't, and make them enough money to stay in business. This has been exacerbated in recent years by publishers being acquired by media conglomerates seeing synergies in having all forms of content under one roof.

Top management at any company are essentially custodians of Other People's Money. They have a fiduciary responsibility to their shareholders to preserve and grow the shareholder's investment. They must invest corporate funds where they will earn the highest rate of return. There are examples in every industry of companies selling off or folding divisions because they determined that they could make more money applying the resources somewhere else.

Publishing has been savaged by this, as book publishing operations have been under pressure from senior management of the corporations that own them to produce higher revenues and greater returns on investment. The problem is, book publishing can't match the revenues and profits of things like feature films. Other forms of media simply make more money. As a consequence, we are seeing some of those "all forms of content under one roof" deals unraveling, as the conglomerates conclude book publishing can't make the return on investment they require. An example is Time Warner selling off Warner Books to Hachette, who relaunched it as Grand Central.

Amazon was releasing Kindle editions of hardcover best sellers simultaneously with the hardcover, at their default $9.99 price point. There are enough Kindles, and iPhones and PCs with the Kindle reader app, that publishers were losing hardcover sales to the ebook version. (If you want to read the book now, have the capability to read the electronic version, and the ebook is priced between 1/2 and 2/3s of the hardcover price, which one do you buy?) Publishers make a lot less on Kindle editions at $9.99 retail than on hardcovers at $25 - $30 retail, and the difference bit hard. Lower prices on ebooks didn't lead to enough additional volume to make up the difference.

"Agency pricing" essentially says "You want to issue the ebook simultaneously with the hardcover? Charge more and give us a higher percentage of the sale, to compensate for what we are losing on the loss of the hardcover sale!" Amazon could choose to not use the agency pricing model, and delay the release of the ebook till some time after the hardcover, the same way the mass market PB edition doesn't hit the stands till a year after the hardcover release, and for the same reasons. But Amazon is a retailer, and wants to make the sale. People who want the title badly enough to buy the hardcover instead of waiting a year for the PB will probably pay a higher than average price for the ebook.

Ultimately, publishing is in trouble. There are too many books chasing too few readers. Publishing has gone through waves of consolidation to get economies of scale, and imprints periodically go through wrenching adjustments as they drop books from contract and trim their lines, made more wrenching by the fact that nobody wants to be the first to do so, and when someone finally does, the rest rapidly follow suit.

I expect to see more consolidation and more attempts at cost cutting. I also expect to see tiered pricing on ebook titles, and some ebook editions being delayed till some time after hardcover release if the prices are kept down.

Unfortunately, there's a lack of realism in the market about how cheap an ebook can be. Books incur a variety of costs before they ever reach the point of being printed and bound or released as an ebook file. Those costs will place a lower limit on how low an ebook can be priced and make any money. An editor I know estimated that manufacturing, warehousing, and distribution comprise about 10% of the total budget for the average book. I think his estimate is low, but even if the actual percentage is double that, eliminating printing, binding, warehousing and distribution won't magically lower costs enough to hit the price points a lot of folks hope for.
______
Dennis

[riemann42]

Originally Posted by DMcCunney

It is about price control.

The fundamental point to recall about the contretemps between Simon & Schuster, Hachette, and Macmillan vs Amazon that resulted in the agency pricing model was protecting the hardcover best seller. Those are the crown jewels of the industry. They sell for the highest prices, have the highest margins, and make the most profit.

Originally Posted by DMcCunney

Unfortunately, there's a lack of realism in the market about how cheap an ebook can be. Books incur a variety of costs before they ever reach the point of being printed and bound or released as an ebook file. Those costs will place a lower limit on how low an ebook can be priced and make any money. An editor I know estimated that manufacturing, warehousing, and distribution comprise about 10% of the total budget for the average book. I think his estimate is low, but even if the actual percentage is double that, eliminating printing, binding, warehousing and distribution won't magically lower costs enough to hit the price points a lot of folks hope for.

As long as people think ebooks are less valuable than hard back books then publishers will value them less than hard back books. Expect delays and poor quality. If people are willing to pay hard back prices for ebooks, publishers will start to respect them more, and they will be more valuable.

Amazon, and to a much lesser extent BN, did ebooks a huge disservice by selling them so cheap. Now there are actually people who rant about books costing more than $9.99, tagging them on Amazon, etc. The damage is done, I think, but we'll see. Maybe people will get used to $14, $15, even $20 for a new release.

One more note: Publishers have to get good at notifying sellers to lower the price when a paperback is released. That's part of the whole deal, right?

[DMcCunney]

Originally Posted by riemann42

As long as people think ebooks are less valuable than hard back books then publishers will value them less than hard back books. Expect delays and poor quality. If people are willing to pay hard back prices for ebooks, publishers will start to respect them more, and they will be more valuable.

The hardcover and the ebook will be produced from the same source file.

Once a manuscript has been line edited, copy edited, proofread (and, sometimes, reviewed by legal to make sure assertions made in it can be proven if someone takes offense and sues), it goes to DTP, who typeset and markup. The end result is a PDF that gets sent to the printer, and the printer's imagesetter uses that to generate the plates from which the book will be printed.

Part of the problem for ebooks is that a PDF isn't always the desirable format, and the output needs conversion to other formats. For instance, every publisher I know uses Adobe InDesign to do typesetting and markup. InDesign can output to ePub format - badly. Producing good ePub files requires well formed XML as the starting point. There are tools to do that, but they aren't widespread. And it the desired output format isn't ePub yet more massaging is required.

And you are still at the mercy of the source file. Things like copy-editing and proofreading are increasingly being skipped to lower costs, and no amount of wizardry in the ebook file creation stage can compensate for poor quality control before it gets turned into an ebook.

Amazon, and to a much lesser extent BN, did ebooks a huge disservice by selling them so cheap. Now there are actually people who rant about books costing more than $9.99, tagging them on Amazon, etc. The damage is done, I think, but we'll see. Maybe people will get used to $14, $15, even $20 for a new release.

The publishers ranted a bit on that exact point, accusing Amazon of giving the consumer unrealistically low expectations of what ebooks should cost. B&N is locked in competition with Amazon, and pretty much has to be competitive on price.

Amazon brought to mind the fable of the goose and the golden eggs. Do things as a retailer that damage the health of the vendors whose products you sell, and you see short term gains but don't do yourself favors long term. That said, I think Amazon cried crocodile tears when they "lost" the argument with the publishers over pricing and bowed to the agency pricing model. They used predatory pricing to gain market share, and did their best to lock ebook buyers into them. Having done so, they can raise prices on hot ebook titles, make more on each sale, and blame the publishers for the price rise. Win-win...

One more note: Publishers have to get good at notifying sellers to lower the price when a paperback is released. That's part of the whole deal, right?

That probably requires work on both the publisher's and the retailer's part.

Exactly how does the publisher tell the retailer the PB is out? Generally, they announce the new PB releases, and the retailer's buyers commit to X number of copies. Translating that to lowering prices on ebook editions is likely more a task for the retailer, as somebody doing catalog maintenance must apply the requisite pricing change.

Whether this happens may depend on a variety of factors. There are publishers out there that price ebooks to begin with at hardcover prices (and I believe there are instances where the book doesn't have a hardcover edition, and is first released as a mass market PB, so you'll see an ebook costing a lot more than the PB copy.) What the retailer pays the publisher for the book will be contractually specified. Depending upon the publisher and the retailer and the exact language of teh contract, thre will be a price for the hardcover, a price for the ebook, and a price for the PB, but there won't necessarily be a lock step relationship between them. The publisher might not lower the cost of the ebook to the retailer when the mass market PB edition comes out. The publisher sets the pricing, and they don't have to drop the ebook price to the retailer to be competitive with the PB.
______
Dennis

[lotrfan]

[

Originally Posted by riemann42

Amazon, and to a much lesser extent BN, did ebooks a huge disservice by selling them so cheap. Now there are actually people who rant about books costing more than $9.99, tagging them on Amazon, etc. The damage is done, I think, but we'll see. Maybe people will get used to $14, $15, even $20 for a new release.

Not sure I can agree with this. Publishers normally price a new hardback book anywhere from $20 to $30 yet Amazon and others have been able to sell them for much lower and I am sure that still at a profit for them otherwise they would be out of business. While I don’t know the process, logic dictates that a book retailer has to pay the publishing company a fixed amount per book regardless of the selling price ie if the publishing company wants $5 profit per book Amazon has to pay them that amount regardless if they sell the book for only $5. If so why would the publishing company lose money on a ebook vs a hardback book?
So Publishing company X suggests a price of $25 and wants $5 of revenue per book. Amazon sells it for $20 (still making a profit for them even having a bigger discount than $5) and gives the publisher its $5.
Now same scenario with ebook. Because of savings associated with eBooks let’s say its suggested price is now $20 yet Amazon sells it for $15 (still for a profit). The publisher still gets its $5 per book.
From a different POV if the printing costs are 10% of retail value (per publishers comments) and we assume another 10% for storage and distribution costs then we still have a cost savings of that about $5 to $6 per book.
This doesn’t include the cost associated with the return of books to the publisher which are none for ebooks but can be substantial for physical books.
What doesn’t make sense is to be able to buy a hardback book for $15 and pay $14 for the ebook.

Originally Posted by riemann42

One more note: Publishers have to get good at notifying sellers to lower the price when a paperback is released. That's part of the whole deal, right?

Yes. But this should be automatic ie when they get the paperbacks then the ebooks should drop accordingly (cheaper than paperbacks BTW).

[Kolenka]

Originally Posted by lotrfan

[
Not sure I can agree with this. Publishers normally price a new hardback book anywhere from $20 to $30 yet Amazon and others have been able to sell them for much lower and I am sure that still at a profit for them otherwise they would be out of business. While I don’t know the process, logic dictates that a book retailer has to pay the publishing company a fixed amount per book regardless of the selling price ie if the publishing company wants $5 profit per book Amazon has to pay them that amount regardless if they sell the book for only $5. If so why would the publishing company lose money on a ebook vs a hardback book?

Hardcovers on sale are usually loss leaders to get people looking at the store for other stuff while they are there.

Places like amazon have lower staff and lease costs for their locations (just the warehouses), where the MSRP is set to provide a buffer for physical retailers to be able to pay for the costs of operating the store and paying the staff that work there. Which also encourages them to lower their prices below MSRP to drum up business because of the lower overhead they pay for their business model.

Right now, ebooks follow a similar model of wholesale pricing with a buffer in the MSRP for the retailer. The catch is that Amazon and the like have used this to go back into loss leader mode on bestsellers. If the publishers try to go for a percentage cut instead of the flat price, then their revenue actually DROPS versus the wholesale model when Amazon and B&N go into price war mode and keep selling the books for 10$ or less. But the percentage cut winds up being more fair to the smaller sellers in the long run.

It's not a simple math problem.

[Elfwreck]

Originally Posted by dugong

Amazon generally brings down the prices sooner than B&N. Are they taking a loss, or are they negotiating better prices from the publisher?

A little from Column A, a little from Column B...

Amazon has the clout to negotiate lower prices in a lot of cases. Also, for books not covered by the new "agency pricing" system, Amazon is willing to take a loss on the price in order to keep sales volumes high, and to convince people to look at Amazon first.

It looks like Roc Hardcover is not a branch of one of the "big 6" publishers, and not one of the 5 that switched over to agency pricing, so Amazon is free to lower the price to whatever they think will entice sales.

The version at BN is listed as being connected to Penguin, not Roc Hardcover; Penguin's one of the "agency price" publishers. (So maybe the author managed to sell ebook rights to two different publishers? Or maybe Roc is a subdivision of Penguin, but the book predates the agency contract so Amazon gets to offer it under the older terms?) Kindlebooks don't list an ISBN, so I can't compare the two.

[DMcCunney]

Originally Posted by lotrfan

[
Not sure I can agree with this. Publishers normally price a new hardback book anywhere from $20 to $30 yet Amazon and others have been able to sell them for much lower and I am sure that still at a profit for them otherwise they would be out of business. While I don’t know the process, logic dictates that a book retailer has to pay the publishing company a fixed amount per book regardless of the selling price ie if the publishing company wants $5 profit per book Amazon has to pay them that amount regardless if they sell the book for only $5. If so why would the publishing company lose money on a ebook vs a hardback book?

It's not that simple.

Agency pricing is about protecting the hardcover best seller. Those are the crown jewels of publishing. Those are where they get the highest revenue and make the most profit.

Amazon is the retailer. They get a cut of the sale. They make out regardless. The publisher is a different story. Amazon gets books from publishers and resells them. They give the publisher a contractually agreed upon cut of the sale.

How much do you think the publisher gets from Amazon from the sale of a $25 - $30 hardcover? How much do you think they get for the sale of a $9.99 Kindle edition? How much less total revenue do you think they get on a hardcover best seller if a large number of buyers decide to buy the cheaper ebook version?

The answer to the last question is "enough to cause them to take drastic action and impose agency pricing." The hardcover best sellers may be the difference between whether a publisher makes or loses money in any particular year. Most books at best break even, and many don't do that. The publisher is betting enough books will do well to cover the losses on the ones that don't.

There are reasons why mass market paperback editions don't hit the stands till a year after the hardback, to give the hardback time to sell. The same reasons will affect the pricing and/or release timing of ebook editions.

For the publishers, this is about survival.

So Publishing company X suggests a price of $25 and wants $5 of revenue per book. Amazon sells it for $20 (still making a profit for them even having a bigger discount than $5) and gives the publisher its $5.

The publisher gets more than $5. The wholesale price will vary by publisher and contract, but the publisher's cut of the sale is likely to be in the area of 40% of the cover price.

Now same scenario with ebook. Because of savings associated with eBooks let’s say its suggested price is now $20 yet Amazon sells it for $15 (still for a profit). The publisher still gets its $5 per book.

Nope. Read on.

From a different POV if the printing costs are 10% of retail value (per publishers comments) and we assume another 10% for storage and distribution costs then we still have a cost savings of that about $5 to $6 per book.
This doesn’t include the cost associated with the return of books to the publisher which are none for ebooks but can be substantial for physical books.
What doesn’t make sense is to be able to buy a hardback book for $15 and pay $14 for the ebook.

It makes perfect sense. A friend of mine who is an editor for a major house estimated printing, binding, warehousing, and distribution accounted for about 10% of the total budget of the average book. I think his estimate is low, but he sees the numbers and I don't, and he has no reason to lie about it. Even if he's off by 100%, the savings in not having a physical book is far less than what a lot of folks would like to believe, and won't permit the sort of pricing folks would like.

Yes. But this should be automatic ie when they get the paperbacks then the ebooks should drop accordingly (cheaper than paperbacks BTW).

The problem is what will automate it.
______
Dennis

[lotrfan]

Originally Posted by Kolenka

Hardcovers on sale are usually loss leaders to get people looking at the store for other stuff while they are there.

Places like amazon have lower staff and lease costs for their locations (just the warehouses), where the MSRP is set to provide a buffer for physical retailers to be able to pay for the costs of operating the store and paying the staff that work there. Which also encourages them to lower their prices below MSRP to drum up business because of the lower overhead they pay for their business model.

Right now, ebooks follow a similar model of wholesale pricing with a buffer in the MSRP for the retailer. The catch is that Amazon and the like have used this to go back into loss leader mode on bestsellers. If the publishers try to go for a percentage cut instead of the flat price, then their revenue actually DROPS versus the wholesale model when Amazon and B&N go into price war mode and keep selling the books for 10$ or less. But the percentage cut winds up being more fair to the smaller sellers in the long run.

It's not a simple math problem.

I understand the “loss leader” concept however there is only so far Amazon can take that. Unless I happen to be extremely lucky all the hardcover books that I have bought from Amazon have been discounted considerably from the suggested price. This tells me that Amazon is still making money off of most of them if not all and as long as the publisher is getting their cut it shouldn’t matter.

Now you do point out about going to a percentage cut instead of a flat rate. If that is not what they are doing now with the physical books then why change now? And if they are already going to a percentage cut now then what is the difference for an ebook? Do they actually expect to get the same money for an ebook when there is less cost in making them? Even with their own percentage figures regarding printing costs there should be at least $3 diff form the publisher’s standpoint and about the same from the distributor and retailer.

This is a simple math problem but unfortunately only the publishers know all the variables and figures. There is no denying that ebooks are cheaper to make, store and distribute and have no costs related to having unsold books yet the publishing company does not want those savings to go to the public. Should we get all of those savings? Maybe not but it sure would help the industry if we got most of those savings.

[lotrfan]

Originally Posted by DMcCunney

It's not that simple.
Agency pricing is about protecting the hardcover best seller. Those are the crown jewels of publishing. Those are where they get the highest revenue and make the most profit.
Amazon is the retailer. They get a cut of the sale. They make out regardless. The publisher is a different story. Amazon gets books from publishers and resells them. They give the publisher a contractually agreed upon cut of the sale.
How much do you think the publisher gets from Amazon from the sale of a $25 - $30 hardcover? How much do you think they get for the sale of a $9.99 Kindle edition? How much less total revenue do you think they get on a hardcover best seller if a large number of buyers decide to buy the cheaper ebook version?
The answer to the last question is "enough to cause them to take drastic action and impose agency pricing." The hardcover best sellers may be the difference between whether a publisher makes or loses money in any particular year. Most books at best break even, and many don't do that. The publisher is betting enough books will do well to cover the losses on the ones that don't.
There are reasons why mass market paperback editions don't hit the stands till a year after the hardback, to give the hardback time to sell. The same reasons will affect the pricing and/or release timing of ebook editions.
For the publishers, this is about survival. Dennis

But doesn’t the publisher get their cut regardless? I would think that whatever premium they are charging for a hardcover would be the same as for the ebook hence my example. By this I mean the price we pay to read it now instead of later. I can understand protecting their “crown jewels” but it is not the book itself but the premium they are charging. I am not saying to sell the ebooks at a fixed $9.99 price but to pass on the savings (most anyway) to the customer. If this can’t be done in a reasonable way then ebooks should come out with a delay like the paperbacks.

Originally Posted by DMcCunney

The publisher gets more than $5. The wholesale price will vary by publisher and contract, but the publisher's cut of the sale is likely to be in the area of 40% of the cover price. Dennis

The $5 was just an example. Per your figure a $25 book would give a publisher $10. If Amazon sells that for $15 I am sure that they still have to pay the $10 to the publisher. However an ebook costs about 10% less than retail price according to the publishers so that would mean $2.50 less than $25 in my example. But that is only from the publishers point and doesn’t include the saving on storage and distribution from Amazon’s point. If Amazon wants to pass those savings to us then why not let them? I have read figures of about 10% also. That would be about another $2.5 in my example. So for the $25 book example an ebook could be $10 giving $7.5 to the publisher and $2.5 to Amazon. Yes the $7.5 is less than the $10 but it makes no diff as the publisher has $2.5 less in cost also.

Originally Posted by DMcCunney

It makes perfect sense. A friend of mine who is an editor for a major house estimated printing, binding, warehousing, and distribution accounted for about 10% of the total budget of the average book. I think his estimate is low, but he sees the numbers and I don't, and he has no reason to lie about it. Even if he's off by 100%, the savings in not having a physical book is far less than what a lot of folks would like to believe, and won't permit the sort of pricing folks would like. Dennis

I have a real hard time understanding that only 10% goes into the printing etc. I have read 10% for printing and 10% for storage and shipping. This last I believe more. That being said even with the 10% it could be feasible for an ebook at $9.99 and still make money as per my example above.

Originally Posted by DMcCunney

The problem is what will automate it. Dennis

Prior authorization that when the paperback hits the shelf to automatically lower the price.