Waterstones and ebook prices

pdurrant · 01-09-2012, 04:57 AM

People often complain about ebook prices in relation to paperback prices, but in the casesI've seen before they are comparing current ebook prices with paperbacks that haven't yet been published.

But I just got an email from Waterstones, advertising an ebook sale, and also promoting Steig Larsson Millenium Trilogy.

Quote:

This week's highlights

Girl with the Dragon Tattoo

Clicking the link takes you to a page listing the three books of the trilogy, as paperbacks and ebooks.

Paperbacks: RRP £7.99, discounted to £4.79
ebooks: RRP £7.99, discounted to £5.99

What!

And yes, the paperbacks come with free delivery. Even if Waterstones are charging full UK VAT (20%), that still makes the ebooks each £0.20 more expensive (ex-VAT) than the paperbacks.

I don't think that this is Waterstones fault, necessarily. For paperbacks, they probably get 55% discount on the RRP, meaning that at £4.79 they are making £1.19 on each paperback sold.

For the ebooks, I suspect that they get a 30% discount on the RRP. meaning that, taking 20% VAT into account, at £5.99 they're making only £0.33 on each ebook sold.

With excessive pricing and DRM, you'd think the publishers were trying to kill the ebook market...

carpetmojo · 01-09-2012, 05:36 AM

I suspect there may be an element of simple misconceptions and a number of other factors, like.....

a) Most readers are a reasonably significant lump outlay, and hi-tech, so they work on the premise that owners have enough significant (in a small sense) disposable income not to be bothered by prices - "they buy phsy-books, don't they ?".
b) Sheer lack of knowledge of the whole medium - save for the accountants, who simply look at product prices, and to them, a book may very well be ..a book....
c) The same accountants difficulty in coming to terms with this new market, and an inability to make publishers see economic sense.
d) Fear - that this might be the year ebooks really take off ? And kill them all.
e) Stupidity/naivity - a failing to look around the market and accept that there are a lot of sources a lot cheaper than them, often with exactly the same product. To say nothing of the Shadow World of "free".
f) Finally, or all I can think of for now, a refusal to fully realise what happened in the Music industry ?

HarryT · 01-09-2012, 05:47 AM

For comparison, Amazon UK are charging £2.70 for the eBook, and that's an increase: when I bought it, about 18 months ago, it was about £2.30.

spindlegirl · 01-09-2012, 06:16 AM

Quote:

Originally Posted by HarryT

For comparison, Amazon UK are charging £2.70 for the eBook.

With prices like that, you'd never hear me criticize book prices again.
Currently in the USA it's $13.53 for the e-book at the amazon website.
Google says that is £8.77

£2.70, on the other hand is a mere $4.16!! (USD) - the only defect being that it has DRM.

Kobo wants $11.99 canadian for the epub version. The USD and CAD are fairly close these days.

carpetmojo · 01-09-2012, 06:19 AM

That's the other thing designed to bug us - differing (sometimes wildly) prices, and availability, in different geographic areas.
Doubt you'll ever change that though...

Adele Ward · 01-09-2012, 06:25 AM

I don't think you've calculated this in the way it works when publishers set a price. You're working backwards taking money off the amount earned by Waterstones when it goes the other way around. If it works the way it does on Amazon it goes like this. The publisher sets a minimum price they need in order to divide the income 50/50 with the author, as ebook royalties should be 50% as recommended by the Society of authors. Imagine the publisher feels the author should get about £1 royalty for a book, so that puts it at £2 as a starting price if it's divided 50/50 with the publisher. Then the seller (Amazon or Waterstones) add their mark-up. So you would add 30% to that. Then you add VAT which has been 20% recently. And that's your final price. Waterstones and Amazon always get their 30% mark-up. You don't take amounts off that to get the low figure you arrived at. This does lead to the kind of pricing for an ebook you've mentioned. Publishers find it hard to charge less than about £5 while paying authors a reasonable royalty per book. The booksellers never lose their full 30% mark-up. It may surprise you to know they have some additional clauses in their agreement with publishers. At times Amazon charges a 65% mark-up and only gives the publisher 35% to share with the author - an incredibly low royalty. Their reason for this is if the book is sold in certain countries - but they're just downloads so why should this make a difference? They also give themselves the right to lower the percentage paid to the publisher if they see a more competitive price for the book. It's not publishers killing ebooks. We really need this market to expand. But the online sellers have us tightly in their grasp and we have to agree to their conditions.

patrickt · 01-09-2012, 07:06 AM

Having paper books taking up warehouse space is a significant expense. Sellers will practically give them away to move them out. The demand for Steig Larrson has to be dropping and I suspect moving the damned books might be a factor.

With the number of titles on the market, I'm not surprised that the compulsives can find a book to fit whatever theory they're promoting.

CRussel · 01-09-2012, 09:03 AM

Quote:

Originally Posted by spindlegirl

With prices like that, you'd never hear me criticize book prices again.
Currently in the USA it's $13.53 for the e-book at the amazon website.
Google says that is £8.77

£2.70, on the other hand is a mere $4.16!! (USD) - the only defect being that it has DRM.

Kobo wants $11.99 canadian for the epub version. The USD and CAD are fairly close these days.

Current Amazon price is $9.99 USD. And when I bought it, it was $7.27.

wallcraft · 01-09-2012, 09:22 AM

Kobo's UK price is £3.46 (List price: £8.16). In the US, this is an Agency ebook so the Kindle price ($9.99) is the "list" price.

Adele Ward · 01-09-2012, 10:07 AM

I realised when I logged off that I got my percentages wrong too.... They don't add a 30% mark up to the publisher's price. They add a 50% mark up because they always get about a third of the total price. So if we charge £2 for a book, the online seller adds about £1 making £3 and then VAT would be added to that. They always get at least about a third of the price. Sometimes they take two thirds, or Amazon do anyway. Publishers then have to try not to devalue a book by making it too much like a freebie they're trying to offload at any price because it isn't selling any more. But I suppose about £4 might be the minimum we could manage while giving the author a royalty of £1, plus the publisher and the seller, eg Waterstones, getting £1 too.

MoodRing · 01-09-2012, 10:07 AM

I have noticed that whilst paperback prices are falling ebook pricing are rising, but why as they are more avilable than ever?

carpetmojo · 01-09-2012, 10:10 AM

Quote:

Originally Posted by Adele Ward

........ The booksellers never lose their full 30% mark-up. It may surprise you to know they have some additional clauses in their agreement with publishers. At times Amazon charges a 65% mark-up and only gives the publisher 35% to share with the author - an incredibly low royalty. Their reason for this is if the book is sold in certain countries - but they're just downloads so why should this make a difference? They also give themselves the right to lower the percentage paid to the publisher if they see a more competitive price for the book. It's not publishers killing ebooks. We really need this market to expand. But the online sellers have us tightly in their grasp and we have to agree to their conditions.

But surely that can't be right ?

Amazon, taking advantage of its market position and screwing authors ? Oh,sorry, it's the publishers who are screwing the authors, by not reducing their profit......

Amazon would never behave like that........

HarryT · 01-09-2012, 10:18 AM

Quote:

Originally Posted by MoodRing

I have noticed that whilst paperback prices are falling ebook pricing are rising, but why as they are more avilable than ever?

I've certainly seen no evidence that eBook prices are rising. Do you have any figures to support your viewpoint?

JSWolf · 01-09-2012, 10:31 AM

Quote:

Originally Posted by HarryT

I've certainly seen no evidence that eBook prices are rising. Do you have any figures to support your viewpoint?

It's not that eBook prices are rising per say. It's that pBooks are being discounted even more.

Adele Ward · 01-09-2012, 10:32 AM

Publishers really want to be able to reduce the cost of their ebooks. It's really hard to compete in this market if we don't, especially with so many free and bargain books. Publishers try to set the ebook price below the price of the print book, while not devaluing by making it look like a remaindered book to be cleared out of stock.

It's just quite hard to do this because there are misleadingly low prices for books with online sellers that don't actually exist and would never be supplied, so we can't compete with those prices. For example, I can see some of our print books on offer from Amazon market resellers for just £3. We never supply books at that discount so these books can't possibly exist and you often find if you order from Amazon that a book isn't supplied.

These books are what are called 'loss leaders'. Either they don't exist but the very attractive prices draw customers to the seller's website. Or Amazon and others actually do sell some books at below cost price because they can balance that against the huge profit they make by taking a commission from marketplace sales where they actually have no expenses and no work to do.

So it is possible that print books could be cheaper than ebooks at times. They are sold at a loss in a way the publisher can't compete with. The minimum price we could charge for an ebook while paying the author a royalty, the online seller a commission of at least a third, and even if we took nothing ourselves, could work out at more than the lowest price from an Amazon marketplace seller.

The answer to this, in my opinion, is that publishers will only manage with ebook sales when people choose ebooks because they really want them, rather than because they feel they should be a cheaper option than a print book. This is actually why I buy ebooks. I prefer them - they don't clutter my house up and I can carry them around so easily to read when out and about.

01-09-2012, 05:47 AM	#3
HarryT eBook Enthusiast Posts: 85,544 Karma: 93383099 Join Date: Nov 2006 Location: UK Device: Kindle Oasis 2, iPad Pro 10.5", iPhone 6	For comparison, Amazon UK are charging £2.70 for the eBook, and that's an increase: when I bought it, about 18 months ago, it was about £2.30. Last edited by HarryT; 01-09-2012 at 06:14 AM.

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01-09-2012, 05:36 AM	#2
carpetmojo Wizard Posts: 3,117 Karma: 9269999 Join Date: Feb 2011 Location: UK Device: Sony- T3, PRS650, 350, T1/2/3, Paperwhite, Fire 8.9,Samsung Tab S 10.5	I suspect there may be an element of simple misconceptions and a number of other factors, like..... a) Most readers are a reasonably significant lump outlay, and hi-tech, so they work on the premise that owners have enough significant (in a small sense) disposable income not to be bothered by prices - "they buy phsy-books, don't they ?". b) Sheer lack of knowledge of the whole medium - save for the accountants, who simply look at product prices, and to them, a book may very well be ..a book.... c) The same accountants difficulty in coming to terms with this new market, and an inability to make publishers see economic sense. d) Fear - that this might be the year ebooks really take off ? And kill them all. e) Stupidity/naivity - a failing to look around the market and accept that there are a lot of sources a lot cheaper than them, often with exactly the same product. To say nothing of the Shadow World of "free". f) Finally, or all I can think of for now, a refusal to fully realise what happened in the Music industry ?

01-09-2012, 06:19 AM	#5
carpetmojo Wizard Posts: 3,117 Karma: 9269999 Join Date: Feb 2011 Location: UK Device: Sony- T3, PRS650, 350, T1/2/3, Paperwhite, Fire 8.9,Samsung Tab S 10.5	That's the other thing designed to bug us - differing (sometimes wildly) prices, and availability, in different geographic areas. Doubt you'll ever change that though...

01-09-2012, 06:25 AM	#6
Adele Ward Connoisseur Posts: 54 Karma: 490324 Join Date: Jan 2012 Location: London Device: Kindle	I don't think you've calculated this in the way it works when publishers set a price. You're working backwards taking money off the amount earned by Waterstones when it goes the other way around. If it works the way it does on Amazon it goes like this. The publisher sets a minimum price they need in order to divide the income 50/50 with the author, as ebook royalties should be 50% as recommended by the Society of authors. Imagine the publisher feels the author should get about £1 royalty for a book, so that puts it at £2 as a starting price if it's divided 50/50 with the publisher. Then the seller (Amazon or Waterstones) add their mark-up. So you would add 30% to that. Then you add VAT which has been 20% recently. And that's your final price. Waterstones and Amazon always get their 30% mark-up. You don't take amounts off that to get the low figure you arrived at. This does lead to the kind of pricing for an ebook you've mentioned. Publishers find it hard to charge less than about £5 while paying authors a reasonable royalty per book. The booksellers never lose their full 30% mark-up. It may surprise you to know they have some additional clauses in their agreement with publishers. At times Amazon charges a 65% mark-up and only gives the publisher 35% to share with the author - an incredibly low royalty. Their reason for this is if the book is sold in certain countries - but they're just downloads so why should this make a difference? They also give themselves the right to lower the percentage paid to the publisher if they see a more competitive price for the book. It's not publishers killing ebooks. We really need this market to expand. But the online sellers have us tightly in their grasp and we have to agree to their conditions.

01-09-2012, 07:06 AM	#7
patrickt Wizard Posts: 1,221 Karma: 8381518 Join Date: Oct 2009 Location: Oaxaca, Mexico Device: Paperwhite 4 X 2	Having paper books taking up warehouse space is a significant expense. Sellers will practically give them away to move them out. The demand for Steig Larrson has to be dropping and I suspect moving the damned books might be a factor. With the number of titles on the market, I'm not surprised that the compulsives can find a book to fit whatever theory they're promoting.

01-09-2012, 09:22 AM	#9
wallcraft reader Posts: 6,977 Karma: 5183568 Join Date: Mar 2006 Location: Mississippi, USA Device: Kindle 3, Kobo Glo HD	Kobo's UK price is £3.46 (List price: £8.16). In the US, this is an Agency ebook so the Kindle price ($9.99) is the "list" price.

01-09-2012, 10:07 AM	#10
Adele Ward Connoisseur Posts: 54 Karma: 490324 Join Date: Jan 2012 Location: London Device: Kindle	I realised when I logged off that I got my percentages wrong too.... They don't add a 30% mark up to the publisher's price. They add a 50% mark up because they always get about a third of the total price. So if we charge £2 for a book, the online seller adds about £1 making £3 and then VAT would be added to that. They always get at least about a third of the price. Sometimes they take two thirds, or Amazon do anyway. Publishers then have to try not to devalue a book by making it too much like a freebie they're trying to offload at any price because it isn't selling any more. But I suppose about £4 might be the minimum we could manage while giving the author a royalty of £1, plus the publisher and the seller, eg Waterstones, getting £1 too.

01-09-2012, 10:07 AM	#11
MoodRing MoodRing Posts: 38 Karma: 10 Join Date: Jan 2012 Location: Cork, Ireland Device: none	I have noticed that whilst paperback prices are falling ebook pricing are rising, but why as they are more avilable than ever?

01-09-2012, 10:32 AM	#15
Adele Ward Connoisseur Posts: 54 Karma: 490324 Join Date: Jan 2012 Location: London Device: Kindle	Publishers really want to be able to reduce the cost of their ebooks. It's really hard to compete in this market if we don't, especially with so many free and bargain books. Publishers try to set the ebook price below the price of the print book, while not devaluing by making it look like a remaindered book to be cleared out of stock. It's just quite hard to do this because there are misleadingly low prices for books with online sellers that don't actually exist and would never be supplied, so we can't compete with those prices. For example, I can see some of our print books on offer from Amazon market resellers for just £3. We never supply books at that discount so these books can't possibly exist and you often find if you order from Amazon that a book isn't supplied. These books are what are called 'loss leaders'. Either they don't exist but the very attractive prices draw customers to the seller's website. Or Amazon and others actually do sell some books at below cost price because they can balance that against the huge profit they make by taking a commission from marketplace sales where they actually have no expenses and no work to do. So it is possible that print books could be cheaper than ebooks at times. They are sold at a loss in a way the publisher can't compete with. The minimum price we could charge for an ebook while paying the author a royalty, the online seller a commission of at least a third, and even if we took nothing ourselves, could work out at more than the lowest price from an Amazon marketplace seller. The answer to this, in my opinion, is that publishers will only manage with ebook sales when people choose ebooks because they really want them, rather than because they feel they should be a cheaper option than a print book. This is actually why I buy ebooks. I prefer them - they don't clutter my house up and I can carry them around so easily to read when out and about.

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