Courtesy of Bloomberg…
I have a new book out, and it’s been for sale at various prices. Try $9.99, $13.75, $16.17, $18.25, $21.66 and, with tax, $27.18.
Welcome to the tumultuous world of book selling and book pricing, particularly online, where “bots” scurry around virtual bookshelves, checking competitors’ prices. Lawsuits, buyouts and mergers also flourish as publishers and online retailers vie for control.
With the proposed merger between Penguin and Random House, through their corporate overlords – U.K.-based Pearson Plc (PSON) and Germany’s Bertelsmann SE – it seems as if the traditional book world is joining forces to stem the tide. Instead, the new behemoth will be carried on the wave with everyone else, as companies large and small adapt to the rise of the e-book and the low and unpredictable prices charged by the dominant e-book and conventional book seller: Amazon.com Inc. (AMZN)
When my hardback book became available for “pre-ordering” in May, the Seattle-based retailer sold it for a bit more than $22, a few dollars less than the $25 list price. In July, though, Amazon (AMZN) had lowered the price to $13 and change. A few weeks later, it was more than $18. Then it became $16.50. For any of these, I would have to pay $3.99 shipping unless I had an Amazon prime membership at an annual cost of $79. Still, most of these total prices were substantially below list.
There is no shipping charge on an e-book. And on Sept. 1, my book’s official publication date, Amazon began selling the electronic edition in its proprietary Kindle format for $9.99.
Amazon’s Strategy
I happen to know that my publisher, the University of Texas Press, sells the book, whether paper or digital license, to Amazon and all other direct retailers for $13.50. So that means Amazon was losing $3.51, a 26 percent loss, on every Kindle edition. That’s a hefty negative margin.
Why was Amazon doing this? It wasn’t making it up on volume. Amazon had no comment. The usual interpretation is that the online publisher is using low prices, not only on e-books but also for its e-reader, the Kindle, which it also sells at or below cost to expand the markets for e-reading. Once readers are hooked, then the company is expected to raise prices.
Read the rest of the article here: Will Penguin-Random Raise the Price of My Book?
