RE: "The Elusive E-book"

At 8:17 PM +0000 5/8/08, you wrote:
>
>I agree.
>
>But what I meant was that whatever the markup is that paper publishers
>charge for printing, binding, packaging, shipping is a cost saving we can
>pass on to our customers.
>
>I don't know the exact figure of how much it cost to get a paper book
>physically produced and into the hands of a customer, but if the above is
>20% of the final cost of the book, then e-books should always be 20% less
>than a paper book with all other things being equal.
>
>Aaron J. WalkerPublisher
>http://www.walkbroadpublishing.com

In the long run, prices are set by economics.

They are a compromise between what the supplier is willing to sell the item
for and what the public is willing to pay for the item.

While publishers and many others in business often use markups to estimate
proper prices, over the long run, the market tends to force them to a price
that fits the above compromise.

The supplier's cost is only relevant to the extent that it influences at
what price the supplier is willing to sell its goods. If the price is lower
than its costs plus some profit margin, the supplier isn't likely to supply
anything.

So, while we often talk about how ebooks have an effective marginal cost of
almost zero, that doesn't necessarily have anything to do with the price of
the ebook.




Having said that, you should know that the cost of producing a book can
vary widely, from less than a dollar a copy for relatively short mass
market paperbacks printed in large quantities, to more than $10 a copy for
hardcover textbooks. The above costs do not include author royalties, nor
the publisher's costs for marketing the book.

To cover those costs, the publisher usually makes sure that the list price
is at least 5 times the production cost. Trade book publishers give 50% to
55% of the cover price to wholesalers and retailers, who make sure that the
book is available to the public.


In the case of ebooks, the above doesn't exactly apply. Retailers ask for a
variety of discounts/markups, so it is very hard to say what the
relationship of list prices to production costs and other book-related
costs should be.


Bottom line, I don't think you can say that ebooks should always be 20%
cheaper. It is also not possible to say what the price should be.

The market for ebooks is still thin enough that it is very hard to say what
the price for any ebook should be.

Kent


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