5 ms·

Amazon Low Prices Disguise a High Cost

14 points by iProject 15y ago

yahelc 15y ago
David Carr has an agenda here, which is the preservation of the old order of media. As a result of this blind-spot, he makes some logical leaps and mistakes. Most egregious amongst them is suggesting that Amazon's strategy is akin to Apple's, which is profiting off of devices. Except, Amazon sells the Kindle at a loss; it treats it as a loss-leader.[1] They reportedly take a $10 loss on every Kindle Fire, and a $5 loss on every $79 Kindle. [1]: http://www.pcmag.com/article2/0,2817,2396248,00.asp http://www.pcmag.com/article2/0,2817,2396248,00.asp
- orijing 15y ago
  Just curious, isn't selling below cost called "dumping" and is illegal in many places?
  - cdash 15y ago
    I am pretty sure dumping is only considered for international trade where an item is exported at a lower cost than it is sold domestically. Another example of selling below costs, is in the console industry where Sony and I am sure other companies as well have sold consoles well below their cost and make up for it with game sales.
  - DaveMebs 15y ago
    It's illegal to sell below the cost of materials, I believe. Cost of assembly does not factor in.
huggyface 15y ago
Amazon allowed the book sellers to set their price, x, from which Amazon could set the retail price to whatever they wanted (whether at lots of profit or no profit). The booksellers got paid x regardless. Apple allowed the book sellers to set their retail price, y, giving them a 70% cut on a sale, demanding that this model be forced on all other sellers (because if Apple's model was an outlier, they would have no sales). There is no universe where the former could be cast as worse for consumers, but through the most ridiculously extrapolated unintended consequences. This piece certainly makes no compelling case, beyond some notion that an equal price for all (and a higher cost for all) is good because it props up less competitive resellers. Welcome to Soviet Russia.
- nitrogen 15y ago
  Amazon allowed the book sellers to set their price, x, from which Amazon could set the retail price to whatever they wanted (whether at lots of profit or no profit). The booksellers got paid x regardless. Indeed. A friend of mine was happy to receive royalties on a non-free ebook that Amazon decided to give away for free for a while.
- deleted 15y ago
  [deleted]
revelation 15y ago
This is the same stuff we've read on music and movies, saying that low prices will kill the authors, even go as far as to kill creativity, if you are inclined to believe this socioeconomic-romance. That is not at all what is happening. Publishers and "music labels" are bleeding out, not writers and authors. It's killing the middlemen, not creativity. And I won't shed any tears on their demise; for their existence is only because of technological shortcomings, and capitalisms very nature is to straighten the process and eliminate them.
- cek 15y ago
  "It's killing the middlemen, not creativity." That is exactly right. Well put.
- nirvdrum 15y ago
  Here's hoping there will still be some level of quality copyediting involved in this new world. Most self-published works I've read I have an extremely hard time reading because the quality is just so bad.
  - robrenaud 15y ago
    Maybe there is a model for a version 2 of self published works? Self publish first, if it gets a following, do the copy-editing/polishing/revising for a different "cut" of the same book. Maybe even throw an extra chapter in to give the dedicated fans a reason to buy the new one.
jay_kyburz 15y ago
Anybody know of a site where I can browse and read novels published and sold independently by the Authors?
russell_h 15y ago
Amazon views e-books as cheap software sold to animate device sales, in this case, the Kindle. This seems like a pretty bizarre assertion, isn't Amazon generally thought to be selling Kindles at, or close to a loss?
SlipperySlope 15y ago
I wonder how much the New York Times viewpoint was influenced by its proximity to the headquarters of book publishers and the extent of book publishing advertising in its newspaper. Amazon probably does not advertise much in the New York Times. I say bring on low prices! I am done buying dead-tree books, and my book reading has trebled after buying a Kindle. I hope that Amazon's own imprints do well and give even more authors the chance to profitably publish their works.

14 points by iProject 15y ago

David Carr has an agenda here, which is the preservation of the old order of media. As a result of this blind-spot, he makes some logical leaps and mistakes. Most egregious amongst them is suggesting that Amazon's strategy is akin to Apple's, which is profiting off of devices. Except, Amazon sells the Kindle at a loss; it treats it as a loss-leader.[1] They reportedly take a $10 loss on every Kindle Fire, and a $5 loss on every $79 Kindle. [1]: http://www.pcmag.com/article2/0,2817,2396248,00.asp http://www.pcmag.com/article2/0,2817,2396248,00.asp

orijing 15y ago
Just curious, isn't selling below cost called "dumping" and is illegal in many places?
- cdash 15y ago
  I am pretty sure dumping is only considered for international trade where an item is exported at a lower cost than it is sold domestically. Another example of selling below costs, is in the console industry where Sony and I am sure other companies as well have sold consoles well below their cost and make up for it with game sales.
- DaveMebs 15y ago
  It's illegal to sell below the cost of materials, I believe. Cost of assembly does not factor in.

huggyface 15y ago

Amazon allowed the book sellers to set their price, x, from which Amazon could set the retail price to whatever they wanted (whether at lots of profit or no profit). The booksellers got paid x regardless. Apple allowed the book sellers to set their retail price, y, giving them a 70% cut on a sale, demanding that this model be forced on all other sellers (because if Apple's model was an outlier, they would have no sales). There is no universe where the former could be cast as worse for consumers, but through the most ridiculously extrapolated unintended consequences. This piece certainly makes no compelling case, beyond some notion that an equal price for all (and a higher cost for all) is good because it props up less competitive resellers. Welcome to Soviet Russia.

nitrogen 15y ago
Amazon allowed the book sellers to set their price, x, from which Amazon could set the retail price to whatever they wanted (whether at lots of profit or no profit). The booksellers got paid x regardless. Indeed. A friend of mine was happy to receive royalties on a non-free ebook that Amazon decided to give away for free for a while.
deleted 15y ago
[deleted]

revelation 15y ago

This is the same stuff we've read on music and movies, saying that low prices will kill the authors, even go as far as to kill creativity, if you are inclined to believe this socioeconomic-romance. That is not at all what is happening. Publishers and "music labels" are bleeding out, not writers and authors. It's killing the middlemen, not creativity. And I won't shed any tears on their demise; for their existence is only because of technological shortcomings, and capitalisms very nature is to straighten the process and eliminate them.

cek 15y ago
"It's killing the middlemen, not creativity." That is exactly right. Well put.
nirvdrum 15y ago
Here's hoping there will still be some level of quality copyediting involved in this new world. Most self-published works I've read I have an extremely hard time reading because the quality is just so bad.
- robrenaud 15y ago
  Maybe there is a model for a version 2 of self published works? Self publish first, if it gets a following, do the copy-editing/polishing/revising for a different "cut" of the same book. Maybe even throw an extra chapter in to give the dedicated fans a reason to buy the new one.

jay_kyburz 15y ago

Anybody know of a site where I can browse and read novels published and sold independently by the Authors?

russell_h 15y ago

Amazon views e-books as cheap software sold to animate device sales, in this case, the Kindle. This seems like a pretty bizarre assertion, isn't Amazon generally thought to be selling Kindles at, or close to a loss?

SlipperySlope 15y ago

I wonder how much the New York Times viewpoint was influenced by its proximity to the headquarters of book publishers and the extent of book publishing advertising in its newspaper. Amazon probably does not advertise much in the New York Times. I say bring on low prices! I am done buying dead-tree books, and my book reading has trebled after buying a Kindle. I hope that Amazon's own imprints do well and give even more authors the chance to profitably publish their works.