As price wars between booksellers heat up, the customers rejoice and the publishers watch out...
In the monopolistic e-world of books, created and run by amazon.com, a new entrant has not only stirred the market but has also slashed prices to pittance, bringing to the fore several debatable questions for the publishing industry and authors. Walmart.com, the new entrant is offering upcoming, highly-anticipated, hard cover books such as Sarah Palin’s Going Rogue and John Grisham’s Ford County for as low as $10 – a 60% cut from the cover prices! The competitor, amazon.com, in return has brought down the prices to the same - $10. In fact, 200 current best-sellers have been identified, including Dan Brown’s The Lost Symbol, to be sold at the same price along with free home delivery.
While this new offer is customer-friendly and gets ardent readers to grin, it will fetch very little to the sellers who acquire books at the wholesale price, which is close to a 47% discount over the cover price. In simple terms, a book at a cover price of $25 would’ve cost any seller around $12 and some cents. Now, online stores such as Wal-Mart can make up for losses on individual items (books, in this case) from other products, but what about the corner book stores that can’t afford such cuts? In the long run, if such price wars continue for popular books and best-sellers, there might be a scenario where purchasing books would have to be done without spending time in the warmth of a book store, flipping through a few pages and enjoying that familiar friendly fragrance of brand new books. Well, that’s just about one repercussion...
The publishing industry doesn’t approve of Wal-mart using the prices of books to better its position in the online space, that too, at ‘unrealistically low prices.’ But, if the publisher has to re-adjust the rates to keep the regular bookstores as well as the online stores alive, the authors will have to bear the brunt (which seems inescapable).
In the monopolistic e-world of books, created and run by amazon.com, a new entrant has not only stirred the market but has also slashed prices to pittance, bringing to the fore several debatable questions for the publishing industry and authors. Walmart.com, the new entrant is offering upcoming, highly-anticipated, hard cover books such as Sarah Palin’s Going Rogue and John Grisham’s Ford County for as low as $10 – a 60% cut from the cover prices! The competitor, amazon.com, in return has brought down the prices to the same - $10. In fact, 200 current best-sellers have been identified, including Dan Brown’s The Lost Symbol, to be sold at the same price along with free home delivery.
While this new offer is customer-friendly and gets ardent readers to grin, it will fetch very little to the sellers who acquire books at the wholesale price, which is close to a 47% discount over the cover price. In simple terms, a book at a cover price of $25 would’ve cost any seller around $12 and some cents. Now, online stores such as Wal-Mart can make up for losses on individual items (books, in this case) from other products, but what about the corner book stores that can’t afford such cuts? In the long run, if such price wars continue for popular books and best-sellers, there might be a scenario where purchasing books would have to be done without spending time in the warmth of a book store, flipping through a few pages and enjoying that familiar friendly fragrance of brand new books. Well, that’s just about one repercussion...
The publishing industry doesn’t approve of Wal-mart using the prices of books to better its position in the online space, that too, at ‘unrealistically low prices.’ But, if the publisher has to re-adjust the rates to keep the regular bookstores as well as the online stores alive, the authors will have to bear the brunt (which seems inescapable).
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles. An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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