I’ll come back to this later, but they’ve already demonstrated quite handily that they can set the norm, but setting the price of eBooks at $9.99. If publishers are forced to bring down the price of hardcovers because of deep discounting (which yes, I believe is unlikely to happen across-the-board, but bear with me here a sec), as keen as that is for people buying books, man does it suck for authors. Royalties are based off of the book’s retail price. If that drops, so do authors’ paychecks. Drastically.

I have no idea what Stephen King’s actual royalty rate is, but let’s say it’s the industry standard 10-15% on a hardcover. Because he’s Stephen King, let’s go with 15%. Under the Dome retails for $35.00. He makes $5.25 per book, whether Amazon discounts it down to $10 or sells it at the full $35.

Now let’s follow the slippery slope down and say there’s a price revolution, and all new hardcovers start going for $10 — not the Amazon discounted $10, but the “suggested retail price” printed on the inside of the jacket flap. Now he’s only making $1.50 per book.

Sure, that’s all well and good and fine, he’s Stephen fucking King and has been a bestselling author since the year I was born. But what about debut authors, people who aren’t pulling in scads of money on their booksales? How is that fair to them? (Not that I think it’d be fair to Stephen King, either, by the way. Fame doesn’t matter here. Fair compensation for your work does.)

The reason they do this is to bring in business in the hopes that people who shop for one of these books will buy other things (which are sold above cost) and the end result will be a profit.

and

“..our business has NEVER been primarily driven by the standard bestseller lists.”

And I think that’s probably true for the majority of independent book sellers. And it’s only those standard bestsellers that are going to get the price cut.

Those two things present a problem, though, don’t they?

Yes, there are some booksellers who aren’t worried about losing bestseller sales, but that’s a small part of the picture. If people buy their bestsellers from Amazon and, as you say, buy other things while they have their Amazon shopping cart open, what happens when those “other things” are books?

Independent bookstores lose sales that might otherwise have come to them, that’s what.

A customer is unlikely to buy his $8.99 Grisham and then log off of Amazon and head out to his local bookstore for the up-and-coming debut guy’s book. He’s going to search Amazon and stick the up-and-comer’s book in the cart right next to the Grisham. So Amazon gets both sales, the discounted one and the full-price one. The indie gets $0.

Sure, indies can sell their books through Amazon. But they have to give a percentage of every sale to them, — 15%, plus a $1.35 “closing fee,” PLUS a $40 monthly fee — and they still can’t offer competing discounts. There’s no guarantee they’ll make that back on profits. I’d bet it’s actually pretty unlikely since they can’t offer the same discount that Amazon does.

So you have a bookstore paying the publisher $15.39 for a book that retails for $27.99. Say the bookstore discounts it 30%, listing it at $19.59. If someone buys it, the bookstore pays $2.93 for Amazon’s 15%, plus the $1.35 closing fee, so $4.28 goes to Amazon, and $15.93 to the publisher.

$19.59 – $15.93 – $4.28 = $-0.62.

Sure, the bookseller could offer a lower (or no) discount, but go ahead and look at Amazon’s front page. Everything’s discounted.

You can take advantage of Amazon’s $8.99 price on a bestseller, or you can click over to the Books That Don’t Suck Amazon store and buy it for $20. Which are you going to pick?

Or you have to read To Kill a Mockingbird for a class. Amazon’s offering deals on the first two editions that pop up (38% on the $12.95 HarperCollins trade paperback, 32% on the $15.99 Harper Perennial edition) and when you look at the Grand Central mass market listing (third one down), if you want a new copy, they’re still the best deal, because even though they’re charging the full $7.99 price, everyone cheaper than that has to tack on $4 for shipping. Yup, a few of the sellers have a $2 or $3 price on there, but if they got the copies they’re selling direct from the publisher, that means they’re taking a loss.

Amazon no longer becomes an evil beast, but a mechanism to get more people to buy their books through independent book sellers. I see most independents as being local shops you do most of their advertising through signs in their windows and maybe the occasional local newspaper ad. Selling through Amazon (or eBay or some other online service) only helps to expose their store to a greater audience outside of their traditional community.

Bolding mine. That’s what IndieBound is. That’s why I keep pointing at it. It’s a way for booksellers to reach readers outside of their local communities. Amazon is not a mechanism to get people to go to their indies — as you can see in the example above, it’s not helpful to indies at all.

There’s the cost of printing, packaging, and shipping with a physical copy. You don’t have any of those costs associated with an e-book, which is why I don’t get the problem some have with lower prices on e-books.

Printing, packaging and shipping are only a small part of the cost of making a book. Most of what goes into the actual making of a book is never seen or considered by the person who picks the finished product up off the shelf.

Books get edited, they get copyedited, they have someone doing the layout, they have someone doing the cover art. The books go into catalogs, which cost money to print. There’s the cost of advertising — you’ve seen book ads on TV, in magazines, on the subway. There’s the price of marketing and publicity. If the author goes on a tour and the publisher pays for it, there’s the cost of flights, hotels, food.

Hell, the cost of running the publisher itself probably ought to (and probably does) get factored in too — paychecks for people in customer service, the sales reps (/waves), the guys in the mailroom, the people who talk to the binderies and make sure the pages get printed in the right order, accounts payable, accounts receivable, the people in royalties who make sure the authors get paid, and probably a dozen or more departments I’m not even remembering.

All of those things contribute to the cover price of a book, and while I can understand e-books being priced slightly lower than the physical copies, Amazon set the $9.99 price without ever having a conversation about it with anyone in the industry. If you look at some of their Kindle prices, you’ll see that they post the “digital list price” (the price set by the publisher, usually the same as the hardcover price) and have that struck through, with the “Kindle Price” of $9.99 beneath.

So, sure, cutting the cost of the physical printing and shipping of dead tree books off of the ebook price might be doable, but it’s not as much of the price as you think.

I get the worry that people are going to put a $10 price tag on all new books, but I’m not sure I buy into that. Even Amazon and company will have to sell the vast majority of their books above cost or they will start taking a loss. The $10 price tags on new releases is not going to become the norm.

Nor do I buy that this price cut hurts independent book sellers. From the article you linked to at http://booksblog.dallasnews.com/archives/2009/10/will-10-best-sellers-doom-inde.html :

“..our business has NEVER been primarily driven by the standard bestseller lists.”

And I think that’s probably true for the majority of independent book sellers. And it’s only those standard bestsellers that are going to get the price cut.

Furthermore, independent book sellers can actually sell their inventory THROUGH Amazon if they’d like. Amazon no longer becomes an evil beast, but a mechanism to get more people to buy their books through independent book sellers. I see most independents as being local shops you do most of their advertising through signs in their windows and maybe the occasional local newspaper ad. Selling through Amazon (or eBay or some other online service) only helps to expose their store to a greater audience outside of their traditional community.

And of COURSE an e-book is cheaper than a printed copy. There’s the cost of printing, packaging, and shipping with a physical copy. You don’t have any of those costs associated with an e-book, which is why I don’t get the problem some have with lower prices on e-books.