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View Stephen Windwalker's Comments
Amazon Positioned for 50% Overall Market Share by End of 2012
We hear a lot these days about Amazon and other retailers having made 50 per cent margins on hardcover bestsellers in the past, etc. Never happened. In fact, Amazon provided deep discounts of 34 to 46 percent on over 95 percent of its hardcover units sold in recent years. So, on a $25-list hardcover for which Amazon paid $12.50, the actual retail price was $13.50 to $16.50, which means that Amazon’s gross margin was somewhere between 7 and 24 percent.
Similar situation with ebooks. Prior to the agency model, there was no 50-50 split: Publishers were setting list at $25 on bestsellers, Amazon was paying $12.50 and charging $9.99 for a 25% negative margin. in spite of the considerable evils of the agency model price-fixing scheme from a consumer’s perspective, it did have the effect of greatly limiting that loss-leader pricing, i.e., selling ebooks at a loss, by Amazon prior to April 2010. Amazon is now making a 30 percent margin on the vast majority of its sales, although it certainly is doing some selective discounting below wholesale, for instance, with certain Random House titles (including, apparently, the $5 Larsson bestsellers), as retailers will always do.
Feb 4 08:04 AM
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Just How Big Is the Kindle Revolution?
@Marc wondered: "Is the existence of a massive Kindle revolution all that controversial?"
It's a reasonable and thoughtful question, Marc. I suspect matters where the conversation is taking place. As recently as the past few months otherwise smart observers were opining that the iPad would cut seriously into the Kindle market, but instead what we have seen is that the iPad and its competitors have become Kindle content delivery devices at a pretty significant level.
And traditional publishers are still being dragged kicking and screaming to the ebook revolution.
But your basic point is right on the money: certainly there is no longer much factual basis for the controversy.
Jan 15 08:07 AM
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