A couple of months ago, it was reported that Amazon and book publisher Hachette were in a dispute of sorts. This led to books published by Hachette to be removed from Amazon’s website, have their prices jacked up, or have their shipments delayed. So what’s the deal? Is this just Amazon trying to be greedy?
Well on the surface it would seem that way, but according to a recent post by Amazon, they claim that the reason behind their dispute with Hachette is because Amazon is trying to bring ebook prices down. As it stands, there are many ebooks released which are priced anywhere between $14.99 to $19.99, a price which Amazon thinks is unfairly high for customers.
According to Amazon, “With an e-book, there’s no printing, no over-printing, no need to forecast, no returns, no lost sales due to out-of-stock, no warehousing costs, no transportation costs, and there is no secondary market — e-books cannot be resold as used books. E-books can be and should be less expensive.”
Amazon also applies some basic economic principles about supply and demand and price elasticity, claiming that Hachette, or any other publisher for that matter, would make more money (because more customers would buy it) if ebooks were priced at $9.99. They also claim that Hachette is sharing too small a portion of their sales with their authors.
We suppose at the end of the day with ebooks being priced potentially cheaper than their printed counterparts, customers would win, but it remains to be seen if Hachette or Amazon will budge. What do you guys think? Is Amazon’s argument valid?