Amazon runs the numbers to convince you that e-books should be cheaper

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Daniel Cooper
July 30, 2014 6:26 AM
In this article: Amazon, e-books, Hachette, Kindle, Price War
Amazon runs the numbers to convince you that e-books should be cheaper
Amazon Kindle

After unsuccessfully trying to charm authors, Amazon is now appealing to its customers during the ongoing war with Hachette. The retailer has revealed the reasons behind the spat, i.e. cheaper e-book prices, and the noble intentions behind it. Using its vast archive of data, the company believes that titles that, surprise, surprise, are priced at $15 won't sell as well as those that are priced at $10. As obvious as it sounds, the company's data says that for every 100,000 copies of the book that are bought for the higher price, 74,000 more copies would be bought at the lower figure, making a total profit of $1,738,000. Given that e-books incur no printing, warehousing or transportation costs, Amazon feels that it's a fair trade off.

The company is also opening up about its proposed revenue split with publishers, saying that both Hachette and the author would receive 35 percent of the profits, or around $60,000 in the example above, with Amazon taking the remaining 30 percent ($52,000 as commission. The Kindle team, however, doesn't believe that the publishers are playing fair with their talent, keeping a bigger portion of that pot for themselves. Another way that Amazon would like to drive a wedge between publishers and authors is by pointing out that the cheaper books have a much better chance of appearing on the bestseller lists -- so authors should be insisting their books are sold for $10. Of course, Amazon didn't say how many titles in its e-book library regularly make 100,000 in sales, so perhaps this is all a bit of very wishful thinking.

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Amazon runs the numbers to convince you that e-books should be cheaper