Amazon and Physical Books: Prices are Increasing?

http://bits.blogs.nytimes.com/2012/11/22/amazons-diminishing-discounts/?ref=technology

In a short article in the NY Times Book review online “BITS” section, David Streitfeld writes that Amazon seems to be changing the playing field in the recent past on the prices for print books by decreasing the percent of discount per copy.  Let’s take a look at this aspect from a few different angles.

As we know, Amazon has a business strategy that is completely alien to any other retail strategy in the bookselling business.  This company is using the sale of books, e-books, and  e-readers (ala: Kindle in all its iterations) to capture market share.  Amazon, or rather Bezosazon, are foregoing profits so that all other aspects of Amazon capture revenue and keep the company ledger profitable against the loss suffered in the sale of books and book products.  A little different take from that of Mr Streitfeld would be that Amazon execs could care less about the individual pricing of books.

If you take a loss to gain consumer market, what difference does it make if you are charging a 4% discount, a 7% discount, or a 10% discount?  It all comes down to the fact that Mr. Streitfeld, as the consumer, bought a book that clearly no one else was looking to purchase for $1.32.  The original list price, as he laid out in the article was $40.  Since the author had died and interest had waned, the book was in “Fire-Sale” mode.  There was a problem as Mr Streitfeld lays out, and he received a second copy of the book as well as his shipping payment refund.  The price of the book than went up to $11.32 after Amazon made good on the sale with Mr. Streitfeld.   WIN/WIN for Amazon!

In the larger picture, Amazon has just made Mr. Streitfeld a return customer.  Their Customer Service and prompt resolution of the problem will ensure many other purchases by him in the future.  If you think about how many other times this set of circumstances gets played out, the future of their market-share is a pre-determined success.   This is the brilliance of the Amazon model!

What do you think?  Is Amazon the beast at the publishing banquet?  Is business more than demographics and market-share?

 

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