A thrilling discourse upon authors’ rights and the financial structure of publishing

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CLICK HERE FOR AMT273

We apologise to Dave for answering his question about book prices in AMT270 in a way that did not please him to the fullest extent:

I would have preferred to hear your views on why the author of a book was selling at a price he knew could be beaten, signed or not, by a retailer he must have had some agreement with via the publisher. He also has a choice of whether to sell his books to Amazon or not.

I know it is not quite as simple as that but generally, online discount stores only get away with it because the publishing industry sells at a heavily discounted price to them. Or am I missing something?

You are a bit, Dave. Firstly, you’re assuming that authors have dominion over such things, whereas practically none of them do. In the corridors of publishing power, authors are the carpet tiles.

But why would authors, and publishers, choose not to sell through Amazon? Both authors and publishers want to sell as many copies through as many retail outlets as possible, and Amazon has become the biggest book-seller of them all.

Secondly, you’re getting yourself into a muddle about the pricing structure, so here’s a riveting precis of how that works:

The publishers set a cost price for a book. Every retailer that stocks said book buys copies for the cost price.

The publishers also set a Recommended Retail Price (RRP), but note the word ‘recommended’: retailers aren’t obliged to sell a product for that price.

Amazon has lower overheads than other retailers, hence it is able to slash the price of a book so it’s barely more than the RRP. Other book retailers then have the choice of selling fewer books, or trying to match the market-dominating price-slashers Amazon. But whichever tack they take, they’re making a loss, and this is one reason why there are far fewer booksellers around nowadays.

None of this should affect the author if they have a good contract in place, in which it is specified that the author is to be paid royalties as a percentage of the RRP, not the sales price. (Of course the usual reason why none of this affects authors is because hardly any sell enough copies of their book to receive any royalties at all.)

Hope that clarifies, Dave. It IS quite a dry explanation, so perhaps now you’ll be happier that we took a different tack answering your question in the first place.

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