Book Pricing Strategies
Book publishers need to consider the market, their costs,
and the perceived value of the book before arriving at a retail price for any
Beyond the Dogma of the Fixed Book Price Agreement
After describing the essential features of the book market, a welfare analysis of the fixed book price agreement is given. Allowance is made for the opportunity cost of reading. Theoretically, the agreement pushes up book prices and depresses book sales. However, more titles will be published, particularly of books with low price elasticity and that take a long time to read. Potential advantages of better service, distribution and retail networks seem less relevant. The book market is one of imperfect competition, but even so the cross-subsidy argument is unlikely to be valid. A qualitative analysis of the Dutch situation is given. Tentative conclusions are that one should be more concerned about the number of wellstocked bookshops than the diversity of published titles and that debutantes do not face big barriers to entry. One should be even more concerned about the falling proportions of people reading books. Governments fail to set (quantitative) objectives for the fixed book price agreement, which makes it difficult to evaluate its success and contributes to it being treated as a dogma in the book world and the political arena.
Book Pricing Tool
If you are interested in reprinting a title, it might be helpful to determine the value of old editions according to used booksellers. This tool checks prices at several online booksellers.
Consumer Surplus in the Digital Economy: Estimating the Value of Increased Product Variety at Online Booksellers
We present a framework and empirical estimates that quantify the economic impact of increased product variety made available through electronic markets. While efficiency gains from increased competition significantly enhance consumer surplus, for instance by leading to lower average selling prices, our present research shows that increased product variety made available through electronic markets can be a significantly larger source of consumer surplus gains.
Developing Your Pricing Strategy
The first of a six-part series on pricing
for small retailers from About.com's
Retail Industry site.
Know the psychology of pricing
An article about retailing that covers some interesting facets of pricing theory.
Measuring Prices and Price Competition Online: Amazon and Barnes and Noble
Despite the interest in measuring price sensitivity of online consumers, most academic work on Internet commerce is hindered by a lack of data on quantity. In this paper we use publicly available data on the sales ranks of about 20,000 books to derive quantity proxies at the two leading online booksellers. Matching this information to prices, we can directly estimate the elasticities of demand facing both merchants as well as create a consumer price index for online books. The results show significant price sensitivity at both merchants but demand at Barnes and Noble is much more price-elastic than is demand at Amazon. The data also allow us to estimate the magnitude of retail outlet substitution bias in the CPI due to the rise of Internet sales. The estimates suggest that prices online are much more variable than the CPI, which understates inflation by more than double in one period and gets the sign wrong in another.
Price and Prejudice
Book prices seem to be going up each year, and the reading public is taking notice.
Pricing Strategies on the Web
A study of book pricing at 32 online bookstores over a five month period in 1999. (PDF Format)
Retail Strategies on the Web: Price and Non-price Competiton in the Online Book Industry
The results of a small-scale study of the physical and Internet channels.
Some Observations about Print on Demand Pricing
Jim Cox of the Midwest Book Review discusses the over pricing of POD books, making them non-competitive in the book market.