{"id":822,"date":"2010-01-31T11:58:08","date_gmt":"2010-01-31T16:58:08","guid":{"rendered":"http:\/\/quackingalone.com\/blog\/?p=822"},"modified":"2010-01-31T11:58:30","modified_gmt":"2010-01-31T16:58:30","slug":"marketing-madness-the-price-war-of-2010","status":"publish","type":"post","link":"https:\/\/quackingalone.com\/blog\/2010\/01\/31\/marketing-madness-the-price-war-of-2010\/","title":{"rendered":"Marketing Madness & The Price War of 2010"},"content":{"rendered":"

E-books have arrived.\u00a0 There's no longer any doubt about that because in the wake of the plethora of e-readers, Apple's iPad<\/a> is about to enter the market.\u00a0 The\u00a0bigs have stopped throwing down over whether e-books should exist.\u00a0 Now they're throwing down over how much they should cost.\u00a0 The journey from whether to how much\u00a0marks the milestone of an industry change.<\/p>\n

This week Amazon<\/a> and Macmillan<\/a> locked horns over price point.\u00a0 At the iPad announcement, Steve Jobs indicated that Apple would only take a 30% commission off the sale of each e-book.\u00a0 Under the Apple scheme, publishers would set the price.\u00a0 Boy, howdy, that would suit the publishers just fine but the public - not so much.\u00a0 After the iPad was out and about and had established itself with a sales history, the pricing structure would have given publishers leverage over Amazon.\u00a0 Note that I said AFTER.\u00a0<\/p>\n

One publisher didn't want to wait.\u00a0 Before the stories from Job's launch announcement had gone to print, John Sergent, CEO of Macmillan, decided to go all Godfather on Amazon.\u00a0 Sergent told<\/a> the e-tailer giant to adopt Apple's price structure and\u00a0abandon\u00a0its pricing insanity ($9.99 as the max for an e-book) OR Macmillan would\u00a0do \"extensive and deep windowing of titles\".\u00a0\u00a0In other words, Macmillan said, give us control of pricing or lose the right to sell our newest and most popular books.\u00a0<\/p>\n

Sergent made the worst of all negotiating errors - he made a threat he couldn't or shouldn't back up.\u00a0 And Amazon took him at his word.\u00a0 The e-tailer didn't just give a verbal response, it gave a real world response.\u00a0 Amazon removed the buy button<\/a> from all of Macmillan's titles, e-books and print.\u00a0 Now Amazon sells a lot of e-books, but it doesn't out and out dominate the market because that market is too new,\u00a0it's evolving daily.\u00a0 However, no bookstore on the planet sells the number of print copies that Amazon does.<\/p>\n

Now Macmilian is in a corner without a fallback position.\u00a0 It overlooked the fact that even after the Apple launch, it will still need Amazon.\u00a0 Macmillan reacted by issuing a \"letter\"<\/a> to its authors\/illustrators and the literary agent community.\u00a0\u00a0As the blog Dear Author noted<\/a>,\u00a0the letter missed its most important audience -- the readers.\u00a0Macmillan wants to make money on its product, Amazon wants to sell a lot of its product, and the readers want to buy books and e-books at a fair price.\u00a0<\/p>\n

The delicate balancing act of marketing\/price structure can't work if total control is given to the publisher.\u00a0 Amazon talks about anti-trust and in response, Macmillan cites a US Supreme Court decision<\/a> legalizing retail price maintenance for luxury goods.\u00a0\u00a0Common sense and the free market can imagine more practical reasons for not giving a producer control of the price of its goods.\u00a0 What\u00a0would Wal Mart or Dollar General have to charge for goods if the\u00a0manufacturer set the price?\u00a0<\/p>\n

If Amazon wants to\u00a0make money on volume instead of price margin, that helps the consumer.\u00a0 If Macmillan weren't so short sighted, it would realize that it helps the publisher and its authors too.\u00a0 People all over America (like me) are caught like rats in the trap of the\u00a0economic crunch and we can't afford to pay big prices for books.\u00a0 But the crunch won't last forever (please God) and when it passes, readers will be able to pay more for books.\u00a0<\/p>\n

Macmillan forgot the most important lesson of the Godfather - if you're making the other party an offer it can't refuse, first you better be sure it can't refuse.\u00a0 Amazon could and it did.\u00a0 Be careful what you ask for publishers, because you might get it.\u00a0<\/p>\n

<\/p>\n

The whole price point battle hit home to me in a personal way because I've been struggling with my pricing on Amazon's Kindle.\u00a0 My books (Email Enticement<\/a><\/em>, Brotherly Love<\/a><\/em>, A Faerie Fated Forever<\/a><\/em>, A Golden Forever<\/a><\/em> and A Sixth Sense of Forever<\/a><\/em>) had been selling fairly well on Kindle at a price of $5.99, but sales could have been stronger.\u00a0\u00a0How to achieve that?\u00a0 Well, there are lots of folks like my family waiting out\u00a0the time when\u00a0the family income returns to pre-depression levels.\u00a0\u00a0(Coping with that stress keeps silencing my muse) But there are other families, too many other families, like mine out there. Wouldn't more\u00a0people buy the books if they cost less?\u00a0<\/p>\n

Yes, Virginia, \u00a0I\u00a0decided that I too could become a wholesaler.\u00a0 I could make a little money on a lot of sales instead of making more money on each sale.\u00a0 So at the first of January I dropped my price across the board - not just on Kindle - to\u00a0$4.00.\u00a0 And I waited for the sales to start rolling in.\u00a0 You know what?\u00a0 By and\u00a0large, I'm still waiting.\u00a0<\/p>\n

Smashwords direct<\/a> (sales on the site) has never been a big seller, but\u00a0the site\u00a0is now distributing to Barnes and Noble<\/a>, Kobo<\/a>, Amazon<\/a> and Sony<\/a> (my work hasn't gone to Sony yet and it's already on Amazon).\u00a0 I've had a few sales on a couple of titles at B&N.\u00a0 But on Kindle, nada, zip, zilch, nothing.\u00a0 Yet\u00a0so many other voices on the site say that they price around the $4.00 level and sell lots and lots.\u00a0 They say that volume more than makes up for margin.\u00a0 Apparently,\u00a0what's true for them is not true for me.\u00a0 As usual, for me, the world is backwards.<\/p>\n

Maybe it's a case of my boss being right - but for the love of all that's holy, don't tell him I said so.\u00a0 My boss, the owner and senior partner at our law firm, says that if you charge less for something then people see it as cheap and worth less.\u00a0\u00a0Ye Olde Boss says that people would rather pay more to get something because then it has more value.\u00a0 Yeah, he says that people believe you get what you pay for.\u00a0<\/p>\n

'Course, my boss also refuses to step foot into Wal Mart.\u00a0 If I mentioned Dollar General, he'd act\u00a0as stumped\u00a0as he did the other night when he called and I told him I was watching House.\u00a0 He'd never heard of the show and says he hasn't watched much TV\u00a0in decades.\u00a0 So you'd think he was out of touch and about some things, he is - but business ain't one of those things.\u00a0 The instincts that helped\u00a0him build a practice and that have helped him keep it going when\u00a0around us so many others have\u00a0floundered (2\u00a0firms went under in our area just last week)\u00a0\u00a0may mean that he's right about this.\u00a0<\/p>\n

My hubby cautions me against playing around with the price on Amazon too much because he says their computer equipment may get confused, and I'm sure he's right about that.\u00a0 But zero sales are zero sales.\u00a0 And any part of our income that we be\u00a0bolstered right now has to be bolstered (I hear our creditors saying Amen in the background).\u00a0 So Monday, I'm going to play\u00a0with prices again - on Amazon, Smashwords, and the yet to be launched Google Books<\/a>.\u00a0 I'm going to hike the price a bit, but not all the way up to $5.99.\u00a0 \u00a0I'm going to split the difference and price at $4.99.<\/p>\n

Why that price?\u00a0 It's less than $5.00 but not so much less that the reader might think that the book is one of those very short novels, based on the price.\u00a0 Hubby warned me about that problem and he's likely right about that too (He's right a lot, isn't he?\u00a0 Except when he's wrong of course.\u00a0 Once in a while - when the moon is full and the seventh son of a seventh son rides by the house in a black car at the stroke of midnight [meaning, almost never] - I get to be right too)\u00a0<\/p>\n

So, my new price structure will try to balance my concern about charging a price people can afford with my boss's belief that people think they get what they pay for, AND with my hubby's belief that the price should reflect that people are getting a 100K-word manuscript instead of one of the shorter books for which a $4.00 price is more the norm.\u00a0 WHEW!!!\u00a0 That's a lot for any price to try to balance.<\/p>\n

How will the new price work out?\u00a0 Sales will tell and in the final analysis, readers will get the last word.\u00a0 That's the biggest thing Macmillan forgot - its audience.\u00a0<\/p>\n

I'm trying not to forget mine.<\/p>\n","protected":false},"excerpt":{"rendered":"

E-books have arrived.\u00a0 There's no longer any doubt about that because in the wake of the plethora of e-readers, Apple's iPad is about to enter the market.\u00a0 The\u00a0bigs have stopped throwing down over whether e-books should exist.\u00a0 Now they're throwing down over how much they should cost.\u00a0 The journey from whether to how much\u00a0marks the ...continue reading \"Marketing Madness & The Price War of 2010\"<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[4,6,7],"tags":[],"_links":{"self":[{"href":"https:\/\/quackingalone.com\/blog\/wp-json\/wp\/v2\/posts\/822"}],"collection":[{"href":"https:\/\/quackingalone.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/quackingalone.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/quackingalone.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/quackingalone.com\/blog\/wp-json\/wp\/v2\/comments?post=822"}],"version-history":[{"count":9,"href":"https:\/\/quackingalone.com\/blog\/wp-json\/wp\/v2\/posts\/822\/revisions"}],"predecessor-version":[{"id":831,"href":"https:\/\/quackingalone.com\/blog\/wp-json\/wp\/v2\/posts\/822\/revisions\/831"}],"wp:attachment":[{"href":"https:\/\/quackingalone.com\/blog\/wp-json\/wp\/v2\/media?parent=822"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/quackingalone.com\/blog\/wp-json\/wp\/v2\/categories?post=822"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/quackingalone.com\/blog\/wp-json\/wp\/v2\/tags?post=822"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}