| 3 people marked this as a favorite. |
Even without Amazon Prime and its discounts and free delivery - they just cheaper! How come that reseller has lower prices, than original publisher (who prints books and sells them to Amazon)? Or Amazon is the biggest fan of Pathfinder/Starfinder and in such way makes these games more popular?
Let me explain, with fake numbers.
Imagine Paizo writes a book that costs $25 each to have printed. The sticker price on the book is $50.
They then send a batch of these books out too a distributor, who pays $40 each. The distributor then ships out small batches to stores, who pay $45 each. The store then sells them to you, for $50.
As well, Amazon asks for a whole crate of books. Paizo might sell those to Amazon for $35 each because it takes almost zero effort for them to send out a crate, and because the order is so large. Amazon decides they are willing to sell the books to you for $45.
Additionally, if you order direct from Paizo, there's the expectation of a $50 street price, and they are not going to undercut the stores. They do have to individually process and package the book, and box it up, so some of the transport savings they pass on to distributors or Amazon don't apply.
Finally, there are non-printing costs involved. Paizo needs to make a certain amount of profit with any given printing batch in order to pay for the artists, writers, editors, rent, insurance, and all other business costs. If they lower the sticker price of the book, they cut into required profits. If they raise the price to distributors or Amazon, they lose some sales.
This is all carefully designed by each of the players to get things done. Amazon in particular is known for selling things at very low margin while doing massive volume.
| 2 people marked this as a favorite. |
Even more bizarrely (though this was in the early days and may no longer be true) Amazon is known to deliberately sell books at a loss.
The key driver of their profits isn’t (wasn’t?) sales to consumers but revenue from third party booksellers paying to use their online platform. If they lose a bit being known as the cheapest place to go, that’s a selling point when trying to woo online bookstores - which is very high margin business for amazon.
Customer Service & Community Manager
|
| 1 person marked this as a favorite. |
As well, Amazon asks for a whole crate of books. Paizo might sell those to Amazon for $35 each because it takes almost zero effort for them to send out a crate, and because the order is so large. Amazon decides they are willing to sell the books to you for $45.
Sales Associate
|
| 7 people marked this as a favorite. |
Oh hey! This is in my wheelhouse! I know this! Neat-o!
So Anguish has a decent overview (fake numbers notwithstanding), except for this part:
As well, Amazon asks for a whole crate of books. Paizo might sell those to Amazon for $35 each because it takes almost zero effort for them to send out a crate, and because the order is so large. Amazon decides they are willing to sell the books to you for $45.
As Sara mentioned above, we do not sell directly to Amazon. We sell to a distributor who in turn sells to Amazon. Furthermore, it is worth noting that we also have no control over our distributor's relationship with Amazon. So whatever deal Amazon manages to get with their distributor is generally completely opaque to us. This leads us to the very relevant point that Steve makes:
Amazon is known to deliberately sell books at a loss.
This totally happens. It's generally referred to as a "loss leader" and is something that happens all the time. Businesses will choose to strategically sell product A at a loss because it generates much more activity and profits in area/product B.
However in the case of Amazon, specifically, it isn't quite that simple. You see a product listed on Amazon, it is not necessarily being sold by Amazon. This is the Third Party Platform that Steve refers to. The actual seller of any given product can be more or less obvious, so who is taking the loss, or if someone is taking a loss can be unclear. We also offer discounts to distribution from time to time (where we absorb the loss to increase sales), and distributors will offer discounts from time to time (and they absorb the loss to increase sales).
Added to all of this, Amazon sets their prices by an algorithm. When their bot sees a price for a product somewhere that is lower than the price Amazon has for the item, the algorithm drops the price on Amazon. The actual process for this is vastly more complex than that, and also an Amazon trade secret, but that's generally how it works.
Through this business model, Amazon utterly dominates the retail industry, and especially the book industry. You want some Pathfinder books, so you search the internet for them. You see the books you want for super cheap on Amazon and go there to get them. Since you're setting up a shopping cart anyway, you go ahead and get those headphones you've been wanting and a new charging stand for your phone. Maybe a new set of dice as well. Oh, and you should probably take this opportunity to pick something up for that person's birthday next month... and so on.
Tl;dr - This is Amazon being Amazon.
| 2 people marked this as a favorite. |
Thank you, oh benevolent Sara Marie and heinous Cos.
|
| 7 people marked this as a favorite. |
Did we also mention the fact that Amazon undercutting everybody on prices is part of Amazon's plan to drive any and all competition dead and ensure that anything you buy, be it diapers, RPG sourcebooks or crystal meth, is purchased from Amazon?
Because that's totally what they're doing.
RPG Superstar 2008 Top 32, 2011 Top 16
|
Even more bizarrely (though this was in the early days and may no longer be true) Amazon is known to deliberately sell books at a loss.
The key driver of their profits isn’t (wasn’t?) sales to consumers but revenue from third party booksellers paying to use their online platform. If they lose a bit being known as the cheapest place to go, that’s a selling point when trying to woo online bookstores - which is very high margin business for amazon.
While that's true today, in the really early days, Amazon was the only seller on Amazon. 3rd party sellers didn't start on Amazon until 2000.
Also, the loss leader product isn't unique to Amazon, lots of stores do that. While some products are like that, most do turn a profit - Amazon is looking to make money after all, but the difference between Amazon and other stores is Amazon is willing to make much lower margins due to volume.
| 4 people marked this as a favorite. |
They also save substantial money underpaying their workers, paying no taxes, and lobbying for worker protection laws to not apply to them.
| 1 person marked this as a favorite. |
Also if you buy from Paizo, you get a free PDF, which is like getting a $10 discount.
| 1 person marked this as a favorite. |
Also if you buy from Paizo, you get a free PDF, which is like getting a $10 discount.
That should say if you subscribe at Paizo, you get a free PDF.
Also, worth pointing out that they haven't said as of yet whether subscription benefits will change with the edition.