(no subject)

[tinyjo]

I can buy Cloud Atlas for 3.73 on Tesco.com. That can't be making any profit, surely?

Comments

[bugpete.livejournal.com]

Ah! I know this!

Retail is £7.99. The standard discout for a new title in a promotion (like a 3 for 2 at Waterstones for example) is about 55% due to the high profile the book is guarenteed, taking the unit cost down to £3.60. Tesco's probably get a bigger discount since they buy relatively few titles in massive bulk sent to one warehouse, rather that piecemeal to lots of stores (and the publisher will just increase the print run by a few thousand so everyone wins thanks to economies of scale). Also, remember that Tescos runs a very tight profit margin on most of their stock hence the low prices, so making 10p on a paperback is probably one of their high profit items.

It's not necessarily a good thing (authors make less money on high-discount sales, for example) but that's how it happens.

And yes, this does mean those full price books you buy are sold at a massive profit, but how do you think all those books that aren't sold immediately are paid for, eh?

[tinyjo.livejournal.com]

Ah, I see. So there is profit but it's not much. I guess you're right - Tesco are using a different business model to Borders so it does make sense.

And yes, this does mean those full price books you buy are sold at a massive profit, but how do you think all those books that aren't sold immediately are paid for, eh?

The eternal connundrum. It's the same with music. I get irritated when they charge me £4.99 for a single but that's the only way they can afford to have tonnes of singles that flop I guess. It's a balance to be struck between pricing things so people will try them out and covering your losses on the flops with profits on the best sellers.

[bugpete.livejournal.com]

If I remember rightly, the end-of-the-day (can't remember if it's net or gross...) profit after all costs were deducted for a high-street Waterstone's was about 7-9% even when the books were supplied at 35-55% discount, and this was in the days before mass discounting to customers.

It gets more interesting at Amazon where they sell what a high street bookseller would call "bread and butter" titles at silly discounts purely to get people in - they then make theirt real money on all the stuff the high street can't stock which they sell at full price.

(I really should write a book about this...)