Print Pricing Piracy: The Perils of Free Trade

by | Dec 7, 2016

I’ve heard a number of folks ask recently about people offering their print book[1] for different prices — specifically on Amazon. I thought I’d share what I’ve told them.

This question comes in two flavors:

  1. Someone’s offering your book at a price lower than your set price.
  2. Someone’s offering your book at a price above your set price (often WAY above).

Sometimes you’ll see both at the same time.

Econ 101

First of all, let me assure you: you’re not being ripped off. This is simply free trade at its finest.

A quick economics refresher: in the US (as in many industrialized countries), there is no set price for any product or commodity. The producer can name a price (the manufacturer’s suggested retail price or MSRP, also known as the cover price) , but stores can sell that product for whatever the market can bear. [2]

The important thing to remember in book sales is that the distributor/wholesaler (i.e., Ingram or Baker & Taylor, or, for print-on-demand on Amazon, Createspace) pays you for every sale based on the MSRP.

Generally that works like this: a customer orders a book from a store. They pay 100% of MSRP. The store orders a copy from the wholesaler, typically at a 40% discount — this covers their costs. The wholesaler holds onto a 15% cut, leaving you (typically) 45%, which after paying for printing, storage, shipping, etc., goes into your pocket (unless you owe royalties on the title — but let’s not make this even more complex than it is).

I’ll get it for you wholesale

NOW, let’s look at how books are sold on Amazon.

There are a bunch of ways that a title shows up on Amazon’s page. For the purposes of this conversation, let’s suppose that your book is distributed by Ingram. Every book in the Ingram catalog is carried by Amazon — even though it may not be in their warehouses.

Since the Ingram catalog shows the MSRP, that’s the price that goes up on your book’s Amazon page.

Nice!

Sometimes Amazon, in its infinite wisdom, decides that the best price for your book is actually lower than MSRP. [3] So they sell it at a discount. People love a discount, so they buy more books. And Amazon still pays Ingram their 60% of MSRP, and Ingram still pays you your 45%. Got it?

There are also vendors who offer their wares through Amazon’s enormous front end. You may notice these if you look the format tab for your book (or other product) — the one that says “paperback” or “hardcover” right below the description. Sometimes they’re selling used books — it will say “14 used from $XX.XX.” Hey: you’ve already made your money on those. Don’t begrudge the used book market its share.

If you see a link in small type that says “32 new from $XX.XX,” and that price is lower than the MSRP, than some enterprising bookseller is trying to drum up business by offering your book at a discount.

Here’s the thing: you still get the same 45% of MSRP. They are taking a risk by lowering their percentage, hoping that the increase in sales volume will be larger than the per-book loss of revenue.

Make sense?

That’s what’s going on when you see your book at a discounted price. As I said: no worries!

ARR! Prepare to repel scallywags!

But what if the price is higher than MSRP?

Ah. That’s a greyer area, and involves something known in business as “the next damned fool” concept.

The idea is that if I get something I don’t necessarily want at a good enough price, I should be able to find someone else to take it for a higher price — the next damned fool.

On Amazon it works like this: a “bookseller” (and I use the term very loosely) offers your book at a substantial mark-up. Perhaps they’re linking it to your ISBN, in which case it shows up in the “32 from $XX.XX” — but more likely they create a supposedly new product with your book’s cover, description, title — all the metadata that populates your book’s Amazon page except for the ISBN. They also add something to the title — “Special Edition” or something like that. They get a new ID number (Amazon’s ASIN) and sell it for, say, ten times the MSRP. Or twenty times. One associate of mine recently ran into a listing of his $19.95 book for $2250.

I kid you not.

Now what’s the likelihood of someone ordering that book for over a hundred times its cover price? Not high.

But this seller is just looking for the next damned fool — someone who sees that price and wants the book badly enough that they’ll pay it, rather than searching for a more reasonable cost.

Then the seller turns around, orders that book at MSRP or below, and has it shipped directly to their “customer.”

They’ve almost certainly got hundreds if not thousands of these bogus items for sale. All it takes is one or two people buying and they’ve made an enormous profit for almost no investment.

But hey, you still get paid your 45% of MSRP.

A solution

There’s not a whole lot that you can do about this. But if it bothers you (as it does me), then you might consider the following procedure to shut these hucksters down, at least with your title:

  1. Copy down the ASIN for the bogus item. (It’s a ten-letter ID beginning with B0XXXXXXXX.)
  2. Go to Author Central.
  3. Claim the book as yours.
  4. Once Author Central lists the book as one of your titles, use the Contact Us link at the bottom of every Author Central page.
  5. Select the following pop-ups in the page that comes up:
    1. My Books
    2. Update information about a book
    3. Update something else
    4. I want to link one edition of my book to another edition
  6. In the email box that comes up, tell them that you want to link your book (give them the title and the ISBN) with the bogus product (give them the ASIN). [4]

Within a couple of days, Amazon will link the two “editions” of your book — and that $2250 version will be listed right next to the $19.95 version. Wonder which version people will buy?

That should keep any of your readers from getting ripped off.

I’ll be back with my run-down of CSS in ebooks after the new year!


 
[1]Ebooks are a whole other ball of wax. Sorry.
[2]They will occasionally even sell it below its cost to them; this is called a loss leader.
[3]And believe me, they’re not stupid. They lower the price because it will sell more books. They make more money, you make more money, ba-da-boom, ba-da-bing.
[4]In case you’re wondering, yes, you should use this same procedure if you want to link a new edition to an old one, or link the ebook to the print edition, or whatever.
 
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8 Comments

  1. Mike Perry

    One of Amazon’s lawyers admitted to me years ago that it has built-in to its search routines a bias that, in some cases, either only displays a listing with a higher price or puts it higher up the search list. That’s not just with book either. I found Amazon doing that with a Bluetooth headset about 6 years ago.

    I’ve complained to Amazon and gotten nowhere, probably because they make an inflated profit if one of these overpriced books sells. So thanks for giving us a way to counter this ploy.

    Reply
  2. Kathy Steinemann

    David, I LOVE YOU! Yes, I’m yelling. This has bugged me for so long, and now I have a way to solve the problem. I’ll be heading over to Author Central soon to fix this.

    Thank-you.

    Reply
    • David Kudler

      I’m very fond of you, too, Kathy. :-D

      Two other options that people have pointed out:

      You can try complaining the Contact Us option in either Author Central, Advantage/Vendor Central, or Seller CentralYou can try using the Tell us about a lower price link that should be at the bottom of the metadata section of the blackhat/high-priced page for your book

      Reply
      • Kathy Steinemann

        More good ideas, thanks.

        I’ve already been to Author Central to claim the overpriced editions, and I’m waiting for the next step in the process you described. This has irritated me for months, and I had no idea it could be such a simple solution.

        Reply
  3. Andrew Chapman

    Based on the prices I’ve seen for such books — the crazy marked-up prices — it seems to me that these are being managed through automation. The prices are often extremely odd amounts, like $438.77, which tells me that this was arrived at through an algorithm. So, I theorize that somehow it’s all being done automatically by analyzing books for sale, sales rankings, availability, list price, etc. As you point out, it only takes one random sale to make it worthwhile — and if that sale generates a few hundred dollars, that’s two months worth of income in some countries. This entire process could be done with nothing more than some well-written computer code, an decent Internet connection, a server, and a bank account.

    Reply
    • David Kudler

      Absolutely, you’re right, Andrew — it’s automated. I could point you to the apps that are on the market for just such purposes. The thing is, they can be used for legitimate sales — automatically finding popular items and offering them at a discount that still guarantees you a profit. But these folks are just being greedy.

      Reply
  4. Ernie Zelinski

    Interestingly, the print edition of my self-published “How to Retire Happy, Wild, and Free” had been discounted as much as 48 percent off the suggested retail price by Amazon when it was $16.95. But I recently raised the suggested retail price to $19.95 (knowing that this wouldn’t affect sales all that much) and Amazon now discounts it by only 28 percent.

    My other international bestseller “The Joy of Not Working” is published by Ten Speed Press (now owned by Penguin Random House). The book is presently discounted by 44 percent off the suggested retail price of $16.99 by Amazon. If I want to order copies of this book for myself from Penguin Random House, I have to pay 60 percent of retail price plus shipping and I don’t get royalties from Penguin Random House for these copies. In short, it is cheaper for me to order these copies from Amazon since I have to pay only 56 percent of retail price plus shipping. What’s more, I get paid royalties (around 15 percent of retail price) on these copies when I order them from Amazon.

    Reply
    • David Kudler

      Yeah, competition is a funny thing, isn’t it. ;-)

      Obviously, I aimed this article at self-publishers, but it’s obviously something the Big 5 are dealing with as well.

      Reply

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