Ebooks Really Are More Profitable Than Print Books

So you remember some years ago there was a lot of hubbub in publishing about how people wanted to pay less for ebooks than print books because of the perception that the distribution and printing costs were so much lower? And the publishers all went crazy telling everyone how books still cost so much to produce because the printing and distribution were actually only a small little bit of the costs of making a book? And then I told publishers to show us the numbers and was met with resounding silence?

Yeah, here's the thing. Turns out ebooks really are much more profitable than print books, but it actually isn't just because of the lack of printing and distribution costs. It's because in the print world, books are returnable, which means that if a bookstore doesn't sell all their copies of something they return it to the publisher for a refund. (Which generally means the book is "remaindered"-- either destroyed or sold to used bookstores for deep discounts.) Because of this, bookstores as a rule overorder everything so that they always have enough to meet demand at no risk, and lots and lots of books are remaindered and wasted. But with ebooks, you only "ship" what you sell, so returnability isn't an issue. So no more overordering, no more destroyed stock. And because of this, publisher profits are actually UP even though revenues are down.

So yeah, while I might have been wrong about the reason, I was right about the conclusion. Ebooks are more profitable than print books. And they should cost less. Period. To anyone who says different, I call bullshit.

Comments

ebooks' refundability

Amazon will refund your money if you don't like an ebook.

Which misses the point.

Which misses the point. Bookstores deliberately overorder books knowing they will return a percentage of them. Customers don't.