Sunday, August 10, 2014

Prices and Profits

The big controversy over prices and profits, as in the conflict between Amazon and Hachette, means little to most of us who write. My previous publisher (I’m now doing it myself) set prices for my books so high even I can’t afford them. (DISCLOSURE: My books are sold on Amazon, and my new one was published using Amazon’s CreateSpace on-line program.) I have set the prices for both paper and electronic versions and I have kept them low because I would rather sell many at a small profit and reach more readers.

For the most part, this is a fight between opposing rocks. Neither is liable to move without some earth shaking of the base. The reason it probably doesn’t touch the vast majority of published writers these days is because the landscape has changed in a major way. I don’t know the per cent age of books being self-published as opposed to “traditional” publishing, but a review of titles offered on sites such as Amazon indicate more and more of us are heading in that direction. Not that it guarantees good or bad writing. That is still up to the writer. I’ve read far to many books in my lifetime, published by “traditional” publishers, that were poorly written and edited, full of typos and “the almost right word.” It is something one finds increasingly wherever words are published. When I read a book that has full throttle promotion behind it, and I read that the character “put on the breaks,” I do wonder if the copy editor really knows what is being presented. “The almost right word,” again.

But back to the big battle between rocks. The crux of the matter seems to be who sets prices, and how fair those prices are to author, publisher, seller and (oh, yes!) buyer. I understand, from the publisher’s point of view, that there are people who must be paid, profit that must be made if the company is going on to publish more books and distribute those it produces. From the retailer’s side, it is axiomatic that lower prices bring more sales.

There used to be a maxim in retail that said, “We lose money on every item, and make it up in volume.” There is truth in that if you base the money lost on the reduction in price from the “MSRP,” the manufacturer’s suggested retail price. You see it all the time on ads for automobiles, and volume discount stores. You seldom find it in stores that must pay a high wholesale price to be the first outlet for a product. Books especially, become “remaindered” rather quickly and soon show up at discount counters in all kinds of stores today. But nobody does business at a true loss for very long.

The other part of this controversy lies in what one means by “publishing.” To the copyright office, as I read their information, publishing occurs the first time you read or show an original piece of writing to others. It is documenting and proving that date which is important. How it is published is another matter. As more and more people do their reading on their computers and pads and phones (and probably on their eyeglasses) the idea of “publishing” has less and less to do with paper, and everything to do with bits and bytes. Now, and at least for the immediate future, the bits and bytes themselves are free. The programs that convert them into whatever they are meant to represent are the things one pays for, as well as much of the information they convey. Whoever owns that can set whatever prices they feel the traffic will bear. Those decisions are related to how much it costs to buy the product that is being resold. And that, if I remember my classes in economics, is an accumulated number that includes the manufacturing costs, delivery costs and profit. Nobody does business for very long without profit. Profit, you probably know, is what keeps the wheels rolling. If the MSRP is too high, sales fall. If price is too low, producers fail. Somewhere there must be a balance. That, it seems to me, is what the present controversy is all about: who is willing to take the hit to keep the presses (and profits) rolling? If the producer can’t profit sufficiently to keep the doors open, the seller will have noting to sell. That includes writers who publish directly via the internet.

While few of us expect to become rich and famous from our writing, it is something to which we aspire. But we are unique: we are sole proprietors who, for the most part, have no raw materials costs (at least for physical materials), and no shareholders (unless your family depends on what you earn as a writer to put food on the table). We depend on those who sell our wares and deliver them in whatever forms are available to obtain the best price consistent with the greatest number sold. That’s why I, at least, don’t see a “side” I can claim in this contest.

Unlike automobile manufacturers and clothing makers and the rest, writers will keep on writing regardless of the numbers.

It’s what we do.

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