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Amazon.com or a Bookstore?

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- 2001.03.15 - Tip Jar

I buy most of my DVDs from Amazon.com, but I usually pick up books at the local Barnes & Noble.

What's up with that?

Partly it's a matter of scale. Those DVDs usually cost $10-20 each, while a paperback book is often $6-7.

The Cost of Fiction

For instance, I picked up Time Scout by Robert Aspirin and Linda Evans while on vacation in January. The paperback sells for $5.99; I would have saved nothing at Amazon.com and added shipping to that. (What's up with that - no discount on a $5.99 paperback?)

A couple weeks back, I picked up Wagers of Sin, the second Time Scout novel. This cost me $5.99 at Barnes & Noble; Amazon.com sells it for 60¢ less and then adds shipping.

On Tuesday I returned to Barnes & Noble to pick up the last two books in the series, Ripping Time and The House That Jack Built. Each is a $6.99 paperback. Each would have cost $6.29 at Amazon.com.

With sales tax, my total cost for four books purchased at a "bricks & mortar" establishment came to $27.52. If I'd ordered them from Amazon.com, I would have paid $23.96 plus shipping, which probably would have absorbed the entire $3.56 difference.

If I read best sellers or trade paperbacks, the story might be different, but I usually buy mass market paperbacks* - unless the hardcover is on close-out for $6 or less.

* Mass market paperbacks are the smaller size popularized by Pocket Books and others. Trade paperbacks are larger, usually 5.5 x 8.5" or 6 x 9".

Having worked over eight years in publishing, I know there's good money in books. Not only is the profit margin usually 40%, but reseller discounts can go past the 50% mark depending on volume and return options. In selling me $27 worth of books for $24, Amazon.com probably makes $7 while I save $3.

Of course, there's also the very real possibility they'll have to pay a 5-15% affiliate fee, which could reduce their profit another $3.60. Making just $3-4 on a $24 sale isn't that good for the bottom line - they have to pay people to process the orders, pay for a shipping box, etc.

The Cost of Movies

Now let's look at the Star Trek videos I collect, DVDs containing episodes of the original TV series from the Sixties. These are $20 discs that Amazon sells for $14-17 each. I usually order at prerelease pricing, which is usually $13-14, and I order two at a time, since that's how Paramount releases them.

I end up with $40 worth of DVDs just a few days after they're released at about $30-31 total cost. I'm saving a lot more than I would have on that stack of Time Scout novels, and Amazon.com is probably making more money in the bargain. (I'm not a video insider; I don't know how good or bad the markup is on DVDs.)

Unlike $7 mass market paperbacks, Amazon.com can make decent money on a $20 DVD - and probably a $17 CD as well. That's where the profit is.

And that's how I'll continue buying: pick up the mass market paperbacks locally, but look at Amazon.com when it's time to buy CDs, DVDs, and more expensive books.

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Dan Knight has been using Macs since 1986, sold Macs for several years, supported them for many more years, and has been publishing Low End Mac since April 1997. If you find Dan's articles helpful, please consider making a donation to his tip jar.

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