Mac Musings

Amazon.com or a Bookstore?

Daniel Knight - 2001.03.15 -

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.