Paizo Price of Paizo PDFs goes up in 10 days

[Velderan]

Pdfs cost less to produce than physical books, allowing companies to increase their margin, that's why the do it. Just like PC gaming, digital distribution is cheaper than producing physical copies of their game. On a $20 item, $3 is 15 percent which is a decent margin differential between physical and digital.

It's not printing free money, but it's certainly more profitable than physical books.

@Morrus would know better than me, but from my perspective the main difference between formats for profitability is how many people are getting a cut and not cost to produce. Paizo prices their books for the traditional model books have been sold through for years now: Paizo sells a bunch of books to a distributor who turns around and sells a smaller subset of those books to a store. Jason Bulmahn went over this concept when he discussed the impact of tariffs, but basically if Paizo pays $5 per book to print, they're selling that $5 book to a distributor for $20 who then sells it to a game store for $40 who then sells it to you for $60. Everyone turns a profit on the sale and Paizo makes $15 in that scenario per book. Since they have their own online storefront, Paizo sells you a PDF directly so they can charge less to make that $15 profit they need since they're not paying a distributor or store to get the PDF to you.

They're not going to charge what they COULD charge to make the same profit margin on a direct sale book because they'd be torpedoing their game store sales.

 

[Cergorach]

It's not printing free money, but it's certainly more profitable than physical books.

Normally... Yes! In Paizo's case, maybe not...

Normally companies sell to distributors, which sells to stores. In the case of Paizo they sell directly, I don't know how much of a percentage of sales that actually is though.

A new rule book costs $70 in print (new price), let's say that it costs $7 to print, ship and store. Normally that would be sold to a distributor for $30, which sells it at $40 to a store, which sells it at $70 to a consumer. $30-$7=$23 in 'profit', thus selling it at $20, and leaving $1 for transaction and webstore costs is no longer an equivalent sale.

Now imagine selling directly to a consumer: $7 to print, ship and store, plus $1 for transaction and webstore costs, that suddenly leaves a $62 in 'profit'. A huge gap in profit for a direct sale PDF and a direct sale physical book. Also, if someone buys a book in a store and a pdf from Paizo the 'profit' is also still less.

*Fictional costs for print, ship, store, transaction, webstore.

 

[Dire Bare]

Pdfs cost less to produce than physical books, allowing companies to increase their margin, that's why the do it. Just like PC gaming, digital distribution is cheaper than producing physical copies of their game. On a $20 item, $3 is 15 percent which is a decent margin differential between physical and digital.

It's not printing free money, but it's certainly more profitable than physical books.

You keep saying that as if you know what you are talking about. Are you a publisher?

 

[Dire Bare]

3+ years and they are inflating the prices by 25%-50%, that's significantly outside of the inflation percentages in the US... The related costs also don't involve the tariff shenanigans... So I wonder if this is due their market share shrinking and/or their policy of the rules being 'free' (Archives of Nethys) and/or that more and more people are moving to digital only (neither needing PDFs or physical books)? If they expect to sell less, the individual prices need to go up, resulting in even less sales, resulting in a vicious circle...

My assumption . . . and we're all just armchair quarterbacking here . . . is that Paizo should have raised prices earlier, but held off. And now that they feel they finally need to do so, they have to raises prices much higher.

Tariff shenanigans aren't over, sadly. Inflation continues to rise, sadly. And there may be other costs Paizo has already absorbed, or will need to.

Price increases suck, especially significant ones . . . but y'all will have a hard time convincing me that the folks in charge of Paizo are chortling in their piles of money as they put the screws to us poor gamers.

 

[Morrus]

Normally... Yes! In Paizo's case, maybe not...

Normally companies sell to distributors, which sells to stores. In the case of Paizo they sell directly, I don't know how much of a percentage of sales that actually is though.

A new rule book costs $70 in print (new price), let's say that it costs $7 to print, ship and store. Normally that would be sold to a distributor for $30, which sells it at $40 to a store, which sells it at $70 to a consumer. $30-$7=$23 in 'profit', thus selling it at $20, and leaving $1 for transaction and webstore costs is no longer an equivalent sale.

Now imagine selling directly to a consumer: $7 to print, ship and store, plus $1 for transaction and webstore costs, that suddenly leaves a $62 in 'profit'. A huge gap in profit for a direct sale PDF and a direct sale physical book. Also, if someone buys a book in a store and a pdf from Paizo the 'profit' is also still less.

*Fictional costs for print, ship, store, transaction, webstore.

Following that logic that 60% of the sale price goes to the distributor and retailer (and those figures are as you say very approximate) buying a physical book directly from a publisher should cost half what it costs from a shop. That doesn’t happen. You can’t undercut the retailers like that if you want them to stock your books.

 

[cranberry]

You keep saying that as if you know what you are talking about. Are you a publisher?

Appeal to authority?...

No, I'm not in publishing, but I know how financials work, I know how math works and I know that producing a non physical product is almost always less expensive than producing a physical product (direct labor, materials and overhead in producing the book itself vs. producing a PDF.) Note, I'm not talking about the cost of the content itself (art, writing, editing, etc), which as far as I'm aware would be the same regardless of the media)

 

[Reynard]

My question has to do with the inconsistent nature of the price increase, not that there was one at all.

I don't think it is particularly inconsistent. They had a threshold for where they decided the price should and could increase, and the things with lower page counts than that were exempt.

 

[Reynard]

Pdfs cost less to produce than physical books

Printing costs money, but 90% of the work prior to printing is the same. You still have to write it, illustrate it, lay it out, edit it and put it through quality control.

 

[cranberry]

Printing costs money, but 90% of the work prior to printing is the same. You still have to write it, illustrate it, lay it out, edit it and put it through quality control.

Yes, I acknowledged that in my post. My argument is all about the cost of producing the physical product vs. the PDF. I explicitly excluded the art writing and editing and related.

 

[Morrus]

I know that producing a non physical product is almost always less expensive than producing a physical product

Yes, that is obvious to anybody. What isn’t obvious, and the info you’re missing, is how much that difference is, and how much of the cost of the product is in development rather than manufacture. But we’ve already had that conversation.