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Message: <blockquote data-quote="JohnNephew" data-source="post: 427399" data-attributes="member: 2171">Re: Re: Re: Re: Re: Higher prices?Here's how it works.  The traditional breakdown is 40% of cover price for the publisher, 10%-15% for the distributor, and 45%-50% for the retailer.  Remember, the retailer is taking risk on those books -- if he buys two copies of our latest release, "Lean and Hungry," and only sells one, he's not making any money.  In fact, he's lost it -- even if he had a 50% discount, he had to spend the money on rent, employees, insurance, and all that.So how does Amazon do it?  Part of it is volume, just like Walmart or Target.  Another part, though, is that online sellers often do not risk any money on inventory.  They only place an order with a book distributor after they've already collected money from you, the consumer.  The book distributor has full returnability (like Clark was mentioning) -- they have the books on their shelves, ready to deliver to Amazon or B&N.com in a day or two, but if the books sell they just send them back to the publisher for a full refund.If we got a bigger percentage of retail, yes, that would give us more money per item sold.  BUT...we would have much higher costs, and without the market penetration and "sales force" of stores we would sell fewer copies -- the result being, we would probably come out behind in the end.  Here at Atlas, we actually outsourced our mail order operations entirely -- it's now handled by Warehouse 23.  We're actually making more money from mail order than we did before, because Warehouse 23 is focused on doing mail order sales, and they do it a lot better than we did.  They have online ordering, people devoted to customer service, answering customer queries, etc; plus they combine orders for our games with orders for SJ Games and other products.  In contrast, every time we did a mail order in the old days it interrupted other work.  Warehouse 23 not only sells more books than we did doing mail order ourselves, but after taking their cut we actually make more profit from their sales than we did from our own, and with a fraction of the work!</blockquote>

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