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Message: <blockquote data-quote="Vanveen" data-source="post: 7776691" data-attributes="member: 6874262">Here's another little tidbit.Thanks to the Thor Power Tools decision in the mid-70s (not making this up), unsold inventory, including books, is subject to inventory tax. That means that if you print a book in 2017, any unsold copies at the end of 2017 will pay an inventory tax in addition to the cost of warehousing them, etc. This has had two profound effects on the book industry: first, most books go out of print more or less immediately. Second, a thriving remainder industry (all those "bargain books" at Barnes and Noble) has sprung up: the publisher sells off old stock, typically about 30 cents a pound, and resellers attempt to resell it. But wait it gets worse. Since the 19th century, booksellers have enjoyed a "returns" policy. Any book they don't sell can be returned to the publisher, typically within three months, for full credit. This is usually quite a lot of books, since something like 5% of titles account for 60-80% of sales (or more). It is also famously difficult to predict what's going to sell in the first place, the reason the policy was created. Ebooks are not subject to any of this. You don't pay warehousing costs or inventory tax. Sellers can't return them. I am having a very difficult time understanding where the "expense" is coming from. Yes, of course you have design costs. On the other hand, *producing* those designs is also an order of magnitude cheaper than print. Pricing here is an attempt to create the illusion of value for an intangible product. That's a well-understood principle in pricing theory, a somewhat arcane specialty of business thinking. Just don't get confused about what's really going on.</blockquote>

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