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Amazon vs WalMart and the $9 book

October 19, 2009

Last week, Amazon and Walmart began a battle of the behemoths as both brought prices on bestselling hardcovers down down down, ultimately to just about $9. 

It’s going to be interesting to see this play out.  Like the WSJ article suggests, it’s not just a book battle.  They’re only talking about low pricing on 10 books, not the millions that Amazon sells, or the 100’s that WalMart stocks.  The battle is more likely to be played out in other areas of the store where profit margins are more easily manipulated for the store’s gain. 

But I do see implications for publishers.  I don’t work for a publisher falling into this category, but I don’t imagine that they are taking a hit on the prices offered here.  Rather, WalMart and Amazon are taking the discount out of their profits, which at some point I suspect the books become a loss leader for them, leading customers to their marketplaces to buy more profitable items.

It does cause us to look at the $9.99 defacto price for ebooks as potentially a price that customers are looking at as the right price on bestsellers.  Will we lower prices to meet that?  Perhaps the question to ask is how we can publish to it.  Expect to see fewer of the 1000 page “mega-value” type books, and more of the “just what you need” titles in non-fiction reference.  Books where you can offer a lower price point, not by taking a margin hit, but by creating a product for that price point.  The implications are different for fiction, but I imagine that these publishers are having these discussions as well.  Creativity, while keeping in mind the needs of the customer, is what will keep publishers and publishing relevant.

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