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Technology Stocks : Apple Inc.

AAPL 274.47

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Dec 16 3:59 PM EST

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To: Sr K who wrote (130680)	4/11/2012 11:06:07 PM
From: JP Sullivan	1 Recommendation Read Replies (1) of 213176

The publishers are unhappy with amazon's pricing, not because they are getting less money -- as I understand it, amazon actually sells at a loss -- but because it "cheapens" the product. It's like Neiman Marcus buying Louboutin shoes for say $800 and selling them at half the price. Louboutin still gets its money but I don't think it would be too happy with the arrangement. Most luxury brands are fanatical about controlling their prices as price implies exclusivity and preserves snob appeal. I'm not saying books fall into that category, but the sentiment is still there. Most of the time vendors rely on retailers' desire to make money on products -- buy low, sell high. But then you get amazon whose intention is to lure customers to buy other (profitable) stuff by selling some items at a loss (buy high, sell low). Thus, while a publisher is happy to sell its books to anyone as long as it gets paid, over time, the public will come to expect the $9.99 price (or whatever low price amazon sets) to be the norm and start rejecting higher prices. This will diminish the publisher's ability to price its books, especially the physical copies, higher in the future. -we-

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