Ask HN: Why many kindle books are more expensive than hardcover ones?

Thanks to Apple, four of the five major publishing houses imposed so-called agency pricing on their ebook titles (the give away on Amazon is the phrase this price was set by the publisher). Under agency pricing, the publisher sets the final price to consumers and Amazon cannot discount it at all. Amazon receives 30% of the price on each sale, 70% goes to the publishers, who are setting ebook prices higher than Amazon used to. But print books (and ebooks from random House) are still sold under the old wholesale model. Amazon pays about half the cover price and can set the retail price at whatever it likes, generally at a big discount. Note that in BOTH cases, the publisher has total control over the amount of money it collects on each sale. But under agency pricing, publishers also control the final price to consumers while under wholesale pricing, the retailer gets to set that price.

Why does milk at a gas station cost more than at a grocery store?

Because prices for goods are set based on what the market will bear, not on some formula or notion of fairness.

Because it means more profit, and because the market will bear it.

Amazon does not set the price; the publishers do.

Many publishers set the price of the ebook higher to prevent cannibalization of dead tree book sales. Also, ebook prices drop more slowly over time than do their real world counterparts, so higher initial prices allows them to make more revenue from the title.

Finally, the higher prices are intended to cover the cost of digital piracy. The prices are estimates intended to maintain revenue lost from piracy of ebooks.

apress above (below?) has a response detailing the legal structure of the Amazon-publisher relationship.