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Maybe I'm hopelessly naive, but why don't the publishers drop their prices by 5-10%? Since Amazon is selling books at a percentage of the cover price, dropping the cover price should theoretically offset the decreasing Amazon discount. I know that books have the price printed on them, but what a great marketing project it could be: "Look, we're dropping our prices across the board by 5%. Go buy a book!"

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or Amazon just keeps it at the same price, making more money.

It was hinted at in the article, but the publisher sells the book to Amazon for less than the cover price. Of course, I have no idea if Amazon's purchase price is a percentage of the cover. But if it's not (and that's what I would have negotiated) then changing the cover price won't affect the revenue to the publisher.

Retailer's purchase price is almost always a percentage of the cover price.

Then I guess it's up to the publisher to do the math and see what works out to more profit in the end: keeping prices the same w/ less volume, or dropping the price and (hopefully) increasing the volumn.

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