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Understanding Online Bookstores and Virtual Inventories

Posted by Brittany Lavin on Thu, Nov 11, 2010 @ 05:00 PM

The internet has created a virtual reality where things are not always as they appear to be. Authors may do did an internet search for their books to see what would pop up on the Googled-web.  To their surprise, they find their published novels listed on several website virtual bookstores.  What was most disturbing was that the virtual bookstores showed several copies of his books, both new and used, available for sale on the internet at deeply discounted prices.  This was especially alarming to the authors since their monthly royalty statements didn’t reflect these wholesale orders for their books.

The reason for this accounting difference is because many online bookstore sites never actually purchase any of the books they show in their virtual inventory which shows how many copies of a book are available for their customers to purchase.  Whatdescribe the image happens is when they receive an order for a book they have listed on their site, they place an order for a single copy of the book from Ingram, and then Lightning Source prints the book.  It’s then shipped to the online bookstore, and they, in turn, send it to the customer.  The customer pays the online bookstore, the bookstore pays Ingram, Ingram pays Lightning Source, Lightning Source pays the publisher for the right to produce the book, and then the royalty on the selling price of the book is paid to the author.

Many of the online bookstores only have a virtual inventory of books which greatly reduces their overhead.  Their lack of a significant capital investment in an on-shelf inventory allows them to offer titles at discounted prices.  The bulk of their listed inventory is virtually available from Ingram and produced by Lightning Source when a customer orders the book.

The used books they offer for sale aren’t really used; in fact, they’re often new books that have been discounted a dollar or so as another inducement to entice the customer to order – like free shipping on all orders over a certain dollar amount.  This is a variation of what is known in retail marketing as a “lost-leader.”  

Unfortunately, there is no way of controlling when or if an author’s book is added to any of these online bookstores. 

Photo by:  ginnerobot

Tags: infinity publishing, infinity, self publishing, bookstores, books, authors, self publishing companies

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