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Enrique Dans

On the effects of technology and innovation on people, companies and society (writing in Spanish at since 2003)

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Why selling books in a store and selling books online are two different businesses

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IMAGE: Lots of books in a bookstore’s street sale
IMAGE: Pexels — Pixabay

I can understand the need to protect companies from creating monopolies through predatory competition, but to impose on Amazon and other online stores seems a bad idea.

Firstly, because there is no reason why books should be subject to different legislation from other products; the fact that they are and that their prices can be changed is simply another way of distorting competition. Secondly, if, in addition to preventing unit prices from being touched, any way of lowering their price is also prohibited for those who do nothing more than increase their availability, then access is simply being restricted, which is no solution either.

Where’s the sense in preventing a company from selling stuff cheaply? Amazon understood from the get-go that adding shipping costs at the end of the transaction led a lot of people to abandon their purchase. To avoid this, it began offering logistics companies high volume in exchange for a discount on their prices, and further subsidized those prices to the consumer at the expense of its own margins. Over time, that evolved into Amazon Prime, a subscription model in which the consumer got a flat logistics fee in exchange for an annual payment.

Enrique Dans
Enrique Dans

Published in Enrique Dans

On the effects of technology and innovation on people, companies and society (writing in Spanish at since 2003)

Enrique Dans
Enrique Dans

Written by Enrique Dans

Professor of Innovation at IE Business School and blogger (in English here and in Spanish at )

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