Three cheers for Philip Pullman for raising this issue. It's quite a long article, and worth reading:
With more than two months to go before Philip Pullman’s long-awaited new novel from the world of His Dark Materials is published, pre-orders have sent La Belle Sauvage flying up bestseller lists. But with booksellers already slashing the cover price in half, the award-winning author has spoken out about how cheap books devalue the experience of reading, and called for an end to the “pernicious” doctrine of “market fundamentalism” if literary culture is to survive.
Pullman is president of the Society of Authors, which is launching a campaign for publishers to stop damaging authors’ earnings by discounting bulk sales to book clubs and supermarkets, and has slammed the cut-price culture in his trade.
“I don’t like it when I see my books sold cheaply,” Pullman said. “But I’d like to think I’m speaking on behalf of all authors who are caught in this trap. It’s easy to think that readers gain a great deal by being able to buy books cheaply. But if a price is unrealistically cheap, it can damage the author’s reputation (or brand, as we say now), and lead to the impression that books are a cheap commodity and reading is an experience that’s not worth very much.”
Virtually all authors have stories of the impact of price cutting at the point of sale. One of the worst offenders is of course Amazon, which is a monster so big that we have to deal with it, like it or not. When I sell my novels to Amazon, the retail monster insists on a 60% discount and insists on taking 3 months to pay following acceptance of the delivery. If I want faster payment, I have to give the monster a 65% discount. So on a £7.99 paperback, it pays me just £3.19, allowing it plenty of room for discounting the book and for selling it for under my RRP. If my print run has been 2,000, that means the printing price per book is about £2. The next piece of iniquity is that Amazon pretends, for the sake of its customers, that it has just one copy left of this particular book, and that there are more copies on the way. That's being rather economical with the truth. The real situation is that it only ever has two or three copies in stock, and that when one is sold, it orders another copy from me as a replacement. The huge Amazon warehouse may contain a lot of stuff, but it sure as eggs doesn't hold many copies of my books! Then it gets even worse, since when I get my order for one new copy to be sent off, I have to deal with it immediately (if I don't the monster starts hassling me straight away) and I have to pay the package and postage costs, in this case amounting to £2.40. So to send one copy of the book off to Amazon, it costs me £4.40, in exchange for which it pays me £3.19. Not a very good commercial deal? Too right.......
The only reason for selling books through Amazon is that I get publicity from it -- the Amazon web-site is where most initial Google searches end up. If you are a new writer and you think it's brilliant if Amazon is prepared to "stock" your books, think again. You probably won't make a single penny from the deal. Philip Pullman has a point.