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Why Kindle eBooks Often Cost More Than Hardcovers in Europe

7/23/2012 7:05:40 PM

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If you live in Europe and own a Kindle you probably find yourself depressed quite often when you see that a Kindle edition of some book is more expensive than even a hardcover. Like in the screenshot above. I don’t know what that book is. It’s just the first book on the first page that was shown to me when I went to the Kindle books section on Amazon. It’s 20%+ more expensive in digital form than in hardcover and 45% more expensive than a paperback. So WTF?

Here are several reasons for this. Let’s start with objective stuff and move to the real reasons later.

VAT on eBooks

There’s either no VAT or special (low) VAT rates on books in European Union, but eBooks aren’t considered books for some crazy reason. Apparently there were improvements in this area just recently:

The price that Amazon charges in all its EU stores (including the UK store) has dropped today to 3% from 15%.

This change is because Luxembourg has dropped the VAT rate it charges on eBooks down to 3%, the same rate it uses for printed books.

But apparently someone wasn’t happy about that:

The European Union's executive began legal action against France and Luxembourg on Tuesday for applying reduced tax rates on the sale of electronic books, something it said was incompatible with EU rules.

 

Wholesale prices on paper books

Amazon buys paper books in bulk at wholesale prices so they can sell them at whatever price point they want. But you can’t “stock” 10,000 copies of an ebook. So the same rules do not apply.

“Free” 3G

When Kindles with free 3G launched in US that was a feature. When they extended that offer worldwide it became an obligation. I own 2 WiFi-only Kindles and I’m pretty sure I’m paying for your free 3G with every book purchase.

Kindle is cheap for a reason

Amazon doesn’t care about making profits from Kindle hardware. They make their money from books and part of your book purchases goes to compensate for low margins on Kindle hardware. That’s why everyone who has ever tried to replace a broken Kindle was ecstatic about the quality of Amazon’s support. No questions asked. The worst thing that could happen is that you’ll stop buying books.

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What did I miss?

Don’t get me wrong, I love my Kindle but every time I see a picture like the one above, I feel dumb and depressed. At the very least they could’ve stopped showing me prices for other editions. They know I haven’t bought a paper book in 3 years. Ignorance is a bliss, right?

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