<p>Kling's maxim: <a href="http://econlog.econlib.org/archives/2009/11/price_discrimin_2.html" rel="nofollow noreferrer">Price Discrimination Explains Everything</a></p>
<p>Who are the sorts of people that purchase at Barnes &amp; Noble? Less price elastic buyers, like those that are purchasing a gift, those less comfortable with buying online, those that value in store recommendations and assistance, and those that just like the in store experience. Barnes &amp; Noble wants to maximize profits, not maximize revenue. Selling to more price sensitive buyers like you means also lowering prices for less price sensitive buyers.</p>
<p>Say the cookbook costs Barnes &amp; Noble \$15 to buy. If they set the price at \$20 they make \$10 of profit selling one copy to you and one copy to the price inelastic buyer. If they set the price at \$40 they make \$25 in profit selling just one copy to the price inelastic buyer.</p>
<p>In summary: <strong>Barnes &amp; Noble targets buyers willing to pay high prices and lowering prices means making so much less per unit sold that they cannot make up the lost profits on higher quantities</strong></p>

CC BY-SA 4.0
2017-01-10T16:17:01.230Z
2021-05-01T21:06:35.023Z
2021-05-01T21:06:35.023Z
BKay
<p>Answer above assumes every buyer gets the same price on a given product. Amazon doesn't work that way. You price check over time, and Amazon isn't stable. Hard to do that in a store. Amazon also knows when I go back to buy and many products have a higher price when I return. If I don't buy at that higher price, it magically drops a week later. And I get an email reminding me of the price cut (back to the original offering price). </p>

<p>A physical store can't do dynamic market pricing like that. </p>

CC BY-SA 3.0
2017-01-11T19:16:10.457Z
I thought this unlikely, but I Googled it and it seems to be true. For future readers, here is a report in the subject on CNN:
http://edition.cnn.com/2005/LAW/06/24/ramasastry.website.prices/ Forbes: http://www.forbes.com/sites/adamtanner/2014/03/26/different-customers-different-prices-thanks-to-big-data/#554e765af31c
Giskard
CC BY-SA 3.0
2017-01-11T18:50:24.567Z
2017-01-11T18:50:24.567Z
Charlie
<p>According to the Authors Guild, Amazon "routinely takes a loss" on book sales to ensure market domination.  <a href="https://www.authorsguild.org/industry-advocacy/amazons-taking-another-bite-publishing-pie" rel="nofollow noreferrer">https://www.authorsguild.org/industry-advocacy/amazons-taking-another-bite-publishing-pie</a>.  This and  other answers probably have bearing on the Amazon vs. Barnes and Noble price differences.</p>

CC BY-SA 4.0
2019-01-28T18:15:01.147Z
2019-01-28T18:15:01.147Z
methodsignature
<p>First, it is about price discrimination, it can mean many things, e.g. consumer not comparing the price , conveniences, branding, logistic capabilities, etc.  Additional marketing is to promote the perception of price discrimination. Depends on the contracts,  author may or may not get additional royalties from additional books sold. </p>

<p>Second, Amazon business model are more than selling stuff. E.g it is also collecting and selling logistics data,  cutting deals on delivery charges, rearranging supplies deals, etc, by skimming huge amount of data and apply correct strategy, they can still making profit than doing the conventional "price differences" sales. </p>

CC BY-SA 3.0
2017-01-11T13:29:08.047Z
2017-01-11T13:29:08.047Z
mootmoot
<p>For my birthday, I wanted a cookbook. So I went to Barnes and Noble and selected it: $40. </p>

<p>Before I got the register I checked it on Amazon: $20. </p>

<p>I started price matching every single cookbook I was interested in and collectively, i could save 60% on Amazon. </p>

<p>So why doesn't B&amp;N just lower their prices already? </p>

<p>Doesn't it make sense to sell 10 products at 0.50 cents each than to not sell 10 products at 1.00 dollar? </p>

<p>Isn't that how that guy who owns all those Family Dollar stores is able to bank? He makes a nickel to a dime for every product he sells but sells many products that he is now banking it? </p>

<p>USNews stated in an article that B&amp;N themselves stated that their prices are so high because they wanna provide for income for their authors and prevent Amazon from becoming a monopoly. Pardon my French, But that sounds like bologna! </p>

<p>Furthermore, they don't price match. Not even with their own online website. </p>

<p>Is B&amp;N slowly slitting its own wrists? Are these stubborn CEOs who just don't want to face reality? </p>

<p>Or is there some economic strategy here? Like they're waiting out something? </p>

<pricing>
Why doesn't Barnes and Noble just lower its prices?
Danny Rodriguez
# Why doesn't Barnes and Noble just lower its prices?

(Asked by: username_0 on 2017-01-10)

For my birthday, I wanted a cookbook. So I went to Barnes and Noble and selected it: $40.

Before I got the register I checked it on Amazon: $20.

I started price matching every single cookbook I was interested in and collectively, i could save 60% on Amazon.

So why doesn't B&N just lower their prices already?

Doesn't it make sense to sell 10 products at 0.50 cents each than to not sell 10 products at 1.00 dollar?

Isn't that how that guy who owns all those Family Dollar stores is able to bank? He makes a nickel to a dime for every product he sells but sells many products that he is now banking it?

USNews stated in an article that B&N themselves stated that their prices are so high because they wanna provide for income for their authors and prevent Amazon from becoming a monopoly. Pardon my French, But that sounds like bologna!

Furthermore, they don't price match. Not even with their own online website.

Is B&N slowly slitting its own wrists? Are these stubborn CEOs who just don't want to face reality?

Or is there some economic strategy here? Like they're waiting out something?

**Tags:** pricing


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## 4 answers

### Answer by username_1 on 2017-01-10. Score: 13

Kling's maxim: [Price Discrimination Explains Everything](http://econlog.econlib.org/archives/2009/11/price_discrimin_2.html)

Who are the sorts of people that purchase at Barnes & Noble? Less price elastic buyers, like those that are purchasing a gift, those less comfortable with buying online, those that value in store recommendations and assistance, and those that just like the in store experience. Barnes & Noble wants to maximize profits, not maximize revenue. Selling to more price sensitive buyers like you means also lowering prices for less price sensitive buyers.

Say the cookbook costs Barnes & Noble \$15 to buy. If they set the price at \$20 they make \$10 of profit selling one copy to you and one copy to the price inelastic buyer. If they set the price at \$40 they make \$25 in profit selling just one copy to the price inelastic buyer.

In summary: **Barnes & Noble targets buyers willing to pay high prices and lowering prices means making so much less per unit sold that they cannot make up the lost profits on higher quantities**


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### Answer by username_2 on 2017-01-11. Score: 4

Answer above assumes every buyer gets the same price on a given product. Amazon doesn't work that way. You price check over time, and Amazon isn't stable. Hard to do that in a store. Amazon also knows when I go back to buy and many products have a higher price when I return. If I don't buy at that higher price, it magically drops a week later. And I get an email reminding me of the price cut (back to the original offering price).

A physical store can't do dynamic market pricing like that.

> **Comments:**
> **username_3**: I thought this unlikely, but I Googled it and it seems to be true. For future readers, here is a report in the subject on CNN: http://edition.cnn.com/2005/LAW/06/24/ramasastry.website.prices/ Forbes: http://www.forbes.com/sites/adamtanner/2014/03/26/different-customers-different-prices-thanks-to-big-data/#554e765af31c  

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### Answer by username_4 on 2019-01-28. Score: 1

According to the Authors Guild, Amazon "routinely takes a loss" on book sales to ensure market domination. <https://www.authorsguild.org/industry-advocacy/amazons-taking-another-bite-publishing-pie>. This and other answers probably have bearing on the Amazon vs. Barnes and Noble price differences.


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### Answer by username_5 on 2017-01-11. Score: 0

First, it is about price discrimination, it can mean many things, e.g. consumer not comparing the price , conveniences, branding, logistic capabilities, etc. Additional marketing is to promote the perception of price discrimination. Depends on the contracts, author may or may not get additional royalties from additional books sold.

Second, Amazon business model are more than selling stuff. E.g it is also collecting and selling logistics data, cutting deals on delivery charges, rearranging supplies deals, etc, by skimming huge amount of data and apply correct strategy, they can still making profit than doing the conventional "price differences" sales.


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