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Harry Potter Books – Cheap!

The last Harry Potter book will be a runaway bestseller but will likely not make booksellers and money, Reuters reports.

Millions of people will descend on stores for a copy of “Harry Potter and the Deathly Hallows” in July, but deep discounts mean many will struggle to turn a profit from the jamboree.

“Everywhere you go there is huge, ridiculous discounting by the chains,” said Graham Marks, children’s editor at the British-based trade magazine Publishing News. “They are literally not going to make one penny out of the book. It is stupid – just throwing money away … The world has gone mad.”

Online retailer Amazon.com (up $0.00 to $73.24, Charts, Fortune 500) and Wal-Mart Stores Inc. (up $0.00 to $50.08, Charts, Fortune 500) have slashed nearly 50 percent off the book’s $34.99 list price, forcing many independent booksellers to follow suit to stay competitive. Barnes & Noble Inc. (Charts, Fortune 500) and Borders Group Inc. (up $0.00 to $20.23, Charts), the world’s largest booksellers, are selling it at 40 percent off.

Such price cuts drive sales, but usually result in minimal profit margin, something Jefferies & Co analyst Tim Allen said typically happens on every bestseller. “It’s so discounted, there’s minimal, if any, gain,” Allen said. “Retailers try to make up the shortfall by marketing loyalty cards, which they hope will entice shoppers back into their store.”

Great news for consumers, if a bit odd. Turning the most popular books into loss leaders strikes me as an odd strategy but, presumably, retailers have found this an effective way to get people into the store to buy less publicized titles.

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About James Joyner
James Joyner is the publisher of Outside the Beltway, an associate professor of security studies at the Marine Corps Command and Staff College, and a nonresident senior fellow at the Atlantic Council. He's a former Army officer and Desert Storm vet. He has a PhD in political science from The University of Alabama. Views expressed here are his own. Follow James on Twitter.

Comments

  1. legion says:

    Especially odd, considering that the sort of people who hustle to get such a book on the first day – or even midnight sales! – would _gladly_ pay full list price to get it. I mean, I understand the concept of a loss leader, but this seems like the wrong tool to use for it…

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  2. I used to work in a bookstore and survived a couple Harry Potter nights. So I’ve been pretty interested in this story.

    The bookstores have to discount deeply or they won’t sell any. Wal-Mart and Target will have the book, but even grocery stores and some gas station/convienece stores will sell it. There are too many places consumers can get the book.

    There’s the loss leader aspect, but Barnes & Noble and Borders also have to maintain their image of being THE place for books. It would really hurt their brands if on the biggest night of the year for publishing few were at their bookstores because they weren’t selling Harry Potter competitively.

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  3. floyd says:

    Considering the labor involved $50 is Way high, I thought Gutenberg cut the cost of producing a book,or is the latest Harry Potter longhand?

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