Wednesday, March 5, 2014

Profit Margin of a Bookstore

Most of the brick and mortar bookstores charge profit margins that are higher than supermarkets and grocery stores. Books are now available in electronic formats and can be sold throughout the world through online shop. Electronic books are cheaper because they do not need paper. Conventional books can be sold with profit margin as low as 30%. If the books are printed in colors, their prices will be two or three times higher than the black and white books.
In modern era where smartphones and tablets have been part of our daily life, more people buy and read electronic books that are purchased and downloaded online. Because there are no printing, shipping and distribution costs involved in the selling of such books, the profit margin a publisher or bookshop charges to customers can be as low as 5%.
In the US, we see that the role of brick and mortar bookstores is getting smaller. More information is now available on the internet. University students and researchers can store hundreds of titles of books in their tablets and e-readers while they go to campus. The market share of e-books is increasing. Owners of brick and mortar bookstores have to adapt with this situation. They can start to sell e-books too. Although the profit margin is small, the number of books sold to customers will be significantly higher than printed copies.

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