It seems so obvious. There are times, like the day of publication, and maybe a week after that, when people really want to buy your book. And then there are times when you feel that even if you set up a table at the street corner and tried to give the damn things away for free, nobody would want one. We publishers all know this; and we publishers do nothing about it.
We like to print the price on the cover of our books, locking us in to rigid pricing (if that’s the opposite of dynamic pricing) for ever. Well at least until we reprint or remainder — ‘cos who wants to pay the warehouse a couple of bucks a book to sticker a new price over the old one? This is idiotic. I know, I know; we do it because our customers, the bookstores, demand it. But who’s running the show: do we determine the retail price, or do Amazon, Barnes & Noble, and all the independent bookstores magically speaking with one voice? Can’t we at least think about it? Just because we have always done something, we don’t have to keep on doing it.
Leaving aside the face-to-face hondling which can go on in any street market, dynamic pricing got going when American Airlines started trying to dodge the cheap airline effect in the early 1980s. From there it expanded to hotels, railways and car-rental companies. The arrival of e-commerce provides a natural environment for such dynamism in pricing. According the The Economist, Cintra, a Spanish company, has built toll roads in Texas which change their pricing every five minutes so that they can regulate the volume of traffic in order to keep it moving at at least 50 mph. Uber’s car service is built on this — more demand, higher price. Apparently though, they didn’t like the PR backlash when they increased their base price eightfold in a 2013 snowstorm in New York City. In our recent snow they only went up 3.5 times over base.
Amazon appears to use a form of dynamic pricing in their second-hand book business. I have no idea what criteria they use — it almost looks totally random — but if you follow the price of an individual title, you will see if fluctuate up and down. Of course there are multiple dealers all taking part in this marketplace, and the huge drop in price which will come if you wait for it, probably results from an individual dealer decision rather than any incentive-driven dynamic pricing plan. The arrival of the e-book has lead to one area where quasi-dynamic pricing can be applied to books. (Thus far we appear to have been unable to find a way to print a retail price on an e-book — though I have every confidence that many brilliant minds are working away at this issue. I see the German parliament has recently voted to extend price controls from printed books to e-books.) E-books can be offered at discounted prices from time to time. Just sign up for the Kindle Daily Deal and you’ll see. This works amazingly well, and is done in conjunction with the publisher: you can sell thousands of copies of a history monograph by dropping its price to $1.99 for one day only. Interestingly it’ll continue to show an elevated sales pattern for a few days after the offer as people who missed the Daily Deal will still be willing to buy it at its full price. I know Simon & Schuster do this too on their own website, and other organizations like BookBub do also. As far as I know we don’t do this with print books though. Couldn’t we?
But this isn’t real dynamic pricing: the sort that makes you pay hundreds of dollars to get in to Hamilton on the same day as every else in the world, or gets you a bargain flight at 4am. To get to that we’d need to assess demand continuously, and raise the price when it’s brisk, and lower it when, in the absence of demand, we need to generate sales. Maybe the depressing truth is that demand for books is just so insignificant that there’s no dynamism there at all. I don’t think so. Maybe we can’t ape Uber and demand eight times as much when it snows and people want to curl up with a book, but it has always seemed a bit stupid to me that we offer the book for the same price today, when the review in the Times just hit, as we do next month, when everyone’s talking about another book altogether. Add a dollar, can’t you?