Why e-books often cost more – but not at The Endless Bookcase

This is a big subject so this blog is probably the first of a series.

People often ask me, “Why are e-books so expensive and why do they often cost more than paper books?”

I hasten to add that this is not the case at The Endless Bookcase, where e-book editions are always less expensive than the corresponding paper editions.

First, let’s start with one reason often given by those who charge more. We think it’s an excuse rather than a valid reason.

The reason is that VAT is charged on e-books in the UK and much of Europe, whereas paper books are zero-rated. So if everything else was the same you might expect e-books to cost more by the cost of the VAT – currently a thumping big 20%.

However, everything else isn’t the same. There are extra costs associated with paper books including:

• The cost of printing.
• The cost of transport from printer to warehouse.
• The cost of storage.
• The cost of distribution to customers or bookshops.
• The cost of having the money tied up (loss of interest).
• The cost of having to scrap unsold or damaged books.

All these charges add up to far more than the cost of the VAT, so based on costs alone e-books should be noticeably cheaper.

So why aren’t they? Well, some publishers argue that the price should have nothing to do with the production costs and therefore the reader should be expected to pay “the market rate”.

There are yet more reasons for the difference, some of which raise serious ethical issues. But we’ll leave them for another day.