Strategically Speaking: How Will E-books Impact Your Bottom Line?
It’s time to sit down and rethink traditional business models. Here are key factors to consider.
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Gross margin is the difference between net sales and the four major components of cost of goods sold. With the elimination of manufacturing and obsolescence costs, gross margin is likely to grow, despite anticipated increases in royalty rates. Put another way, odds are that publishers will eventually see e-book gross margins equal or superior to the current business model because the major components of the costs of producing the printed product will disappear entirely.
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David Hetherington
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