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The problem with deep discount ebook deals

Deep discounts need to be associated with some sort of return.

This post originally appeared on Joe Wikert’s Publishing 2020 Blog (“What Good Are Ebook “Daily Deals” & Other Deep Discounts?“). It’s republished with permission.


Kindle Daily DealI admit it. I check Amazon’s Kindle Daily Deal every day. Every single day. Why? As a publisher I’m curious to see what they’re offering and as a consumer I don’t want to miss out on a great deal. (In the spirit of full disclosure, at O’Reilly Media we offer an ebook or video deal of the day too. In fact, our program was in place long before Amazon started theirs. Everything I’m about to say below pertains not only to Amazon’s program but O’Reilly’s and everyone else’s as well.)

As a publisher I worry about the mindset we’re reinforcing that content needs to be deeply discounted to garner customer attention. Amazon started this thinking by pricing so many Kindle editions at $9.99 even when they took a loss on each sale. And now the Kindle Daily Deals are often priced at $1.99-$2.99 or less, so the effective discounts off digital list price are 80-90% or higher.

You might ask, “what’s the harm”? After all, brick-and-mortar retailers of all shapes and sizes have offered deep discounts as a way of getting the customer into the store. That’s why a grocery store sells a gallon of milk at a loss and hopes that you’ll pick up several other profitable items between the dairy section and the checkout counter. And that’s the problem.

When I go to the grocery store I always wind up buying something more than what I went in for but that never happens when I buy online. I find I’m willing to let more items catch my eye in a physical store than an online store, so impulse buys are the norm for me in a physical store. When I’m online I’m much more of a destination shopper. I have something in mind. If I find it at the right price I buy it and nothing else.

So I’ve now bought three or four of the Kindle Daily Deal titles but they were all bought alone as single-title transactions. Each day when I check the Daily Deal I’m greeted by plenty of other products and offers on Amazon but I don’t bother with any of them.

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You might still say the deal is good for both Amazon and that day’s publisher/author. I’m not so sure. One way of measuring that would be monitoring how long the discounted title continues to sell through at higher levels after the discount ends. I don’t have any statistics to prove this (since Amazon doesn’t share the data) but just watching Amazon’s Kindle bestseller list tells me the Daily Deal titles typically stick around the top 5 or so for another day or two and then pretty much disappear from the top 25-50. Maybe they’re still selling at a higher rate than they did pre-promo but if that’s the case you’d think Amazon would be playing that up with publishers and authors. I haven’t heard a word from them about it.

Meanwhile, the Amazon program is causing me to change my behavior, but not in a good way. I used to take a closer look at the Amazon home page for other campaigns but now I pretty much check the Daily Deal and head out. To make matters worse, one of the recent Daily Deal titles was one I paid full price for several months ago. That one left a bad taste in my mouth all day.

I should point out that I’m a fan of discounts and promotional campaigns … as long as they lead to something more meaningful than a one-and-done transaction. So why not make these deals part of some membership program? There are a lot of directions that could head in. For example, if I buy five books at regular price I get the sixth one of my choice for only $0.99. Or what if the Amazon Daily Deal was always priced at $2.99 to $4.99 but if I’m a Prime member I get it for $0.99 cents? In that model the general public still gets a deal (albeit not as deep a discount as today) but customers are encouraged to join a membership program that should lead to even more purchases down the road.

That’s all I’m asking for. Let’s get away from these one-product deep discount campaigns and start thinking about how to build a much more extensive relationship with our customers.

P.S. Again, since O’Reilly offers an ebook deal-of-the-day program I’m going to see if I can grab our head of online, Allen Noren, to join me in a TOC podcast where we can talk further about our results, what works, what doesn’t, and how we might want to think about tailoring it for the future. Stay tuned for more details on that podcast interview.

Associated photo on home and category pages: Bullring – Selfridges lit up in the evening – Sale by ell brown, on Flickr

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  • Dmitriy Arsentiev

    Hello, Joe.

    Make the experiment: close your O’Reilly-Deal-of-the-the-Day program and look at conversion.
    I mean conversion from visitor to buyer. Let us denote conversion as K.
    Comapre Kdeal-of-the-day-is-on and Kdeal-of-the-day-is-off. I’m sure, you will be despleased with Kdeal-of-the-day-is-off.

    Have you got any instruments to measure loyality of your site reach? I guess you have. OK.
    Make the experiment: close your O’Reilly-Deal-of-the-the-Day and look at your loyality diagram.
    I’m sure you’ll be displeased too.

  • Mark Carey

    One thing that distinguishes O’Reilly from Kindle Daily deal is the technical content of the book. There is a clear value from a good technical book that usually ends up being rewarded in a professional sense. A lot of other books are often marketed in a way that I see their value as very limited or non-existent.

    I’ve been a regular buyer of O’Reilly books for 15 years now. The ebook deals allow me to buy books that I otherwise would not buy. It also allows me to recommend purchases of some books to people who otherwise would turn to torrents (which I think we all agree paying customer is better than pirate).

  • http://vulcanears.com/ William

    I’ve bought O’Reilly books for my ipod, just because you guys had them priced at $5 for the app version and I thought they might be interesting. In some cases, this is books that I wouldn’t have picked up had they cost even $10, so I’m definitely spending more than I would have without the deep discount :-)

    I do kinda like the membership program idea..of course, part of that could be because I already have Amazon Prime..

  • anon

    I don’t think that the comparison between retailers of goods and a website delivering ebooks is a good one. I think it might be better to compare an ebooks seller to an apple itunes store. You have to remember that once you get an ebook in pdf form, replicating it is completely free…so as long as we had physical books, the previous comparison made sense; but now it really doesn’t…

  • Mat

    I just had an impulse buy on oreilly.com a few days ago because of discounts, and that happen to me a lot on well designed and highly regarded commercial websites
    Guess your point is maybe biased toward your personnal experience, a generation/country/cultural issue?