Study On E-Books Pricing And Coordination Problems In Book Supply Chain

The advent of e-book is changing the consumers' reading behavior. The process of the e-books' publishing and distribution is different from the traditional paper books. The advent of e-book has prompted many publishers to redesign their traditional channel structures by engaging in e-book sales. This paper is one of the attempts to analyze the influence of this new technique on the book supply chain. The followings are the main conclusions our paper brought.(1) The e-book supply chain is different from the traditional paper book supply chain. The traditional paper books are tangible; however the e-books are intangible products. These two kinds book supply chain are different including the supply chain participant, the supply chain structure, and coordination strategies. From the consumers respective, these two kinds of books are substitutes as well as compliments.(2) The publisher will make the decisions on the style of the books by considering such as the consumer acceptance of the e-books, the market share of p-book-captive consumers, the unit cost reduced when the e-book will be published etc. Because of the cost advantage, the publisher should publish the electronic books as soon as possible; but the decision whether to abandon the traditional paper books should be conducted seriously.(3) The adoption of agency pricing model of e-book will help to alleviate the competition of the books supply chain and the supply chains efficiency could also be improved. The traditional wholesale pricing and the agency pricing are two main pricing activities in practice. These two pricing models are different because the publisher instead of the retailer will price the e-books under the agency pricing model. The difference of prices equilibriums and profit sharing under these two kinds of pricing models are analyzed in this paper. The findings show that the prices and the profits of the whole supply chain are higher when the agency pricing are adopted. (4) There are some strategies which could help to coordination the books supply chain. The relationship of the p-books and e-books indicated that they are more than substitute. The compliment of the e-book will help to alleviate the competition between these two books supply chain and the canalization effect. The substitute of the e-book to the traditional paper books will also bring the publisher more profit by adding no more risk. Some people suggest that the selling season could be divided into two periods, and the e-books are sold during the first period however the p-books are sold during the second period only if the demand of the e-books is high. This strategy will benefit the whole system only if the correlationship between the demand of p-books and that of p-books is highly significant.