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The Honolulu Advertiser
Posted on: Monday, July 16, 2007

Huge sales, but skimpy bookseller profits

By Edward Nawotka
Bloomberg News Service

Hawaii news photo - The Honolulu Advertiser
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With J.K. Rowling's "Harry Potter and the Deathly Hallows," the seventh and final book in the series, set for a Saturday release, Scholastic, its American publisher, is printing 12 million copies. Yet what looks to be a virtually guaranteed bonanza won't necessarily trickle down to booksellers. Amazon.com is offering the book at $17.99 — a 48.6 percent discount off the cover price of $34.99 — and has reported almost 1.6 million pre-orders worldwide. With the publisher's discount to Amazon unlikely to go much beyond 50 percent, that leaves a slim profit, though Amazon might still make a little extra on shipping.

Big-box wholesalers like Costco and Sam's Club, as well as regional grocery and drugstore chains, have in the past offered even lower prices, using the book as a loss leader to draw in customers. Barnes & Noble, Borders and other chain bookstores have typically discounted the book by 40 percent.

The booksellers also have to sign a novella-length agreement for the privilege of selling the book.

Among its Draconian provisions: They must keep the novel under lock and key before the midnight launch, and they may not use trademarked "Harry Potter" names to promote it outside the store. (No Diagon Alleys in the parking lot.)