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It’s worth considering different ways of looking at things. In particular books and money.

Why do Publishers focus on raising/conserving prices instead of cutting costs or increasing volumes?

Consider the actions Publishers are taking -

1. Raising eBook prices.
2. Not releasing eBook versions of books.
3. Trying to delay eBook releases. 
4. Disabling the Read To Me feature.

The underlying attitude is to save the price point of books at any cost. Instead of focusing on the amount of value for money books can provide Publishers are focused on keeping the price point stable.

It’s supposedly because books cost a lot more to create than people think.

• Paper, Ink, Labor – all the costs are going up.
• There are huge risks.  
• Marketing, Distribution, Returns, Retailers all take a toll. 

However, here’s a question -

Can’t profits also be increased by cutting costs?

Publishers haven’t really done anything to cut costs – There are lots of ways to use technology and intelligence to make the creation, publishing, and distribution of books faster, cheaper, and more effective.

Surprisingly, Publishers aren’t doing any of that.

Publishers aren’t trying for economies of scale either

A third way to increase profits is to increase the value proposition of books and thereby increase sales volume.

You would think Publishers would promote $20 bundles that include the physical book, the eBook, and the audiobook. The increased value proposition for customers would lead to a lot more sales.

Publishers would almost certainly make more than they currently do from $24 hardcovers, $10 eBooks and $20 audiobooks sold separately (which can still be sold as stand-alone products). 

Yet Publishers aren’t trying to increase sales volume either.

Why is it that Publishers are making this great last stand on book pricing when they haven’t explored cutting costs or increasing sales volume?

Transitioning to Money and Personal Finance 

It’s easy to point at Publishers and their focus on raising/conserving prices and not trying to cut costs.

It seems so obviously inefficient and short-sighted.

Well, what about us and money.

Why do people fixate on saving money instead of earning more?

The whole concept of personal finance and money intelligence revolves around -

1. How to spend less. 
2. How to save money.
3. How to cut costs.
4. Finding deals and bargains.

Let’s say a person buys into this and starts spending 5 to 10 hours a week of time and effort and a ton of psychic energy on saving money. It’s what they fixate on and they get very good at it.

That might be better than spending money recklessly – However, it’s Penny Wise and Pound Foolish.

 The real gains are to be made by increasing your earning power

If that same person were to focus on increasing how much they earn and spend those 5 to 10 hours a week and all that psychic energy on how to earn more, you’d see something completely different -

1. They probably wouldn’t save $25 a week on groceries any more.  
2. They would miss out on the great 25% shoe sale.  
3. They would no longer know exactly how many cents they spent on dining out in a month.  
4. The big positive would be that they’d figure out how to increase their income 50% or 100% or more.
5. They might also figure out some way to invest it without paying for bankers’ bonuses and make a killing there.

Is current Financial Intelligence just Financial Handicapping?

All of personal finance on the Internet seems to be focused on -

1. Budgeting and keeping a tab on what you spend.
2. Saving money and deals.

Leave out taxes and you have 75% of your income.

Even with the most amazing budgeting and deals you can never go beyond that i.e. 75% of your income is the most you could ever save.

Realistically, given fixed expenses, you’ll probably save atmost 25% of your income that you wouldn’t save if you weren’t budgeting and saving.

That 25% is nothing when you consider that no such limit exists for how much you could increase your earnings.

You can go up 25% or 50% or 100% or even 200% or more.

There literally is no limit.

Where are the sites that help you increase your net earnings?

Where’s the Mint.com equivalent that shows you -

1. What your work is worth to your company.
2. What share you get and what share people at competitor companies get.
3. What earnings freelancers with your profile make (and how long their hours are).
4. What directions you could take your work to earn double what you currently do.
5. What areas are going to be next year’s $200 per hour iPhone App development.
6. How much the top few in your line of work earn and why they earn that.

Could it be that what passes for financial intelligence is actually financial handicapping.

By making us focus on saving 25% of our income sites like Mint.com are blinding us to the option to double or triple what we earn.

The Last Question

Which would you rather have at the end of 2011 -

1. Efficient budgeting and cutting expenses by 25%. 
2. Increasing your income by 100% or more.

Filed under: Reality Tagged: | money, saving vs earning