ONLINE COMPETITION
In honor of my obsession with my book's Amazon ranking, my new NYT column looks at research that uses Amazon and BN.com rankings to gauge how price changes affect the quantities of books sold on each site:
Not surprisingly, the researchers found that higher prices mean fewer sales. But the effects are notably different at the two sites. Both sites lose customers when prices rise, but Barnes & Noble loses a lot more.
A 1 percent price increase at BN.com pushes sales down 4 percent, making price rises a bad idea. By contrast, the same increase at Amazon reduces sales by only 0.5 percent--a net revenue gain.
Lots of interesting info for those in the book business, with implications for how all sorts of businesses might be affected by online competition.