Say Goodbye to the eBook Middleman: Wholesalers Don’t Like the Agency Model

ingram-digital.pngAnother effect of Apple’s entry into the eBook business, and of its agency model (through which publishers and Apple split sales 70/30 after publishers set the price), is that wholesalers, like Ingram Digital, are put in a really bad spot.

Why, wonders Slate‘s The Big Money blog, would retailers buy eBooks from wholesalers like Ingram Digital (which does a lot of this kind of thing–distribution of eBooks to various retailers), with whom they’d have to split their 30 percent take, when they can just buy the eBooks from the publisher and keep the whole 30 percent?

Here’s an excerpt: “If you’re a retailer, you can get the e-book from the publisher and keep 30 percent of revenues or get it from Ingram and fight over how to split the revenues. Since Ingram no longer has to warehouse and ship–let alone sell–the titles to you, the retailer is going to get the e-books directly from the publisher.”

Of the big publishers, only Random House is still holding out on signing up for the agency model.