In Goddin’s most recent blog post, titled Coordination, he discusses a new more collaborative approach to internet business, made possible by technology and cited Logos’ Community Pricing strategy as an example.
According to the Logos website, “Community Pricing offers some amazing deals on classic works in the field of biblical and theological studies. Thousands of Logos users have gotten books for less than the price of a latte or a gallon of gas (which is around $3.00 in Bellingham, Washington).”
Community Pricing works by online customers indicating on a graph how much they would be willing to pay for a specific title. At some point in the process enough customers and a high enough price cover production costs and the book can be released.
Logos explains it this way: “If it costs $4,000 to produce an electronic edition of a book, the costs can be covered by 4 people paying $1,000 each or by 1,000 people paying $4 each. The more likely scenario, though, is that no one wants to pay $1,000 and there aren’t 1,000 people interested in the title, even at $4. But there may be 200 people who would pay $20 each.
“Community Pricing is about finding the lowest price that covers the production costs.”
Customers bids are tracked on an online graph to provide some guidance as to how to bid and when a price is set, it is the lowest possible price which is paid by all bidders, even if they bid higher.
It is another example of how the book industry specifically and retail in general is changing due to digital communication.
Godson loves the approach because it eliminates waste and allows customers to collaborate with the supplier.
It is great to see a Christian company at the forefront of change.