Harry Potter, a consumer hit ... but a loser for book stores?

If Reuters is accurate, the seventh and final Harry Potter novel, Harry Potter and the Deathly Hallows, won't just be a consumer hit, but will also hit book-sellers in the pocketbook. Would you have ever believed it if you read that perhaps the biggest book event of 2007 is going to be a money loser for those selling it? I wouldn't have believed it; it sounds ludicrous. Using a key seller as a loss leader sounds a bit like selling plasma and LCD TVs at a loss at convenience stores to make money off smokes and bubble gum.

This makes me wonder why book stores don't just sell the book at a profit and take the risk that the other secondary and tertiary shopping dollars spent on the same visit don't go too far away. Why would a supermarket be able to sell the novel for cheaper than a distributor? That's the claim, and it is pretty shocking that Scholastic Corp. (NASDAQ: SCHL) would create a pricing tier in which book stores lose money. It's almost shocking the company also didn't put pricing demands or restrictions on sales of the hit book for the first 60 days. The demand for Harry Potter is nearly inelastic, at least around the launch date, or not as sensitive to price as the discounters would think.