How do book clubs work?
Book clubs have an array of enticing offers out at any given point in time. A book club introductory offer may involve free books, free shipping, or both. Accepting some introductory offers obligates you to purchase a few books (usually 1-4 books) from the club over the next few years (usually 1-2 years). There are also some book clubs that do not require that you purchase any additional books – your free introductory package is yours to keep whether you purchase more books or not. If you do have to purchase a set amount of books, you can purchase those books and cancel your membership at any time.
You have to remember that there’s a lot of markup on these items. With most book and CD clubs, however, you’re cutting out a couple layers of middlemen and dealing directly with a publisher or distributor. Also, most book contracts stipulate a lower royalty for copies sold through book clubs (not sure for music, but might be the same thing). So, they’re definitely making money in the end — they wouldn’t offer you the deal if they weren’t. They are probably making close to the same amount of money as they would on retail sales, in fact. It’s a form of price discrimination — making different kinds of buyers pay different prices, kind of like outlet malls. You can get a significantly better price if you’re willing to jump through the hoops, or pay a higher price if you want the convenience of shopping in a store.
