The most brilliant business plan ever

Take a look at the kind of profit you can make from various businesses. This is pretty good money.

profits

We all know Apple's business model is to build cool gadgets with high end stuff inside that it then sells at a high markup for premium design and ease of use -- they're at least creating something novel. But what makes Wiley and Elsevier so profitable?

That's the genius of it all. Their customers create everything, they charge the customers for the privilege of selling it to the publisher, and then they sell it back to their customers. Imagine if Apple did that: all of you homebrew computer people who buy components and assemble them into functioning wholes and trick them out with spiffy bells & whistles are contacted by Apple, who offers to take them off your hands if you pay them a few hundred dollars, and they then take your creation, polish up the case a bit, stick an Apple logo on it, and sell it in their catalog for a few thousand dollars.

Oh, also, when you buy an "Apple", they require that you get shipped a broken Sinclair and an old Commodore PET. It's part of the deal.

That's how the scientific publishing houses operate. It's a broken system that profits the middlemen.

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I can only add that the petition to boycott Elsevier stalled out at a few thousand people.

Please support non-profit journals and if you don't like the ones available, start your own.

By Ethan T. Vishniac (not verified) on 02 Aug 2014 #permalink

What is the operating profit of the sCAM business?

It is a brilliant business strategy, but not particularly original or new. It is simply an adaptation of two very common in the 20th century developments: focus on industries with smaller logistical and labor burdens (ones with limited contact with the physical reality); insinuate yourself into the scheme without having to engage in production.

This is a pretty common combined strategy. Real estate is another. The agencies don't actually build or markedly improve houses. They make their money charging a percentage. They have, over more than a century, insinuated themselves into the process while simultaneously transforming the process to make themselves essential.

This, if it was observed in a biological system, would be considered parasitism. In the wider context it is seen as the proliferation of middlemen who slide in, form chains that artificially raise prices, and take over the system.

hi PZ, the table is CC-BY, so you ought to indicate its creator- me. Here are the references for the numbers: http://alexholcombe.wordpress.com/2013/01/09/scholarly-publishers-and-t… If I have time to update the chart, the percentages will be a bit different because I'm getting advice on cost allocation etc. when calculating profit. But rank ordering will be similar, with sci publishers on top

By Alex Holcombe (not verified) on 11 Aug 2014 #permalink

Sorry, I didn't see the hyperlink you have to my post, someone emailed me your post with the hyperlink stripped. The implicit attribution is fine with me.

By Alex Holcombe (not verified) on 11 Aug 2014 #permalink