Hi all,
In Today’s posting, I wanted to talk about pricing your ebook. I know that many self-published authors are engaged in a ‘race to the bottom’ of sorts in an effort to eek out as much money from a book as possible. Someone once told me that I should always price my first book at 99 cents because “why would anyone spend more on a more expensive book when there are 99 cent ones out there?”
Good question. But I would like to say that there are not many other books out there just like my book. To be sure, there are a lot of quality 99 cent books out there. There are even many quality free books out there too. But for me, I know what my own book is worth, which is my first point.
1.) Price your book for what you think people will really pay for it. Everyone wants to get the most bang for their buck, and people are always looking for deals. But at the same time, don’t forget that you get what you pay for. If you purchase a 99 cent book, you’re expecting to read a 99 cent book. I don’t expect it to be great, just average. But if I see someone charging a bit more for their book – and it has good reviews with a good amount of traffic (I like to check the ranking numbers) then I’ll check it out.
2.) You will make more money by selling fewer higher cost books than you will selling more lower price books. Amazon, in particular, gives authors 70% of the profits if their book is priced between $2.99 and $9.99. So I make roughly $2.74 off each book I sell at the 70% rate. Contrast this to the paltry 30% offered to those who sell their book at 99 cents – a meager 30 cents (roughly) per book. So a person with a 99 cent book would have to sell nine books to make almost what I make in one book. One sell is a lot easier than nine.
3.) The flip side is also true. Nine cheap sells are a lot easier than one tough(er) sell. But this is where being smart ties in. Right now I have just one book. So I’ve priced it a bit high, with the idea that eventually I can lower the price. But how can you have your book, your work of blood-sweat-tears that took you a year to write actually have a helpful price while also keeping excited readers? Create a loss leader! Make a short story or two (ten thousand words or so) and price them at 99 cents or free. You don’t need an incredible amount of editing, just some basic formatting work and cover art. People will buy the cheap one, and be drawn into your story, then purchase your more expensive novel. By the way, Lindsey Buroker is an expert on this, check out her multiple 99 cent short stories that helped her get started in the world of self-publishing.
4.) Using a loss leader – This can be especially easy if you have a series. A loss leader is simply when you offer something at free or reduced prices to get someone interested in a product. You see this all the time when credit card companies give you a baseball hat or t-shirt when you sign up for a card. They lose a (small) amount of money on the shirt, but expect to gain more when you rack up big debts on your account.
So you set up your first novel as a cheaper or free introduction to your story, and hope the reader enjoys the story enough to purchase the next installments. Bingo, the ‘free’ book leads to two or three other purchases perhaps? Maybe more if you have multiple series.
What do you guys think about price setting? Is it better to start high then go low or simply stay low? Thoughts?
Ciao!
Modern Papyrus 
Your philosophy is pretty much the same as mine. As a reader, I only buy hardcopy books, so of course, I pay a bit sometimes, but as an author, I think it’s important to price your book hardcopy or ebook both to what you think it should be worth. I think a novel should at least be 3.99 as an ebook, and short stories should be .99 because someone will definitely take more of a chance on that, and if they like it, you’ll likely sell a novel. I also like to put discounts on my books though during holidays or book tours, or things like that where people are likely to buy more.
Lots of excellent points, Daniel. Thanks for the article; really informative and good food for thought.
Thanks! It’s very obvious that a lot of ebook authors are doing this race to the bottom, and it’s hard because that’s how many people *think* the system works!
I recently published my debut e-book and started it .99. A week later, I raised my price to $3.99 in preparation for my free promotional days I would be using shortly (thinking more people would give it a try for free the more discounted it looked). To my great surprise, I sold MORE copies at the higher price, before my promotional days, without any great chnage in reviews or ranking #s. $3.99 is the price now, and 2 weeks out of the gate I’m selling 3-5 copies a day, and getting ‘borrowed’, and it’s still increasing bit by bit. Maybe this will be the best I’ll ever do, but I hope the momentum continues! I think it comes down to this- some consumers love freebies/chepaies and try to stick with just those, and some see cheap or free as ‘lesser’ quality and will stick with purchasing things for the prices they equate with quality. Who would you rather be your target audience- those who want it as cheapy as possible, or those willing to part with a little more cash for quality? I’m gunning for group #2, personally.
Personally, I think it is better to sell fewer, but more expensive, copies than a ton of 99 cent copies. I put a lot of heart and soul into my work, thus I think it should be priced that much. Eventually, I may lower it more, but the fact of the matter is that some people avoid 99 cent ones precisely because they are thought to be ‘cheap’ and poor quality.