The explosion of eBooks and the number of midlist and new authors choosing self-publishing has brought about some heated discussions on price point and perceived value. How much should we charge for an eBook? 0.99? $2.99? $6.99? $9.99? $14.99? What is too much? What is not enough?
Many authors are upset over the 0.99 book. They argue that it’s devaluing the work of the writer. That it somehow tells potential readers that the writer and their work is only worth 0.99. We understand the argument. We know what it takes to write a book and our time is worth far more than 0.99 for the year it took to write.
However, if we sold 1500 in one month of that one book (which we have done this month on several venues) then the book is worth 1500 x .99 x .35 = $519.70. That is number of books X price of books X royalty given by Amazon/PubIt = total income for one month. It’s not an earth shattering number, but that is only one book out of many books we offer, most of which we are charging 2.99 for and get 70% royalty. We have only a few books at .99 and they are leads to series or genres, such as the first Atlantis book, and Eyes of the Hammer, which was Bob’s first thriller ever published.
Price point is a marketing tool and when considering price, a business owner must consider the range for what consumers are willing to pay and it doesn’t have to do with the value of the writers’ time or the value of a single book. The idea behind the bargain book is to pull readers in, hook them on the quality product so they will buy more (at the higher, and valued, price).
When we write a book, we need to get into the minds of the reader or we end up with too much backstory, or too much over explaining, or give the reader information they don’t need. When we enter the business of publishing we have to do the same thing and stop thinking like a writer and think like a consumer AND a business person.
Readers do troll for the 0.99 ebook. If they don’t like the book, no biggie. They don’t buy from the author again, but if they did, they gobble up every thing they can find from that author…and at regular prices.
There is another argument about how eBooks should be the same price or close to a paperback book because the content of the book is the same. Just because it costs less to produce the ebook doesn’t mean content is any different therefore it is worth the same price. Then wouldn’t that be true for the hardcover and the paperback? Identical content. Consumers wait all the time for the book to come out in paperback for the sole reason they refuse to pay the higher price for the same product. Additionally, let’s consider a $6.99 paperback for which the author is receiving an 8% royalty from the publisher. That means the author gets .56 per book sold. For a $2.99 ebook, the self-published author gets a 70% royalty from the distributor, minus some other minor charges, but it comes out to $1.99. So the $2.99 ebook make the author almost four times the royalty of the print book.
But we’ll tell you what makes absolutely no sense. Pricing an ebook between $10 and $19.98, where, strangely, many traditionally published ebooks are priced. Here’s why it doesn’t make sense: go below $2.99 or above $9.99, your royalty rate goes from 70% to 35%. So any ebook over $9.99, up until it hits $19.98, is actually making less money than an ebook priced at $9.99. Can anyone explain to us why many publishers are clinging to a price that makes absolutely no sense except for the delusion that it will drive people to buy the print version? Instead of being concerned about the .99 ebook, authors need to really be concerned about the blatantly destructive agency pricing models many publishers are using.
One of the reasons the price has been driven down is because of the influx of books being put out on the web. This is partially related to the law of supply and demand. But another reason the price is being driven down is due to another P in the marketing mix: placement.
You can’t sell if your product isn’t seen. In traditional publishing that meant the racks at the front of the store. Indie Authors are getting their placement via a lower price.
We’ve discovered a key to ‘placement’ for ebooks is to get on a bestseller list in a specific genre. Amazon breaks books down to subgenres and lists the top 100. For example, Atlantis, is now in the top 50 overall on UK Kindle sales, and has been as high as #2 in science fiction, just behind Game of Thrones. It’s in the top 10 in science fiction in the US, nestled among, again, all the Game of Thrones books. Chasing The Ghost started as a .99 book, hooked a place in the top ten in men’s adventure, we raised the price to $2.99, and it’s still there in the top 10. Why? Because it’s a good book. But we needed that .99 lead to get it that ‘placement’.
Publishing has changed a lot, but it’s still a business. Part of our job is to understand that business. There needs to be a balance. We can’t promote or price a product if we haven’t taken the time to better our craft. But, on the other hand, if we don’t take the time to understand what is happening in the business, we reduce our chances of selling our books to our readers.
Price point is a tool. One that can be abused. But it is one that can send you to the top of the Amazon lists and earn you a nice royalty check at the end of the month.
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Comment
I don’t think this was clear in the article: Re the $10-$19.98 regime, the “Big 6″ trade publishers get a 30% cut regardless of the price. They get the same percentage at $14.99 as at $9.99, so there’s some sense in them pricing at those levels.
For the self-published author going through Amazon or PubIt, the royalty rate abruptly drops off at $10.00, with the result that the author makes significantly less on each sale at $14.99 as at $9.99. Presuming that the number of sales drops off at higher prices, there’s little sense for the self-published author to set a price in the $10-$20 range.