Writers tie themselves into knots about ebook pricing when learning how to self-publish – and sometimes when they are more experienced too! But it can be quite simple, once you dispense with some rather popular myths.
As you will see, if you focus on income over price, the path forward becomes very clear – one which can be adjusted to suit your personal circumstances.
Price is not a hill to die on, but a powerful tool for levering your books into the charts, rewarding fans, generating buzz, and expanding your audience.
A tasty stew indeed. Let’s tuck in.
Price-value confusion
Before we get to the nuts-and-bolts, it’s time to slay a zombie meme. Much of the distracting noise on this issue springs from conflating two concepts which should be distinct: price and value.
Authors often say something like, “My book is worth more than a coffee.” Or publishers might say, “A movie costs $10 and provides two hours of entertainment. Novels provide several times that and should cost more than $9.99.”
Price and value are two different things. From Wikipedia:
Economic value is not the same as market price. If a consumer is willing to buy a good, it implies that the customer places a higher value on the good than the market price.
The price is something we, as self-publishers, attach to the product. The value is the worth the consumer places on it (not the author or publisher). In simple terms, unless your price is lower than the value a reader places on your book, they won’t purchase.
Marketing isn’t simply about reaching consumers but also about convincing them to place a value on the product higher than the price tag. The higher the price, the harder that job will be.
In other words, it’s a lot easier to sell a book at $2.99 than $9.99.
Doesn’t price influence value?
Do bargain basement ebook prices indicate low quality? Will a 99¢ price tag actually reduce the value a reader places on a book? That’s a harder question to answer.
In short, I think it’s true in some cases for some readers, but I also think it’s massively overstated.
It’s hard to sell a book at any price if you have a crappy cover, insipid blurb, wonky formatting, a flaccid sample and tons of terrible reviews – all cues to the reader about the value of the product.
If you have a striking, professional cover, an enticing blurb, clean formatting, a sample which grabs readers right away and lots of great reviews, then you can avoid any negative association with a lower price. Or, at the very least least, the number of readers you will gain through lower prices will greatly exceed any you might lose through such negative associations.
The data is clear: lower ebook prices shift more units, but that comes at the obvious cost of decreasing your take per sale. So how do you strike a balance? Well, that depends on your goals.
- Are you seeking to maximize income?
- Or are you willing to trade some of today’s income to build a bigger audience?
Authors who are exclusive to Amazon and enrolled in KDP Select will also be seeking to drive Kindle Unlimited borrows. Guess what? That can affect your pricing strategy too. Let’s look at each of these three scenarios.
Goal: maximize income
It’s incredibly important to remove emotion from ebook pricing. Once you have dodged the price-value myth, the next step is to determine your goals.
If your goal is to maximize income, you should set a price which brings you closer to that goal. And you will only discover what the appropriate price point is through experimentation – it varies from book-to-book and genre-to-genre. For example, romance tends to have lower prices than historical fiction.
Most self-publishers tend to price full-length work at $2.99 or above, because this is the floor at which Amazon pays 70% royalties. Below that, Amazon only pays 35%.
Self-publishers also like to price at $4.99 or below, with many feeling that keeping the price below $5 keeps the purchase in impulse buy territory for many readers.
Repeated surveys from distributors like Smashwords indicates that pricing between $2.99 and $4.99 is a good rule-of-thumb for maximizing income.
Some advocate higher ebook prices again but I haven’t seen much data to support this view. I know a handful of self-publishers selling huge amounts at $9.99 a pop, but they are notable because they are anomalies.
You will need to test a few different price points to find your own sweet spot. Personally, I’ve found $4.99 best for full-length books. I’ve tried everything from free to $9.99, and $4.99 seems to maximize income.
I like this price point for a bunch of reasons. I make almost $3.50 per sale but it’s still below the psychological $5 threshold for readers. And it leaves me plenty of room for discounting when I run a promotion.
But maximizing income is just one potential goal to consider when pricing ebooks.
Goal: build audience
You might make more money at $3.99 or $4.99, but you will sell fewer copies than at 99¢. If your goal is to build audience, then lower prices make much more sense. But when is it a good time to build audience instead of maximizing income? How do you strike a balance?
Successful self-publishers often price the first book of a series at 99¢ to increase the numbers of readers trying that first book. They make less on Book #1 but easily make that up when the reader goes on to Book #2 and Book #3. And the longer the series is, the greater the upside on a strategy like this.
In fact, this strategy is so successful that many series writers make the first book free. While you will lose all income on that title, it tends to massively increase the number of readers going on to purchase the rest of the series. This approach also benefits from being one of the few ways to gain traction on Barnes & Noble, Apple and Kobo.
It doesn’t work for everyone though and, as with ebook pricing in general, you should experiment to see which brings best results. If you do experiment with free in this way, don’t judge it after a week. Give it a couple of months.
Make sure to get some eyeballs pointing at that freebie by using some book promotion sites – that’s when you can really see the power of free.
Goal: boost borrows
This isn’t the place for a lengthy digression on what drives Kindle Unlimited borrows, as it can get quite technical, but if you want to dive into that topic further you can read this post on the value of visibility on Amazon.
For our purposes here, you can just take it as a given that visibility on Amazon drives Kindle Unlimited borrows, and authors who are really racking up big page read numbers in 2021 have an entire strategy which revolves around maximizing that Kindle Store visibility – at the cost of almost everything else.
An aggressive approach, for sure, but one that most certainly pays off when the authors in question are racking up 10m-20m page reads a month. If you consider that they are getting almost half a cent per page read, well, you can calculate just how lucrative this approach can be.
While such a complex strategy isn’t realistic for most authors starting out, those who are in Kindle Unlimited can learn some lessons from the big dogs: in short, Kindle Unlimited authors can be more aggressive with ebook pricing and will often find that visibility boost will more than make up for it in terms of increased page read income.
Now I’ll deal with some objections…
Shouldn’t e-books be priced more like print books?
No. You don’t own them, you only license them. And you can’t resell or donate them. Aside from that, it’s a digital product! There’s no paper, printing, typesetting, binding, shipping, storing, or returns. Yes, ebooks cost money to produce, but once you have covered your costs you can sell a billion more copies without incurring additional cost.
Print has all sorts of ongoing costs. When a book fails to sell as expected, publishers have to deal with returns. Even when a book is a runaway smash, publishers must go back to the printers and shell out for another round of printing, shipping and storing.
Ebooks are cheap to make. Readers shouldn’t be forced to pay for the inefficiencies of publishers, or subsidize print editions.
Doesn’t all this cheap pricing devalue ebooks?
Well, no. Price and value are two different things. If you aren’t convinced by the foregoing, consider this: libraries have been providing cheap or free access to books for generations. Second-hand bookstores have been in existence for as long as regular bookstores. And all of the classics are available either as free e-books or extremely cheap paperbacks.
None of these long-standing phenomena have done anything to devalue books in readers’ minds. If anything it has done the opposite. And besides, shouldn’t we be in favor of making reading cheap? Don’t we want more people reading books?
But… but… what about the industry? Aren’t we training readers to only demand lower ebook prices?
Screw the industry! If publishers can’t compete at our price points, that’s their problem. And anyway, rather than inspiring a “race to the bottom” and “destroying the industry” author Ed Robertson argues convincingly that self-publishers are saving it with cheaper pricing – pricing he discovered is perfectly in line with paperback pricing from the 1930s to the 1970s until the industry began consolidating into today’s mega-sized publishers.
This book took three years to write and it’s worth more than… [snip]
Okay. Maybe looking at it through the prism of price/value isn’t helping. Let me try something else. Instead of focusing on the price you’re selling at, focus on the income the book generates. How much do you make each month at $9.99 versus $2.99, $3.99, or $4.99?
How To Decide Your Ebook Pricing
All this theory is fine and dandy, but let’s translate that into actionable steps for you so you can set your own ebook pricing, confident that it lines up with your aims.
- Determine your goals.
- Experiment with different prices.
- Evaluate the change in income.
It really is that simple.
Pricing to value is a subjective topic. Yes, traditional publishers do charge more, but isn’t the value higher? Very few self-published books would be accepted by traditional publishers, and the truth is that they aren’t of high enough quality to meet their standards. Most indie authors have sent out dozens of query letters to agents and been rejected or ignored, mostly because the quality of their work isn’t good enough. I buy ebooks from both indie and traditional publishers, and sometimes I pay $.99, but more often I pay $9.99+ because I want to read Erik Larsen or Ken Follet, or the latest published political novel. I find that I am more likely to get value for my money when I buy a known quantity. I have to buy a dozen $.99 novels to get one that is worth 10 hours of my time. Traditional publishers are here to stay, and the size of them has nothing to do with how they set prices. They lose money on the vast majority of their books, but the quality authors earn enough to make the company profitable. The fact is they need to charge $12 for Ken Follett in order for the entire company to make a small profit. If you think the big publishers are making a fortune by gouging, buy their stock.
I am an indie author, unknown because I’ve concentrated on writing and put no effort into marketing. I sent query letters to 46 agents for the first of my books and got the usual rejections and cold shoulder. I accepted that the book wasn’t good enough for the market and hired an editor who brought my writing into another space. With his help, I rewrote that book and wrote 3 more books in the series. I will now republish as an indie author. Why? Because I don’t believe my books are good enough yet for the big publishers, and the small ones who have said they are interested will pay a pittance for my copyright, while l have to do most of the marketing. I will follow David’s advice to the letter because I trust him, and in business trust is everything.
All traditional publishers passed on DUNE.
All but one traditional publisher passed on Harry Potter.
There are literally hundreds of authors earning big money by avoiding tradpub, not just because of what their “nurturing” costs readers but because of what it costs *authors*.
Today, if you want a shot at making a living as a writer you are more likely to get there by doing Indie *properly*. If you can’t or you’re more interested in validation than in revenue, then go ahead and give your book to a tradpub. Good luck.
Just remember that tradpub only picks books they *think* they can sell, not because they think it is “special”. That is why they love celebrities or established authors with large fanbases; all they have to do is print and dhip. Well, IngramSpark does that, too. And tbey don’t demand copyright control.
I didn’t get to read through all of the comments to see if this has been answered…I see many comments about books in a fictional genre. Are the pricing principles the same for a non-fiction book(s)? What’s your opinion of how they sell vs fiction? I’m a veterinarian, writing a book on animal care in disasters/emergencies. Is there any point in guesstimating based on the 40+ million pet owning households (Obviously just getting a very small
Fraction…). It would be my first book. I know how to reach my audience but I have no name recognition. Thanks for your feedback.
Commercial Non-fiction is just another genre.
So, assuming you’re starting with an ebook with an eye to doing print and/or audio later, then your best bet is to look at what other similar books are going for on Kindle. Look at prices, popularity, and ranking. Don’t forget a lot of the same non-fiction ground (any ground) is covered by a horde of websites. Do an online search and look and see how/if those folks monetize their expertise.
Then do as Mr. Gaughran suggested: choose a strategy.
Do you want to maximize reach or revenue? As if the latter do you want to maximize per-sale take (like the big multinationals) or maximize total revenue? They aren’t the same thing, you know. And there’s the time factor to consider; do you want most of your money fast right after launch or are you willing to pay a long game and let word of mouth help you? Will you have more books and make a series, say like Desmond Morris with CATWATCHING, DOGWATCHING, etc.
You have a bit of homework to do and decsions to make.
Good luck.
Good post with some great ideas on pricing! Thanks for sharing.
I just discovered this blog yesterday, and after reading several of your articles, I have to say that you are one of the most rational voices out there on the subject of e-publishing. I’m glad I stumbled across this.
Reblogged this on Veronica Del Rosa and commented:
As both a reader and a writer, I agree with lower costs for ebooks. I don’t hesitant to buy one priced low but I’ll certainly think twice before I spend over $3 on a book.
I am in the process of publishing an e-book. The book is is a study guide aimed at high school teens, more specifically juniors and seniors of which there are some four to seven million in the US and also some college students, mainly foreign students – probably another million or so. Since this is not going to be part of a series and since it is likely to be highly desirable I was considering pricing it in the $9.99- $14.99 range. Just wondering if anyone has experience with the teen market and any recommendations…
Reblogged this on David Pandolfe and commented:
Since I’ve been running Streetlights Like Fireworks at $0.99 so more readers become familiar with my work, it seemed fitting to share David Gaughran’s post regarding “cheap books.” Believe me, my intention is not to devalue books but rather to give readers a chance to check out someone new (namely, me). This is a great post and I especially appreciate David’s point that maybe it’s expensive books that are devaluing literature.
Brilliant blog post, David. Totally got my money’s worth.
Reblogged this on At the BookShelf.
So, I’ve never read any of your books but I just bought Mercenary on the strength of this piece alone. Yeah, I went with the Kindle sample first to see if it’s something I’d enjoy, and the first few sentences convinced me that it would be.
My problem with Big Publishers is that I live in a third world country. Their ebooks are priced high enough as it is, but it becomes even higher when the $2 surcharge that randomly gets added for anyone buying outside the US. While I wouldn’t mind paying $5.99 – 7.99, $10 and up is just ludicrous. That’s more than what I spend on my daily living expenses 🙁
And the regional distribution rights nightmare associated with Big Publishers… It’s kind of frustrating when I can’t purchase an ebook I want because the Publisher didn’t make it available in my country due to rights or contracts or whatever hoopla. This is less of a problem with Indie ebooks. Even if an indie ebook I wanted wasn’t originally being sold in my corner of the world, I would just contact the author and they’d get it sorted. Not so with the Big Publishers. I actually emailed an author about it once. She said she doesn’t have any control over it, but I have her blessing to download the books via torrent because it’s not my fault that the publisher won’t sell it to me.
I don’t actually remember the last time I purchased anything from the Big 5. I mean, I can derive as much enjoyment from a well written, cheap ebook by an as yet undiscovered author than I can from expensive ebooks from those big publishers. And I get to have money left over for a decent meal 🙂
Fantastic post, David, insightful and inspiring – and great timing for me as I’m about to launch a new book and have been dithering about the price. Decision made! “Quick Change” (flash fiction) will now launch at 99p on 21st June. I’m also going to buy your 99p novel now by way of thanks. (Love the cover, btw). I know I buy a lot more books at 99p, whether that’s their permaprice or offer price, and it’s also encouraged me to try books normally outside of my comfort zone, with some great results.
Reblogged this on Michael McGrinder.
I’ve found that 99 cents works well for short stories – hate to charge too much for something so small. As a sidebar: I was wondering how Kobo works for you. My short story just seems to keep saying it’s publishing. Not sure what the hold up is. Have you had any trouble with them?
Reblogged this on The Real Life Stories from a Fantasy Writer.
I certainly don’t rely on rock-bottom prices. I use them judiciously. I normally price full-length books at $4.99. I gave a range of examples of how 99c could and has been used just to show the possibilities. Personally, I only use 99c for full length work in very specific situations.
The point of this post was not to argue that 99c is the only price or the smartest price. The point was that writers shouldn’t restrict themselves from any tool – even 99c.
Some writers don’t price cheaply at all – in any situation – because they feel it devalues their work, or undermines the viability of the profession. *That’s* the viewpoint I’m arguing against.
Where’s the contradiction?
So, here’s the thing: there’s a big difference between $.99 and what the big 5 are charging for ebooks. It’s not an “all or nothing” proposition – $.99 or big 5 prices. In between are prices like $3.99 for a new release, $2.99 for an older book, $4.99 for a book from an NYT bestselling self publisher. I’m not in this to save an industry, and I know quite well the industry doesn’t give a crap about me. BUT, I am here to earn a living, and honestly, nothing I’ve experienced at the $.99 price point is going to achieve that for me. I need to sell so many more books at $.99 to equal my normal earnings at $3.99 that it’s just not viable. I’ve tried $.99, for sales, to celebrate next in series releases, for introductory offerings. I’ve lost money. Every. Single. Time. How do I know? Because I can compare how many sales I had for the previous release or the week before (on an existing title) at $3.99 or $2.99 and how many sales I have at $.99 during the sale. I’ve never broken even financially. Now, did I get new readers? Honestly, I don’t know. I got more copies out there, but I’ve never felt the “surge” that you get from some promo opps. Growing a readership is a very tricky thing, and relying on rock bottom prices to do it may not be the disaster that some would claim, but it’s also not the pie in the sky dream scenario that’s painted around the Indie world either. Sales engines like Bookbub probably make the $.99 price point more effective, but I’d caution all self pubbers to think very carefully before jumping on the “cheap will solve your problems” bandwagon, because $3.99 is still pretty damn cheap, and at least you can pay the mortgage with it.
“If you make a decision which is pro-reader, you won’t go too far wrong.”
+
“Cheap books expand the pool of readers”
=
Are you basically saying, through this obvious contradiction, that a self-publisher is an hypocrite by nature?
The line about helping you destroy literature made me laugh. Good one. David, you’re a man after my own heart. Writers should always be pro-reader – they are after all why we do what we do, aren’t they? Naturally the pricing wars will go on and indies and those who back them will be accused of all manner of things. But the truth is when a group of people think they have the market cornered on something and somebody comes along and proves them wrong by offering some real competition, they scream ‘injustice!’ and various other chicken little strategies. Hey if ‘destroying literature’ results in more people reading, I’m all for it.
Really like your stuff.
Writer Chick
“If you would like to help me destroy literature…” But of course I do! I already downloaded it and it is on the to-read list. You are hoot 🙂 Cheers.
I agree – this world of words isn’t a game of ‘I win/you lose’ . . . The more people purchase and read, the more we can all do what we love. Good points.
I think there are two things at play here: “cheap” is a matter of perspective, and there’s no one-size-fits-all strategy.
I grew up at a time when mass market paperbacks — which I read a ton of — cost $5.99. For a novel-length work of fiction, I feel like the value-exchange there is balanced. I also remember when I used to shop at Barnes & Noble for the remaindered hardcovers, and usually thought $4.95 was a good price there, and was happier still when I found one for $3.95.
When hardcovers are $27.95 or more, and trade paperbacks are $14.95, those prices seemed both inexpensive and reasonable to me.
Now that I’ve gone on to start a press myself, and work with other authors, I’ve been experimenting liberally with different pricing points. For a while we used KDP Select to ensure that there was always one title free. Later, we published short stories priced at 99c, so we had something at pretty much every price point between 99c and $4.99. Lately, $5.99 has been our upper price point, and there are tiers down to $2.99 — which we use as the price for a nano-collection of three short stories. I’ve noticed lately that we’re selling more books than before, if slowly but surely.
But then that’s the other thing: I want to be doing this for years to come. I want to be publishing while inflation and rates change and dip and rise. There’s no shortcut to the long game.
Interesting post. I hate the fact that big publishers charge paperback pricing for e-books, but I also don’t like the .99cent book either. Personally I feel people are getting used to the low prices to where anything over .99cents is passed over because we only want free or next to it. Unless it’s for promotional or temp. Nothing says cheap like a cheap book. At least that’s how I see it.
10x faster than a year ago and publishing every week sounds good to me. Publishing doesn’t just mean putting something on Amazon, et. al. I think your next step is figuring out how to reach your potential audience, not to sell to them but to participate in a community. Find out where they congregate on the web. Or create a place for them.
A few suggestions from an avid reader of Byzantine SFF. Think about putting up a the first 3-5 chapters as a permafree when your ready to publish or a few months before. That gives you 2 works and a way for people to sample your work. If drawn they then buy the book. I know this has worked well for a number of authors just make sure you label it well including the cover art.
You might also find that you are able to write a few short back stories for the main characters of the book as you have those stories in your head. Or during editing of the book some sections might work if pulled out and published as short companions. I wish some of my favorite authors had done that with their 800-1000+ page novels as those pulled out sections would have been much more interesting as standalones and the main book would have been easier to follow.
#Mercenary: Read the sample at amazon.com and bought the book for 99¢.
William, ‘Publish regularly and often’ is like dieting and exercise programs: sound good in print, gets people all enthused, and fails for some of us.
I literally can’t – and I’m ten times faster than I was a year ago. I need the strategies other people like me – VSW (very slow writers) – figure out.
If you like what I write, you won’t want it any other way: that’s the way I write. Twisted, connected, Byzantine, and long. Many people will not – I’m hoping some will.
Right now Book 1 IS free – it goes up on my blog, new finished scene every Tuesday. But I don’t know what I’m going to do 1) when it’s done, and 2) as I get into the next Book (of 3).
Strategies very welcome.
Alicia
Yes to your point about high prices ruining the industry. There are very few e-books I will buy for what publishers charge for them. I think it’s criminal that they are trying to get as much for an e-book as they charge for a paperback. The production costs simply aren’t comparable and, as a result, there should be a discount to the reader who buys an e-book. As a result, I rarely purchase traditionally published e-books and instead look for options where I can purchase e-books that are lower in cost.
Reblogged this on A Keyboard and an Open Mind and commented:
Fantastic post that totally pulls apart any arguments one might put forward about how cheap books (e-books, self-published books, both…) are certainly NOT destroying the world of literature, and are in fact, probably enhancing it.
Thanks – that’s far more current, and more applicable.
I think one benefits from thinking about – and comparing carefully with – similar writing styles as well as genres. Some of us will never put out quick books – our style is to have complicated novels which take time to plot and write – others seem to toss off 80,000 words, switch a few commas around, and put them out there for sale (and do well).
If you’re writing them like pancakes, the strategy of luring in reader with inexpensive starter sets is going to work well. However, if you put your first book at .99 – and it’s going to take you two years to write Book 2 – you may need to rethink your strategy, and look for other authors who are slow.
At least folks are very kind with their data – and I love it that so many different writing/sales models are catching readers’ attention.
And it never hurts being fast AND good – so check your writing style for places you may be slowing yourself down unnecessarily, as well as places where you really have to stop using cliches (or whatever) and up the quality a bit (usually more in response to drooping sales than to a desire to change your style).
I’m working on making myself faster. Really.
If you look back to 2011, most of the indies making money seemed to be pricing most or all of their books at 99c. What we have seen since then is more indies making money at all price points – and a move away from 99c as a permanent price, except as the intro to a series.
We’ve also seen indies who were primarily selling at $2.99 edging up to $3.99, and $4.99 (and sometimes more).
In other words, effective prices for self-publishers seem to be trending up rather than down.
Readers can great books every day for little or no money. They can go to the library, borrow a book off a friend, or download one of the millions of free books available on the internet (both legally and illegally). If they want a little more convenience, they can subscribe to ten different deal sites which have great books every day, for only 99c. You can buy great books every day for next to nothing. This hasn’t conditioned readers to only pay 99c. Books with higher prices are all over the charts. If you want cold hard numbers, just count all the different price points in the Kindle Store Top 100 – from indies too. People have been launching books at 99c for three or four years. Free has been a big tool for self-publishers for almost three years. Writers have had identical worries during all that time and business conditions have improved!
Reblogged this on Author Mandy White and commented:
Yes, I, too, ruin literature on a daily basis with my 99 cent ebooks. But I don’t hear the consumers complaining.
Hi Alicia. If you want a more current example of someone pricing aggressively – even more aggressively than Locke ever did – look at what Ed Robertson did recently. When he was releasing his fourth Breakers book, he put books 1-3 in a box set for 99c. He went on a crazy sales run and brought (i’m guessing) tens of thousands of new readers into his series. He made more money on the series overall, and that was before counting all the new readers who bought Book 4, then Book 5, and who signed up to his mailing list and who will swarm all over Book 6 when it comes out soon.
This isn’t really about 99c per se, but how all sorts of aggressive pricing can be very effective, and writers shouldn’t bar themselves from using certain tools out of misplaced fears that it will devalue books somehow.
Marketing isn’t as simple as Do X and Y will result. But that’s a good thing! If it was that easy, there would be a quarter of a million authors and publishers pressing the Big Red Marketing Button and everyone would be selling identically.
The good news is that effective marketing today, with the tools we have, is less of a challenge than it used to be. You have to try a lot of stuff, and iterate so that you get a better feel for it and how to pitch your books. And I think authors should generally focus on this kind of stuff: https://davidgaughran.com/2014/01/03/if-you-dont-enjoy-marketing-youre-doing-it-wrong/
Reblogged this on Ruth Nestvold – Indie Adventures and commented:
Interesting post by David Gaughran, reviving the 99c price point for ebooks.
What is the lifetime value of a new customer? If you haven’t asked yourself that question, you’re doing it wrong. A permafree or permacheap book or a sale on one of your books should be part of your reader acquisition strategy. Optimize your process for going from story idea to words in front of the reader. Publish regularly and often.
Great post! Thank you
David, I generally take everything you say as gospel truth (don’t have time to chase down every single detail, you hang together when you write, and in the past – and mostly today – are spot on).
But you shouldn’t use Joanna Penn links from TWO THOUSAND AND ELEVEN – in the current indie publishing, that’s the dark ages. What do you think? Her results – and the John Locke stuff she based the theory on – are ancient history (oh, I get it – you write historical fiction!).
Looking forward to hearing from you how your current results are – something you’re inimitable at.
But you made me click – AND spend time reading – before I realized I started learning about self-pubbling AFTER 2011, and Joanna’s links won’t be applicable to this Fall (IF I can get myself done by then).
Everything else was lovely, as usual.
Alicia
We can actually see an experiment in action! There are plenty of ebookstores out there which either stock self-published titles. In the UK, I don’t think there are any self-published titles in WH Smith since the erotica mess. I haven’t heard any stories about readers responding wonderfully to this more limited selection, nor have I seen any articles about WH Smith suddenly grabbing huge marketshare now that they only have “curated” books. If you want a store which takes curation further, then you have things like Zola books – and I don’t think that’s gobbling up market-share either. And while Sony allowed self-published titles, it gave them zero visibility. It’s now gone.
Hi, David — I’m glad I got you started because I’ve been having this debate with my fellow indie authors and have been at a loss as to how to offer a cogent counterpoint. You’ve gone a long way towards doing that for me.
I think the biggest objection my fellow indie authors have expressed is the fear that by releasing at 99c, our readers will be conditioned to expect to always pay 99c for eBooks. Soon, they will no longer be willing to pay full price. Not everyone will sell Amanda Hocking-like numbers and so won’t be able to make a living if all books are 99c. I might, in the short run, benefit from a 99c release, but what if, in the long run, readers no longer want to pay even the low indie regular price of $2.99 – $5.99 because we conditioned them to pay 99c for new releases? Will that mean fewer indies can make a decent living off self-publishing?
I make a comfortable 6-figure income selling my eBooks at $4.99 a piece, with the occasional sale or BookBub at 99c to boost sales and gain new readers. But I only sold 85,000 books last year. When I put my books (regular price $4.99) on sale, for example, I go from earning $3.44 per book sold to $0.3465 per book sold. To break even, I have to sell ten times more books or make up the loss through a bump in sales of other full-priced books in the series or my backlist. If all my books were priced at 99c, I would have to sell ten times that amount a year — or 850,000 books — to make the same income.
You can make a decent living with books priced 99c only if you sell in huge quantities. In other words, are we conditioning readers to expect eBooks for 99c? Will they pay more once they’ve been used to paying so little?
That is the concern I have read or heard from my fellow indie authors. I am buoyed by your optimism but I fear it rests on theory alone rather than cold hard numbers.
Another great & informative post David!
It’s getting to the point where the first thing I do on WordPress is check your blog before checking my own! Kudos
I think that argument confuses price and value, which I blogged about here (and also talk about various price points): https://davidgaughran.com/2014/04/07/the-great-e-book-pricing-question/
In general, I think you should be flexible, experiment, and price according to your goals. If your goal is audience expansion (the first book in a series is a perfect candidate for this) then it makes sense to experiment with free and 99c. If it’s a standalone, then you may prefer to maximize income and price at $2.99-$4.99 (or more, depending). Genre can be a big factor. Romance seems to demand lower prices. Historical fiction seems to allow higher prices. And readers’ responses to various price points has changed dramatically in the last few years as the market has developed.
Personally, I prefer keeping 99c for special occasions – a sale over a weekend when I have a few ads running, or, in this case, a very particular kind of launch. But the most important thing is to figure out your goals, experiment to see what price brings you closer to those goals, and remain flexible as things change.
For me, that has generally meant pricing at $4.99. For you, it might be different.
Well, in a sense it was kind of standard for a while in 2010/2011 – that’s the strategy that worked so well for Hocking, and put Victorine Lieske on the NYT list (at least I think she was running at 99c at the time) – and the world kept turning. There were a lot of incentives to price at 99c at the time, but no one was compelled to. Eventually so many writers did put their work at 99c that there was a glut, and the aggressive experimenters moved to $2.99 and $3.99 and $4.99.
IMO, 99c is a great tool if used correctly. I’m sure pricing will go through all sorts of convulsions in the future, but we’re pretty adaptable and even when the digital market was strongly characterized by heavy readers and bargain hunters (less so now as the market matured), it was still better than the system before and plenty of writers were building audiences and making money (both at 99c and above).
I suppose there were critics back in 1482, faulting Aldus Manutius for making printed paper books affordable in the first place. But what happens when no discount pricing strategy has an effect on sales? R.L. Copple has posed some good questions here.
I’ve read about the push to segregate books into those published by the major publishers and those published by self-published authors, and my response is, “Bring it on!”
Let’s separate the two and see who wins. Do most readers want limited, overpriced-selections with overused themes, or a huge, rich variety of fresh ideas and stories, reasonably priced?
From a recent post in “Writer Beware.” I got the impression that BEA shoved self-publishing into a backroom closet (apparently embarrassed at having to host something so tawdry.)
Well guess what? We’re here and we’re here to stay, so get used to it!
We OWN our rights, they’re our property. We haven’t peddled them off to a publisher. We can charge any price we deem fit and no one can stop us. If Amazon or any other retailer wants to make life hard for us, some free-thinking soul (like Smashwords) will come up with an alternative and make money in the process.
Good points, though I’ve done limited 0.99 pricing other than a sale here and there. I have one permafree 4 short story collection set in the trilogy series. Nothing has had a lot of effect, but that is probably due to other factors.
A lot of the arguments you mention would also apply to the lower prices (below $5) and traditionally published prices. But mostly you refer to $0.99 pricing. What is your thoughts, preferences on, say, $0.99 vs. $2.99?
One argument I’ve heard against $0.99 pricing as opposed to $2.99 and up is:
It indicates to a reader how much the author values his own work, and that it is more likely to be bad from the reader’s perspective.
Is it a good idea, in your opinion to sell everything at $0.99, or just select books for periods of time?
Thanks for the post.
Reblogged this on theowlladyblog.
Thanks Richard. By the way, speaking of B&N, I’ve been hearing reports that the store has gotten much better recently, that search has improved etc. Have you noticed anything? What has your experience been in general?
I think the real problem writers have with Traditional Publishers isn’t pricing, it’s the ridiculously low royalty percentages, and I think that’s the problem writers ought to be pressuring them about. I don’t see how selling your book as though it belongs on McDonald’s Dollar Menu and making next to nothing on a sale helps that. It’s just another example of the writer getting ripped. I see the value of occasional 99 cent pricing for marketing reasons, and I’ll be using it shortly, but I think it would be a shame if it became the standard. Even a bad book is worth more than 99 cents because there’s a writer’s heart and soul behind it.
Publishers are more than happy to take advantage of this tactic when it suits them. Despite all the wailing and gnashing of teeth, the no.1 Ebook when I published my own novel this year was “12 years a slave”, reduced to 99p to cash in on the film’s popularity.
Another good post, David. The noise of those messages going out from the Big 5 is itself telling–they have the money, the clout, and the P.R. machine to keep beating the drums of Amazon Derangement Syndrome. I guess indie authors will simply have to keep our heads down and keep writing…and bringing in the money to support ourselves while authors stuck in the TradPub system watch in amazement.
And that’s why I read whatever you write David 🙂
This … “But if the change coming at us is a negative one, then all the more reason to be aggressive now about audience building.”
Gold.
Let’s assume your scenario comes to pass, or let’s go even further and imagine a world where all books are always free – that this is the only price the market will bear. Retailers and authors would need to generate money or else they won’t keep writing and selling books. So we’d probably evolve to some ad-supported model, or some subscription model, or some freemium model where readers pay more for extra stuff (a novel with a side character, enhanced content, extra stories, whatever).
Whatever change is coming at us, self-publishers are probably going to be in a better position to handle it as we are more nimble and can learn from each other. But if the change coming at us is a negative one, then all the more reason to be aggressive now about audience building.
My sympathies for the large publishers are non-existent. Hooray for writers and cheap books!
Well, the guys that used to be in the middle: agents, publishers, print distributors, bricks-and-mortar stores.
It’s amazing that both the mainstream press and the trade press still refer to things like “the alleged collusion” or just deny anything took place whatsoever. The revisionism takes a number of forms, but my favorite is that the judge and/or the DOJ were biased somehow. If that’s the case, why did regulatory authorities in Europe, Canada, Australia and more come to pretty similar conclusions about publishers’ behavior? Publishers *love* price-fixing. Look at markets where it’s permitted (like, to a certain extent, France, Germany, and Italy) – they embrace it, celebrate it, campaign for its retention.
And yes, they have totally wriggled off the hook for this and have been able to pitch themselves as pro-reader or pro-author. But I think more people are starting to see through the spin.
PW has broken out the whole Amazon/Hachette/Price thing this morning… one mo’ time. I’ve heard enough of it. Markets are set into movement by the consumers. Price is one of the variables, and the combination of low price and high quality is something the Big 5 can only dream about at this point. By the way, David, I’ll be happy to help you wreck literature and just downloaded from B&N — not to jump on the bells and whistles bandwagon to boycott Amazon, just ’cause I own a Nook!
I thought it was going to be DON’T BELIEVE THE SPIN.
‘IT WAS AUTHOR SOLUTIONS!’
It’s not relevant for fiction readers but for a howto author like myself, 99ct has a big benefit even though it is 35%: we can go crazy (well kinda) with the media, f.e. with images and alike.
It may not make a big difference in royalty, but a reader is much more likely to buy 5 books for 99ct than several for 2.99 – and if I get nearly as much royalty from the 99ct as from the other one, I can plan differently. Smaller books with a lower proce are okay to be 99ct – less expectation with it too.
That would totally be going on my gravestone if I hadn’t already settled on SPOILER ALERT.
Let’s say, hold on to your seats… that books eventually get sold for 1 penny a piece in digital form, or printed form if you want a more extremist take on this.
(NOTE: It probably won’t ever happen in our lifetime, but … ???)
Self published authors in control of their book business could find other ways to make money, make a living (maybe selling the audio or gasp… VIDEO versions of their books … or other means).
But traditional publishing companies are already behind the curve, as evidenced by their “99 cent books destroy what WE do” argument. So, if it does happen, that books are sold for 1 penny … they will fold up shop and leave? Or will they innovate, struggle, and try to survive?
The fear that expresses itself in almost every argument for the “old” way tells me they aren’t ready for dramatic change (it’s coming, digital isn’t the dramatic change it’s capable of, yet).
Personally, I love the idea that every author gets a “marketing department.” That’s not the experience of any author I know, except the lucky few who get the red carpet treatment along with their big advance.
Most authors get assigned a publicist (often an unpaid temp), who has a ton of books to look after at the same time. The “marketing” mainly consists of appearing in the publisher’s catalog, appearing on the publisher’s website, and having some ARCs sent out. Not exactly a big push.
We have to trust readers, not the experts who’ve built a complex, good old boy publishing network that was found guilty of collusion and bilking readers of hundreds of millions of dollars by over charging for ebooks. I find it simply fascinating no one latched onto that and was outraged. No Colbert lambasting publishers. Nope. They price fixed, got called on it, CEOs lied in court on the stand (I love it when people say publishing is ‘honorable’) and hardly anyone blinked.
I trust readers.
And hooray for you, David. I’ve been having this argument with writer and reader friends for a while now, and I passionately believe that the easier it is for people to rget their hands on a book, the more we writers all benefit. Where does RRP leave students, children and people with no money to spare? I buy new books, I buy from charity shops and I use libraries. I don’t want my books to be valuable commodities, I want them to be READ.
“Worrying about the ‘industry’ is pointless because the industry doesn’t care about you” – brilliant. I couldn’t agree more.
Like you say, it’s about readers and writers – if books sell in large numbers because they are cheap, who exactly is losing out?
Hi Deborah. I fundamentally disagree with you regarding backlist titles. But because you think the self-publishing comparison is unfair, let’s take a publisher like Open Road. It is aggressive both in its digital marketing and its e-book pricing. And, despite that, it can still afford to pay authors way higher royalties than the Big 5 – leading authors like Michael Chabon to sign digital rights over to them instead of accepting the paltry industry standard at Random House.
Do you think readers should be forced to pay for the inefficiencies of large publishers? That’s a particularly tough argument to make when you are talking about backlist titles – especially those which have already earned out and are now withering on the vine.
It’s not very imaginative to insist that Backlist Title X has to pay for some basket of legacy costs so we can’t discount it. And it’s the kind of zero sum, analog thinking that I’m arguing against.
“If self-pubs would stop dealing in simplistic arguments and try to understand the business of running a business, and how that business differs depending on the size and structure of the business, we could have a useful discussion of pricing.”
Deborah, maybe you live in a different corner of the internet. I’m seeing a lot of discussion on the business issues of independent publishing. Have you read Kristine Rausch, Hugh Howey, Dean Wesley Smith, Passive Guy, Joe Konrath, Johanna Penn…? There is a lot of focus on money, and income. And the simple fact is that indie authors are not only staying afloat but actually thriving. (AuthorEarnings.com is a great place to start to read up on this.)
If all you see are “dirt-cheap prices” then you’re missing the bigger picture. Yes, some indie authors self-publish because they write crap that wouldn’t see the light of day otherwise. But for many of us, it’s a business decision to go indie.
E&O insurance can be purchased. Professional editing can be contracted. Talented cover designers can be hired. Marketing talent and techniques are available in all industries. Yes, some indies may skimp on these things. And on the other extreme, we have divisions of multinational conglomerates who own and/or lease some of the most expensive real estate in the world and maintain huge staffs, focusing on blockbuster books and treating midlist authors as the necessary churn to power their hit machines, and they’re raking in the profits right now. We’ll see over time which business models work.
As for “career management” … isn’t that up to the author herself? Some say there’s never been a better time to be an author. When I look at the world today, with all these options, I tend to agree.
Dave Gaughran – Curriculum Vitae
~ 1999 – 2009: World traveler, student of life
2010 to present: Author and blogger
2014: Destroyed literature
Authors and publishers are free to price their books however they want. It is missing the point to argue otherwise. The point is this: Comparing full-service publishing to self-publishing is apples and oranges. It makes no sense. It’s a useless straw man. A business that offers a wide range of services to authors has staff to pay and overhead to cover. A full-service publisher provides an author with liability insurance, a sub-rights department, a marketing department, distribution, and much else. Selling books at dirt-cheap prices is impossible for that business model. It’s not a matter of greedy choices; it’s a matter of paying the bills. Many authors *want* that kind of publishing experience. And arguing that old backlist titles of a publishers’ should be offered cheaply shows a lack of understanding of how much management costs are involved in even those old titles. They still have to pay their way.
If self-pubs would stop dealing in simplistic arguments and try to understand the business of running a business, and how that business differs depending on the size and structure of the business, we could have a useful discussion of pricing. “You get what you pay for,” has never been truer in terms of self-pubs receiving a 70 percent royalty but *no* publisher support, risk,investment, creative or career management services. That system works well for those who can run their own ship, but many authors can’t stay afloat. ,
Deborah –
You seem to have an intimate knowledge of the costs associated with legacy publishing. Why don’t you share some of the costs with the other readers here so we can make that apples to apples comparison?
I think the strongest argument you could make is to show exactly what services legacy authors receive and at what cost to the publisher.
I love this post. I think my favorite part, and the part that others have to do to remember is: this isn’t zero sum game. It’s not a race. Me winning doesn’t mean you lose. Me earning $500 doesn’t mean you don’t. Readers love to read, and if they can get books for cheaper, they’ll often read more books. Readers who love to read also tend to always be looking for something to read, so if they pick up your book and like it, they’ll likely want another one. And that’s a good thing. They’ll adore you if you sell it to them for cheap, so they can own their very own copy, instead of being 25 on the waiting list at the library because they didn’t sign up quick enough (or because the library only has one ebook copy available). It’s always good to help your readers, and by pricing low, you’re not hurting anyone else.
I could also argue that the industry focus on overall dollar revenue of ebooks versus print – rather than unit sales – is analog thinking too. Since self-publishing grabbed such huge market share, readers dollar spend is flat or down. But unit sales are up. A real world example might be this: readers who used to spend $20 on two traditionally published e-books, now spend $19 total on one trad-pubbed book and two or three or four self-published books. The industry sees a decline, but in author earnings terms it’s a huge improvement. Of course, in *publisher* earning terms it’s a big drop.
Reblogged this on The Wandering Barefoot Editor and commented:
I frequently get asked how to price an eBook. It’s sometimes a tough decision and it’s difficult to explain all the angles to look at when making the pricing decision. David Gaughran sums it up nicely in this post.
Reblogged this on The Real Life Stories from a Fantasy Writer and commented:
I’m adding this to my list of things I’m throwing at friends and family that think I can upload a word document to Amazon slap a 99 cent price tag on it and quit my job.
Thank you so much! I really enjoy writing for fun and sharing with close friends and family. I have been working on a particular story for a few months now. I’ve had a bit of writers block lately and it may be due to a suggestion I received about selling my story as an EBook. Since the suggestion I have been fixated on pricing my book and not really having any fun:( . I constantly look at books in my genre and get discouraged. When I am writing it seems to be in the back of my mind. Although your intention here is to help publishers price more effectively, I gained something different from your blog. It has helped me realize that I MAY be able to make money from eBook sales, maybe a lot, maybe very little. Its not like I intended to even go this route and ……. I guess simply put. I shouldn’t really get caught up in the pricing. I’m truly taking so much of the “value” away from my potential readers and myself. So thanks again, and im going to grab my coffee and have some more fun. /cheer
Loved your blog. I confounded a company called Screwpulp to address the problem with Value and Pricing. We believe the readers determine the value of the book. As such, we give away the initial copies in exchange for a review/star rating. You can continue to get free books so long as you reviewed the previous one. After the free copies are given away the book goes up to 1$. As ratings, reviews, popularity, go up, the price goes up in $1 increments. We’re trying to let the readers find the value for each book. So what sold well for 3 stars at $4.00 might get a lower rating at $7.00. Instead of putting an arbitrary number, we let the readers determine the value. Happy to run across your blog today.
Reblogged this on expressionallyme and commented:
Deep down I dream of publishing a book at some point. I have played with writing, but see little to encourage me right now. I do have a number of very articulate and entertaining friends that I hope get to read this blog. I am reblogging this one for future reference because I like his reasoning.
Reblogged this on Mark Winter and commented:
Davey G’s wisdom on e-book pricing. I went for 99p myself…
I think $3.99 is a solid price, especially for first time writers (like myself), though, since I’m “somewhat” financially stable, I’m probably going to make my first book free.
Reblogged this on Jonas Lee's Imaginarium and commented:
Normally, I will do these on Thursdays, but I shall be in another country and most likely away from electronics until I return. But, I read this article and found it useful if not enlightening. So, enjoy David’s work and look into his other posts!
A very important factor: reading becomes less and less common. Just check your neighbours, friends and relatives: how many people are reading? I agree with the smashwords philosophy: the only real danger for your book is becoming obscure. Any other models, including the “pay as much you want” is better than nont being read.
Reblogged this on TJ's New Book Blog.
David, I’m okay with 99% of what you wrote but take issue with the following: “Marketing isn’t simply about reaching consumers but also about convincing them to place a value on the product higher than the price-tag. The higher the price, the harder that job will be.” And here’s why.
“Marketing” is simply a bringing of a product to a market. The process of marketing is actually a composite activity comprised of Public Relations (PR), Promotion, Advertising and Sales – each has its own set of rules. PR garners attention from potential publics; Promotion makes something well-known and well-thought-of; Advertising not only captures attention (makes impressions), but also informs and presents a call to action (when done well); and Sales converts prospects into buyers who actually buy something.
Rather than price/value points, in my experience, a great cover and the other important ingredients that go inside of a successful book, bring sales when they match the reality (what people agree on) of the targeted public, knowingly or unknowingly – the difference being whether the elements were surveyed before marketing commenced or not.
A highly matched (surveyed) reality factor re: a book, causes a naturally high affinity for (liking for) that book, which in turn increases willingness to communicate to others about the book. In other words, finding the correct “buttons” (what people will agree on) elicits “likes” and communication about it (word of mouth), and a reach by consumers to possess or have (buy) it. Correctly done, direct market research surveys (not focus-group studies) contribute to this series of intended results with precision, allowing for more for more closing opportunities for sold books — more correctly stated as purchased books, at which point selling becomes a viable proposition.
In my opinion, then, “…the higher the price, the harder the job will be…” is incorrect. In my book (no pun intended), desire to own a book, makes any price a non-factor – certainly not “harder,” since consumers ultimately never even buy a book; they buy the “promise” of that book – what they think they might get as a result of purchasing and/or reading that book. (Some books are purchased as gifts and are never intended to be read by the buyer.)
When that perceived value exists, price simply no longer matters. People always find the money, when they think they know what they want.
When that perceived value exists, price simply no longer matters. People always find the money, when they think they know what they want.
* * *
So authors would like to think but I’m not sure this is the case. There are very few authors’ works in a Kindle version I would buy at more than $6 for and there are none I would buy at $20. $20 is the ceiling for my hard cover book purchases. When I weigh the relative value of an ebook at $15 and a hard cover at $20, the hard cover is going to win every time.
Ebooks are about immediate gratification, but if they get too expensive . . . I will just wait and buy a hard cover that I can give away to friends or donate to the library when I am finished. Publishers are not ever going to be able to convince me that the value of an ebook and a hard cover are the same.
Thanks for your reply, which I only saw today. Word of mouth — the Holy Grail of all Marketing, PR, Promotion and Sales departments — is capable of pushing limits of pricing beyond the norm. To wit, the post-championship books and merchandise sales in Columbia, SC, when the Gamecocks finally captured the elusive brass ring. And other similar events, albeit, perhaps, anomalies.
Last year I decided to write a few non-fiction e-books. The first was released last month and is about self-publishing, I also write novels, the fourth will be coming out next month. As an author who blogs I’m always thinking about the best pricing, but it has begun to really annoy me when I see bloggers flogging their PDF e-books on their websites.
To me they are not authors and have absolutely no idea what we authors who slog our guts out go through to get our books up and published. They simply write up a word doc, add a few pics, do some formatting and then turn it into a PDF to sell through their website. And what really annoys me, is the prices they believe their books are worth. As authors we keep our books in the $.99 – $9.99 range as we know how things work, but bloggers have inflated egos and believe their little 40 or so page PDF “book” made up of old blog posts is worth far more than the average novel that’s several hundred pages long.
I am constantly astounded that bloggers believe their “books” are worth anywhere up to $30+ for a few pages of tidbits they shared on their site. Bloggers are just looking for something to flog and unfortunately they have harped on making PDF books to flog to unsuspecting followers who have no idea how hard authors actually work when it comes to writing books.
I don’t know if you’ve done posts on blogger books versus author books David, but I’d love to know what you think about it.
“They simply write up a word doc, add a few pics, do some formatting and then …..” Edit the end of that sentence to read “publish it on Smashwords.” and you have, unfortunately, just described a very large segment of today’s “authors”. I’m constantly astounded by the number of people that think they’ve written a book. Books tell a story that stands on its own. If your “book” requires the reader to buy another book to get to the end of the story then you’ve written an episode for a soap opera. Sequels are wonderful but they should be the “next” story.
Speaking as a reader/consumer: Free – $.99 books are great for getting attention for your work but if the story doesn’t have an ending I’m not likely to buy any of the future books no matter what the price.
Hi David, thank you for your sound counsel on pricing. It is an area, i have to confess, that has totally baffled me. I’m on the brink of a decision if i should self-publish or slog down the well beaten path of taping on publishers’ doors. I’m siding more and more with e-book publishing after reading your article. I wonder if you could advise on the best route to take to have books reviewed by credible people (hoping the work itself is up to scratch), especially for a first timer.
thank you again for the tips on pricing.
Reblogged on
http://writerinaforeignland.blogspot.com/2014/04/midweek-teaser-great-e-book-pricing.html?m=1
and commented:
Awesome post David, thank you for these insights. For me it’s one of the more difficult parts of the marketing mix, especially with the increasing options in promotion and place in the digital world (eventually each one with its own pricing). Leaves me with the product – but is it really the story only or might this be a bit more complex too? What do you think?
Right, but again the cost to produce does not affect either of those factors. It does affect supply to the extent that a producer may decide not to produce if the costs are prohibitive. But consumers are not swayed by how much a producer has to pay unless the costs show up as additional benefits in the product.
I don’t really want to go back and forth on semantics. I sell digital books for a living and will definitely consider your thoughts here, and appreciate your posting them. While I do take the cost of production into account, at the end of the day my pricing decisions are driven by expected demand.
BTW I’m about to try out a “pay what you want” model and will be very interested to see what that does for my bottom line.
“Shouldn’t e-books be priced more like print books?”
I like your article but feel your arguments here are weak. The idea that digital should be automatically cheaper than print is debatable. There are a lot of advantages to digital – you can read it on multiple devices, store it anywhere, search it, easily copy and annotate, etc. None of this is easy with print. While a buyer can’t legally make a copy of his digital book, neither can a buyer of a print book.
Very often I will decide not to buy a book because it’s not available in digital form. I’m sure a lot of readers feel that way.
If the issue of owning versus licensing doesn’t sway you, what about costs of production? All books – print or digital – need to be written and edited, and need covers, but e-books don’t need typesetting (more expensive than formatting), printing, binding, storing, or shipping. And the big albatross around print publishing’s neck is returns. There are huge costs associated with dealing with returns. In the e-book world, they are minimal and automatic – taken care of by the vendor. In the print world, those returns have to be shipped back from stores, cataloged and stored, and then re-sold – if they haven’t been too badly damaged (which will mean writing the stock off).
Pricing should be based on the buyers’ willingness to pay (demand), not the cost of production, that’s business 101. A customer really does not care what the seller’s costs are, he only cares about the value of the thing he is buying.
You are correct that a seller needs to take all this into account in order to make a profit, but that should not affect his decision on how to price his wares.
Actually, price is the intersection of supply and demand. Econ 101 🙂
Reblogged this on Diane Tibert and commented:
Pricing is always something self-published authors must give great thought to. David does a great job of explaining how you should go about it.
Reblogged this on John Castle and commented:
Excellent post every indie author should read.
David,
I didn’t read through the ton of comments so maybe someone pointed this out.
Regarding: “I’m thinking about this topic today as I work on the 2nd edition of Let’s Get Digital, which I’m aiming to have out in a couple of months. I’m working on a way to make it free to all original purchasers – still some logistics with the retailers to sort out.”
On Amazon this is an easy fix.
Simply upload the 2nd edition to replace the file for the existing one…unless you want to keep both editions on the market. Then email KDP and ask them to pretty please and with sugar on top email the customers that purchased the first edition and they will receive an email that gives them the option to update to the new edition free of charge.
I’m at a loss when it comes to easy answers to solve this problem on other retailers.
Hey AC, that’s exactly what I’m doing for Amazon. An easy fix. Smashwords should be no problem too as readers can download the book multiple times. For paperback purchasers (from Amazon), I’ll make the Matchbook free.
Still figuring out what to do with Kobo, B&N, and Apple. Hoping to find a solution which isn’t too labor intensive.
Having Amazon send an email to the readers who purchased the first edition is especially important, as I don’t seem to get any kind of notifications for updated ebooks even with auto update turned on.
I found this very helpful, especially because I am preparing to publish my first novel, and it’s sequel after that. I’m sure I’ll have to experiment like you say, but it’s informative for someone like me (who is just starting out) to know where I should begin based on my goals. Thanks for the post!
Excellent post, my good Irish Sir. Shall we declare a race to the NY Times bestseller list? This assumes that multigenerational wild colonial geese are allowed in the race.
Cheers.
To add another term to the pricing equation, Amazon rankings factor in not just number of units sold but also total revenue. For that reason, one of my novels at $3.99 can outsell my four-novel set by 5-to-1, but the set, priced at $8.99, can do just as well in the overall rankings. And rankings translate into visibility, which can boost sales, which…
–Larry Constantine (pen name, Lior Samson)
Hi Larry. Are you talking about the Best Seller list or the Popularity List. Because the Best Seller list is simply a list ordered by Sales Rank and Sales Rank is a function of sales (and time), nothing else. Price doesn’t influence it, nor does reviews etc. On the Popularity List however, price weighting is in effect, meaning that a sale of your $8.99 box set is worth more than your $3.99 novel and a lot more than someone else’s 99c novel.
I referred to rank, not list, full title Amazon Best Sellers Rank, which appears in the Product Details block of every book. The exact formula is proprietary, but inside sources confirm it is a rank order of unit volume weighted by revenue (and possibly other factors) in a time interval, not simply unit volume. I believe you have been misinformed on this one. The Top 100 rankings that pop up below the overall rank (e.g., “#33 in Kindle Store > Kindle eBooks > Literature & Fiction > World Literature > Jewish”) are based on the same rank order calculation, but I cannot confirm whether they further massage the data.
Larry, I’ve spent a long time studying Sales Rank and Best Sellers Lists and Popularity Lists and the various algorithms that go into ranking on same – I wrote a whole book on the topic. I can absolutely assure you that revenue plays NO part in determining Sales Rank or position on Best Sellers.
As I said in my last comment, the list price of the book plays a part in positioning on Popularity Lists – sales of more expensive books are weighted more heavily, and sales of cheaper books are penalized.
Sales Rank is purely sales. Nothing else. There is weighting in play, but it’s historical weighting. In other words a sale will be worth more that day, less the next day, less the next day after that, and worth virtually nothing in the ranking algorithm after a few days.
No other factor is in play.
David, assure away and write all the books you want, but inside sources assert otherwise. Until and unless Amazon publicly discloses their algorithm (highly unlikely), anonymous sources and external experiments and data will have to suffice. My own time series analyses also support revenue as a factor in rank, so I trust my sources. Other indie writers can use their own data to confirm or disconfirm the factor. If two books are known to be selling at the same rate but are significantly different in price, the higher priced book will have a somewhat better (lower) Amazon Best Sellers Rank.
The weighting you refer to is called an exponentially weighted moving average. The parameter alpha, a value between 0 and 1, determines the relative weight of past history versus the current value. A high alpha means current value dominates; low alpha means historical average dominates. Amazon is known to have played with the parameter, and seems to have settled on a relatively high alpha. Combined with their high frequency of updates, this means that rankings can fluctuate dramatically.
I have seen zero evidence for a revenue/price effect on Sales Rank, but if you have any I’ll take a look. I still wonder if you are referring to ranking on the Popularity List (often confused for the Best Seller List). There is a price bias in effect there, but that’s a rolling 30-day average and has other quirks compared to the Best Seller list (e.g. freebies are counted but at tenth of paid sales. Freebies aren’t counted on the paid Best Seller lists and are separated out in to their own lists. Popularity Lists aren’t split this way.)
To put it another way: it’s easy to figure out what a book is (roughly) selling, given its Sales Rank. If a price/revenue weighting was in effect, it would be immediately obvious, as it was when Phoenix Sullivan and Ed Robertson discovered the same bias on the Popularity List. This blog post goes into some depth about how the Popularity List is calculated: http://phoenixsullivan.blogspot.cz/2012/08/just-how-do-those-amazon-algos-work.html
Quoting from that:
I am not confusing Popularity Lists with Amazon Best Sellers Rank (or Sales Rank), as should be evident from my post. Merely repeatedly asserting the same thing adds nothing to the discussion. We all know what you as well as Sullivan and Robertson assert, but these assertions are not based on direct knowledge from Amazon. What I have been told is that the weighting on revenue is small compared to unit sales, but it is there. In other words, it takes a big price difference for the effect to show up. That fits with my own data. Maybe I was given incorrect information, maybe I am wrong. In any case, I have no stake in whether you accept that or not, I was just sharing what I know for what it’s worth. You do a great job with your posts and provide much valuable information, I just wanted to add to that.
I hope you don’t take my posts in an antagonistic way, I enjoy hashing these things out. Because Amazon is so tight-lipped, a good deal of fuzzy logic is needed to make any headway and things can easily be overlooked. If there’s no hard data to prod, I’d be somewhat skeptical of the Amazon source. In my experience at least, sometimes data-hungry indie authors like Phoenix & Ed know more about the various algorithms than internal Amazon people. But the whole point of throwing these things out there – whether in books or blog posts – is to figure stuff out, and it’s always good to re-examine any assumptions.
Great post, David.
Price v. Value. Yeah, Basic Econ 101 stuff. Too bad Big Pub doesn’t seem to get it. I have to wonder why, since BP employs so many beancounters and gives them carte blanche to screw around with so much of BP’s business practices. Pricing ebooks at $12 plus and hardbacks at $30 plus, and they wonder why self-pubbers are continually gaining market share. Doh!
Reblogged this on Ruth Nestvold – Indie Adventures and commented:
Great post by David Gaughran on ebook pricing — when I have time for marketing again, I should do some more experimenting with pricing myself. 🙂
Thank you for this excellent article. I have not published anything (yet), but you answered one of my biggest questions–How much is too much or too little to charge? As a consumer, I have to consider price of course, but I have noticed that if I get a free book or purchase one for 99c, many times I don’t read it for several months, where if I spend 2.99-3.99, I generally read it right away. This would be particularly good to know if you are wanting people to write reviews.
I’m the same way. If I grab a book on impulse at 99 cents or free, I might never get to reading it because it keeps getting bumped down the list by books I paid more for. I’m probably missing out on some good reads, but that’s how it seems to go on my Kindle.
Reblogged this on The Writer's Workshop Blog and commented:
Some really sound and well balanced advice about pricing and value being two different things – important to keep in mind.
I’ve been experimenting with price for my novella, The Seals of Abgal, and I’ve found that it sells the best at $1.99 than it does at $2.99, which doesn’t say all that much because I haven’t sold a hell of a lot. However, it would be interesting to see what happens when I have the second book out and how that will impact pricing on the first.
As for Mercenary, I am looking forward to that one. I’m really looking forward to that one.
Reblogged this on DV Berkom Books and commented:
Interesting thoughts on ebook pricing…
Ahhh, the age old question. My personal theory is that I price my ebook at what I would pay for an ebook. And I can’t see myself paying more than a few bucks for an ebook … precisely because it’s a digital copy, and not a physical item. I’m more than happy to shell out $20 for a softcover book, but if it’s an ebook, I just feel like I’m getting robbed if I pay more than $3. So I would never willingly price my ebook above $3 (unless, of course, the ebook pricing paradigm shifts in the future!)
Rhetorical question on a tangential topic – are the big publishers trying to squeeze out Kindle or just milk it? Why else would prices for kindle editions of books from many of the top publishers be priced 15-20% higher than paperback editions? It’s a trend that only started in the past six months or so.
It could be a game of pricing cat-and-mouse with Amazon. Since the price-fixing trial and the abandonment of Agency pricing, publishers are on a wholesale model with Amazon – meaning they set their list price, and Amazon is free to discount as much as they like (as long as they turn a profit overall across the list). Some publishers may be trying out higher prices, e.g. $12.99 or $14.99, in the hopes that Amazon will swallow the discount to keep them $9.99 or less. But they don’t have to. Who blinks first? I’m not betting against Amazon…
David, what I’m wondering, in the price – value continuum, is how the subscription models, like Scribd & Oyster, will influence this, if at all.
But, with fair pricing at neutral, I do think the pricing-enticement goes away. Attraction to the work of art is all that remains, it seems.
I’m in the baby stage of participating in these models, so we’ll see 😉
Best wishes on your new work, thanks David.
Subscription models are interesting. I’ve been thinking for some time that they will ultimately be a significant part of the mix. It’s early days and we don’t know if revenue-per-lend rates will hold up at good levels or whether it will degenerate significantly, and we don’t know yet how popular with readers they will be.
For us, if it does become a big part of the market, I don’t see our job changing too much. The currency of the internet is attention. Price is a tool we can use to gain attention. In a subscription model, that’s one less tool we can use. But we’ll still have to get eyeballs on our books, and I’m afraid I don’t foresee some kind of utopian system where cream automatically rises to the top. We’ll still have to hustle!
Definitely agree about still needing to hustle. Maybe more so. Like with Netflix, price of an item irrelevant.
Either way, already interesting, gonna be more so 🙂
Thanks David
Reblogged this on and commented:
Some things important things to consider when self-publishing.
Some things to consider about prices when considering self-publishing. I think this is well-thought and taught me a lot.
Very thought-provoking. Maybe I should ask my small press to price at $4.99!
I originally set my eBook price around $4.99. It’s a full length novel and has a paperback version which someone occasionally purchases. That eBook sold a few copies but nothing to rejoice over. I dropped the price to 99 cents several years ago for a Read an eBook Week promo with the intention of raising the price at the end of the week. It rocketed to the top in its category on Amazon and remained there for over 2 years. I’ve earned far more at the 35% royalty and don’t feel it has devalued the book. That 99 cent eBook has sold roughly 41,000 copies on Amazon to date and I continue to sell at least 120 copies/mth. I wouldn’t dare change that price. I’ve built an audience and get great reviews. Why mess with a good thing?
The first book in my series has been free since Dec, and I’m making a nice paycheck on the whole series. Definitely worth the loss of income on the first book.
Even though I’m a little known author, I have my books priced at $3.99 for a couple of reasons. First I think that any lower is selling them (and myself) short and also because of the Smashwords data. Incidentally, when I published my second novel, a sequel to the first, I gave the first away for a while as a promotion and received its two worst reviews. At $3.99 most everyone seems to like it. Go figure.
I agree that pricing your book at $3.99 is the right thing to do. First if it was say $0.99 or $1.99 it would bring the wrong message of value to certain readers who may not have been your market audience in the first place. The 15 % free sample is enough to determine whether the reader will like your book or not, and so why try to make the wrong person buy your book based on the price being cheap?
There wasn’t room to get into it in this post, but you should all check out Ed Robertson’s post which has a more radical view of pricing, esp. for launches: http://edwardwrobertson.blogspot.cz/2013/10/challenging-assumptions-pricing.html
It’s a brilliant post, and I’m sorely tempted to launch my next novel at 99c then raise to $4.99 on maybe Day 5. It would be nice to let the mailing list peeps get a special deal and it’s always fun to experiment.
As usual, a well thought out post with plenty of details. Thanks David.
Really can’t agree enough re: Price≠Value. As I’m currently working on a scifi trilogy, I have a more funnel-based pricing model in mind ($2.99-$4.99-$4.99, maybe $8.99 for collection), which of course I’ll play around with until I find a sweet spot.
It seems like some of the smaller traditional publishers are finally getting the message. I’m currently reading the first book in a popular fantasy series, which weighs in at an impressive 1,000 words, and I bought it for $2.99.
Hoping everyone realizes I meant 1,000 pages, not 1,000 words. I did not spend $3 on a four-page fantasy book.
Hey, we’re not judging…
Reblogged this on Lee Fullbright's Room.
The market price vs consumer perceived value is a correct point but it is marketing that also drives what consumer will feel as the “right price” for the value of a good.
Amazon has created an ebook market domination based on the $0.99 and then pushed even further with the *free* price point influencing a title overall visibility with readers. After a while, Amazon marketing must have found that it wasn’t anymore a good ROI for Amazon so *free* doesn’t do much today toward climbing the ranking.
The ‘right’ price doesn’t exist, it is indeed a perception. $0.99 is Amazon created perception as entry point for unknown authors, or no-risk impulse purchasing. It could have been $1.99 or $2.99, anything Amazon wanted to but it would have not dominated the market in a few years, and competitors would have not have a hard time with a $2.99 as minimum price. The only reason behind that choice is to maximize the Amazon platform dominance.
As far as I remember, reading an old market report, up to a certain volume of transactions, Amazon was losing money at $0.99 but could sustain that for more years than the competitors. The break-even price point was indicated as $1.36 .
Now it is profitable even at $0.99, tomorrow might be even more with a %50 royalty scheme for $2.99 and higher if competitors don’t show the same sales volume.
I’m pretty sure Amazon didn’t “create” the $0.99 price point. That was created by indie authors, who have now moved away from that except for special promotions. Through the 75% royalty rate, Amazon helped authors to create the $2.99 price point, although there is a good argument for raising that to something like $4.99 as being a ‘reasonable’ price for a full length novel (> 75,000 words). Pricing for novellas and smaller works are another matter entirely.
Could you expand? Hard to get what you mean exactly. How could Indie Authors create or impose a price point on the Amazon platform?
Amazon offered the price scheme, $0.99 was the minimum price point from the beginning. It wasn’t “created” by Indie authors.
Amazon could have gone for $2.99 as minimum price point.
If Amazon truly wanted to encourage 99c, it would offer 70% royalties for that price point. That charge can be laid against Apple, who do pay 70% at 99c, but not Amazon. In the last couple of years, they have further eroded support for 99c by introducing price weighting on the Popularity Lists. I would argue that all the algorithm changes of the last two years have resulted in self-publishers increasing prices, rather than the opposite.
Then they would lose money on those, and writers flock on the platform that give them more sales. 1000 sales at $0.99 earn more than 100 at 70%.
The market changes continuously, and for Amazon the price war is won (Apple will not gain market share with 70% on the $0.99).
Amazon has won the price war, that’s why the algorithm can change and bring more cash to Amazon with more books selling at higher price point. Unfortunately I think the ‘marketing’ damage of the $0.99 price is irreversible now (for debut authors, or to build a readership from scratch).
Besides, I didn’t say Amazon ever encouraged 99c. It was a price war to win the market. Of course now that they have achieved that goal 99c is no more an advantage for Amazon in terms of earning but in readers’ mind 99c is casted in stone.
Now even paperback are sold at $0.99 (e.g., Compton Newton publishers) and for the same reason: conquer a market sector.
i was glad to see you mention early paperbacks because I’ve been thinking that this whole issue has been fought before, without any noticeable harm to publishers.
The parallels between the paperback era and the ebook era are fascinating – teased out in Ed’s post above. Paperbacks were looked down on. Only trashy genre writers published that way. They weren’t “real” books. Etc. etc.
Reblogged this on Author Unpublished and commented:
Some interesting food for thought on pricing in today’s digital book market.
Hi David. Thanks once again for another thought-provoking article. There is another consideration to take into account when pricing. There are several countries that are still charged the extra $2 Whispernet charge by Amazon. This makes my $2.99 books $4.99 for my friends and relatives. With today’s exchange rate it is not a cheap purchase, although still much lower than a paperback, but I’m reluctant to promote the books to them unless they are on a Countdown or a Freebie. Interestingly, they are not charged the extra $2 when I do a Countdown from $2.99 to 99c.
Reblogged this on Getting Personal… again.
Great post, David! I have a permafree book that leads into my Karma series (a WOOL tie-in) and brings me a regular stream of buyers. The full-length collection at 85,000 words is now $4.99. A BookBub ad and pricing the whole novel at 99¢ for a weekend lifted the collection into the top 100… briefly. But I got the screenshot! I think your price/value thinking is spot on. It gets easier to remove the emotion the more books you have out. It’s a business, as well as an art.
Thanks, as usual, for your support and wise advice to the Indie world.
Great post, David.
Writing is a business – whether you are doing it for a big publisher or as an Indie. Those taking part in this wonderful enterprise have to remember that, otherwise the result will be certain disappointment.
I see the “It took me 3/4/9 years to write…” comment everywhere, and the people that make it are never going to be convinced their work is only worth 4.99 or less however much logic dictates they are wrong.
Your point about value is spot on – we buy things we judge to be of good value. This also goes as far as NOT buying something at 99c (which I admit to doing) because we consider even at that price point it is unlikely to offer the value we seek. I find myself doing this when loading my Kindle with holiday reading. I look at books 3.99 and above, in the expectation they will have been edited, proofed and formatted professionally.
You’re also right on maximising revenue over sales – and writer’s have to think hard about where they want to place themselves in the curve of sales vs. income before deciding on their price.
On a final note – with the long tail of availability for eBooks a writer can afford to invest in a professional product without the need to recover the costs over a scant few months, as the traditional marketplace tends to do. Our books will be selling many years after publication and continue to generate an income.
The price/value problem is easier to solve when looked at from the different perspectives of producer v. consumer. Circling back to focus on the goal is solid advice.
The point that consumers value more what they pay more for is valid. A few years ago, colleges and universities in the US determined that the value of an education at their institution was perceived as greater when the price was higher. Tuition raced up, competition for admission was intense. Then came the Great Recession — new grads can’t get jobs with their impressive, highly valued credentials and are straddled with so much debt they can barely breathe. At the time, the goal was admission to a prestigious school. Now the goal is get a job.
By experimenting with pricing, an e-book publisher can also refine his goal which may not always be clear.
Hi David! Great, straightforward, logical thinking here. One thing you didn’t touch on – bundles. We’ve just seen a 12-book, multi-author bundle being sold for $0.99 make it to the *real* bestseller lists (including the NYT). The sole intention was to get it on the list (as admitted by the publisher / organiser), which allows the authors to then call themselves a “NYT Bestselling Author”. Is this right? Does it devalue the bestseller lists?
The logical extension of this would be to include greater and greater numbers of books in a bundle, but Amazon have a download limit for that price point. And, apparently, even getting these 12 books inside that limit took some careful formatting.
I’d be interested in your thoughts.
Hey, I’ll have a post about box sets very soon. I’ll be in one myself that’s launching shortly and will go into all the details: pricing, goals, how you put one together, and so forth.
Re your question, I see zero problem with these authors describing themselves as NYT Bestsellers. The NYT has very specific rules about what qualifies, and this box-set does. I have no issue at all with this box set hitting the list. None at all.
It’s an interesting question to ponder, but what’s the problem? The price? Should we only count sales at… what? $2.99 or more? $4.99 or more? This is a problematic approach because it’s a bestseller list, not a highest-income list. And if the problem is the 12 authors, where do you draw the line there? Do we ban all collaborations? Anthologies? Writing partnerships? Honestly, I think fixing the “problem” will create a bigger mess. And I don’t really see what the problem is anyway.
As for devaluing lists, I think most bestseller lists are a sham to be honest. The NYT will ignore books that only sell at one retailer – cutting out many self-published and Amazon-published books – and there are all sorts of quirks to how they put together the list (and persistent rumors of related shenanigans). The situation is worse again with other bestseller lists where publishers can openly purchase a spot (I’m particularly thinking of book chains and their “bestseller” lists).
But there is some value to the reading public (and in a professional sense) to appearing on those lists, so aiming for it is a valid and understandable goal.
Thanks for your comments, David. I’m still trying to work out what “the problem” is, to be honest. Would I like to be on that list in some form or other myself? Of course I would.
I suppose it’s a personal thing, and thinking that, somehow, it’s ‘cheating’ to become a “NYT Bestselling Author” by this method. I would want to be on the list for a single book or collection written by me and me alone.
I understand and accept that it’s no more cheating than buying reviews, or using sock puppets to promote your books – both methods probably employed by traditional publishing as well as self-publishers. And, as you say, we have the purchasing of positions on lists and in bricks-and-mortar stores by trad publishers. I suppose it all comes under the umbrella of “clever marketing”, of which there are numerous examples, I’m sure.
Good luck with the forthcoming collection, and I’ll be eagerly awaiting your blog post about box sets.
I don’t think it’s cheating at all. It’s nothing like buying reviews or using sock-puppets. The NYT places no restriction on length, price, number of authors, or on box sets at all. It’s not gaming the system in any sense, it’s 100% playing by the rules. I can’t even see where there is an ethical question mark.
Being a “NYT Bestselling Author” doesn’t mean anything more than you sold a lot of a particular title in one week. How you sold it, what you sold, it doesn’t matter. It’s not a literary prize. It doesn’t confer some kind of special status. It’s a badge that says you sold a lot in one week. It’s an achievement, for sure, but it’s hardly some sacrosanct institution that’s being defiled by grubby commerce. It was always about selling books.
Thought-provoking and well argued as usual, Dave. In my case I now have 2 WW2 spy thrillers selling at $3.99 (give or take a few cents – Amazon are continually playing around with the price). The books are selling quite well, and I would be afraid to tinker with the price for fear of upsetting the applecart. If I increase the price I am sure sales will plummet; if I decrease the price and income doesn’t improve, it could be difficult to raise the price again without losing potential readers.
JJ, if it ain’t broke… Others may disagree, but I’m loathe to play around with stuff too much when something is going well. But if sales take a dip, and you have less at stake, that might be a good time to experiment.
BTW – I’m about a third of the way through The Black Orchestra – really enjoying it too. If I remember right, that book has become quite sticky in the charts. I wouldn’t touch anything in a situation like that. When you have more out in that genre, you can look at making one of them free or cheap to lure in another tranche of readers – perhaps if you have one at that point which is underperforming. Not as much point doing it when things are going well and you have just 2 titles to play with in that genre.
A useful and informative post, David. I’m very mindful about this as I edge (eeeeeeeever so slowly) closer towards completion on my first novel. Ta.
I like your idea of focusing on total income generated by the work rather than piece price – and also the idea to experiment with price levels to find the best income attainable. I think some markets will allow higher prices, some not. It’s just like selling a house – you want top dollar for your property but your must take into account what a local market bears, otherwise NO sale.
True, except it’s a digital house that you can sell infinite copies of!