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.
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.