Will 99-Cent E-Books Destroy The World As We Know It?

There are a lot of people getting worked up about cheap e-books. But I am here today to tell you the sky isn’t falling.

Let’s rewind.

When an author or publisher uploads their work to Amazon (and the rest of the e-tailers), they are free to choose the price that they sell at. With most companies, the minimum price you can sell at is 99 cents. Until recently, only a small portion of writers were choosing to sell their work at this price, mostly new writers, without an established audience, hoping to build a following.

On paper, that’s a good strategy, although other writers have complained that this was a race to the bottom, and that they were being priced out of the market.

At first, Amazon paid a 35% royalty across the board, so authors were free to experiment with a variety of price points, and find the level that maximised their revenues. Many authors were pricing at $1.99 and $2.99, comfortable that they were still significantly cheaper than trade published books, but happy that they were making enough sales at a reasonable royalty rate.

Many would run a sale at 99 cent for a week. The increase in volume would make up for the lower price as fans of bargain books spread the word, and the authors climbed the sales rankings. Once they had done so, they would raise the price again, hoping that increased visibility would hold their position.

In January 2010, Amazon announced that they would double the royalties to 70%, if authors price their work between $2.99 and $9.99.

Predictably, there was a rush to the $2.99 price point, as it was the lowest price where you could gain the higher royalty rate, but not too expensive to dissuade all impulse buyers and bargain hunters. Writers could now make over $2 a book at this price, which should offset any lost sales from increasing their price.

Many of those who had written a series still kept the first book at 99 cent as a kind of ‘loss leader’, attempting to lure readers in, hoping they would then continue with the series, paying $2.99 or more for the rest. Amanda Hocking had huge success with this exact strategy, selling around 1 million e-books, netting her approximately $2 million, in less than a year, and many writers adopted her pricing policy.

John Locke changed all of that.

When Locke looked at the traditional publishing market, he thought it would be next-to-impossible to crack. Even if he did beat the odds and get a deal, the competition in the marketplace, and especially in his genre, was fierce. He would have to convince agents, editors, booksellers, and if he got that far, readers, that he was as good as James Patterson. Not an easy sell.

But when Amazon launched their digital publishing platform, he saw an opportunity.  He wrote a series of thrillers and decided to price the whole lot at 99 cent. He wanted to be the greatest 99 cent writer in the world. He figured that now James Patterson, selling at $9.99, would have to prove he was 10 times better than John Locke.

As with many of the indie author success stories, he didn’t sell much at first. By September 2010, he had made a grand total of $47. That’s not a typo. But as many self-published writers noticed, something happened around November last year, and his sales took off.

In the first two month of 2011, he sold over 300,000 e-books at 99 cent, netting him over $100,000. In the figures just released for March, he went bigger again, selling 369,000 e-books in just one month.

Clearly, John Locke’s strategy was that the increased volume of sales would outweigh receiving the lower royalty rate. He’s only making 35 cents a book, but he is selling a hell of a lot of books. Many authors decided to try and replicate his success, and now a glut of writers selling at 99 cents.

Many publishers and traditionally-published writers decry this, arguing that it devalues the whole concept of what a novel is worth. And they have a point. Readers are now being conditioned to pay a lot less for books. Trade publishing houses are fighting hard to hold the upper line. Most of them are pricing their e-books at around $9.99, and while some are selling cheaper than that, there are significant numbers of new releases being priced up to $14.99.

And because Amazon still has the power to heavily discount hardback and paperback releases, we are often left with the counter-intuitive situation where trade-published e-books are more expensive than hardbacks. Readers have reacted badly, giving one-star reviews on these books, even if they haven’t purchased them.

Some self-published writers are throwing their hands in the air too. In genres such as high fantasy, historical fiction, and literary fiction, where writers tend not to be as prolific as, say, thriller writers, they feel like they cannot compete, as they don’t have as many titles where they can sell in volume and reduce price.

A few industry commentators have declared the end of paid-for content, and that writers will have to get used to giving their work away for free and finding other income streams, just as musicians often make more money from touring and merchandise.

I don’t agree, and I don’t really see what the fuss is about. Trade publishers have been selling surplus books to discount booksellers for years. I discovered Michael Chabon in a $5 store, and both he, and his publisher, seem to be doing alright.

And just as there have always been high-end publishers, regular publishers, and discount publishers, there has always been dollar theatres and day-old bread. That bread is probably fine, and John Locke is said to be a hell of a writer for 99 cents, but discounted goods don’t necessarily crowd out the rest of the marketplace.

It’s all about positioning and perception. If you make the reader think that your work is overpriced at $1.99 or $2.99 (and poor covers, editing, formatting, openings, descriptions, and marketing will certainly help with this) then yes, you will struggle to compete with cheaper books.

However, if you do everything in your power to make your book look like it came from one of the big New York publishers, if you run a clever marketing campaign, if you have professionally designed covers, a great opening that readers can sample, descriptions that will hook people in, and if your work has been professionally edited, you can price your work at $2.99 and higher, and not only survive, but thrive.

Michael Sullivan is a great example of this. He wrote a six-book fantasy series called The Riyria Revelations. Go and look at one of his books on Amazon. Together with his wife and publicist, Robin Sullivan, they set up a company, Ridan Publishing, and published Michael’s books. Everything was done with the highest level of professionalism. To me, these books look as good, if not better, than anything coming from a trade publisher.

Because of this approach, they have been able to price the books at $4.99 (that’s a $3.49 per-book cut for the author), and they have sold truckloads.  This is because when your book looks like it came from one of the big publishers, $4.99 is a bargain, and people love bargains.  They were even able to price the fifth book in the series at $6.99, and readers were happy to pay it.

EDIT: As one of the commenters below pointed out, Robin Sullivan experimented with lower price points, and sales actually dropped.

The lesson here is this. You need to decide what kind of publisher you are going to be. If you have a large backlist, or if you are very prolific, or if you think you can stand out in the crowd at 99 cents, then that could be a viable strategy for you.

However, if you are less prolific, or if you are writing in a genre that hasn’t fully taken off yet, or if you can put the time (and some money) into positioning your book as a quality purchase by making it look as good as anything coming from New York, a quality purchase rather than an impulse purchase, there is no need to fear the 99 cent e-book.

There are no guarantees with any strategy, but remember this: there are still a ton of people paying $14.99 for Michael Connolly.  Why?  Because they think it’s worth it.

David Gaughran

Born in Ireland, he now lives in a little fishing village in Portugal, although this hasn’t increased the time he spends outside. He writes fiction under another name, has helped thousands of authors build a readership, and has created marketing campaigns for some of the biggest self-publishers on the planet. Friend to all dogs.

39 Replies to “Will 99-Cent E-Books Destroy The World As We Know It?”

  1. Excellent post AGAIN! 🙂

    I found this post really interesting because while I was hanging out on the Kindle Boards yesterday I came across two indie authors who’ve had GREAT success with higher price points.

    Amanda Brice has cracked the top 100 (Heck, blown it to pieces!) with a price point of $3.43. Katie Klein sold over 500 books in just 21 days with her two books priced at $3.52 and $4.58.

    What do these authors have in common? Both their books look like something from the Big 6. They are professionally edited and have really gorgeous PROFESSIONAL covers. They spent a little money and did things right and readers want to buy even at the higher price point!

    I can’t believe the number of authors over on the Kindle Boards whining they can’t sell anything and they don’t know why. Then I look at their books and oh my lord, their covers are a hot mess. It’s like Photoshop threw up and not in a good way.

    As I reader I’m far more likely to fork out a bit more money for a good looking book than I am to pay 99 cents for a tragic looking one. I know not every author has a lot of cash to splash out on professionals, but there are plenty of people out there doing quality work for affordable prices. This is why I am having professionals do my covers, editing and formatting while I stick to the writing.

    1. I agree. Some of the stuff out there is awful. If they spent a little money on professional editing and professional covers, it could make the world of difference. It’s no guarantee of success, but it’s the only way you will even have a chance. And if you are not going to give yourself a chance, why are you self-publishing in the first place?

      Formatting can be done on your own, and done very well. However, it requires a fair bit of time, and a little bit of technical ability, but for editing and covers, for sure, leave that to the professionals. I’m not against people hiring professional formatters – especially for non-fiction or something with an unusual layout – and in fact, they are very cheap – I am just emphasising here the areas where people absolutely MUST spend money. I am going to format a few short stories myself, but if I find it too time-consuming or annoying, I may end up paying for it when I get around to my novel. Probably, in fact.

  2. Cover is important, but there are people with so-so covers that clearly look homemade who sell well.

    I think the best way of putting it is you give yourself the best chance to sell if your product looks polished and professional, but even that is no guarantee, and even a lack of polish doesn’t always doom a book.

    1. You’re right Mark, a bad cover won’t doom a book. But with a bad cover, people will click on it in smaller numbers, then you really have to knock them out with your description and opening.

      There are 900,000 books available for the Kindle right now, with more and more being added every day. Most people are only going to see your book in a list of 20 or so, you have to give them reason to click on it.

      To climb out of the soup, you have to give yourself the best chance possible, and a good cover is part of that.

  3. I agree, Dave. I could have done the formatting myself and will probably learn to do that soon. But for the first one I wanted to make sure it is done quickly and done RIGHT once my book is finished with the editing process. Fortunately I was recommended to a woman who does it for an extremely reasonable price. I figured that for the amount of time and frustration she would save me, it was worth it this go ’round.

    But certainly it’s not necessary for everyone. I know a LOT of indie authors do the formatting themselves. Others pay to have formatting and editing done, but do the covers themselves. Dara England did her own cover and it is GORGEOUS. But that’s also her day job. 🙂 I wouldn’t recommend it unless you are a graphic designer or something like that. It’s like the old adage of a lawyer being his own client. 🙂

    1. You’re right, and there are exceptions. In fact, Michael Sullivan did the artwork for his covers.

      I’m lucky in that I know a pro book-cover designer who is going to help me out for free (the first one anyway!).

  4. I have a question. You wrote: “By September 2010, he had made a grand total of $47. That’s not a typo. But as many self-published writers noticed, something happened around November last year, and his sales took off.”

    So, what happened? Something must have happened. I don’t think it was magic and I don’t think it was luck. I also don’t think that John Locke was languishing in the 6 digit rankings one day and then *poof* he was number 1 without something (other than .99) influencing those sales. Did he start getting more reviews? Did he spam message boards? What happened between September and November to turn John Locke into a best seller? That is the question that needs to be asked.

    1. p.s. That is to say, I don’t think that he has attained the level he has attained simply because he prices at .99. There are plenty of other good authors with better looking covers pricing at .99 that haven’t reached the same level.

      1. True. And let’s not forget that he worked in marketing for years. He has done some clever things. He generally promotes his character, Donovan Reed, rather than himself. That’s the brand. He has said in interviews that he wanted to create a bad-boy character that female readers would respond to, that they would want to ‘reform’. He said that 80% of his readers are women, so it seems to be working.

    2. It’s a good question, and not one that I have a full answer for.

      A lot of people saw an uptick in November, and another at Christmas/January. The second is easy to explain, but the first? I would say the Kindle 3 coming out was a factor, iPhones saw a huge bump in sales around that time, and I am sure iPads sold a lot too. A lot of big books are brought on the market around that time, which could have an effect on the whole market, but I don’t have a complete answer for you.

      With regard to John Locke specifically, I don’t know. He was hitting the blogs and the review sites well before that, I have seen interviews and blog posts about him all through the summer, and even as far back as March 2010. I don’t know if you can point to one specific reason. He kept releasing books a month or two apart, increasing his Amazon footprint, he kept promoting himself, increasing his internet footprint, and it all came together for him.

      I hear this a lot. One writer I know with more modest, but still good, sales – they have sold 10,000 books in the last year – saw virtually no sales for the first three months, then a steady little trickle for the next three, and then a dramatic increase in November which was sustained.

      It’s a pattern a lot of writers have seen and a reason why people shouldn’t get too worked up about how much they have sold in the first few months. It takes time to find your audience, and there is no “magic bullet”. All you can do is put the best product out you can, promote it as well as you can, then you have a chance. Oh, and keep writing, because the number of titles available is a big factor.

  5. Data point. Robin Sullivan mentioned on Joe’s blog that she ran an experiment around September, temporarily lowering the price of a book to $2.99 (I think). They sold *fewer units* of it than when it was at $4.99.

  6. There’s a very vocal minority on Amazon which is extremely price sensitive/price obsessed, but I don’t think most people will follow this pattern. A novel takes hours to read, so it doesn’t make much sense to save a couple of dollars to read something one finds much less interesting. Stuff in public domain is already free, and I haven’t seen a huge increase in people reading Dickens or Moby Dick.

    I do think that, say, a 14.99 e-book prices gives people pause (so price does matter), but I doubt .99 is the magic tipping point.

  7. David, I agree with you entirely. Just before reading your post, in fact, I had already said the following over at Kindleboards:

    It seems to me that if major “name” authors can command $12.99 – $14.99 ebook prices, yet still land in the Kindle Top 10, this tells me that plenty of readers will buy a high-priced ebook. Why is that — and why from those authors?

    Because they already have established reputations for being good storytellers. In other words, lots of people will still pay plenty of money for a good story.

    Same goes for indie author Michael Sullivan, who is selling extremely well at $4.95 – $6.95. Why? Because he’s established a solid reputation with his audience. There are others.

    The only reason to price low is if you are unknown and need to establish a “brand name” as a good storyteller among your target audience. A low price will help encourage “impulse purchases” and thus get you visibility and a following. But once you do that, there is no need to continue charging bargain-basement prices. Readers who know you’re a good storyteller will pay more than 99 cents for what you have to offer.

    In my case, I’ll be releasing my first novel, HUNTER: A Thriller, in June, and I’m setting the price at $3.99. I think it’s a well-written tale with a great cover. I aim to promote it with sizzling teaser copy and a big online marketing push aiming at its target audience. And I’m betting that it will do very well at this price point.

  8. Another great article, Dave.

    It’s interesting that Amazon incentivised authors increasing the price of their e-books. Obviously from Amazon’s point of view the 2.99 – 9.99 price-range is the most profitable for them, even after allocating a larger royalty to the author. And I’m guessing that they were also worried the .99 e-book might have a negative impact on hardcopy sales.

  9. Good post as usual, and thanks for mentioning Michael and Ridan Publishing. I think for self-published authors or authors from indie presses keeping under $5 is a good strategy.

    I think one of the important things to keep in mind is that there is no magic price across the board. There is a magic price for a particular book at a particular time and you need to experiment and adjust to see what that price is.

    My personal take on John Locke is that he’s leaving tons of money on the table. I realize that he believes $0.99 brought him to the dance and he has to stay there but I think he would do himself a lot of good by having a few low-priced leaders and then up some of his other books. To have 8 books in the top 100 is a huge opportunity – and I personally don’t feel that he’s maximizing his earning potential.

    Robin Sullivan | Write2Publish | Ridan Publishing

  10. Nathan Wrann says: So, what happened? Something must have happened. I don’t think it was magic and I don’t think it was luck. I also don’t think that John Locke was languishing in the 6 digit rankings one day and then *poof* he was number 1 without something (other than .99) influencing those sales. Did he start getting more reviews? Did he spam message boards? What happened between September and November to turn John Locke into a best seller? That is the question that needs to be asked.

    Nathan, I can give you some insight because I too was right in the middle of the “explosion” that happened in November. John Locke was not alone. Virtually every Kindle author who was doing “moderately well” went through the roof in November. This was the first month of significant sales for Locke, Hocking, Sullivan, Konrath, Mallory, and the list goes on and on.

    It was a matter of being in the right place at the right time. These authors had been self-promoting for a long time before November came along but the numbers of books bought in that month went through the roof and we all benefited simultaneously.

    Robin Sullivan | Write2Publish | Ridan Publishing

  11. While I’ve not noticed the other two authors breaking into the top 100 (did you mean top 100 for their genre’s? because their rankings don’t look top 100 to me. There is one that I can verify (I track the top 100 monthly) and that is J.R. Rain who has a $3.99 book in the top 100 (for the last 19 days). Also on the flip side….big time author David Baldacci has “No Time Left” at $0.99 – only one of a handful of “top names” that have used this price point.

    Robin Sullivan | Write2Publish | Ridan Publishing

    1. Sorry Robin – yes that was top 100 for Kindle Romance, but in one of the cases, the book was only just released and sold over 500 copies in 21 days, so there is potential for great growth there.

  12. Thanks for the post, Dave! And I liked the image choice.

    Self-publishing is looking like the way to go, but I’m going to think before I leap. No sense in tossing myself into the fray before I know what I’m doing, right?

    1. Will – be careful.

      There is a lot to learn, and it’s not right for everybody. There are people out there who say everyone shouldn’t bother with traditional publishing anymore, but I’m not one of them.

      Every writer should educate themselves about both paths of the business as much as possible, and make their own situation based on their own circumstances. And there is no point doing it if you are not doing to do it right, you will lose money AND the ability to ever get a traditional deal for that book.

      I spent 18 months sending my stuff to agents, getting close a couple of times, very close once, but no dice. It sucked, but in that 18 months, based on great feedback, I rewrote my novel three times. I’m pretty sure that it is in good shape now, and that I would be proud if it if I self-published, but if this option was around 18 months ago, I could have been seduced by it, and it would have been a disaster.

      Research both options. And if your stuff is ready to go now, send some stuff to agents – why not? While you are waiting on responses, learn about self-publishing, and make sure you are writing every day.


  13. I think it all comes down to public perception. You said it best when you wrote:

    “It’s all about positioning and perception. If you make the reader think that your work is overpriced at $1.99 or $2.99 (and poor covers, editing, formatting, openings, descriptions, and marketing will certainly help with this) then yes, you will struggle to compete with cheaper books.

    However, if you do everything in your power to make your book look like it came from one of the big New York publishers, if you run a clever marketing campaign, if you have professionally designed covers, a great opening that readers can sample, descriptions that will hook people in, and if your work has been professionally edited, you can price your work at $2.99 and higher, and not only survive, but thrive.”

    I’ve worked in marketing and it is all about people’s impression of worth. If they think that your product is in the discount bin, the leftover table, or the ‘nobody else wants’ group, they are going to be less likely to buy. If they think they are getting a deal or a bargain, but still receiving great quality, they’ll buy left and right. I guess it all comes down to wording…”Limited time only, book for 99cents” vs. “Author’s book 99cents now & forever”…what will they really think they are getting?

    People assume they get what they pay for…

    1. Hi,

      I posted a lengthy reply to this last night, but I think the cyber-gremlins must have got to it. I can’t remember everything I said, but in short, you are right. The 99-cent strategy is a good one, for certain authors, sometimes, in certain circumstances, but not as a blanket strategy. But the more people that do it, the more room there is for others at alternative price points, as long as the marketing (and everything else) is done right.


  14. This is an older post – I’m wondering what you think now? The reason I ask is because of the glut of books out there. I’ve priced mine at 99 cents (except for the second in my Reed Ferguson series) because I want to catch impulse buyers and hook them in, then charge a bit more for the second. And I am one who has professionally edited books, great reviews, I’ve paid for covers and so on. It’s a very tough market right now, trying to stand out from all the crap that’s being published. Thoughts?

    1. Hi Renee,

      My views haven’t changed since I wrote that. I think it’s hard to stand out if everything is free, 99c, or $9.99. The fact is, there are a lot of books out there vying for a reader’s attention, and there always were. What I do think is that the days of standing out exclusively because your book is 99c are long over. I only price shorts at 99c. I don’t think I would ever price a novel at 99c, but I can see the logic of doing that for the intro to a series (or making it free). You can read my full thoughts on pricing here: https://davidgaughran.com/pricing/


  15. I’m with you on this, David. I believe authors need to distinguish their work and stand out by effective branding methods — not simply by bargain-basement pricing. More and more, 99 cents is giving way to “free”; and if pricing is your only strategy, how do you compete with that and still make a living?

    I released my first novel, HUNTER: A Thriller, at $3.99 this summer. I’ve sold several thousand copies so far, and the sales continue at a steady, decent pace — one comparable to sales of famous backlist titles by many of the top thriller masters. So, my sales haven’t appeared to suffer. Now, would I have a good shot at the Top 100 by pricing at 99 cents? Maybe. But from everything I’ve read, it would be a temporary surge, during which time I’d have to sell seven or eight times more books just to generate the same income I’m getting now. I decided at the outset that, rather than compete on price alone, I’d compete instead on the novelty and originality of my characters, on the quality of the story, and on the distinctiveness of the “romantic vigilante” theme, which I have been turning into my “brand.” My future books and my marketing will continue to reinforce that brand.

    That is how I aim to stand out in the overcrowded marketplace — not by giving away all my profits in an unwinnable and pointless race to the pricing bottom.

    1. Heh. You are the second person to stumble across this post from April today. Weird.

      Anyway, I think what I wrote then is true now more than ever. And you ARE standing out in the marketplace using just the methods you describe – which are, it should be noted, far more useful for building a sustainable writing career than just competing on price or some other similar gimmick.

      Congrats on your fantastic sales – especially given that your book is $3.99. I’ve been thinking of raising the price of Let’s Get Digital to that for a week or so, just to see, but wanted to wait until after my guest post on Joe’s blog. I’m going to get an opportunity to test the $4.99 price point next month with my next release and will, of course, share the results.

      1. David, just FYI, I received a “new comment” notice about this post, which is why I replied.

        Anyway, I enjoyed Let’s Get Digital very much, and I don’t think a price hike of a buck will impede its sales. I do look forward to your first novel, too. I think you have established enough of a “platform” and visibility for your name that you can expect decent sales, even at a $4.99 price point. Especially if you do all the other things necessary to develop a distinctive brand for your fiction.

        Sure, Amazon constantly tweaks its algorithms, and new titles are pouring online as fast as writers can upload them. We always face those competitive factors, which we can’t control. But you’re correct: There have always been a glut of titles out there competing for the reader’s attention. It’s never been any different. You still have to make your title stand out, and there’s only so much you can do with price. My pricing strategy was simple: Price low enough to be considered a “bargain” by people used to paying paperback prices, or comparing it with the Big 6’s $9.99 ebooks, but high enough to make a decent royalty per sale. $3.99 seemed perfect.

        David, I approach marketing introspectively. I have never walked into a bookstore saying to myself, “Today, I’ll look for paperbacks priced at $6.99.” I go into bookstores looking for a great story. There are certain authors I know will deliver that, and for them, I’ll eagerly buy the hardcover edition, usually at $16 – $20 or more, on its release date. And while looking over paperback titles, I’m motivated by the jacket blurbs and the author’s reputation (if I know it) — not a price difference of a mere dollar or two. If the alternative is the latest Daniel Silva paperback at $9.99, or some lesser thriller author’s latest at $7.99, I’ll pick Silva every time.

        That’s how I look at my buying habits introspectively. And I think there are a LOT of readers like me. We don’t want just “a” story; we want a great story. We pay ten bucks to go to the movies, plus gas, plus outrageously expensive theater snacks, and sometimes even highway tolls and parking, just to experience a great story. If you can give readers reason to expect that your book is a great read, and you price it anywhere under $5, thousands of them will be eager to buy.

        On the other hand, if you want to attract only those people eager to fill up their Kindles with free or 99-cent titles (which they’ll probably never get around to reading, anyway), then by all means give your book away. But don’t kid yourself that you’re building a loyal following, or that you’re going to make significant money. John Locke and Amanda Hocking beat you to the game with that strategy over a year ago, and it was distinctive and attention-grabbing when they pioneered it. But it’s no longer distinctive now, because everyone’s doing it; and your book won’t stand out if you copy it, expecting similar results.

        1. Ah, now you see that makes a lot more sense than what I had cooked up!

          Your thoughts on price are spot-on – buying habits too. That’s how I shop. Although, I notice that I am more price-sensitive with e-books – probably because I know I’m being ripped off and the author is only getting a small cut. I think twice about spending more than $10 (and haven’t done so yet for an e-book, but I will crack soon, there are several now that I really have to read) whereas I wouldn’t have thought twice at spending double that for a print book. Anything under $10 (from an author I know and like)? I don’t think twice.

  16. I think a fair price is 1/2 to 1/3 the price of the hardcover or paperback. I agree that professional looking covers will sell the book better, but if you put lipstick on a pig it’s still a pig. I have seen terrible covers on best selling ebooks, too; so that’s a matter of taste, not effectiveness. I have contemplated reworking my covers because aethetics change over time. Also, cover changes are not noticed by previous readers, just those discovering the title for the first time. Right now I have ebooks going for $2.99 to $3.99, but Amazon’s lending program has blown all priced ebooks away from contention. Amazon is cultivating a culture of freebie lovers; something it won’t be able to repair later on. Until people start wanting ebooks which are worth something I dare say Amazon will kill the hopes of authors wanting to make a living from their work.

Leave a Reply

Your email address will not be published. Required fields are marked *