eBooks: Pricing Strategies (How much do I charge?)

Guest post by Irene Watson

Usually I have an informed opinion on a lot of things in the publishing industry but I have to admit I didn’t have a clue how to answer an author’s query:

I am thinking of placing my new children’s book on Kindle and need to make informed decisions on the cost and whether it is a good decision at this point.    

I turned to the publisher of my books that has140 eBooks titles, Victor Volkman of Loving Healing Press, to enlighten me as well as have a professional answer for the author.  He says:

My system is simple:

1.  Start with 50% off List Price as the basis for eBook price for Black-and-White books.  If this new amount is above $9.95, Amazon will punish you by cutting your royalties in half thus all our eBooks are $9.95 or less, even for printed books with a list price of $29.95.   In practice, this means our B&W eBooks are $7.95, $8.95, or $9.95.

2.  Color books (for children mostly) are priced at $5.95 because they are shorter.

3.  Magazines and Journals are $4.95.  Although this may seem “pricey,” our journals are 55,000 words so it is really not a lesser product than a book, other than its product-positioning.

4.  Monographs and shorts 2,000 to 10,000 words are priced at $2.99 because that is the lowest price that Amazon allows for maximum royalty (70%).  A few very short articles are bargain-priced at $0.99

We do not participate in KDP Select program because we don’t believe in monopoly marketing.

I don’t believe the extra bonus money would compensate for the loss in sales on B&N Nook, Kobo, iBook, eBrary (academic), and OVERDRIVE (libraries) combined.  I’ve seen publishers move 20,000 free eBook copies through KDP Select but I don’t have evidence that this causes paid sales later.  Also, I think there is a tendency for people to “binge” on free books that they never actually read or they have no commitment to read because they have nothing to lose. 

Amazon tracks free book “sales” separately for a ranking basis so even they know that a free book isn’t as good as a paid copy.

After I read Victor’s model I kicked into the psychology mode. There are some established “rules” when it comes to pricing eBooks or in fact anything that you are going to sell:

1.  Always end your price with a 5, 7, 8, or 9.  Never end in a 1 or a 0.  Our brains seem to think that $9.99 is much less than $10.00 and 99 cents is a better bargain than $1.00.

2. Purchases are often made by emotions, especially non-necessities like books/eBooks.  This is referred to impulse buying.  Impulse buying is often determined by price – buying a 99 cent eBook rather than paying $9.99 gives justification of “saving” after the purchase.

3.  Buyers have a tendency to purchase a product if they feel they are getting something for free.  There are many sites, especially those for business gurus and those selling non-fiction books or children’s books, that will offer something for free if you purchase their eBooks/books.  For example, you will get white papers or “secrets” valued at $197 if it’s a business themed book.  Or, in a case of a children’s book, if you purchase the book/eBook you’ll get 15 free templates that you can print and have your children color the pictures.   Value could be $9.95 for the templates – not a bad deal when you “just” pay $5.95 for the eBook.

Fiction writers can “bundle” their series, for e.g., sell three eBook titles for the price of two.  If each eBook is priced at $9.99 then you would sell all three for $19.98. The buyer will perceive a bargain.  For those that have only one eBook title then you could team up with another author and offer his or her eBook for free.  The other author will do the same.  More than likely each of you have a different social network therefore your eBook will be accessible to a whole new world in the sphere. Get the idea?  (Granted, these ideas will only work if you are selling the eBooks on your own site but just because you have your book in Kindle or Nook format doesn’t mean you can’t market the eBooks from our own site.)

Back to you and pricing…if you are really, really, serious about selling your eBook and getting paid for what it is worth, then these are the questions you have to ask yourself:

How much is this thing really worth? How much am I worth? 

You have options in this realm.  You can let peer pressure intimidate you into pricing the eBook for less than you are worth or you can be firm and decide you are going to charge a realistic value for your work.  And oh, “realistic value” needs to be based on the quality of your eBook which  means fantastic plot or information, professionally edited, and something that could easily stand by the best-of-the-best on the market.  (And, no…just because Aunt Gert “loves” the book it doesn’t mean it is a quality eBook.)

By-the-way, did you know majority of people don’t really buy books based on price?  They buy on value (and that means a really good book) and then rationalize the price they paid.  But…you are saying…yes, I know there are those that want everything for dirt cheap or for free.  Are those really the ones you want to spend your time and effort marketing to? They aren’t going to buy your book anyway because they are looking for freebees so I say, price the eBooks at what you are worth.  Is it 99 cents or is it $9.99 per eBook?

Irene Watson is the Managing Editor of Reader Views, where avid readers can find  reviews  of recently published books as well as read interviews with authors. Her team also provides author publicity  and a variety of other services specific to writing and publishing books.

Advertisements

Posted on February 5, 2012, in Publicity & Writing, Writing & Publishing. Bookmark the permalink. 6 Comments.

  1. Irene, I've seen this question debated among independent authors all over the Internet. I've kept my prices low, $2.99 for the ebooks and $9.99 for the paperback editions, because I'm a nobody. I could be persuaded to sell my first book (the first in a series of four novels) for $.99 to a reader who buys my second book for $2.99. (The third and fourth books will be published later this year and in 2013). But giving away an ebook just to boost it in Amazon's rankings doesn't make a lot of sense to me. I doubt that very many of those downloaded free books are actually read. And if they aren't read, then there's no valuable word-of-mouth. Providing free books, even paperbacks, for bloggers' giveaway contests is another matter. I make a friend of the blogger, and I'm giving away the book to somebody who actually wants to read it based upon the blogger's review.

  2. I agree with you, Irene, that authors should not lower their prices in hopes of selling in bulk. It just makes their books look less valuable. I have paid as much as $75.00 for a paper copy of a book I have really wanted, and I also have paid far more than that to collect first editions of books. If a book contains information or entertainment content I want, I am happy to pay what it is worth. A book is the best value for your entertainment out there. Even a hardback book priced at $30 easily can give you 4 times the hours of entertainment you would get from watching a movie. If you went to see four movies you would pay that much or more, plus you actually own the book afterward. $9.95 for an ebook that an author spent 1,000 hours writing is a steal.

  3. Yes I agree we should not be so quick to embrace a "race to the bottom" where every ebook is $2.99. One critical point that many people overlook is that NOBODY ever chooses between book X, Y, and Z based on which one is cheaper! I don't care if it's a romance novel or a book on Java programming, our time and our energy is worth SOMETHING and we want the best we can get within a reasonable limit. So unlike say purchasing a 40 inch vs. a 55 inch TV, the monetary question, which can I really afford does not enter this. If it did, the college textbook market of $100+ books would fail. As an aside, most college textbook publishers only give you about 25% off the eBook cost. So that $100 textbook would be $75 eBook and that is one reason why they have failed to dominate the market given market conditions that should cede the whole market to them: young, tech-savvy people. Yet these people aren't so stupid as to think that a $75 eBook which can never be re-sold is a great idea and the calculus of how-many-tacos can I buy or get this electronic thing that I can't even touch…. So paper textbooks are still very much alive and so is greed.So authors, stop selling yourself short, you're NOT Amanda Hocking yet and just because she got rich on a $2.99 book doesn't mean you're failing because you asked the abominable amount of $9.95 for a 70,000 word novel you spent a decade writing. I guarantee she didn't put that amount of time into it, the physics are impossible unless she herself were undead.Last, but not least, any books sold on Apple iBook platform MUST end in $0.99 so what your dad or grandfather learned in the era of Mad Men is still true, people round DOWN more than UP. They can't help it. I remember an executive at RadioShack in the 1980s saying that all their stuff was priced at $.89 back in the day for the same reason.

  4. My first publisher insisted that eBooks be priced at $7.99 or higher. I always felt this was a ripoff and would limit sales. When I published my last two novels, I was determined to keep their prices low, but…I was NOT going to give the books away. Thus, it came down to either $2.99 or $3.99. After some deliberation, and with some consideration given to the time spent writing and publishing the works, I decided on $3.99. Frankly, I doubt one dollar, at these levels, is going to sway a buyer one way or the other. And given that G_d's plan for the Universe doesn't necessarily include making me rich, I simply decided on $3.99, letting the chips fall where they may.

  5. Movie tickets cost $9.95 each where I live. Therefore I refuse to feel guilty about charging as much for an eBook which provide more hours of enjoyment than a movie. Also, you can share it with your spouse for no extra charge, just hand him/her your eReader. Compared to a night out at the movies which runs to $33 for two adult tickets, popcorn, and two drinks, I think eBooks are a freakin' bargain.

  6. You guys are making sense to me.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: