Pricing Your E-Book: What’s the Sweet Spot?

Authors who self-publish their work must weigh a number of considerations when determining a price for their book. Among these are:

  • Perception of quality
  • Consumer appeal
  • Author royalties
  • Marketing
  • Time spent

Let’s examine these considerations:

  • Perception of quality. Does the 99-cent novel consign our work to that wasteland of low-quality, error-riddled novels? Are you banking on savvy consumers to somehow pick out your high-quality novel among the scores of amateur efforts? I decided to price my first novel, Small Change, at $2.99, which is the lowest price on Amazon for which the 70 percent author royalty applies. Why? Frankly, I thought it was worth at least that, but as a new author, I didn’t feel confident pricing it above that level. My thought on perception is this: if you believe your novel is of a high quality (don’t we all?) and you have put a lot of time and resources into your work, I see no reason not to price it at $2.99 or higher. That’s less than the cost of a latte at your favorite coffee shop.
  • Consumer appeal. The 99-cent novel has great appeal. It is low risk (no risk, really)/high reward for the consumer. If the consumer doesn’t like the book after finishing the first page or chapter, what has he lost? The consumer has paid less than he would for a pack of gum. The price point matters to consumers. Just ask Amanda Hocking or John Locke. I haven’t ruled out dropping my price to 99 cents, but I would like to have a second book out there before I do that.
  • Author royalties. If you are confident your book will sell and are willing to put in the time and effort to market it, you are leaving a lot of money on the table by opting for the 99 cent price. Amazon offers authors a royalty rate of 70 percent for books priced at $2.99 or above through its Kindle Direct Publishing program and 30 percent for books priced below $2.99. The example often cited is John Locke, who sold one million e-books at 99 cents, but would have made a lot more money by setting his price at $2.99. Of course 99 cents is part of a deliberate marketing strategy, which brings me to my next point.
  • Marketing. 99 cents is seductive. An author doesn’t need any descriptors like “only” or “such a bargain.” The price speaks for itself. Put on your marketing hat and ask yourself: is it possible to underprice a book in these times? I don’t think so, especially when authors are offering “free” promotions to get their work in the hands of readers. However, it is possible to over-price your book. If you are a first-time author and you are charging $4.99 for your book (just to pick a number out of the air), why would a consumer want to take a chance on you when he could buy the hot new 99 cent novel? Besides, if you charge 99 cents and sell a ton of books, a publisher will take notice, as was the case with Amanda Hocking, who was signed by St. Martin’s Press.
  • Time spent.  Here’s where things get dicey. You have no problem charging 99 cents, but then you think about all the time you spent on your manuscript. Let’s say you spent 1,000 hours on the first draft. Figure another 1,000 hours on revisions, editing, proofreading, and polishing your work. These are conservative estimates. Throw in 50 hours for marketing and coordinating your cover design. That’s 2,050 hours. I’ve made close to $60 on my book so far. If you calculated an hourly rate for the time spent, I’m making pennies on the hour. And that’s fine with me. This is a passion, not a job. It all comes down to your goals and how to achieve them.

So what’s the bottom line? Authors should experiment with price. Err on the low side. Don’t get caught up thinking your book is the best one ever written and the reader will gladly pay eight or nine dollars. It’s not going to happen, unless you are Jonathan Franzen or Stephen King.

How much would you pay for an e-book by a first-time author? How much would you pay for an e-book by a renowned author?

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12 Comments

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12 responses to “Pricing Your E-Book: What’s the Sweet Spot?

  1. If I read a sample and like it, I don’t look so much at the cost – of course, there is a point where unless I really want to support an author that I’d not pay for an ebook – even for “well-known” authors — I think ebooks over $15 are too expensive – I can buy a print book for that – and if they are priced too low, I think the author does themselves a disservice. But I also understand trying to get your book into the hands of many readers.

    I purchased your book because it sounds interesting – you came by my blog, I recognized your name from WU, and it prompted me to buy your book – if it had been more than $8, I may have hesitated, but I’d have paid $8 for it just by the premise and wanting to support you.

    • Kat,
      Thanks for your comments. I would advise new authors to go on the low side when it comes to pricing. With so many 99 cent books out there, authors don’t have a lot of leeway on price. A friend of mine did a special promotion where he offered his book for free for one day and 5,000 copies were downloaded. I advised him to get his second book out there right away. It’s worth losing all those royalties to get that kind of a following.

      Thanks again for buying my book. I hope you enjoy it.

      Regards,
      Chris

  2. I started your book last night – just letting you know! 😀

    • Thanks, Kat. One of the founders of my critique group left an awesome review on Amazon.com. He had seen my first draft (which was horrible) and really liked the changes I’d made. Hope you like the story. I was reading your book on the plane last night returning from a business trip in DC. Virginia Kate is such a great character. Can’t wait to read more.

  3. Samples, for me, are key in the e-book game.

    I have to like what I read in that sample, I have to see that the writer has put in time, and not just into thinking up a creative plot; if they haven’t made sure the copy is clean, if they don’t use the language with skill and imagination, I’ve got better things to read, at any price.

    If I really like the sample, I’m willing to pay more than a buck.

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