A few months ago, this blog discussed the issue of eBook pricing of novel-length works. At the time, I didn't have lots of comparative data from my personal experiences. I asked others to share their thoughts on bargain ($1 or less) eBook pricing and got a few comments from readers (Thank you). No one who commented said lower prices had helped their sales.
Since then, I've been doing quite a bit of research and "field testing" concerning my pricing theories. This post will share what I have found out.
We have to begin with a bit of marketing theory here, so you can see the logic behind my price testing.
As most of us know, sales are controlled by the laws of supply and demand. In most circumstances, the number of units (books) sold is a factor of pricing vs willingness to pay the asking price. The lower the price, the more books sold. This is how typical product pricing is determined in our economy, and how competition keeps product prices in check.
There is an exception to the "lower price equals more sales" paradigm in the area of "luxury goods." In the case of luxury goods (such as prestige watches - Rolex- fine jewelry and gems and luxury automobiles - Mercedes/Ferrari) sales actually DECLINE when prices are too low. This is because either: 1) buyers of luxury goods want everyone to know that they possess these luxuries that others cannot afford. Lower prices mean more people can afford the items; or 2) buyers perceive that higher prices mean higher quality (and conversely, lower prices mean lower quality).
Artistic creations often fall into the category of luxury goods. Buyers assume that if the price is too low, the art is no good. Since buying art is a very subjective purchase decision, buyers rely--to a degree--on the pricing of the product to assess its value.
What about books?
What I have found is that, in the venue of book sales, buyers act more like purchasers of "luxury" goods than they do buyers of "normal" goods. The market value of a book, like the market values of many other artistic creations, appears to be driven more by luxury buying principles than ordinary supply/demand economics.
That is a very cool finding in so many ways!
If you consider your book to be a "good" book with a target market that can afford "good" books, charging more for your book (within some parameters) will actually stimulate sales! You can earn a decent sales margin and not have to worry that buyers will think you are pricing yourself out of the market. Of course, this thinking won't work if your buyers don't care if the book is any good. They'll happily pay $.99 for a book they expect will be worth only that amount.
What have I done that leads me to this conclusion about books being luxury goods?
First of all, I've done a lot of asking among book buyers. "What do expect to pay for a quality eBook?" Responses have almost universally been that any price under $10 is considered a good deal.
Not coincidentally, many NY Times Best Sellers are currently being released at a price of $9.99. Apparently the market research of these mega-publishers coincides with my own, much smaller, sample.
Secondly, I tested my theory over the last six months. I currently have two novels that have been listed for sale as eBooks for more than six months. During that time period I have re-priced each book at different points and observed sales results.
-- at a price of $6.99 -- sales are okay.
-- Drop to $2.99 -- sales drop off dramatically
-- Raise to $8.99 -- sales approximately same as at $6.99
-- drop to $6.99 -- sales remain steady
-- drop to $2.99 -- sales drop off again
-- raise to $8.99 -- sales increase to previous levels again
If you have a book that you want to market as a quality work of contemporary commercial literature, or as a quality non-fiction work, I recommend pricing it at $8.99 (just under the NY Times books, but still high enough so buyers perceive the quality of your publication).
Okay . . . I'm sure many folks will disagree with me. And no one can ever say for certain what the total sales of their specific book would have been had they sold it at a different price.
So . . . if you have your own well-reasoned pricing strategy that you'd like to share, please feel free to comment. I'd love for my readers to benefit from it.
For now, my eBooks are for sale at $8.99. I certainly need sales to increase to make significant money in this writing endeavor. But as I mentioned in earlier posts, marketing books is a marathon, not a sprint. I'm only about 7 months into my initial 18 month marketing strategy. (And 18 months is the average time that a traditional publisher will market a book BEFORE releasing it. So I think my timetables are reasonable here.)
That's it for today. Thanks for stopping in.