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Wednesday, March 23, 2011

Pricing Your eBook

Hello all.

Some of you may have noticed me on Twitter or FaceBook, or even on this Blog, advertising "experimental pricing" on Kindle versions of several of my novels. My goal was to test the price waters (again . . . I did this last fall, and again this winter, as well). I wanted to find the best price point for my books.

Following are my observations:

GENRE MATTERS

If you write paranormal romance novellas, I can safely say that the folks who have had the most success with selling these eBooks are pricing them at $.99 each. I didn't find this out through my own empirical study. I sampled other blogs. I looked on Amazon to see how much the popular books in this genre are selling for. And of course, there's the famous case of Kindle millionaire, Amanda Hocking. (If you haven't heard her story, Google her. You'll find out plenty.)

Although my pricing study didn't include novellas of any kind, I feel pretty comfortable going with the prevailing opinion on this one. $.99 is your price point.

If you write popular fiction, I have some actual results from my unscientific studies (both last fall and recently) to offer.

For the past several months, or more, all of my novels on Kindle have been priced at $8.99. Sales have been surprisingly steady -- I said steady, not high. But the steadiness gave me a nice comparison point for my price study.

For a period of several days this March I lowered the price on my most popular novel from $8.99 to $2.99. I advertised the price drop like crazy, everywhere I could. The first day, I sold triple the number of that book compared to the average daily number I had been selling. After the first day, sales dropped below my normal sales numbers and remained there for three days, at which time I returned the price to $8.99. Sales of this book have now returned to their pre-experiment level. And they did so almost immediately.

My conclusion, based on this admittedly scant, but entirely accurate, data, $8.99 was a better price for the book than $2.99. Even though I did sell more books the very first day, I suspect that those purchases were made by folks who planned to buy the book anyway and simply took advantage of the price drop to do so. (I actually contacted two buyers who had notified me of their purchases. I asked if the price was a factor for them. Both said that it wasn't.)

In the battle between the $8.99 and the $2.99 price points for popular novels, the unscientific winner is: $8.99. Not only do I get paid three times as much per book sold, I actually sell more books at that price level.

If you write religious or other niche fiction, I can offer you some information on pricing in this area as well. Before my price study, I was selling my full-length religious novel at $8.99. For the study period of four days, I lowered the price to $.99. As with the other novel, I advertised the heck out of the price drop.

The results? I sold four copies of the book during the four days of the study. I hadn't been selling tons before that. But this level of sales certainly didn't make the $.99 price point an attractive option.

What I learned with this book experiment, is that almost giving your book away does not attract purchasers. This bears out similar results I have experienced when I have actually offered to GIVE eBooks away. I don't believe people value most fiction when you price it too low. (Romance being one apparent exception.)

So the price point for my religious novel at present? Back to $8.99. Sales are still slow. But awards are starting to come in. So we'll see what the future holds.

The above findings are comparable to results I discovered last fall when I lowered prices on my books to $6.99 and then to $2.99. No appreciable increase in sales. In fact, sales DECREASED as the price dropped.

I posted an article on this blog a a couple months ago describing how I chose the prices for my books. I'll see if I can locate it and link it here.

The upshot of my pricing strategy is to price my books slightly lower than their traditionally published counterparts. If NY Times Best Seller thrillers sell for $9.99 to $11.99, I sell mine for $8.99. You get the idea.

I would like to have done a more thorough and more scientific pricing study whose results I could share with you. But as you know, among other things, I am an author. So writing itself has to be a priority. This is especially true since, as I have stated in this blog before, if you want to sell more books, write more.

I hope you have found this article helpful to you (if only in a small way) when you make that important decision about pricing your book.

That's it for today.

Cheers!

John

31 comments:

  1. Cool info, John! Funny how authors are having to become experts in market analysis! :-)

    After reading your (and many other) thoughts about price-point, I tend to side on the lower $2.99 purely because most of the accounts I've read had people selling more copies at that level. Even more so at the .99 point.

    While it does seem to cut into profits, unless you're as popular as Stephen King, I'm always in favor of more exposure over more money. Meaning even though you have to sell 2-3 X as many books at .99 to achieve the profit of a $2.99 book (or what have you), if you sell more copies you're going to be better off in the long run. I say this because there's no way to accurately gauge repeat buyers, and if you build a fan base you'll continue to make money off of that customer well beyond the initial .99 purchase.

    That's the theory anyway, however your data seems to refute that a bit. Just curious, do you think 4 days is enough time to see the true impact of a price change?

    I think this is really fascinating, and I really applaud all of you authors testing the waters and passing on the information. I think in time we'll be able to get a better grasp on things, but that's contingent on folks like you openly sharing the data.

    Best of luck to you,

    EJ

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  2. Thanks for your comment, EJ.

    Do I really think a four day experiment is long enough for a definitive answer to the pricing question? No. I don't.

    But it does provide some information, which you may then use to compare to reports by others. Collectively, all this pricing info should become useful at some point.

    All the best you.

    Cheers!

    John

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  3. Thanks for the post, John, and in sharing your findings. I'm experimenting right now with my own urban fantasy title. I raised the price on March 12 from 3.99 to 4.99 and within one week I noticed a 20% increase in sales on B&N and a 23% increase on Amazon.

    I did not advertise the price change, but I did swap the ebook cover image from the professionally designed one for the print edition. The new cover is brighter and more light-hearted than the previous one.

    While it does not convey the "feel" of the book as accurately as the first one, it is more eye catching and may appeal to more buyers as a result. The product description and everything else will remain the same.

    I plan on running this experiment for a month and then judging where to go from there.

    Kudos to you for selling more at the higher price - wishing you much continued success

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  4. Thanks for sharing your thoughts, CJ.

    I would be most interested to hear the results of your month-long study. If you get a chance, please contact me and let me know.

    Thanks for stopping in.

    Cheers!

    John

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  5. I am so glad to see that someone else has had the same experience I've had with dropping prices!

    Having experimented with 99 cents and other lower price points, I've found that I sell more keeping my prices between $3.25 (for short stories!) and $5.25 (for novellas, the longest works I currently have available).

    Every time Amazon discounted my titles, my sales dropped like a rock. I put one of my $4.75 titles at 99 cents for a month last year. Sold 7 copies.

    The day the price changed back to $4.75, I sold five copies.

    I decided to experiment with 99 cents again this month, thinking that readers might be accustomed to 99 cents not necessarily meaning terrible writing.

    A little different result: still selling the same average number for the month, just not making as much money.

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  6. Hi Scath.

    Very interesting! I don't claim to have "proven" anything with my little experiment. But I'm encouraged to see someone else with similar results.

    Thanks for stopping in.

    Cheers!

    John

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  7. Great post John; I had posted something similar to this a couple of weeks ago (http://steveumstead.com/2011/03/08/where-do-i-price-my-e-book/) with my same dilemma, me vacillating between $2.99 and $.99 as a debut author with no backlist.

    CJ - the difference is actually SIX times; an author needs to sell six times as many at $.99 to make the same money at $2.99, as Amazon drops the royalty rate for books under $2.99 from 70% to 35%. Profit on one book at $.99 is $.35; profit on one book at $2.99 is $2.09.

    My thought is that once I put out book two of the trilogy, dropping book one to $.99 as a lead-in to the series to generate interest. I have no reputation or backlist to give credibility, so I'm banking on the hope that readers will take a chance on the lower price, I can get work out there, and make the money later on.

    Cheers John!

    Steve Umstead
    http://www.SteveUmstead.com

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  8. Sorry, I meant EJ - not CJ - in regards to the six times figure!

    -Steve

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  9. This is fascinating, John...and not just the prices, but the speed at which your sales returned to normal. Normally a price change seems to take a few weeks to really kick in, so I was surprised by that.

    I think demographics have a lot to do with this, for sure. I've been playing with price points for awhile now, and while my "high point" for romance is far different than yours due to genre, I'm definitely going to be playing with a bit higher prices later this summer as well, along with keeping some things in the lower range. Should be interesting, if nothing else.

    Thanks so much for sharing your data. :-)

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  10. I forgot to add that mine are mainly sci-fi romance and paranormal romance. =)

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  11. Thanks, all, for your insightful contributions. Please keep the comments coming.

    Cheers!

    John

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  12. Hi John. Really interesting experiement you've done here. There's a lot being discussed about eBook pricing at present. As you've highlighted a lower price doesn't necessarily mean higher sales - personally I'm starting to think that you should price your work at a level your happy with to start with and see how it goes - you can always increase/decrease depending on how it does.

    All the best

    Adam Charles
    www.iWriteReadRate.com

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  13. Hi Adam,

    In many cases, I would say that your approach to pricing your eBook may be as valid as any. There's certainly not a lot of proof to the contrary.

    Cheers!

    John

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  14. Very interesting! Any thoughts about mystery pricing? Not sure if I think it's closer to romance (in terms of the kind of devotees) or popular fiction? Am considering this route for my new series if I don't get any traditional traction.

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  15. Hi JoanneL,

    If I were you, I would check the price of Robert B. Parker mysteries or some other author in your genre.

    Then if you're looking for a starting point, I'd go a dollar or two less than the big name competition.

    Just my two cents.

    Cheers!

    John

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  16. This topic is of great interest to me as a soon-to-be self-published author. Thank you, all, for sharing your experiences.

    I wonder if the higher prices sell more copies because most of us are unconsciously driven by that old cliche, "you get what you pay for..."

    Also, if I put the message out there that I think my time and effort is worth only .99, do readers also see an author who lacks confidence in his or her own product?

    Does a book's price really have some sort of psychological affect which drives a reader to buy it or not? Or am I over-analyzing here?

    I agree with your recommended starting point, John (of going a dollar or two less than the big name competition.) Psychologically (or egotistically-speaking, if you prefer) pricing in this way says to me, 'I am not pretending to be as great as the big name competition but I am a good writer with a great story that is worth your money.'

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  17. Shewriting,

    Thanks so much for your thoughtful comment. I'm confident that we could analyze and study this issue forever. The bottom line is that every book is unique. It's ART!

    With art...the value is in the eye of the beholder.

    Stop back soon.

    Cheers!

    John

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  18. My book has been at $2.99 with steady sales. I considered dropping it to .99 to see if it would boost sales any but have since reconsidered. If it ain't broke, don't fix it. Thanks!

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  19. Hi Judi,

    Hear, hear. If you're happy with sales where they're at, messing with pricing would likely only cause disruption and uncertainty among your buyers.

    Thanks for stopping in.

    Cheers!

    John

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  20. I've never heard an indie author propose the $8.99 price point before, but now that I think about it it's a good idea. Many publisher-backed ebooks are selling at $9.99, so if it's good enough for them, why are we indies staying with $2.99?

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  21. Thanks for this, it's good to have your perspective.

    I think 99 cents is too low for any book. It devalues the effort writers put into it. I figure that if you're interested enough in a book to buy it at 99 cents you'll buy it for $2.99. I wouldn't price a full length book so low though, even for a new author, it says you have no confidence in your work. It's okay as a special sale price or for short works.

    $8.99 is a reasonable price that says that you are confident that your work is good, but it's not above the $10 mark where if others are like me, they'll think twice about buying a book they're interested in.

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  22. Laura and Tahlia,

    Thanks for your comments. I've spoken to a number of Kindle book buyers. Several have told me that "anything under $10 is golden." I do think there's a psychological barrier at the $10 level.

    But $8.99 seems cheap compared to maybe $15 to $20+ for a Trade Paperback.

    Thanks for stopping in. Come back soon.

    Cheers!

    John

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  23. Hi John

    I've just launched feathers at $2.99 for a short story collection. I am intending the novel I am writing to be pitched slightly higher. I feel, as many of the above comments have highlighted, people are under valuing their work just to get pitched in the top 10 on Kindle.

    Before I launched Feathers, I did a quick snapshot of market research regarding pricing. There was a lot of people who thought 71p/$.99 was too cheap for a book, and would not consider buying it, even if it is in the top 10 as they thought it would be useless.

    I think a lot of your pricing strategy may revolve around your end goal point. Do you want to be a top 10 seller? Or do you want to be able to make an income from your books without having to slog your guts out to sell many thousands, and as an indie writer, this is exceptionally hard work.

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  24. Greeting, Kristina.

    Thanks for sharing your thoughts with us. As you mention, pricing does depend on your goals.

    Thanks for stopping in.

    Cheers!

    John

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  27. Thank you Florius and Calanthe.

    I'm sure there will be followups as often as I discover useful things to add. I've got two new pubs in process. So I'll have new data.

    One pub is non-fiction. I'm certain I'll learn something new from that.

    Thanks for commenting.

    Cheers!

    John

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    Cheers!

    John

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