Image: Matthew Loffhagen
Deciding how to price your ebook is a tricky business, especially because there are no hard and fast rules to help you decide what’s best. Do you set the price low in the hope of increasing traction and gaining new readers? Or, do you go higher and hope to build up a loyal readership who value your writing and actually read your books?
As I said, tricky.
I am going to tell you something that you probably don’t want to hear … the price of your ebook should be determined by who you are as an author, what your goals are, and where you are in your self-publishing journey.
I’ll admit it sounds like a wishy washy statement, but let’s have a look at these ideas in a bit more detail.
Are you a well established author?
If you have published a few books already and thus have an established fan base, you can get away with pricing your ebook at a higher rate. This is because an established author does not pose a risk to readers.
In other words, as an established author, you have already shown your fans that your books are worth paying for. You have proven that the experience you offer them is worth it and because of this, your fans will be more inclined to pay whatever price is set (within reason of course).
Taking this one step further, there is of course the possibility that you, as the author, add to the overall value of the book. For example, Khaled Hosseini adds to the overall value of his books just because he is who he is. Though you are probably not Khaled Hosseini, you may still be popular in your genre or even internet famous. If this is the case, readers will be prepared to pay more.
Do you have a series published?
If you have written a series, it is pretty common to make the first book in the series cheaper than the rest. The reason? Well, there is a lot of evidence to suggest that the first book in a series sells best at a cheaper price point. The rationale is that readers are far more likely to take a chance on a cheaper book. A cheaper price reduces their risk which makes your book far more appealing.
If your first book is enough to convince the reader that the rest of the series is worth reading, they will be more inclined to pay a higher price for the other books.
That being said, you will only get away with higher prices for the next books in your series if you are ready to publish them soon after the first one was published. You need to strike while the iron is hot so to speak, and make sure that you don’t lose your captive audience by waiting a year before publishing book 2.
Another word of caution, a quick way to irritate your readers is to leave your first book on a cliffhanger and charge a very high price for the next book. It’s just not good practice and will damage your reputation going forward.
Is this your first published book?
There is a risk factor at play with new authors. If you’ve got no reviews, no recommendations and no platform, in fact nothing but a great story and an alluring cover, you have two options:
- Price your book at rock bottom levels (i.e. 99c to $1.99); or
- Give it away for free.
New authors are a risk to readers. Pricing your book at the lower end of the scale mitigates the risk factor and readers will be more inclined to give you a chance. It is a horrible truth, especially because you have poured your heart and soul into your book, but at the end of day, you have to prove your worth as an author.
Also, unless you are the unequivocal number one author in your genre, don’t price yourself above the top selling competition in the genre. If you think about it, nobody would take a chance on your unknown book if they can buy a book from “the best” for less.
Are you selling fiction or non-fiction ebooks?
If you are selling non-fiction, you will have to think of the value you are offering your readers and of course, how niche your book is.
Generally, non-fiction books solve problems for their readers or they teach their readers something new: “How to use Adobe Photoshop”, “The ultimate guide to Yo-Yo dieting”, “Vegetables that grow well in Fall”, etc.
You can theoretically price your book at whatever the reader is willing to pay to solve their problem. It goes without saying that a book on “How to avoid pitfalls in million dollar mergers” is going to have a higher perceived value to a reader than “How to grow succulents”. It all boils down to the value you are offering and how you communicate this value to your reader.
There are general reference books which cover a mainstream topic in detail, they might include “How to Win Friends and Influence People” or “The Lean Startup”. These sort of ebooks are generally priced between $2.99 and $9.99.
Then there are specialist niche guide books. These are quite frequently software guides and they actually compete with training courses or one-on-one coaching. Because they only have small audiences and don’t sell in huge numbers, they are generally priced over $20 as they have a higher value to their readers. An example of this would be “Adobe InDesign CS6 Digital Classroom”.
Non-fiction books are a completely different beast to fiction books. For starters, fiction books are a luxury item whereas non-fiction books add value beyond the book. Readers tend to engage with fiction books very differently too. For example, fiction readers tend to read at a fast pace, buying multiple novels in a month. Generally, once a reader has finished with a fiction book, they won’t refer back to it or read it again (there are exceptions to this of course). Because of this, there is the inherent expectation that fiction books be priced lower than non-fiction books.
Ebook royalty structures and percentages
As you know, Amazon (for the sake of this article I will refer to Amazon as it is the largest ebook retailer) takes a cut of your sales price and you get to keep the rest. The amount you get to keep depends on the price of your ebook.
If you price your book between $2.99 and $9.99, Amazon will take a 30% cut per sale. So, it goes without saying that if you want to encourage readers with a low price while still earning a 70% royalty, you will need to price your book at $2.99. Doing this means that you will earn $2.09 from every sale.
However, if you decide to price your book below $2.99 or above $9.99, Amazon will take a 65% cut. This means that if you price your book at 99 cents, you will only make 35 cents per sale. The payoff from pricing your book below $2.99 is that your cheaper book is more attractive to readers so there is a higher chance of selling more.
This leads me on to my next point.
Are you trying to sell as many ebooks as possible?
If your goal is to get your book into as many hands as possible, you should simply price your ebook at $0.00. That’s right, give it away for free.
This will give you the greatest chance of hitting high numbers.
There are however a few drawbacks to giving your book away for free. Firstly, Amazon doesn’t count free ebook downloads in the same way as paid for downloads. So if you’re doing this to improve your profile and climb the charts, you are going to come up short. If you want to start making waves in the charts with your free ebook, you have to sell an extraordinary number before Amazon even thinks of registering your sales in its algorithms.
Secondly, free ebooks are giving rise to the “book hoarding” phenomenon. Book hoarders simply scour the web, looking for free ebooks to download and hoard. They download your book because it is free and not because they are interested in reading it. Because these book hoarders don’t actually care about you or your work, there is a higher chance that they will make pirated copies and distribute them online. This will have a knock-on effect when you do decide to start selling your book for a price.
There is a lower value attached to digital books
The advent of online publishing has given rise to the popular belief that digital books have less value than hard copies. This is partly because consumers believe that producing a digital book is cheaper than a hard copy as you don’t pay for paper, printing and distribution costs. What they don’t realize of course, is that self-published authors have to foot the bill for absolutely everything.
The value attached to an ebook is clearly demonstrated by Amazon’s insistence that your ebook be priced at 20% less than the hard copy if you want to take advantage of the 70% royalty rate.
As the back and forth arguments suggest, there is no clear “one-size-fits-all” approach to pricing your book. It all depends on you, your genre, your marketing efforts, and what the pricing trends are at the time.
Like everything in the publishing world at the moment, ebook pricing is evolving and reshaping itself almost constantly. Fortunately for you as a self-published author, you can evolve with the times and adjust your prices accordingly.
Remember to track your profit and not just your sales numbers. Selling one book at $9.99 will make you more money than selling 3 books at $2.99 or 20 books at $0.99. However gaining 20 new readers might have more long-term value for you if you have multiple books.