Deciding on the optimal list price for your eBook is probably the most important marketing decision that you can make.
That list price is critically important to:
*how readers both discover your work and then chose to buy the eBook, and
*how much you can earn in royalty payments for each eBook.
Let’s start with the big one. Readers. Those lovely people who cannot wait to read your work and rush to their favourite online book store the moment your eBook is launched.
Ah. Yes. About that…
When I came to setting a list price for my first self-published romantic suspense book, I popped my geeky hat on and resolved to answer a few tough questions.
*What do readers look for when they rate price vs value?
*Are there definite patterns for specific prices emerging?
*Do we have any statistics to back up these very subjective decision making criteria?
*And how have readers shifted their buying choices over the past few years?
* How can I make the most money from my book in a competitive market? What are the best price points for a single title length mystery novel?
There are literally hundreds of categories for eBooks in both fiction but I want to focus in on commercial fiction.
The good news is that the Market for Fiction eBooks has never been greater.
Publishing houses have rushed to create Digital first publishing divisions which offer romance, crime, science fiction and other genre fiction as eBooks.
The bad news is that the Market for Fiction eBooks has never been greater.
The virtual tsunami of fiction eBooks in every possible genre and sub-genre has flooded the publishing world until we feel that we are waist deep in choice and struggling to make any headway.
No matter genre best describes of your novel.
So where does that leave the self-published fiction writer? Up a mountain looking for a track to follow!
Consider your Target Demographics for your eBook.
Who are your target readers? Where do they live? How many books do they buy every month and how much are they prepared to pay for them? What are they looking for? Does your book meet their needs?
You have to accept that there is a huge diversity of eBook buyers who respond totally differently to price points for eBooks.
Low Price or Free
There are some readers who will not download an eBook from an author who they are not familiar with, unless it is free or offered at a very low price.
They do not know your work and your author brand and this is a low risk option for them.
If they love your work there is a very good chance that they will respond with a good review on the online bookstore and they will buy any other books that you have on that store.
You can think of this low price as a loss leader which will introduce readers to your work.
This is also a great selling tool if you are writing a series of linked eBooks and you have a new release. Offering the first book as a free download, or very low price, can be a great incentive. But the book had better be superlative!
Competitive and Top level Pricing
On the other hand, some readers refuse to buy books below a certain price point because they are assuming that if your book is priced too low, then it is not a quality product, and they will be wasting their precious and limited leisure time on something which is poorly written and produced.
Unfortunately over the past few years, online book stores have been flooded with very poor quality eBooks priced at 99cents, which have devalued promotional pricing in the fiction market. What worked to increase book sales three years ago is no longer effective today.
What is in it for the reader? You have to know your readers and what they are looking for from an eBook.
For example. Romance fiction has traditionally been sold in mass market format and romance readers still have a voracious appetite for low to medium prices romance fiction in any format. Anything above $4.99 might be a tough sell to this market, unless you are a big name author with a dedicated readership.
And where do we go to try and find some facts, even if they are historical and therefore out of date in this fast changing publishing world?
The Online Booksellers.
Two reports came out last year which provide very interesting reading and helped answer many of my top questions.
A. The first was from Mark Coker of Smashwords, who reported the results of a survey and the full presentation is well worth reading– New Smashwords Survey Helps Authors Sell More eBooks). Here is a snippet:
“For the study this year, we analysed over $12 million in sales for a collection of 120,000 Smashwords ebooks from May 1, 2012 through March 31, 2013. We aggregated our sales data from across our retail distribution network, which includes the Apple iBookstore, Barnes & Noble, Sony, Kobo and Amazon (only about 200 of our 200,000 titles are at Amazon). As the world’s largest indie ebook distributor, I think our study represents the most comprehensive analysis ever of how ebooks from self-published authors and small independent presses are behaving in the marketplace.”
Here are a few key points from the survey which I found relevant to my questions:
Image credit: Mark Coker/Smashwords
1. $2.99 is the Most Common Price Point chosen by independent [indie] authors who self-publish through Smashwords but there is a definite bias towards the lower end of the price range overall.
2. What price ranges sell the most number of copies?
“As you might expect, we found there’s a definite relation between price and unit sales volume. Lower prices generally sell more copies than higher prices. But not always.
We normalized the data so we could understand how the average book priced at a given price would perform compared to a book priced over $10.00+. We set $10.00+ as equal to “x.”
Image credit: Mark Coker/Smashwords
“So, for example you’ll see in the chart that $.99 is 3.9x. This means that a $.99 book will on average sell 3.9 times as many books as a book priced over $10.00. A $2.99 book sells about 4 times as many units.
Note how books priced between $1.00 and $1.99 significantly underperform books priced at $2.99 and $3.99. $1.99 appears to be a black hole.
What price moves the most units? The answer is FREE. Although not shown in the chart, my presentation includes an analysis I performed of our sales at the Apple iBookstore over the last 12 months.
FREE books, on average, earned 92 times more downloads than books at any price.
If you’ve written several books, consider pricing at least one of the books at free. If you write series, consider pricing the series starter at FREE. Nothing attracts reader interest like FREE. But remember, it’s one thing to get the reader to download your book. It’s an entirely different challenge to get them to read it, finish it and love it.”
3. How does List Price and Sales Volume translate into Royalty payments?
“It goes without saying that a $.99 book will usually sell more units than a $10+ book. But will the $.99 book make up in volume what the $10+ book earns in margin?
That’s the question answered by the Yield Graph. We computed book earnings for all the books in each price band, and then divided the results by the number of books in that band to determine the average yield of for a book priced in each band.”
Image credit: Mark Coker/Smashwords
“We labeled each bar with a percentage so you know how the yields of each book in that band, on average, compare against against the overall average of all the bands.
So, for example, books priced at $3.99 will earn about 55% more than the average book at any price. Books priced at $1.99 are likely to earn 67% less than the average.
One surprising finding is that, on average, $3.99 books sold more units than $2.99 books, and more units than any other price except FREE.
According to our Yield Graph, $3.99 earned authors total income that was 55% above the average compared to all price points…
Other highlights from the Yield Graph: Books priced between $.99 and $1.99 continue to underperform when we look at the book’s total earnings. $1.99 performs especially poorly. It’s a black hole. I’d avoid that price point if you can. Price the book instead at $2.99 and you’ll probably earn more, AND sell more units if your book performs near the average.”
Personally I also found it interesting that there was also a second peak at the $6.00 to $6.99 price range which is what I would expect to pay for a mass market mainstream paperback. [$6.50 is approx. £3.99 at 2014 exchange rates before VAT is deducted, while $3.99 is approx. £2.49]
The full presentation is well worth reading for a full discussion of this data – (New Smashwords Survey Helps Authors Sell More eBooks)