As promised, here at BookPromotion.com we are constantly experimenting on our own work and reporting the results back to you. I like to think of this as “trying and failing/ succeeding so you don’t have to.”
As you probably know, Amazon (through their Kindle Direct/ KDP program) wants you to keep the pricing of your eBooks within the $2.99 – $9.99 zone. They do this by penalizing you (in terms of royalty percentage) when you go over or under this window. For instance, you make 70% royalty (in most countries) on a book in the $2.99 – $9.99 price range, but drop below or above this range, and you’ll only get a 35% royalty. Ouch! You don’t have to be able to do algebra in your head to figure out that you’re going to have to sell a huge amount of books at $.99/ apiece to make up for that lost percentage. So, while you might want to keep your book’s prices low to entice your customers, doing so might cost you (literally).
Here are some thoughts on the low/ high ends of the book pricing argument. Of course (of course!) you’ll first want to do a thorough competitive analysis to determine the average pricing for your genre/ niche/ type of book you are selling. The competitive analysis might answer your question about pricing, but if it does not, here are some guidelines:
— Free: Amazon will let you do this for five out of every ninety days if you’re enrolled in their KDP Select program. Our suggestion is that you use these five free days to get as many downloads and reviews as possible. This can be a good strategy for authors trying to build their mailing lists (of course, you’d need a link for email signup in the front or back matter of the book), and can get you some sales in the “post free” lift period that occurs immediately after your book is free. We have been noticing lately that Amazon is cracking down on this “lift” period, however, so don’t count on this being a huge number. If you’re wondering about the “permafree” strategy that some authors employ, there is more information on that right here.
— $0.99 – $1.99: With pricing in this zone, you’re only getting the 35% royalty, so you need to make sure you’re doing a larger volume of copies at these prices. It is true that some books will only sell at this price, and at that point, you should be trying your best to get the reader to perform a secondary action (like signing up for your mailing list or buying another book). Amazon does not want you to use this pricing model, so make sure it is worth your while if you have to take that pay cut.
— $2.99 – $9.99: This is Amazon’s “sweet spot” for self-publishers, and if you stay within it, they will reward you with a 70% royalty. That is awesome, especially if your market research shows that your book can sustain this pricing.
Over $9.99: This is not pricing I would recommend for self publishers (in fact, I even advise large publishers against this, and some of them are starting to listen to me). Amazon’s user base of readers gets savvier every day; if your Kindle book is priced at $19.99, this not only makes you look like you don’t know the eBook market and are clinging on to legacy hardcover pricing, you also are almost daring someone to buy the book at that price and then leave it a scathing one-star review over quality/ pricing. I have seen this happen more than once, so please consider this a warning. Also, remember that big publishers have totally different deals with retailers, so you don’t know what they are getting paid on a book priced at $14.99 for the eBook version.
Here is some excellent wisdom on pricing experimentation from author Dave Hendricks:
I start each new book at 99¢. After I’ve gotten at least 10 reviews I raise the price to $2.99 to get 70% royalties. After that, I raise the price by $1 every 2-4 weeks. The longer testing period is necessary if my sales fluctuate a lot. When the weekly royalties stop rising, I stop raising the prices. Or I stop at $9.87, whichever comes first. Do not judge your price point by the NUMBER of sales, but by the profit you make.
Finally, I will show you this chart (that Dave also told me about), from Smashwords:
Here’s what Dave concluded from the chart: SmashWords did research that revealed that, in general, price points between $3 and $3.99 were the most profitable for most authors. Prices between $6 and $6.99 were the second most profitable, followed closely by price points between $4 and $4.99. But that’s a generalization. Every book and topic is different, so experiment to find out your own most profitable price point.
The bottom line: you should be conducting market research on your book / topic/ genre regularly to see what the market will tolerate in terms of pricing your particular book. If you want to read more about Amazon’s pricing, here is a link.
And with that, I will leave you to consider the all-important questions: is your book priced appropriately? Is the price of your book holding it back? Should you try changing your book’s price today?
Here is a step by step guide, in case you were needing that:
How to Price Your eBooks
Pricing your eBooks can feel like a daunting task. Set the price too high, and readers may pass on your work. Set it too low, and you may undervalue your effort or miss out on potential earnings. Here are some strategies and considerations to help you determine the best price for your eBook.
1. Understand Your Market
Before setting a price, research your genre and audience. Take a look at successful eBooks in your category and note their pricing. For example:
- Romance novels often range from $0.99 to $4.99.
- Business and self-help eBooks may command higher prices, typically between $7.99 and $19.99.
Consider your target audience’s willingness to pay. Readers looking for entertainment might be price-sensitive, while those seeking professional advice might be willing to invest more.
2. Consider Your Goals
Your pricing strategy should align with your objectives. Are you looking to:
- Maximize Sales? Lower prices (e.g., $0.99 or $1.99) can attract more buyers and help you gain visibility.
- Establish Authority? Higher prices (e.g., $9.99 or more) can position your eBook as premium content, particularly in niches like business or education.
- Encourage Reviews? Offering your eBook at a discounted price or even free for a limited time can help you gather reviews and build momentum.
3. Leverage Price Psychology
Price endings can influence buying decisions. For instance, $2.99 feels significantly cheaper than $3.00 to many buyers. Experiment with popular price points like $0.99, $2.99, $4.99, or $9.99.
4. Test and Adjust
Pricing isn’t static. You can:
- Run promotions to test how different price points affect sales.
- Use tools like Amazon’s KDP Select Countdown Deals to temporarily reduce your price while retaining a higher royalty rate.
- Analyze sales data and adjust your pricing based on performance.
5. Factor in Royalties
On platforms like Amazon Kindle Direct Publishing (KDP), your royalty rate depends on your price:
- Prices between $2.99 and $9.99 typically qualify for a 70% royalty.
- Prices outside this range usually earn a 35% royalty.
Calculate your potential earnings at different price points to find a sweet spot that balances volume and profit.
6. Offer Multiple Editions
You can cater to different segments of your audience by offering various editions of your eBook:
- A basic edition at a lower price.
- A premium edition with bonus content, such as additional chapters or resources, at a higher price.
7. Monitor Competitor Pricing
Keep an eye on trends in your genre. If competitors lower their prices or introduce new offerings, you may need to adjust accordingly to stay competitive.
8. Don’t Be Afraid to Experiment
Pricing is not a one-size-fits-all strategy. Experiment with pricing tiers, seasonal discounts, and limited-time offers to find what resonates best with your audience.
Conclusion
Setting the right price for your eBook requires research, experimentation, and a clear understanding of your goals. By considering your audience, monitoring trends, and remaining flexible, you can develop a pricing strategy that maximizes your eBook’s success.
