The New World of Publishing: Book Pricing from Another Perspective

Teri Babcock posted the following comment on the last article I wrote in this series and I asked her for permission to move it to the front page. Thanks, Teri, for permission to use it here.

Teri’s comment is spot on the money in many ways, at least from my opinion. So even through I hate talking about pricing of e-books, it is an important topic for indie writers and Teri’s great comment really hits home. 

And, of course, I will make some comments after his post as well.

——

Teri…

Went over to the Kindle boards, remembered why I don’t go there. A lot of people arguing with the pricing of short stories above 99 cents. And I thought again about the professionals I’ve heard speak about pricing goods and services. I thought about one of them in particular who consults with people to maximize their incomes, and what he would say about selling books.

He doesn’t work in the publishing industry, and he doesn’t have a pre-existing mindset about where book prices should be. He would base their price on a number of factors, one of the important ones being ‘perceived value to the consumer’.  He would look at how much people will pay for other things of similar value, and price similarly.

He would also look at ways to increase the perceived value, so he could charge more.

He would look at all the short stories and say ‘It takes 15 minutes to read? And it was fun? Okay. charge 5 bucks.” And when writers squacked in horror, he would say “Starbucks sells fancy coffees for $5 that take 15 minutes to drink. They sell millions every day. Did you enjoy the story as much as the coffee? Yes? Well, no problem.”

And the writers would come back with “but there was actual substance in the coffee… cream and coffee beans and sugar…” and the he would respond with “yeah, and if I really like the story, I can read it again. I can’t drink the coffee again. I can lend the story to my friends. I can’t say to my friends, ‘gee you should taste this coffee, it was really good, you can try it when I’m done with it.’

He would tell you that it is not good practice to set anything, no matter how ‘small’, at regular price at the very bottom of the price structure.

The bottom price should be reserved for sales exclusively, and used only in an integrated, strategic way to give you more sales traction and build your brand.

If people said “oh, well I’m new, and I don’t have name recognition so I have to sell cheap to make sales” he’d say, no. Set the price you want to regularly sell at. From that price have sales, or other promotions that give an incentive to the consumer to try your new stuff. You’re telling the consumer that you know they are taking a bit of a risk on a new, unknown quantity, so a price break makes it more appealing. Once they’ve tried your stuff, then they know if the regular price is worth it to them.

You are always educating the consumer as to what your product is worth. The regular price will come to be perceived as its true value. You don’t want to set that too low. You steal from the consumer the thrill of getting a deal, you steal from yourself the flexibility to build and expand your brand appropriately.

And some writers would say “well, I’m pricing my stuff low because, in addition to my being a new writer, I think it is not quite as good as some of the more established authors.”

He would say “Don’t sell it unless it’s good. Do you think I’m going to be grateful that you took and wasted 15 minutes of my time and only charged me a dollar? My time is valuable. I’d pay $5 to have my 15 minutes back.

Do you think when I started as an accountant I told people ‘this isn’t my best work, so I’m going to give you a discount’? No. I did my best work, I gave them a price break from my regular rates – and told them I was doing this – as an incentive to try someone new, while I built my business. As my reputation grew, I didn’t need to do that anymore. And everyone knew what my regular rates were. With my reputation, I was able to support further price increases.”

The big difference between people paying $5 for a fancy coffee every day, and balking at paying $5 for a short story is this: consumer expectation. Starbucks has been training consumers to pay a high mark-up for their coffee for a long time. Consumers might grumble occasionally, but they still show up every day and pay $5. The writing e-market has been doing the reverse, because it is now a market of the commons, and the majority of the commons have no experience with marketing and sales.

The first and last tool of the unsophisticated sales-person is always to reduce the price. Like a chain-saw, price reduction is a powerful tool, but if it is not used carefully you can cut your own leg off.

I’m sure this finance guy would set his bottom price for stories at 2.99. He would not give up the 70% profit margin by dropping below that. If he perceived a need to set a sale price below that, he’d probably just make it completely free, rather than setting it at 99 cents, since there is so little profit at that price point anyway. And for a limited
time. There’s good reason Amazon sets the KDP Select free limit to 5 days.

Anyway, unlike the squackers, this guy makes his money making other people money. And I’m sure he would agree with Dean’s pricing… and say he hasn’t gone far enough yet.

——

Dean here… Thanks, Teri. Wonderful and clear and spot-on-the-money from a business perspective.

And I think you are right, I haven’t gone far enough yet. Right from the start I argued with all the talk from all the places about discounting books too low and for no reason. And now, because of that start, it’s going to take indie publishing years to recover the public mindset of that 99 cent price.

And it is a mindset we caused by the early adaptors being so eager to make sales and give their books away for no sound business reason.

As I have said over and over and over, every writer and indie publisher is different. My hope is that an indie publisher will make a clear decision as to where to price their books. Clear and thought through from the perspective of history and business.

Just a little publishing business perspective.

In publishing there are (and have always been in one fashion or another) three areas of book selling. High end, mass, and discount. 95% of all books (in history) were sold in the middle end, the mass area where consumers got used to paying a certain price for a mass market paperback, a different price for a trade paperback, and yet a higher, but normal price for a hardback.

The high end books (in history) were the signed collector’s editions with added content and art.

The discount publishers (in history) published directly to the front discount shelves of big bookstores or discount mall stores. If a regular mass book got to those shelves or into a ten cent bin in the front of a store, it was because it didn’t sell and the store wanted to get ride of it.

Readers expect all three levels. Even with the new electronic distribution. They expect the middle prices to be the good books. They expect the very expensive books to have added content. They expect the discount books to be either poorly done or not wanted.

It’s called “perceived value” as Teri mentioned and it has been a major factor in publishing for centuries.

When you, as an indie publisher, decide to price your novel to 99 cents, you are shouting to readers over and over that your book is not wanted and has no value and is just being moved out.

If you price your electronic novel from the $4.99 to $7.99 range, you are telling your customers and readers the book has value and is a normal traditional book.

If you price your book electronically over $12.99, you better have added content or a demand like a bestseller with a million fans who want to read it now.

Nothing has changed in publishing, folks. Electronic is just a new delivery system that allowed writers to take control and get directly to readers. If you decide to indie publish, understand the business of publishing enough to at least tell the readers (with your price) that your book has value.

Now, go ahead and shout at me, but realize I will not put nasty comments through. Discussion is fine, anger you can take to another blog or to the Kindle Boards.

And thanks once again, Teri, for the great comment.

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106 Responses to The New World of Publishing: Book Pricing from Another Perspective

  1. joemontana says:

    I’m honestly surprised this debate has endured. If I see a 10,000 square foot house in a great location up for sale @ 25,000 bucks, my first question is “What the hell is wrong with it?”

    Likewise, when you are looking to buy a reliable car, do you got to the used car lot and run for the one marked $2500? You do if you are broke, but you don;t expect it to have heated seats, GPS and a 5 disc cd changer in it either, do you? You won;t cry when it falls apart in a year or 2 either…

    Weird that books and music are perceived so differently…

  2. Well…. again, it all depends on the consumer. I base my prices largely on myself as a consumer–and I, for one, am VERY careful with my money as a consumer.

    To use the example in this article, in any given year, I could count on one hand the number of times I buy coffee at Starbucks or any remotely similar sort of venue. Precisely because I can have good coffee at home (and/or pack good coffee in a thermos) for pennies on the dollar when compared to the cost of buying it at a coffee bar. Similarly, I usually just order club soda at bars, even though I am a wine drinker. Because I can invite friends over and share a whole bottle of wine with them for the same money that one glass of wine costs me in a bar.

    I have bought ONE hardcover novel in the past 3 years, because they’re too expensive; the story is exactly the same if I wait for the paperback. I rarely buy books by a writer whose work I don’t know; I try them out at the library.

    When two new fantasy novels these days, by authors making similar advances, are priced drastically differently in ebook format (one at $7.99 and one at $12.99), and the only difference I can see between them is that one has a print edition in mmpb and the other in hc, I know that the $12.99 ebook is drastically overpriced in order to support the print edition–and there are no conditions under which I’ll pay that high a price for that ebook. Similarly, seeing one author’s backlist priced at $7.99 in ebook format while the new book, released in hardcover, has an ebook priced at $12.99 is again a clear indication that I’m be OVERCHARGED for the ebook, and I won’t pay that price. If it’s a book I want to read before the paperback comes out, I’ll get it at the library.

    It’s extremely rare that I will pay for anything that I think isn’t a good buy. And I have exacting standards about what I, as a consumer, consider a good price. I am also well accustomed to doing-without or finding another solution (such as going to the library; or buying things at consignment shops; or buying last year’s software and computer model when prices drop bceause the shiny new model has just been released; etc.) rather than paying a price I consider too high.

    So there’s no way I’m going to charge for my self-published ebooks prices which I, as an exacting and value-conscious consumer, would consider too high or not a good buy. I’ve experimented with lowering prices (was unimpressed with the results) but not yet with raising prices. I may do so next year, but have no firms plans at this time. IN any case, whatever I do, I’ll stay within the range of what I, as a consumder, think is a fair price when -I- buy a book–and the only time I’ve paid as much as $9.99 for an ebook, I felt it was poor value and decided I wouldn’t pay the much again. I’ve never paid more than that for an ebook.

    • dwsmith says:

      Laura, sounds all good to me. I’m a little different, personally. Over the last two months I’ve bought maybe a dozen brand new hardbacks (all favorite authors, all from Sheldon MacArthur one of the indie bookstore owners here in our small town.) Now granted, most of them were $26-28.00 but Shelly gave me a discount on all of them down to $22 and about half of them were signed. (I have not read them all yet, but also note I do not read on either my iPad or our two Kindles or the office Nook.

      But I have also thought nothing of buying a paperback with a 1940s cover price of twenty-five cents for $50.00 and it didn’t bother me in the slightest to just sell a copy of a signed Bradbury first edition hardback for almost $2,500.00.

      So, as you said, it depends on the consumer. But what I was talking about was the general feeling (trained in over a century or more) of the consumer to the three areas of books. You think our modern world is fun, you ought to go back and read the discussion about the value and quality and pricing of the Pulp magazines in the 1920s as they took over the lower end for a time. Our three-level structure started around 1960 with the collapse a few years earlier of the old distribution system. It has been solid in publishing since and I have even written books and stories for the discount publishers. And as a publisher, sold the high-end added-value books.

      My point is helping indie publishers know of the three areas of publishing and the consumer attitude toward the three areas and then price their book where they want for their own publishing goals.

    • Simon says:

      There is also the rule of 80/20 to consider. That is 80% of the revenue in a business comes from 20% of the people (or numbers to that effect).

      As Dean implies, it depends how you position what you sell in the market (is it luxury Starbucks coffee or gas station fare?).

      At some point though, you have to ask yourself is it worthwhile selling to 99 cent customers.

    • allynh says:

      “Laura Resnick says: June 25, 2012 at 5:36 pm – Similarly, seeing one author’s backlist priced at $7.99 in ebook format while the new book, released in hardcover, has an ebook priced at $12.99 is again a clear indication that I’m be OVERCHARGED for the ebook, and I won’t pay that price.”

      My dad would go to the store and get that day’s bananas that were brown and being tossed by the store, to make banana bread. The ripe bananas had far more flavor, so he would literally get a bag filled for free. HA!

      Books are not bananas that have a limited window of flavor before they turn to slime. Books do not spoil.

      Every day someone discovers Stephen King, and they spend the next five years buying all of his books. Would you really price his “backlist” books at less than the latest?

      Why should you price your backlist lower than your new books, when every day someone will discover your books, and your backlist will be “new” to them. HA!

  3. D.B. Baldwin says:

    If you price an ebook at 12.99 you’re shooting yourself in the foot due to the 35% royalty rate on titles over 9.99.

    There are a tremendous number 2.99 short stories selling well on Amazon that are 3500 to 8500 words. They’re mostly erotica, though. Writers in other genres just need to train their readers like the erotica authors have.

  4. Jerry says:

    This is such a timely discussion to me. The business sense is totally on the mark. I’m new at this game, and pricing my ebook at $4.99. Anything lower and I might a well add a tagline to my cover that reads “Now with extra garbage”. That’s how the book will be perceived, I’m sure. I produced a solid story, pro edited, good cover, accurate formatting. It’s worth the price of a cheeseburger and fries.

    Here’s a little story to highlight how I’ve seen this in action myself. My dad, an avid reader of many years, finally jumped into Kindle and the ebook world. He had himself a ball downloading the free and cheap novels. At the time he didn’t even know I had put up my own book. Well, this lasted for several weeks before he declared to me that he has realized the cheap and free prices are generally not worth it. He felt angry for wasting his time on them.

    It’s not to say a $2.99 novel is not good. But it’s certainly sitting next to the rotten fruit on the stand.

  5. Scott Ellsworth says:

    I would argue, though, that perceived value does matter. I pay between 4 and 8 dollars for something that pushes my “mass market” button, perhaps ten or twelve for a hardback-a-like, up to 14 if it is on my very short list. (Hesrd on Science Friday, or nonfiction, or the first week of a top tier author.)

    Of course, I do expect a delay if I want mass market prices – the first Iron Druid book would have been mass market in paper, and I expected something in that zone. The fourth, on the other hand, I would have expected to be at trade prices for six months.

    A single short story, n the other hand? I would rather see an author package it with enough others until the total is book-length, and I expect to pay book prices. I do not find lots of appeal in a $0.99 story. I find more in seeing that story with a group of like stories for $5.

    Just like writers should be in for the long haul, we the readers are too. We want to enjoy the story experience, and I believe we pay more for that.

    To be clear, though, I only buy 0.99 books when I spot an author I like running a special, and I want to have an ecopy to mirror my print copy.

  6. Chris Ward says:

    This blog is fast becoming my mantra and this is another great post. I’m still relatively new to self-publishing but I’m gradually moving all my short stories up to $2.99 and my novels to $4.99. On Sunday I actually sold one at that price, and the royalty was worth 10 sales at .99c. I’m pretty sure whoever bought it probably felt it was of more value too. Maybe I didn’t get the same amount of exposure as a result but getting a name takes time, and I’m 600% up on sales in June (sounds better written as a percentage! :-) ) compared to May so things are moving in the right direction.

    Thanks again for the post, Dean, and also thanks to Teri (and his friend!) for his great insights.

  7. Sawyer Grey says:

    I’ve got a stack of 4000-8000 word erotica stories selling for $2.99, with bundles of 4 priced at $7.99. By using stock photos (good ones) for the cover art and doing the covers and formatting myself, production costs average under $10 per story. That means I need to sell 5 copies of each story over the whole “life of the author plus 70 years” to recoup expenses (not including writing time).

    This is simply a no-brainer. 99 cents is a waste of time and does nothing but cost you money. I’ve tried it both ways, and I will take the 70% royalty rate every single time. Your audience may be different, but mine gives me more money at $2.99 than they do at 99 cents. A lot more.

    “I’m sure this finance guy would set his bottom price for stories at 2.99. He would not give up the 70% profit margin by dropping below that. If he perceived a need to set a sale price below that, he’d probably just make it completely free, rather than setting it at 99 cents, since there is so little profit at that price point anyway. And for a limited
    time.”

    This. Exactly this. I don’t *like* giving my stories away for free, but I will do it for one reason. Reviews. My stories with reviews sell at least twice as many copies a month as my best-selling stories that do not have reviews. If I make a story free, it gets thousands of downloads in a month, generally from people who would never have paid $2.99 for it to begin with. Out of those thousands of downloads, I’m likely to get 6-10 reviews. Here’s the fun part – even if the reviews average out to only 3 stars, sales of the story jump drastically.

    The lost sales for one month at the non-reviewed level are *very* quickly compensated for by the higher average monthly sales at the reviewed level.

  8. I read your original post on this subject and I scared me silly to price my books at $4.99. It still occasionally gives me pause. But the thing is I see .99 as “Loserville” and I can’t stand to see my novels on that side of the tracks. I have a couple of short story collections that I sell for .99 but not the novels. I give away short stories because they are basically just ads for my books. I feel bad about charging a viewer for an ad! Over time, I may rethink even that, though.

  9. Ed Teja says:

    It isn’t just new writers putting the prices down. Lawrence Block has released a slew of stories lately at 99 cents and giving Amazon its exclusivity. He said he sells ten times more there than on Smashwords, but I find that odd, given all of the outlets they go out to.

    Some of these price points strike me as odd, that perhaps $2.99 is good and $1.99 for trash books, or real books are $4.99 and only losers with garbage put them at $2.99. While I agree that it is nicer to get more for your books, and I would like to see the expectations raised a bit, there aren’t going to be any magic numbers that will define much of anything for quite some time. Making a religion out of price points strikes me as only slightly mad, though not particularly harmful.

    • dwsmith says:

      Ed, we are all new at this, and these are the discussions that will sent things for the new normal coming to publishing. Just because I have about fifty stories at 99 cents and Lawrence Block has a bunch at 99 cents certainly doesn’t mean that’s where this will end up, and it certainly isn’t where my stories will end up. Again, most of us bought into that yelling at the beginning about the “keep it cheap” thinking. And changing things takes time.

      And I have no problem if anyone leaves their short fiction at 99 cents, or even their novels. I honestly don’t care. I just am trying to help people understand what they are doing when they make those decisions. Nothing more.

      As far as the price points, the largest store at the moment set price points between $2.99 and $9.99 to give the highest percentage to the publisher. Keeping those points in mind along with the perceptions of the buyers are two business decisions.

      Am I angry at myself in the beginning of this, almost three years ago now for me, that I set all my short fiction at 99 cents? Yeah, a little, but I had so many other things to think about, I just never questioned that one detail until this last year. (However, I always questioned it for novels.)

      • Ed Teja says:

        I understand what you are saying entirely. I simply was referring to LB’s recent blog where he is putting fairly lengthy books up at that price now. They are his to do with as he pleases, and I am certain he has his opinions on that pricing, although he didn’t give them. But when a name writer is doing that, I suspect it does influence reader expectations about pricing. That was all I meant by that.

        My other comments were in reference to the general tone of some to your post comments that say 99 cents is junk, or that some particular price indicates quality. I completely agree that we should price our books at a decent market price. The problem, as you’ve pointed out, is figuring out what that is.

        When I first started doing ebooks, like most folks I put shorts at 99 cents and still have some there. It’s the old impulse sale philosophy and might or might not be relevant. They seem to sell in spurts, and for me they are promotional–they show off my writing and perhaps will attract readers at higher price points. They aren’t worse stories, just quite short (and backlist anyway, not that means much, if anything today).

        For new books, I have more or less followed your lead in pricing, because it seems reasonable, just I have started putting out print books as well. I have only been in the ebook world since the beginning of the year, so of course my sales mean nothing yet. It has taken months for the first ones to even snake through SW distribution channels, and there were the normal screwups (mine) as I climbed the slippery slope of the learning curve. Maybe by this time next year the numbers will have some meaning.

        Anyway, sorry you hate writing on the subject, because your thoughts are always useful and well presented.

    • I sell way more than 10 times as many copies through Amazon as I do through Smashwords. Way more. I’m lucky to sell even two copies a month through Smashwords and all of it’s outlets on all of my books combined. I load my Nook sales separately, but even with those sales, I still am more than 10-1 with Amazon over everything else.

      And my first indie-published book was at 1.99 or 2.99 it sold very poorly (about one per week). I sell far more at 4.99. The book I gave away for two days using KDP outsells the first book 3-1, so I’m glad I signed up for it this time. I certainly don’t plan to list it through KDP indefinitely, but my two days of promotion made it well worth losing three months of sales at the other outlets.

  10. Books are not commodities, and there is certainly room for every kind of price.

    I do think, though, that comparing short fiction to lattes is shortsighted. Or perhaps I’d call it the positive equivalent of a straw man. YOU can compare the cost of a book to whatever you want, all day long, and it doesn’t matter if that’s not what the audience compares it to.

    Most people do not compare entertainment to food when considering price. They compare a similar pleasure. A movie. I only go to movies at the cheap times, so I get two hours pleasure — as a show, an event — for five bucks. And for five bucks, I can rent a whole season of a TV show over several weeks from our local video store – many hours of pleasure. Or I can spend $5 equivalent of time off work downloading books from Project Gutenberg, and get years of pleasure.

    And no, I’d never spend $5 on a latte, but I’d happily spend twice that much on a great bowl of Sichuan red oil dumplings.

    What matters about price is how much the consumer can afford, and how much they want it. If your audience is made up of latte sippers who see a short story as equivalent to a find cuppa, then great, put the $5 price on it.

    But if that doesn’t work for you, you have to consider that maybe your audience is more Value Menu folk. (That doesn’t make them Discount Bin folks, btw — remember, MOST people are used to reading short fiction 12-20 stories to a 7.99 paperback or magazine. That’s not discount bin.)

    • dwsmith says:

      Camille, interesting how your points went all over the map. But I do want to ask that if you do have a ten or twelve story collection, do you price it at $7.99?

      Here are my suggestions for pricing of short fiction. And they work fine with what Camille was talking about.

      Short story… if under 7,000 words, add in a complete and similar genre bonus story to get the word count over 7,000 words.
      Longer story… over 7,000 words and under $10,000 words price at $2.99
      Longer still story… over 10,000 words and under 15,000 words price at $3.99
      Over 15,000 words and up, $4.99 and up depending on length.

      Collections 5 story collection around the 20,000 word range $4.99
      Ten plus story collection at the 40,000 word plus range $6.99.

      So a reader only wanting one or two stories gets them for $2.99. In essence paying for the price of buying the story solo.
      If a reader wants a small collection, they get the stories for about $1.00 each.
      If a radar wants a larger collection, they get the stories for about 70 cents each.

      From the reader standpoint, this price structure gives a logic they can understand.
      From the business of the publisher standpoint, every sale makes 65-70%. And gives readers a break if they want to read a lot of your work.

      Just my suggestions. That’s what all my short fiction will be priced at in a month or so as I work through the inventory and start doing new stories again to finish the challenge.

      • Ramon Terrell says:

        You know what’s funny is that I price all of my full length novels (the shortest being my vampire books in the 85k word area at $4.99. I have thought about raising the price, but since all of my books have been published no longer than nine months, and they are just now starting to sell a handful of copies every month, I’ve decided to leave them alone and keep watching. Funny that I price my work at five bucks, but I’m willing to pay up to $10. On a rare case I might go $11.00. I still buy my favorite authors in hardcover, as I already have everything they’ve written in that format.

        This is all very interesting.

      • My point didn’t actually go all over the map — I was demonstrating how pricing perspectives are (and must be) all over the map.

        YOU compare a short story to simple pleasures, but most people don’t. Most people have their own ideosyncratic reasons that an item is worth something.

        Unless you can hand sell that story to every single individual, you can’t draw that equivalent of latte = short story. (Or movie = novella. Or cupcake = poem. Or diamond = rare first edition Ellison paperback.) They’ll draw their own equivalents whether you like it or not.

        Even among people who actually drink lattes (who are a minority) the reasons they spend that $5 differs widely. They may not be buying 15 minutes of pleasure. They may be buying 15 minutes of mindlessness, or 5 minutes of sense stimulation. Or 15 minutes of sitting in a nice atmosphere. Or heck, 15 minutes of wifi. They might be buying a shot of caffeine that doesn’t taste awful.

        As I said, books are not commodities. One does not equal an other.

        As for my own short fiction….

        I don’t HAVE 10 stories which are enough alike to put into a single collection, but if I did, I would price them according to the equivalent length novella or novel. (For me, a novella is 2.99 and a novel is 4.99, but I don’t recommend that people do as I do. That’s just the price I think is right and fair.)

        What’s more important, imho, is that price is like cover and title — it is a part of the package that communicates something to the reader. The biggest trick about pricing is not whether to price high or low overall, but what the differences in your prices mean. Is your cheapest book a discount or short? They’ll make a judgment of relative value long before they get through the book description to find out.

        I don’t have enough books in any series or genre to help the audience clarify that, so I’m not worrying about it yet. In a couple of years, I’ll have the titles, and will have worked out the cover styles and all of that to make it more clear. And then I’ll worry about the message sent by price.

        The one thing I do believe has already sorted itself out is that 99 cents is, in the mind of the consumer, the same as “free” these days. It’s seen as a loss-leader, a sales come-on, a sample.

        And that’s how I happen to use short fiction right now. I don’t recommend it, and I’m not trying to make a living out of it. The other thing I’m doing is using it all as a learning experience. Watching audience behavior. Finding my audience.

        We’re in a whole new paradigm — full of opportunities unlike any of the opportunities we had before — and I see no need to lock myself into anything.

      • SL Clark says:

        Thanks Dean, this answers my question how to get a short beyond the artificial .99 bar set by the retail volume leader. Your 7k floor seems reasonable, so I’ll be reconfiguring all of our shorts to include enough bonus material.

        $0 .99 cents isn’t Art and if we aren’t making Art, why bother?

  11. Suzan Harden says:

    This is just an observation based on my limited experience. I started with the whole “99 cents for a short story” fifteen months ago when I first published my books. It worked for about six months, until about the time the free/99-cent backlash started.

    I figured I had nothing to lose by following Dean’s advice about treating your work as worth more than the discount bin. Sales actually jumped for me when I started raising prices.

    So, Dean, first of all: Thanks for sharing your experience and giving us a place to share information. Second: Don’t be mad at yourself because this is a whole new ballgame, and we’re all still working out the rules.

  12. RD Meyer says:

    An interesting discussion with points I’d never really considered. I thought about originally pricing at $1.99 b/c it seemed like more than .99 but would still draw in readers. Now I wonder what it says about my product’s quality. Definitely gives me something to think about.

  13. Elfwreck says:

    I have a reader’s perspective, not a writer’s. While I want the writers I enjoy to make enough money to keep writing, I am also sharply aware that no writer anywhere–no small pool of writers anywhere–is going to keep up with my reading rate, so I need to ration my book purchases.

    I’ll buy Starbucks-priced ebooks, a few bucks for 15 minutes of reading pleasure… occasionally. I have to already believe I’ll like it, which means not wasting that money on an author I haven’t read before. (While I will buy coffee or a sandwich from a place I haven’t bought from before, if it turns out bad, I won’t buy anything from that place again. In the case of ebooks, this means boycotting a publisher or subgenre, and certainly not buying a second book by that author.) I have a cap on fiction: Baen charges $6 for ebooks, so when I see a book that costs more than that, I ask myself, “would I enjoy this more than one of the Baen books I haven’t purchased yet?” So far, the answer is always no. I don’t buy fiction ebooks that cost more than $6. (Nonfic, my current highest cost is $30. I don’t have a price cap for nonfic.)

    I am not happy with the movement to shift ebook prices upward, because I remember being poor. I bought a lot of three-for-a-dollar used books. There are no three-per-dollar ebooks; Amazon’s pricing setup has killed that market. The drive away from $1-$3 ebooks is something I watch carefully.

    I wonder about the future of literary culture… my daughters can’t legally buy ebooks, because they can’t legally agree to the contracts necessary to have accounts at ebook stores. So they read freebies, and whatever I hand them that fits their tastes. (They read fanfic. I’ve attempted to buy them ebooks; the results weren’t promising and I stopped.) They are avid readers… but they’re not learning the habits that will set them up to be avid *buyers* when they have money of their own. If the ebook market stabilizes at “Freebie – all levels of quality (because there will always be freebies of random quality); $1 – self-indulgent crap and first-draft short stories; $3 – a few decent shorts and promo novels, but mostly more crap; $5 and up – good stories”… they’ll never make the jump from freebies to paid ebooks. They’ll look at the paid market, buy one or two things, get burned by a novel that looked good but was either a bad story, or badly formatted, or just not to their tastes, and decide that paying for books is too risky.

    There is an *endless* supply of free content to read. Some of it is *excellent* content. While I can respect authors who decide that the $1 customer is not of interest to them, I hope that enough decide that those customers *are* their demographic of choice, that the future of ebooks doesn’t have a large schism between “those who pay for content” and “those who read promo freebies, fanfic, public domain & creative commons works and disdain even looking at anything with a price tag.”

    The $1-$3 ebook niche is the market for the used-bookstore customer. Is the college student on a budget. Those are longtime avid readers who usually didn’t pay royalties… now there’s a way to get them to pay directly to the authors. They’re willing to wade through piles of books they’re not interested in, of random quality levels, to find what they like. But if there’s nothing in their price range, they’ll find freebies to read, or shift to other media.

    Ebooks aren’t just competing with print books; they’re competing with Tumblr. I don’t want indie authors to fall into the trap the big publishing houses are building for themselves, believing they are in the “book” industry instead of the “entertainment and information” industry.

    • There’s a really good point in there… I went into bookstores and bought a LOT of books as a preteen and teenager. In an ebook world, if kids can’t buy ebooks, where are they going to go to get their reading? By not allowing minors to set up accounts with ebook retailers, are we training those future readers to look to the free fiction sites first, rather than retail? Interesting.

      Also worth considering that the site which first does allow say, 13+ year old people to buy ebooks could capture a good market.

      • Elfwreck says:

        Minors can’t set up accounts with ebook retailers *mostly* because minors can’t have bank accounts and credit cards. This is an internet problem, not an ebook problem; nobody’s figured out how to manage the weirdness of cashless commerce without liabilities that require adult customers. The closest minors can get is the child version of PayPal, where the parent always has the right to shut down their activities, and is directly responsible for every act with the account.

        There is no “give the 15-year-old $50 to spend on ebooks.” Booksonboard is, AFAIK, the only one of the large ebook retailers that doesn’t require a person be old enough to sign a contract to set up an account. While many people have their kids set up accounts at other sites–it’s not like most of them ask for birthdays–teaching kids that it’s okay to just ignore the parts of the TOS they don’t like is also problematic. (Technically, they can’t even check out ebooks from a library; Overdrive’s TOS requires being able to sign a contract.)

        This is wandering pretty far from ebook pricing; I’m aware this is mostly a tangential issue. In ten years, it won’t be. Tomorrow’s ebook readers don’t think of ebooks as a new and exotic way to get books; they think of them as just another format, and there is no part of the current ebook market that is aimed at drawing them in. Parts of it are aimed at drawing their *parents* in, but there are no “spend your allowance money on my ebook!” campaigns. When they’re old enough to be targeted by “spend some of your paycheck on my ebook!” ads, the jump from what they’re used to paying for reading material–$0–will seem immense.

        • dwsmith says:

          Elfwreck and others worried about the young adult problem, my suggestion is control their spending by buying them gift cards and setting up an account where they can only buy books using the gift cards. Easy to do.

        • Actually, children can also get prepaid VISA cards and use them; minors can open checking accounts in many states at ages below 18 (15 and 16 are not uncommon). In those states which do bar minors from opening a checking account, parents can usually open a joint account with a minor. Or, if you don’t want checks involved, you can get a savings account set up with a VISA or MC debit card.

          Lots of options for allowing teens to have their own accounts, and although the US requires a parental co-signer for kids under 13 for online places where personal data is collected, there’s no real reason why retailers can’t allow 13+ as the age bracket for accounts. The TOS violation is the real barrier for kids being able to have ebook purchasing accounts, and I think it’s something they ought to look at.

      • I think this (kids looking for unsupervised reading material) is an opportunity masquerading as a problem.

        It’s not an opportunity for everyone, though. It’s a place to potentially build new models. That is a long-term and laborious strategy that tends not to make money right off the bat.

        For instance….

        PROBLEM: kids, when they have the opportunity to browse freely, are big time readers, and really get hooked on books. But current tech doesn’t make that easy — parents have to set something up, even with Dean’s suggestion.

        This is where, imho, freebies could come in very useful in building the audience, on blogs and social media — things kids have access to. It would be a very specialized model, and a lot of investment of time and effort.

        I see this model already working for certain kinds of things (anything from web comics to t-shirts) but as far as I can tell right now, the people who are successful are those who already understand the model and how it works inside and out.

    • This is my experience too. People in publishing seriously underestimate the size (and financial volume) of the used book crowd.

      And I don’t know that a lot of people in publishing understand how many people who buy new books buy them at the price they do because they can resell them. eBooks are changing the dynamic of that huge flood of money. The used book audience is NOT going to up-convert to high prices. They can’t afford to.

      They’ll do what they always have done: they’ll buy a few new books at a higher price, but either get most of their reading from lower priced options, or head for the grand free world of public domain, borrowing and piracy. And the money they would have spent on books will go elsewhere.

      Does that mean everybody should go after that audience? No. Does that mean anybody should go after skinflints who don’t value books at all? No.

      But that audience is huge, and it is NOT the same audience as the discount bin audience. (Used book buyers are price sensitive, but they aren’t looking for bargains.)

      • dwsmith says:

        Camille, you point about the used book readers is well said, and a large reason why I tell writers to get their books in print and into bookstores, because then they filter to the used bookstores in time. And there they find you new readers. Most used bookstore readers also buy new of favorite authors. Good point on the used bookstores, but means little to the indie electronic pricing discussion.

        • It means something because we used book buyers are in the ebook market as well. We aren’t just collectors who only read paper. As a matter of fact, a lot of us are moving fast — and eliminating paper altogether.

          We’re just price-sensitive readers. We’re a huge audience.

          The truth is, we USED to seem irrelevant to the book publishing industry, because we weren’t measured as a direct buying force. But now we are a part of that customer-base.

          Amazon always knew we were relevant (which is why they have used books on the same page with new), and publishers need to keep it in mind as well.

          • dwsmith says:

            Yes, I agree, Camille, indie publishers need to keep that in mind as well for their paper books.

            Folks, one thing to remember here. The statistics. Most readers who have spent the money to buy a reader and who do buy electronic books still read more paper books than electronic.

            Here is the problem no indie publisher seems to think about with their pricing. The perception between your indie paper books and your electronic books in pricing needs to be logical.

            For example, if you have a paper collection of five stories priced at $7.99 paper, $4.99 for an electronic copy looks to be in perspective. But if you put $2.99 on the collection for electronic, that difference is out of proportion. If you have your novel in print in trade paper at $15.99-$17.99 (which is a solid trade paper price) and you put $7.99 on your electronic for the novel, it looks correct. But if you put $2.99 on your novel, it looks wrong compared to the $17.99 paper price.

            Part of this problem in electronic pricing is because indie publishers seemed to think that selling to a small percentage of the reading public was the thing to do and they left electronic pricing just out there in a vacuum. I suppose if you have no desire to reach most of your audience you can stay electronic only and let your pricing just float around at will. But if you are doing paper books to reach everyone, you need to keep your prices of electronic books in a decent and logical relationship to the paper book of the same work.

            Crap…I need to do a front page post on that topic don’t I? Stay tuned, coming in the next day or so.

          • Yep, you should do that post on consistency and how prices have a context.

            I really think it’s getting time to expose the indies to the concept of Big Picture Thinking. (And on more than pricing.)

          • Oh, yes, please!

            I’m wrestling with InDesign even as I type this, working on my first POD. And wondering about price!

            I’ll look forward to your post!

      • allynh says:

        “Camille LaGuire says: June 26, 2012 at 10:43 am – This is my experience too. People in publishing seriously underestimate the size (and financial volume) of the used book crowd.”

        My sister goes to the gym and people bring bags filled with used book for anybody to take home. There is a steady supply of bags filled with books that are taken home, read and returned. The only reason this system of bags of free books work is because they are filled with books by popular authors. People buy new books, read them, then add them to the bags, thus keeping the supply fresh and current.

        I bet that system exists in every women’s gym. HA!

      • I’m right there with you, Camille. I’m a used-book and library reader. I love ebooks, but if they’re too expensive, I’m going to the library. And I’ve had to really change my book buying habits with the constant availability of ebooks!

  14. Dean commented above that it might take years for the indie market to move upwards in pricing. I’m not so sure; because Amazon is helping.

    The 99 cent price point was pushed by a bunch of high profile success stories – bestsellers who got there by placing one or more books at 99 cents. I think that the early adoption period where this worked is passing; and I am seeing Amazon sending that signal to indie publishers.

    In May, Amazon changed their algorithms. The new system only counts free promo books given away at about 1/10th the value of an actual sale for purposes of improving popularity ranking. Used to be it counted the same, which is why you saw people run a Select promo and suddenly vault to the top 10 popular for their genre.

    The new algorithms also seem to include price in the way sales impact popularity ranking. Which means a 99 cent ebook has to sell a LOT more copies than a $4.99 ebook to reach the same popularity. Popularity is important because that’s the default search listing parameter; when people go to browse, they browse the “most popular” by default.

    Many of you know I’ve been tracking bestseller lists on Amazon for months, looking at pricing changes and indie/trad market shares. Hey, everyone needs a hobby. ;) Anyway, the June numbers I’ve run have seen dramatic changes from the older numbers. Indie market share is down in many top 100 lists by genre, in some cases down by 20%. Average indie pricing is up 10-15%. Most notable, the number of 99 cent books has been dramatically reduced in the top hundred lists.

    Amazon’s algorithms now favor higher priced books over cheaper ones. There’s also suspicion that the algorithms use the digital list price, not the actual selling price. If you look at the various Amazon imprints, most are priced at $9.99 digital list, and show special sale prices in the $2.99-4.99 range. Using digital list price makes sense, as Amazon prepares to be able to discount “big six” books again shortly, because it will mean even if they discount a super-popular “big six” ebook very low, the weight given to sales will still keep it visible, where it will sell well.

    Indies are noticing. Indies are raising prices. Will some folks leave prices lower? Sure. There’s room for a variety of pricing programs. But the new math no longer favors discount pricing. Amazon is leading the push for an increase in ebook price tags.

    • dwsmith says:

      Thanks, Kevin. That has been both my observation of the Amazon methods lately, and also what I have heard and cannot repeat from sources. Higher priced books are getting more weight in all the formulas. Makes sense from a business perspective for Amazon. Thanks.

      • Actually Amazon is not favoring the high prices specifically.

        Amazon’s algorithm is attempting to reflect the actual level of interest customers have in a product. What they found is that when a book is on sale or free for a period, a lot of people who aren’t interested download it. So after a year of study, they’ve adjusted the algorithms to compensate for that.

        When Amazon actually wants to encourage or discourage a price point, they just change the royalty deal. They like to keep the algorithms pristine — and free of bias — so that they serve the customer, no matter what level of profitability.

        • It’s more complex than that. Some bright folks got to comparing books, and found that in every case, a $2.99 Kindle book required a *much* higher bestseller ranking to match the popularity ranking of a $6.99 ebook. So you might see a $6.99 ebook ranked above a $2.99 ebook on the “Most Popular” pages even if the $2.99 ebook is significantly higher ranked in terms of actual sales.

          This is new. Used to be, a sale was a sale for purposes of popularity. Now, price matters.

          And we think – but are not sure yet – that it’s the digital list price that matters, not the actual price (thus Amazon putting most of the books by their imprints at digital lists of $9.99 and then discounting them down to lower prices gives them the algorithm edge of the higher price, if we’re right – which we might or might not be).

          • That still doesn’t tell you WHY Amazon is doing it.

            Amazon has been working on the algorithm for over a year to adjust their popularity rankings to be more accurate. A sale at a higher price is actually worth more as an indicator of popularity. I take a chance on books I know nothing about at 2.99 — but that doesn’t mean I like them. At 9.99, you can be absolutely sure that I love that book. My purchase at 9.99 is a clear and ringing endorsement of a book.

            My purchase at 2.99, not so much. (As a matter of fact, usually, not at all.)

            That’s all the new algorithm is about. It’s not a conspiracy to sink $2.99 books, or favor 9.99 books. It’s an effort to be accurate about the popularity lists.

            Amazon considers accurate popularity, relevance and recommendation algorithms to be the holy grail. One thing Amazon really wants is that if there is only one customer for an item in the whole world, they want to be able to match that item to that customer. They know that even if that particular sale costs them money, it doesn’t matter because it will win them the customer for life.

          • That may very well be true, Camille (although I think anticipation of being able to discount “big six” ebooks in the near future is heavily involved in the timing of this change). It doesn’t change the effect, however: less lower priced books are going to “break out” in a big way. This will alter the perception among indie writers of the value of those prices, and will cause an upward trending in indie ebook pricing.

            The guys at Amazon are pretty doggone smart. I have no doubt they’ve considered that impact as they made this tweak.

  15. Interesting. I had only recently begun to ask myself whether a single short story was worth a cup of coffee. Answer (as above), yes. $2.99 converts to about £1.90 in UK money, which is what I pay for a small black Americano in my local hangout. So, is my latest novel worth two cups of coffee? Hell yes. It’s probably worth three or four, but let’s not push our luck. Anyone who goes to Amazon and looks at it can read a fair chunk for free, so it’s not as if they don’t have plenty of opportunity to decide its value for themselves.

    • I’ve been using the coffee argument for a long time. Many of us don’t think twice about paying a couple of dollars for coffee when we’re out of the house and want a drink, yet a novel isn’t supposed to be worth that much.

      I did try my novel at $0.99 for a month and sold far less copies that I’ve sold at $4.99. I think I’m going to try raising the price of one of the shorts that hasn’t sold yet to see whether it starts selling :).

      Certainly any future novels are going to be $4.99 and up unless they’re temporarily discounted.

  16. Mark Lord says:

    I completely concur with the post above and I have evidence from my own sales of short stories to back it up as well I think. I have experimented quite a bit with changing prices from 0.99 to 2.99 so I went and looked back at my sales history on Smashwords over the last 3 years. I found that there was no increase at all when I reduced a price from 2.99 to 0.99 – I ended up selling exactly the same amount of copies every month.

    About 6 months ago I did move all of them to 0.99 (having read a few posts on kindleboards about short story pricing), but I am regretting this now and have moved them to 2.99.

    I do think that the occasional free offer can help – but mostly this is because of the reviews you attract. I’m planning to make my titles free for short bursts in order to get the reviews in and then revert to 2.99 pricing.

  17. B.C. Young says:

    Another great post. I’ve recently updated my pricing structure. For my short stories and novellas, I’ve included a bonus story in each. This has allowed me to raise the price and changed the perceived value of my book. It’s a pretty simple structure and goes like this:

    Short Stories (with bonus short story): $2.99
    Novellas/Novelletes (with bonuse novella/novellete): $3.99
    Short Story Collection/Novels: $4.99
    Earlier Novels in a series: $3.99

    My sales have pretty much stayed the same doing this BUT I’m making more money. I think it’s a fair trade.

  18. Jack Roberts says:

    Great information here–thank you. I believe this pricing methodology can apply in the non-fiction world, as well. This post spurred me to change the price of my law school guide from $0.99 to $5.00, primarily based on two points: (1) the book’s perceived value and (2) my explicit intent for readers (who are in a true niche) to re-read the book throughout law school.

    As stated above: you can re-read a book, but you cannot “re-drink” coffee. Readers can enjoy the value of a book many times over. A quality book can provide an ongoing “value stream” to readers while providing an income stream to the author.

    I’m curious and excited to see the results of the price change.

  19. Josh says:

    When deciding how to price my short stories, I looked at comic book pricing.

  20. Todd says:

    I read an article recently about a guy named “Martin Crosbie”, an RV salesman who wrote a book called “My Temporary Life” which experienced a meteoric sales rise earlier this year.

    Here’s a link to the article, worth a look for a number of reasons (copy and paste if interested): http://www.theglobeandmail.com/arts/books-and-media/how-to-become-an-e-book-sensation-seriously/article4103854/

    The relevant bit to Dean’s post is point #7 in the article:

    7. Pricing: Martin “tried the 99-cent thing.” Verdict? “It makes us look self-published and unprofessional. I really believe that now.” The e-version of My Temporary Life is $3.99 – though John Locke, the first self-published author to sell a million Kindle books, counsels the contrary.

    I’m with the RV salesman!

    Todd
    http://www.toddtrumpet.com

    • Angie says:

      Five to fourteen hours per day on promotion?? Holy sheep. :/ He’s got the pricing right, but it’s going to take him forever to build up any kind of inventory.

      Angie

  21. Faith says:

    Thanks for the great posts, Dean! Fascinating as always. I’ve pointed several writers to your and Kris’s blogs. I write both fiction and non-fiction. Any discussions anywhere on prices for non-fiction books that you could recommend?

    • dwsmith says:

      No discussion on nonfiction, Faith, that I know of. Kris has a large nonfiction book up for $24.99 paper and $8.99 electronic. I think the electronic is a little cheap, but nonfiction is based on the content and the demand of the audience for that content. One of the writers who attends workshops here is selling nonfiction books and making a ton of money with very high prices, but his content is valued by a set of people out there who are willing to pay. So no clue on nonfiction. Heaven’s, we’re making this up as we go on fiction. (grin)

      • Mercy Loomis says:

        Speaking as a reader, I will gladly pay $25 for an ebook version of an academic title, because academic titles are often RIDICULOUSLY priced for print. I just can’t afford to pay over $100 for a research book, no matter how perfect it sounds for my project. Once the ebook prices start moving higher than $25 I start getting squeamish. Depending on the book, I’ll add it to my Amazon wish list and check every so often to see if any of those titles have shown up used for a decent price.

        While I MUCH prefer to have research books in print, I’ll take digital if the price break is good enough. I wish more were offered in digital. (Although my checkbook is happy they aren’t.)

        However, for non-research nonfiction I won’t usually pay that much. My price range for those is about the same as for fiction, although I’ll go slightly higher for nonfiction than fiction. For example, I bought one recently for $12.99 (and am kicking myself for not waiting as it is now $9.99) but I had to think about it for awhile before deciding to buy it. (And am now wishing I had forked over the money for the print version. Navigating footnotes on my pocket computer is really annoying.)

        • Faith says:

          Thanks Dean and Mercy! Research books put a dent in my budget, as well. Almost pre-ordered a title I’ve been waiting for, but the retailer wouldn’t accept my coupon code. OK the retailer lost that pre-order. I’ll wait for the book to come out and for a new coupon. 20-30% off is real money when the book costs a bundle.

          Right now, I’m doing competition research to price my own non-fiction. There’s not much out there on the specific topic (the life of Hypatia, Lady Philosopher of Alexandria–major character in my novel.) This should be a good thing! Currently looking at what people are selling similar types of books (length and content) for and deciding where I want to position my product. I’m also coaching my adult daughter who has a fun non-fiction series in the pipeline. We’ll be making the pricing decision soon and experimenting.

          Again, thanks for the great posts and discussion!

  22. Carradee says:

    I’ll only drop $3 on a beverage that I’ll be enjoying for a good 30 minutes (which won’t be a Starbucks coffee, for the record—their coffee’s always burnt). If I spend $4+ on a beverage, it’s for a treat that I’ll nurse for longer (or something I’m enjoying while hanging out with a friend).

    At my reading speed, 30 minutes > 15k words. So I personally would not spend $3 on a short story, and my pricing scheme for my own fiction reflects that.

    However, I also recognize that I might change my mind later (or decide to target a different type of reader). I know I’ll be changing my novel prices when I get the sequels out. (I also expect to need to raise the short story prices in another year or two just to keep up with inflation, but that’s another issue.)

    I’m not trying to say that you’re wrong for comparing a short story to a coffee shop beverage—I’m just pointing out that it’s not a good analogy for all readers, and not all writers are targeting the same group of readers.

    • Carradee says:

      Oh, and in “30 minutes > 15k words”, I meant to say that I read >15k words in 30 minutes.

      • allynh says:

        “Carradee says: June 26, 2012 at 9:29 am – Oh, and in “30 minutes > 15k words”, I meant to say that I read >15k words in 30 minutes.”

        You read fast. I’m lucky to read 10k in an hour. HA!

        Yet with that speed I’ve read over 6k books, god knows how many short stories, 10k comics(make mine Marvel), all over the past 50+ years.

        Don’t price books on how fast “you” read, price them on how fast I read.

  23. Jamie D. says:

    I’ve been experimenting. I’ve played with price points from 99 cents up to $3.49 (which is about the upper limit for traditionally published novels in romance for the length I write), and have developed a pricing strategy that seems to work well for my rom. suspense and erotic romance (my thriller/suspense writing is a whole ‘nuther ball game – I’m not sure if it’s my pricing or my writing that’s the issue, but I’m working on figuring it out on the writing end first). Like Laura above, I don’t normally buy expensive ($3) drinks or ebooks (over $4 or so – nothing over $10 for print), so I won’t price over what I would comfortably pay as a reader (and I work hard to keep my paperbacks in a range I would pay as well).

    All of my ebooks get the intro price of 99 cents for the first two weeks, to reward fans/early buyers. It seems like good business to reward/entice the readers most likely to spread the word/write a review right up front. I don’t do free for the most part (aside from the occasional review copy), so that’s my “bargain price”.

    After that, pricing is as follows:
    8k – 15k: $1.49
    15k-40k: $2.49
    40k and up: $2.99 – $3.49, depending on word count or if it’s a collection of some sort. My romantic suspense novels seem to do better at $2.99 – one sold okay at $3.49, but the other wouldn’t move at that price (even with a new cover/blurb), and now sells at $2.99. I may try raising those to $3.49 again in the future, but for now, I’m okay with ‘em where they are. And obviously when I have enough novels in a series to bundle a few together, those will be priced higher ($7 -$8).

    In my opinion, there really isn’t a “one size fits all” pricing structure (I realize you aren’t saying there is, Dean…but so many people seem to want that). I think it depends a lot on the majority demographic for a particular genre and what tier of the buying public you want to target (or multiple tiers).

  24. Ron says:

    This series of discussion is really a great help. I appreciate Laura’s perspective. I have a wife that has the same approach. I appreciate Teri’s perspective because it is very business oriented. What has helped me is to consider publishing a story or book for an author other than myself.
    In business the customer sets the price by what they are willing to pay. I don’t go to Starbucks but I can’t get my son’s to stop doing so. I am willing to buy my clothes at Costco but my daughter prefers brand names. So the business owner must decide what customer demographic they want to attract. Then they must provide the product with the perceived value the chosen demographic desires.
    The product is what everyone has their personal doubt about and is the curve ball in this discussion.
    “I wish I was a great writer then this would all go away,” was my initial thought. Then I realized the people arguing the point are those writers.
    What a wonderful world I am wading into.
    Thanks again Dean and all of you making these valid points for continuing my education.

  25. Thom says:

    Dean:

    Since we as shorts writers will probably be compared by shoppers with the digests (you know, the big boys: EQ, AHMM, ASIMOV’S) in perceived value, do you think we need to match their content?

    For example, subscribe to all of the above on my Kindle, and I’m paying about $2.91 per issue for much more than 10,000 words. There are articles, multiple stories–well, you know what’s in those digests.

    My question is, do you think we may have to match, or even exceed that content to justify to our end users a price point of $2.99? If I were a shopper, looking at two stories for $2.99, and EQ magazine, with all of it’s content, do you think that’s a fair comparison?

    • dwsmith says:

      Thom, nope, not a really good comparison in my opinion. If you buy an issue of a magazine, you are getting samples, small ads in a way, of a bunch of writers, some you will love, some you won’t get past the first sentence. Called “taste” that most new writers don’t understand, to be honest. But when a reader picks up a five story collection of your work, they know they are getting a full range of your work. And chances are they would not have bought a collection if they didn’t like your work. So that has more value than a sample pack which is basically what a magazine or anthology is.

      That said, there are real advantages to picking up the magazines. I can go on for a long time listing those advantages. But the comparison on price between an issue of Asimov’s and a collection by an author in Asimov’s is not a good comparison in my opinion. The collection should always be priced higher.

      • Thom says:

        Thank you. That makes good business sense.

        What I hear you saying is that the perceived value goes up when you consider that the reader has sought out and wants the work of a specific writer–you when they buy your collection. Therefore–they’ll pay the premium as compared to the price of a digest like Asimov’s.

        It’s not just word count that matters–it’s who is writing those words. So, a specific writer’s collection has higher value because the reader is much more assured of satisfaction, rather than having to “taste” other writers in a digest–writers that they may find unsatisfying, thus lowering the value of their investment.

        Yes?

        • dwsmith says:

          Thom, yes.

          J.A. and others, my suggestion (only that) with sequential stories is to add in a bonus story from another series. Say you have two science fiction worlds going, story #2 from first world would go with story #6 of second world and so on. Gives your readers a taste for free of your other series and that way you spread around your readers. Just my opinion, but as a reader that would be nice for me.

  26. Pricing stratification has existed as a marketing tool nearly forever. It’s a mix between the real cost of the product and the buyer’s perceived value.

    1920′s General Motors under Sloan moved to the ‘product for every purse’ system to add branding cache to models while ‘two buck chuck’ has won accolades over a few premium wines by blind taste tests. And many people select their computer brand of choice on price even though the machines are made in the same factory with the same equipment, people, and the same sub components. Buyers make a choice assuming pricing is a quality indicator they can use to save time when there is very little difference between products. I think that is the missing feature.

    Rather than belabor the pricing side .. how as writers can we increase the differentiation and value to hit the “$5 Starbucks” coffee mark? Or the $10 level? Or even the mystical $30? Remember: there is no caffeine addiction from reading books where your head hurts if you miss the daily fix.

    What is the next step after already having a great cover, superb editing, and an engaging story to command higher price values?

    .

  27. Thomas K. Carpenter says:

    I raised my prices after the workshop in February and haven’t looked back. My novels are in the $5.99 to $7.99 zone and I know in the long run, this is the right pricing strategy. My short stories are at $2.99 and though I’m selling about a 25% of the volume I was selling before, I’m making twice the money. Is math really that hard?

    As for the Kindle Boards, I think part of their problem is they typically talk about “units” of sales and never total profit. *shrug*

  28. Mercy Loomis says:

    People may also want to consider 99 cents as part of a pricing progression, which is what I’m doing.

    I only have one novel. It’s $5.99. I have one novella. It’s at $3.99. Everything else is short fiction.

    I have something like 16 short fiction stories self-pubbed right now (I forget the exact number, LOL) and a new story is released every month.

    My short stories are short. Average is around 2500 words, so I wouldn’t feel comfortable charging $2.99 for any one story, or even two. I’m currently experimenting with charging $2.99 for a combo of two regular shorts with a flash fiction extra bonus. So far sales on the $2.99 haven’t been good, but part of that is perception, because the sales don’t need to be as good. I need to crunch the profit numbers when I get more sales info from Smashwords.

    With a fairly limited pool of short stories in three rough categories, I find that I just can’t fit them all together satisfactorily into bundles yet. So until I can find or write “mates” for them, I have them up at 99 cents and together they pay for the stock photography for the next month’s story.

    What I’m planning on is having short stories debut at 99 cents. Then after a month or two (or longer depending on compatibility), combining it with one or two more stories for $2.99 (at which point they are no longer available for 99 cents). Then when I have 5-6 stories that more or less go together, putting those in a collection (still keeping the $2.99 collections available) for $3.99, same as a novella. A 10-story collection would be $5.99, the same as a novel. I figure $4 for 5 stories looks like a good deal to the reader (bulk discount, it works) and they get the discount again for buying the 10-story collection instead of two 5s. I may monkey with that and make it $6.99 for a 10er, but I have a hard time charging more for a 25,000-word collection than for a 100,000-word novel. And so far I’ve had the best experience with the $5.99 price point on the novel. YMMV, of course; I’m one of the only writers I know who makes about as much at B&N as I do at Amazon. I’ll post the results of the experiments over at my blog sometime later this year.

    The nice thing about this is I can catch people at the low end and at the middle at the same time.

    Dean, did you ever figure out how to handle sequential stories? I have two shorts that happen in a specific order, and I would hate to bundle them so that the second story was first.

  29. Hal says:

    Like Laura R., I’m cautious with my money. But why spend 99-cents for a story? Lately, I’ve been downloading at least a book a day because so many writers are making their work available for free. Maybe they’re doing it for sales ranking or for reviews. Or maybe they just believe in the old joke (“How do we make a profit? Volume!”)

    As a reader, I love it. As a writer, it’s hard to compete with $0.00.

    • “As a reader, I love it. As a writer, it’s hard to compete with $0.00.”

      I disagree. I have over 1,000 free novels on my Kindle that I downloaded in sales, but I’ve barely read more than two paragraphs into most of them. The books I read to completion tend to be the ones I buy, because… I bought them because they’re the books I want to read.

      Taken to an extreme, Stephen King’s $12.99 e-book has no problem competing with Joe Self-Publisher’s free e-book, because far more people want to read King’s novel than that from an unknown writer. Books are not interchangeable items that have to compete on price, just as Ferrari don’t have to compete on price with a Honda Civic.

    • Carradee says:

      As a writer, it’s hard to compete with $0.00.

      Not really. Because as soon as you charge for your work, you aren’t “competing” with them. You’re targeting a different type of reader—which type, it depends on your pricing scheme.

      I know as a reader, I’m not likely to read something I download for free unless it’s something I was planning to buy anyway—but even when it is something I wanted to buy, I sometimes forget I downloaded it! (That happened with one of the Grayson titles I picked up.)

      • dwsmith says:

        Have I said before how much I HATE the talk about writers competing with other writers. Just flat silly and… wait… oh, yeah, I did full posts on how silly that concept is.

        When you think you are competing with other writers you are making a mistake. Period. No more competing comments let through here. Too silly for this blog and I don’t want to continue that myth. You people need to catch a clue…sign…have I said how much that idea makes me angry…oh, yeah, in entire posts….

  30. Interesting post – very relevant for me, a new indie writer!

    I wrestled with how much to charge for my e-book after spending the money to get a professional cover and editing. Although quite a few blogs and books suggest new indie writers should charge 99 cents or maybe $2.99 for a first book, that seems to send the message that it’s not worth the price of a “real” book.

    I went with $4.99 – hopefully still a good deal, but also implying that my book is worth reading (said with a nervous quaver).

    Thanks for the valuable insights!

    Inara Everett
    http://www.jurisfictional.com

  31. Teri Babcock says:

    “In an ebook world, if kids can’t buy ebooks, where are they going to go to get their reading? By not allowing minors to set up accounts with ebook retailers, are we training those future readers to look to the free fiction sites first, rather than retail?”

    No. There is limitless quality free fiction for all reading levels available at the public library. To be able to go into a library and be surrounded by thousands of books – to chose any 5 or 10 books they want from those thousands, and to be able to come back in 2 weeks and choose 5 new ones – this is exciting and wonderful for a curious child. It is also important training in good citizenship; learning respect and care for common property, and understanding consequences.

    “Amazon’s algorithms now favor higher priced books over cheaper ones…The new algorithms also seem to include price in the way sales impact popularity ranking. Which means a 99 cent ebook has to sell a LOT more copies than a $4.99 ebook to reach the same popularity. The new system only counts free promo books given away at about 1/10th the value of an actual sale for purposes of improving popularity ranking. ”

    Well, now. That is important information. That explains all the comments from people whose thousands of free downloads aren’t getting them as high up the list as they used to. Wouldn’t I love to be a bug on the wall at Amazon during their meetings! Great post, Kevin.

    Speaking of increasing short-fiction prices, I saw something new – to me, anyway – at the library recently. Two sci-fi novellas published in hardcover. The cover price was $35 Canadian. One was “Queen of the Hourglass” and the other title I don’t recall, it was about a interstellar Shakespearean troupe whose performance will determine the future of the human race. The Hourglass book was a limited edition signed by the author, the other book wasn’t. Both authors had won major awards for their fiction.

    It was very interesting to see a very slim book priced like a 100,000+ page hardcover. Apparently, the publisher thinks it’s worth testing the upper end of the market for short fiction.

    Psst. Dean. I’m a girl…

    • dwsmith says:

      Sorry, Teri, I knew that. I just get sloppy in these posts at times. Sorry, fixed it.

    • I’ve always said if price were the only factor, Project Gutenberg would have put us all out of business a long time ago.

      I read a LOT of stuff from Project Gutenberg, but I’ll still spend up to 9.99 for a novel I really really really want — but I’ll only spend that for personal favorites which I re-read regularly. If I don’t know if I’ll re-read it, I wait for a sale.

    • Thanks, Teri! Glad it was useful. =)

      As for the “training our youth” bit, it’s not the presence of free works that bothers me… I used to haunt libraries a ton when I was young. But I also bought books. I hadn’t realized til reading the bit above (and then verifying it on Amazon) that the ebook retailers actually barred minors from buying ebooks, having their own ebook accounts. That seems like a problem to me for a variety of reasons.

  32. Brilliant post — and good comments. Nothing to add … except …

    Going back a few years I lived with my then young family in an old Edwardian house on the north-east coast of England. The plumbing was — well, bonkers. We never had enough hot water to run a bath and feed the radiators. “Call this guy,” the locals said. And I did. Phil turned up on the doorstep with just two tools — a rubber mallet, and a wooden mallet wrapped with chamois leather. “Is that it?” I asked. He nodded and pushed past me. “Let me at it,” he said.
    He stripped the insulation from the hot water tank, and surveyed the feeds and outflows.
    “I think it’s the pump,” I said.
    He shook his head and stepped back a pace and swung the chammy wrapped mallet at the copper tank. “That’ll sort it,” he said. “That’s sixty quid ($95 in 1990), thank you.”
    “Sixty quid?” I railed. “But all you did is bash with a hammer.”
    “Look,” he said. “Your hot water system now works. You’ll have enough water to bathe the kids, wash the plates, warm the house, and take a shower with your missus. It took me thirty-four years to learn exactly which tool to use, where exactly to aim it, and how much force to apply. You owe me sixty quid.”

    Skill. Quality. Value. Price.
    Happy customer. Improved quality of life. No refunds or discounts needed.

  33. I price my e-book novels at $4.99. I think that’s a fair price. Writers make a statement with the price they set. It shouldn’t be a race to the bottom. Nobody wins that.

  34. Vanades says:

    I find this discussion absolutely fascinating. A part of me sits here thinking *At least you’re talking about people PAYING you for your writing.* I’ve had discussions with people who don’t want to pay for books at all. Or who only want to pay for books after reading them and then deciding how they liked it and what the book is worth to them. Oh, and some politicians in Germany have the idea of a culture flatrate (don’t ask).

    The value for money is definitely an important factor. I used to work in sales and one of the sales managers was in negotiations for a big contract. The customer was negotiating the price very strongly and the sales manger caved. The end result? The customer decided not to do business with us because the sales manager had allowed himself to be negotiated to a price the customer considered too cheap. And yes, the customer actually said that. And he also said: ‘For that price I doubt that you’ll be able to deliver quality.’ The customer went with the more expensive competition. Food for thought, isn’t it?

    As a freelance-translator I often face the same issue and I refuse to sell my services too cheap, even though I know other translators and editors who do.

    I’m currently working on putting together my first short-story-collection and thinking about pricing, in addition to all the other million things one has to think off :-). I’m thinking about starting with either 3.99 or 2.99 and then maybe only offering it at 0.99 as a special sales-day/week or so.

  35. Okay, so I changed the prices on my short stories today. I went with the pricing levels from the February post, but I think anything new will be priced as you posted above.

    It’s not like I have anything to lose, really. Most stuff has sold a single copy or less, and sales on the others seem to have flatlined. (Where’s that crash cart when you need it?)

    If it all goes to heck, I’ll just blame it on being sick this week and temporarily not being in my right mind. Yep, that’ll work. ;)

  36. While I’m not new to publishing, I’m new to self-publishing and I have to say that deciding on price has been a concern to me.

    With my first “indie” book I decided to price it at $3.99. That seemed to me to be a fair price for an established but relatively unknown midlist author. A price that wouldn’t scare away readers who were new to my work. I based this decision on recommendations from indie author friends and my own gut—it’s the price I wouldn’t hesitate to pay to an unknown author if the book is enticing.

    I also priced my backlist at $3.99 after first considering lowering it to $2.99.

    Now, I come here and the suggestion seems to be to price a novel at $4.99 and above. Yet there’s something inside me that says this price point is too high. My inner cheapskate, no doubt.

    I think if I had priced my new book at $4.99, I wouldn’t have sold over 17,000 copies in the last month and a half. I really do think the $3.99 price point made a difference in sales. There’s no way to know, of course, and I could be talking out of my butt, but that wouldn’t be a first.

    Now, however, I’m seriously considering pricing the sequel at $4.99. I just hope it isn’t a mistake.

    • Carradee says:

      Well, I took one short novel from $2.99 to $4.95, and the sales weren’t hurt. My one $3.99 novel also was $2.99 for a month, and sales dropped. None of my titles have sales like yours, though, despite good reviews and reader feedback from some folks who haven’t left reviews.

      Both of their prices are going up when the sequels come out, but I’m not worrying about it until then. :)

    • Rob Cornell says:

      Hey, Rob. Nice to see you over in this neck of the woods. I had my books at the $2.99 rate for a while. It wasn’t until Dean did a pricing post a while ago that I worked up the courage to try $4.99. At first my sales…stayed exactly the same. Which was nice, because at the same time I was making twice the money. Over the past several months, my sales have increased for those same books (except for a bad month in April). So I’m obviously totally on board for the $4.99 price point. And I think you could easily make that switch without hurting sales.

      Now here’s the weird, new experiment. I decided to raise the price of one title, my crime thriller, to $6.99 for shits and grins. It wasn’t selling hardly at all on Amazon, but is selling in regular but small numbers over on B & N. (As a side note, it appears the readers of my crime novels own Nooks, and the readers of my paranormal thrillers have Kindles. Figure that one out.) Anyway, for the fast 2-3 weeks Red Run has been on sale for the higher price, I have also seen no change. It’s selling the exact same amount, only now instead of making $3.24 per sale, I’m making $4.54. That adds up.

      Red Run was the first book I self-pubbed. It could use a new cover and I know it needs a better copy edit. Yet the sales remain steady at that price. Give it a face lift, and who knows? Try that price with my more popular paranormal thrillers?

      I’m not sure I’m going to go there. Not yet. But food for thought. It’s that whole perception of value thing again. You have to find the sweet spot between not looking like cheap junk and not pricing yourself out of the market. And as we’ve seen, that range is different depending on the reader.

  37. Thomas E says:

    Surely I can’t be the only person who has ever bought an entire anthology just because it contained one short story by an author I love? Yeah, in effect I’ve spent $8 on a single short story before now. And I didn’t consider myself ripped off.

  38. When a band is “indie”, they still charge ) 0.99 cents to 1.29 dollars PER SONG. And while some may gripe about the cost, it is a conditioned consumer response to accept that as the basic price structure. WHy, then, do authors, whose work has artistic merit, want to cut themselves short by rationalizing why a lower price point is necessary? A house is only worth what someone is willing to pay for it. Why, then, is a beachfront shack more than a fantastic inland house with all the amenities? Because of the perceived “value” in a beachfront property. If an author does not htink their work merits a higher price, then why should readers think that? Those are the readers who, once conditioned to lower prices, will react when the author tries to raise them later.
    I know a lot of authors have used a lower pricepoint to increase their visibility on Amazon’s algorithms, but I still feel a quality product will find its audience. At a reasonable price- but not for free.

  39. Rose Garcia says:

    As a new aspiring writer I am so happy to stumble upon this blog and this post. I am about to finish my first novella and was wondering what to price on Amazon. I saw all the .99 and 0.00 books for sale and imediately thought that I would have to price my book for that to get any readers. But you have made some wonderful points about quality and pricing.

  40. conradg says:

    Dean, I’ve had an idea for a pricing/marketing structure for a self-pubbed novel that I’ve not heard anyone describe before, and I was wondering what you think.

    The basic idea is to announce that the price of the novel will keep going up, based on sales volume, starting at free, and ending at the final price point, in this case something like $6.99.

    So it would look something like this:

    First 1000 copies: 0.00
    1001-2000 0.99
    2001-4000 2.99
    4001-6000 3.99
    6001-8000 4.99
    8001-10000 5.99
    10000 + up 6.99

    Everything about this structure is subject to changes. The basic idea, however, is to make this pricing structure known to the reader ahead of time, on the Amazon page or wherever it’s being sold. It’s an incentive for the reader to buy now, before the price goes up. It also front loads the freebies at the beginning, to increase awareness, traffic, reviews, etc.

    Curious to know what you or your readers think of this kind of pricing/marketing scheme, and if it’s possible to implement it via Amazon and other esellers.

    • dwsmith says:

      Conradg, can’t imagine any reason you would do that in publishing, and I sure can’t imagine how it would work. Just the problems with changing prices around the globe and keeping track. I assume if you only had one book, and your entire focus was the one old book, then this kind of time and energy could pull something like that off, but I see no reason to do it. None. My opinion you would be better off spending the time writing another book. Set your price at $5.99 and just leave it alone until you’ve written another ten novels or so.

      • conradg says:

        Well the idea is to generate a lot of action at the beginning through aggressive pricing, and slowly raise the price until one reaches the final pricing as sales increase. It’s the “get in early while it’s a better deal” notion.

        It’s not much different than what a lot of people are already doing, just organized and formalized. People seem to offer their books at low prices early, then raise them later on if they get more popular. It’s fairly common for people to start off pricing at 0.99, then raise it to 2.99 when it catches on, and then 4.99 later on.

        As for the difficulty of raising prices, it can’t be that hard to do on Amazon, which for most people is 85-90% of sales anyway. And for most authors, they might just have a separate B&N account, and have Smashwords handle the rest. One doesn’t have to have the price changes at that exact interval either. True, for someone like you with hundreds of titles to handle, it would be very difficult to monitor. And yes, I’m thinking of a new author with just a few titles out there.

        But, if it’s a bad idea, it’s a bad idea. I have lots of bad ideas. Hopefully the bad ones will get shot down and leave only the good ones.

  41. Mark says:

    For $1.80 I get a soda and a very good David’s all-beef hotdog at Costco. How does that translate into what readers are willing to pay for ebooks?

    Also, while there are a lot of Starbucks there are even more Redbox outlets that rent me a movie for $0.99 that gives me two hours of entertainment. Does that mean a short story that takes me 15 minutes to read should be $0.25?

    My point is the coffee analogy is a bit silly. Consumers don’t base pricing expectations for books, movies, and just about anything else on the cost of cup of coffee at Starbucks.

  42. Ray says:

    I am not a writer, so I am coming at this from a consumer/reader perspective. I live below the poverty level as set by govt studies. I make $7.25 an hour in a part time job that limits us to 30 hours a week (this info is relevant, I promise), but I absolutely love to read. I hate the library, and was given a eReader (kobo) by a friend who had upgraded to a nook. Ebooks has opened up an entire new world of reading for me, and thanks to conversion software I can take advantage of Amazon’s lower prices and still read them on my eReader. I have downloaded around 200-300 of the free/.99 cent book and there are some real gems hidden in those. There were some duds too, but I have paid 15 bucks for a paperback that ended up being a pile of stink as well.

    The most I have ever willingly paid for an ebook is 9.99 (one of Jonathan Maberry’s) and it took me over 3 hours of sitting there going over the math in my head rying to decide if I wanted this book more badly than I wanted to eat from the dollar menu at Burger King this for my dinner break at work. This economy sucks (pardon my wordage) and people are going to go for a cheaper product. I have around 10 authors I love, and will read anything they write, even if it was the contents of a cereal box… I just can’t afford them most of the time. If more books were in the 2.99 price range, I’d be more apt to buy without trying to figure what I’d be willing to give up that week in the trade off. Even 4.99 wouldn’t be so bad, but still a bit more of a stretch for me depending on which payday it was on. The way my luck runs, all the expensive ebooks that get reduced for a shor ttime always goes back up to full price before I can afford to buy them, so I still miss out.

    Anyway, just wanted to give you a poor broke reader’s perspective on this. Thanks for listening.

  43. Dean, I like your idea of “bulking up” a short story under 7,000 words. And you don’t need to do it just with another story. I had a uniquely set Midnight Louie story of 5700 words at $1.49 and had two Amazon review/complaints that it was “too short” for the money. Ouch. On there forever. I added a 3,000-word interview between me and my first-furperson narrator, Louie, about his real-life history as a super-surviving stray and how he became a “literary lion.” I changed the site copy to reflect that. I raised the price to $1.99. No more complaints. I was getting $ .60 for the $1.49 price and a whole $ .80 for $1.99. May try $2.99. :)

    I also added a short essay about how the story came about at the end of a novella and the first chapter of the first book in the series, which illustrated my approach to the subject matter. I believe any personalized “added value” you can put in helps the reader feel she’s getting something special.

  44. suburbanbanshee says:

    I’ve been out of work for more than six months. I don’t buy coffee.

    It doesn’t take me fifteen minutes to read a story, either. Fifteen minutes is short novella length.

  45. Byron Gordon says:

    Looks like I’m a little late to the party but I can’t resist adding my .02 (or should that be $2.99?)
    Some serious readers posted, I thought I read fast. The actual coffee is besides the point, it is a metaphor being used to illustrate perceived value. Starbucks grabbed a huge market share at a particular price point. Then they started Seattles Best at a lower price point. Can anybody say different pen name?
    The thing is, you will only know if something is worth the money you paid AFTER you buy it. Before that it is all belief, resulting from impressions (blurb, cover art, price point), research (looking up the author’s blog, sampling their free work, etc), and prior experience with that author.
    I’m leery of $2.99 for my shorts which usually fall between 3k and 8k, but the idea of multiple discount options is a draw. I cut my novellas by 50% for the SW July sale and we’ll see how that does…

  46. Audra says:

    I too am a bit late to the party. I am a self published writer and I decided before my book ever went live on Kindle, that I wouldn’t ever go free with it. I put too much work and effort into it to let it walk out the door for nothing. Now, this doesn’t include books to reviewers. Those I gave freely. I did experiment a bit with the price. I started at 3.95. Sales were okay, steady at about a book a day which I didn’t think was too bad for a brand new indie author who’s book was swimming in sea of millions of other books.

    Then I tried 4.95 for a couple of weeks. Sales went flat and stayed flat. So I tried a 2.99 promotion for three days to bring back interest. I sold four books. Then I put it back at 3.95. Sales floundered around for the next couple of days and then started coming in. First one to two a day. Then three day, then more. My Amazon ranking shot to 8,081 (the book went live the first week of may of this year, I reached that rank by the end of June), and sales have remained steady enough to keep me in the top 11,000. I know, that isn’t a huge thing to authors who have many titles and years under their belt, but pretty cool for a newbie like me. When it first went live, I said I would be happy if I averaged a book a day sold over a months time. It is the 3rd day of July and I have already met that average.

    Sometimes you have to play with the prices a bit to see what works, but don’t undervalue your story or your work so much that you give it away or sell it at the bargain basement price of .99.

    • dwsmith says:

      Audra, wow, I would never suggest anyone do what you did. First off, my suggestion is set a price and live with it for six months or more. Changing a price every day means first off you are only on one outlet and second, why??? Spend the time writing something new. So I do NOT suggestion anyone else do what you did.

  47. Audra says:

    I didn’t change it every day. I had it 3.95 for three weeks. Tried making 4.95 and there were no sales for over week. I did a weekend promotion and then put back at the original price of 3.95, where it was doing well before and continues to do well now.

    Having spent many years in retail, I do know that price fluctuations do work. That wasn’t my original intent, it just worked out that way. However, I can’t tell you how many times I watched us “roll back” a price at Wal-Mart and people snapped it up thinking it was a deal. They bump the price up on something and leave it there not for six months, but for maybe a month, sometimes two, then they “Roll Back” the price to the original price. People think it is on sale and they buy it. They do it all the time and it works.

    Like I said, I didn’t intend to bump it up and then put it back. I hoped it would sell as well at 4.95 as it did at 3.95. It didn’t, so I went back to what was working. Simple as that.

    • dwsmith says:

      Audra, and my point is that you didn’t give the $4.95 a chance at all. I doubt it even got through the system to most customers in a week. You might have worked in retail. But that’s not the way books work. It would if every book was exactly the same. But it just doesn’t. But again, it’s your business. But I can tell you after thirty plus years that one week for a book in any book system, including the new ones, isn’t any time at all.

      And as a word of advice, you really should have your book selling to the entire planet instead of just one place. That’s like having a line of clothing and only selling them in one Walmart. Joe Konrath just did a good blog on this topic as well. For a time he went with Kindle only and now says he thinks he lost a ton of money. And I agree, he did.

  48. Great article and great point. I haven’t ventured into self-pubbing yet, though I’m looking into it. I’ve always been worried about this trend for .99 and FREE Books. I’m worried that book publishing will go the way of the music biz and that the public will begin to expect that books SHOULD be free all the time. When you sell something for .99 or give away you’re teaching people that’s what your book is worth. Just like people now think they have a right to free music downloads (because it’s not like they’re hurting anyone. I mean, all those musicians – I mean authors – are all rich anyway, right?) But what is your book worth? How much time did you spend writing it? A few months, 6 months, a year? Would a cabinet maker spend weeks building a cabinet and then not charge for it?

    • Carradee says:

      Personally, I don’t worry about that. Different price points cater to different audiences. Plenty of folks are making solid livings pricing their novels at $4.99 or higher.

  49. Lorna Reid says:

    This was a breath of fresh air. I think that if more authors had the courage to fairly price their ebooks, we would see a slow but reversing trend, away from the .99 price-point. I hate the thought of selling a book at a stupidly low price, just because that’s what readers have become used to. With my debut novel, I decided to offer a print copy, which would be priced at £8.99 ($12.99) in order to make any profit. This meant that £4.99 ($5.99) seemed like a reasonable amount for an ebook.

    Price, like it or not, IS viewed as an indication of quality by many. Although we’re programmed to love getting a bargain or a great deal, the cheaper something is, the less value it can be perceived as having (and sometimes it is actually the case). I wouldn’t go into a Poundland, for example, and expect their screwdrivers to last me anywhere near as long as a sturdy set of Stanley ones from B&Q. Whether your quality IS there or not, people will be naturally cautious. Price is seen as an indication of quality in many industries, from cars to wine.

    Some dialogue from my fave Columbo episode summed it up perfectly:
    Columbo: “How do you tell a good wine from an average wine?”
    Wine guy: “By er… the price!”

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