Tuesday, December 06, 2011

Guest Post by Elle Lothlorien

Why Your Novel is a Tall, 6-Pump Vanilla, Breve Latte Grande, Extra Hot, Heavy Whipping Cream, Extra Dry Cappuccino (Or It Should Be) by Elle Lothlorien

In June of 2010, after months of querying, I had two offers of agent representation in-hand for my romantic comedy, THE FROG PRINCE. One was from my “dream agent” who represented several New York Times bestsellers. Although the second offer was from an agent from a newer, smaller agency, I found her enthusiasm attractive. In the end, and for various reasons which aren’t worth going into here, I chose to pass on both offers.

Which, of course, left me right back where I was before I’d ever queried anyone: unpublished and depressed as hell about it.

Regular readers of Joe’s blog will be familiar with how Boyd Morrison leveraged his indie-publishing success into a four-book, traditional publishing deal with Simon & Schuster [link to post here: http://jakonrath.blogspot.com/2010/05/ark-by-boyd-morrison.html]. Boyd and I had been friends since the first Thrillerfest in Phoenix in 2006 (insufferable inferno of a bar, anyone?), and he called me in July of last year, suggesting that I consider uploading THE FROG PRINCE to Amazon for the Kindle.

Here’s the problem: All that stuff a publisher normally does for you–designing a book cover, marketing, formatting a manuscript for e-publication across several platforms—is now your job. Graphic designing not a part of your skill set? Too bad. Those who can’t do either hire or learn on the fly.

Which is what I did. I designed a passably professional book cover. I formatted the manuscript for the Kindle Digital Text Platform, asking for help when I ran into problems. (One memorable text to Boyd contained words I never thought I’d use in a million years: “Did you find that you had to convert your ms. to HTML and edit the tags directly in order to fix the formatting errors for the DTP?”)

THE FROG PRINCE went live on Amazon in August 2010. I priced it at $2.99, not so much because I understood the nuances of the various pricing arguments bouncing around the indie-pub blogosphere at the time, but because I sincerely doubted that anyone would pay anything more. In fact, I was doubtful anyone would even pay $2.99.

That particular misgiving seemed spot-on; for the entire month of August, THE FROG PRINCE sold exactly 18 copies. The story was essentially the same for September when I sold 70 copies.

And then two things happened at about the same time.

The first revelation took place at the beginning of October. While skimming various Kindle reader forums, I ran across a thread on the topic of pricing. One reader wrote that she never bought a book that was $2.99 or less because it was sure to be self-published “indie crap” riddled with typos.

The second occurred on October 10th of last year when a reader posted a five-star review for THE FROG PRINCE, writing: “The book description was a little strange, inbred insanity and impotency and all but for $2.99 I figured I'd give it a try given the high ratings by the others. In the end I would have paid full price for this [emphasis mine].” Of course, the mercenary portion of my little author brain perked right up at those eleven words.

These two things got me to thinking a bit more about what my pricing was saying to potential readers of my novel. I thought I was conveying the message “Give this book a shot! At $2.99 what do you have to lose?” Instead, I think I had inadvertently turned my Amazon page into the equivalent of a dubious used-car lot, with blinking neon lights screaming “SALE, SALE SALE! EVERYTHING MUST GO!”

This got me to thinking about coffee. No, seriously.

Consider what Starbuck’s has done for coffee. I am not a coffee connoisseur, and I could probably count the number of times I’ve been in a Starbuck’s on one hand (let’s face it, I’m never going to say with any measure of confidence: “Yeah, I’d like an antibacterial ricin-berry latte with a squirt of methadone and a splash of yak milk.”).

But you don’t have to know coffee to understand how Starbuck’s took full advantage of the economic concept of “imputed value.” Strictly defined, imputed value is “the worth or value of a given asset that is not recorded or documented in existing historical records, although that value is considered to be inherent in the asset.”

Still awake? Yeah, that was a total snore, but I can easily boil that dreary explanation down to the more familiar, oft-heard expression: “Why in the hell would anyone pay six dollars for a cup of coffee?”

Why indeed.

People may grumble about parting with their six dollars, but they’re unlikely to grumble about the coffee. Why? Because at six dollars, customers assume they’re getting one high-class cup o’ joe. At six dollars, they want it to taste good. And if it doesn’t? Well, they’re more likely to convince themselves that it does. After all, who spends six dollars on something that tastes like crap? Throw in the peer pressure of “everyone else seems to like their six dollar cup of crappy coffee just fine,” and you have an impressive marketing strategy on your hands.

Starbuck’s entire business model is built on the concept of imputed value. Should indie authors be doing the same?

Consider this: In mid-October I raised the price of THE FROG PRINCE to $3.99. I immediately saw a jump in sales. And when I say immediate, I mean overnight. Within a few days the book had leap-frogged for the first time onto two Amazon Top 100 lists. And even though half of the month had already passed, I sold 158 copies for the month of October.

At the beginning of November, I raised the price to $4.99. In November I sold 224 copies. I raised it again to $5.99 at the beginning of December, and that’s when the whole thing began to pick up steam.

December: 472 copies

January: 857

February: 862

March: 867

April: 746

May: 799

Keep in mind that by December I was charging $5.99 per book and keeping $4.19 per book. In January my royalties on Amazon alone were close to $3,500. Now, these aren’t New York Times best-seller numbers, but they’re comfortable, mid-list bestseller numbers.

Here’s what else they are: Day Job Quitting Numbers. I made $3,200 a month after taxes as a clinical research administrator. By January, my book royalties from Amazon began to approach the net monthly salary from my Day Job (but keep in mind that you have to pay royalty taxes on book royalties). And those totals do not include sales on Barnes & Noble, Smashwords, or any of the other digital reader platforms, nor do they include paperback sales through CreateSpace.

I recently took an extended leave of absence from my Day Job to finish a second novel. I never returned.

In June I was feeling confident enough to experiment with pricing a little more. Halfway through the month I lowered the price to $2.99 and then to $0.99. Did I sell more books? Yes, I did. My June total was 1,024 books sold. However–and this is an important “however”–I lost money. As you may be aware, Amazon royalties are 70% for the author at books priced $2.99 and up. Anything priced less than $2.99 and the author receives only 35%.

Now, you could argue that more books sold will create a larger pool for the “word of mouth” that you hope will spread the news of your great read. And for authors with a large back list–those who are able to put out many titles simultaneously–that strategy is certainly one worth taking a look at because they have the advantage of volume. For authors with only one book (and who are also balancing the dreaded Day Job), pricing at $0.99 may be giving the impression that your work has no value.

Something else intriguing that I noticed when I lowered the price on FROG PRINCE to $0.99 was the way it affected the reviews and refunds. Up until that point, about two percent of customers who purchased THE FROG PRINCE returned the book for a refund. One, two, or three-star reviews were very uncommon. When I dropped the price, the refund rate went to almost zero, and the number of negative reviews (between one and three stars) went up.

Here’s what I suspect was happening: At $5.99 you just bought the literary equivalent of a cup of Starbuck’s coffee. Your customer wants to like it. After all, they’ve read the reviews and it looks like everyone else liked it, right? If they get through the first few chapters and begin to suspect that the book just isn’t for them, they’re very likely to return it for a refund. Hey, six dollars is six dollars. And if they do like it, they want to jump on the review bandwagon and let everyone else know just how much they liked it.

At $0.99, the reader isn’t as heavily “invested” in your novel. If they didn’t like it, they may not bother to return it to get their dollar back. Instead they’ll find their way to your review page and let you have it by way of a negative review.

For authors with one book, it’s worth considering creating “imputed value” first with higher pricing. With a decent novel, this will “prime the pump” with positive reviews from readers who are invested and who want to like your book. This in turn will lead to more sales.

My second novel, the romantic suspense SLEEPING BEAUTY, came out on Amazon for the Kindle in September, just as sales of FROG started to drop. My religious/historical thriller VIRGIN comes out December 6th. Today I lowered my price on all three novels to $4.99, because 1) I no longer have to create “imputed value” because FROG PRINCE has almost 50 reviews; 2) with sales of FROG PRINCE now leveling off (something not unexpected) I anticipate that the sales of SLEEPING BEAUTY and VIRGIN will fill the revenue gap.

Indeed, SLEEPING BEAUTY sold 183 copies during the month of September, something it took FROG PRINCE over three months to do. The numbers for SLEEPING BEAUTY for October and November were 199 and 291 respectively, a steady climb that continues to outpace what FROG PRINCE sold three months after its release.

I may not be making millions of dollars, but I am making a living doing what I love, which is all I ever wanted to do. Over a year on this journey and I’ve only now begun to think about shifting my strategy from “creating imputed value” to “creating a large fan base to market future novels to.”

And for those of you who will no doubt ask–yes, I believe I could leverage my sales record for THE FROG PRINCE and SLEEPING BEAUTY into a traditional publishing deal. In fact, I have already been approached by several “big agents.” I could write a whole other blog post about why, but suffice to say that at this time, a traditional publishing deal is not attractive to me for reasons that Joe has covered again and again in his posts over the last two years. (And for those of you who will no doubt ask—yes, it is a little satisfying to be the one to say “thanks, but no thanks…”)

That’s my two-cents (for what it’s worth over your six dollar cup of joe).

Joe sez: Pricing is driving me a little crazy, for several reasons.

I've also come to the conclusion, based on my own research and that of my peers', that ebooks can make more money at $3.99 or $4.99 than at $2.99. So at the beginning of this month, I raised prices on Kindle six of my titles, going as high as $4.49.

But I ran into a snag. Because the prices had not gone into effect on Smashwords, Amazon didn't raise my prices. They simply stated my new price then discounted them back to the original price. I don't know which price I'm earning royalties on, the higher one or the discount, but I'm guessing it is the discount.

Then contrast that with STIRRED. Last Sunday, Stirred was the Kindle Daily Deal, and the price was lowered to 99 cents and hit #1. STIRRED sold more ebooks in one day than TIMECASTER (published by Berkely) has sold in both ebook and paperback since June.

So what's more important, units sold or money in the bank?

I'd say money.

If I sold 10,000 copies of an ebook at 99 cents and a 35% royalty rate, that earns me $3500.

But I can sell 3000 copies of an ebook at $2.99 and a 70% royalty rate, and earn $6000.

Or I can sell 2500 copies at $3.99 and 70%, and earn $7000.

It really seems like higher prices is the way to go.

"But Joe," you're probably saying, "if I raise my prices then my sales rank will get higher due to fewer sales, and I may drop off bestseller lists, making me harder to find."

I dunno. Maybe you won't drop off the bestseller lists. Maybe, like Elle, it will help you get on some bestseller lists.

I do know one thing for certain: Kindles and ereaders are selling like crazy, Which means authors can make a lot of money, even at higher rankings.

A $2.99 ebook ranked at 600 might have earned an author $2000 a month back in April. But now an ebook ranked at 1800 can earn $2000 a month. So many ebooks are selling that our rankings can be poorer even though our profit is higher.

I say: Experiment with raising your prices. Unless you've got a runaway bestseller at 99 cents (or even if you do), chances are you'll make more money at a higher price. I'm not saying gouge the reader and charge $12.99, but $3.99 or $4.99 seems reasonable.

Try it for a month, then report back with your results. This obsession with rank and bestseller lists is silly. Sales rank, or being on a bestseller list, doesn't pay the bills. Making money does. And while it may take time to find the sweet spot between price and sales, unless you try for yourself you are potentially leaving money on the table. The market has shown it can bear prices up to $14.99. We need to show a little guts and start pricing higher.

108 comments:

Phillip Thomas Duck said...

Here, here. I raised the prices to my novellas (EXCUSE ME, MISS series) at the beginning of last month to $2.99, and though sales dropped I made more money. Food for thought.

I.J.Parker said...

Thank you both for those insights. I don't have enough books up to judge, but I've always tended toward the higher prices. I may keep open the possibility of occasional sales to spur some activity, but for the time being, my full-length books in my mystery series are 4.99 and 5.99. A historical trilogy is 2.99. 3.99, 3.99. That one, I'm still watching. It racks up modest but steady sales at the moment. It's probably reasonably priced, considering that I split up a single volume monster of a book.

Mike Langlois said...

Agreed. I've raised my prices to 4.99. Here's why:

It's hard to differentiate yourself in the indie market at 2.99, simply because the two big price points for new releases are .99 and 2.99 (the minimum required to qualify for the 70% Amazon royalty). It's unfair, but the perception out there is that indie books by unknown authors just aren't as good, and the 2.99 price point can really tie you to that stereotype by readers who have had bad experiences in the past.

Though it shouldn't be, price is a very real component in how the value of an item is perceived. We're conditioned to believe that the more expensive an item is, the better it must be. In blind taste tests, people who are told that a wine is expensive before tasting will assign much higher scores when they later sample it.

http://www.corbettbarr.com/cheap-vs-expensive-wine-can-you-taste-the-difference

So, I decided to go from 2.99 to 4.99 for this release. I don't want to be an unread bargain on someone's Kindle that they never get around to reading. I want them to be excited about the book itself, and become fans because they actually read it.

Note that going this route is going to require a professional cover and hopefully, a top-notch, expertly proofed book underneath. If you're going to assert your quality through pricing, you have to be just as attractive as the known quality leaders in the market.

Just don't disappoint after the sale.

Interestingly, my sales increased about 20% after the price change, but I don't know if that's the price/value effect, or just the slow climb of a newly released book.

Eva Hudson said...

Congratulations, Elle - it's a heartening tale.

Though I think I may be missing some vital piece of the jigsaw here. I'd been seeing very low sales myself at the $4.95 level (admittedly, I've not been marketing like crazy) and last weekend was persuaded by various stories of 99p/99c success to lower my price. Mainly because when you're an unknown, visibility trumps income every time.

So I have upped my marketing and dropped my price - though I'm only 24 hours into the 'campaign' nothing has changed with the rate of sales. The Loyal Servant is still languishing at the bottom of the Amazon pile.

Elle - what did you do to market The Frog Prince? and Joe - is the landscape just different now and stories like Elle's fewer and farther between? (BTW I am writing another damn fine book and hoping to get lucky!)

J. R. Tomlin said...

I write 2 genres and when I raised prices on both the reaction was different. On my (pretty heavy duty non-romance) historical novels sales went up slightly. On my fantasies sales plummeted.

I think there were some factors that went into that such as that I already had better sales on my historical novels. (Mind you I'm on no best seller lists for either) I pulled my prices on my fantasies back down but sales still haven't recovered.

Anyway, I'm just pointing out that there may be differences in genres.

Great article. And this from Joe is very true: "Sales rank, or being on a bestseller list, doesn't pay the bills. Making money does."

Eric Christopherson said...

Amazon itself doesn't care about revenue or profits when it first enters a new business. They'll take a loss on every sale, in fact. All they care about is market share.

Not sure how commensurate an author selling ebooks is to Amazon, but one shouldn't rule out trying the same strategy. A lot of people have found success giving away some of their books for free. I'd be interested to hear from them here too ...

Walter Knight said...

99 cent sales help introduce your body of work, but the main reason my 'intro' book stays at 99 cents is because I want to stay visible in an ever more crowded market.

Staying visible means remaining on the "Customers who bought this item also bought" portion of Amazon listings.

Taking this long-term approach garantees free advertising on Amazon, and a perpetual revenue source. Otherwise my books risk being buried, disappearing as established authors ann N.Y. publishers unload their backlists on the Kindle market.

Lynda Hilburn said...

Elle: Great article! Thanks for sharing your experience. Price is really a confusing issue. My publisher arranged a "daily deal" for my kindle version a while back, lowering the price to $1.99 for 24 hours. My rankings were awesome. #2 in the whole paid kindle store for a little while. But I also got a bunch of 1- and 2-star reviews from people who never would buy my kind of book. It was definitely a mixed-bag experience for me. I can't wait to be able to add to my self-pubbed books again. Good luck to both you and Joe! Keep up the awesome work!

Marie Simas said...

Trying to launch a new pen name is tough. I've found that the 99 cent price point will get you downloaded; people are willing to "try you out."

Then, following Joe's advice, just continue to write and price subsequent books higher. That's been my plan and I've done it successfully a number of times.

Michelle Muto said...

No matter how much people talk about pricing, I still listen.

I'm wondering if this holds true for ALL genres, or just some? I write YA, and by all intents and purposes, teens don't have as much money. But, adults read it too.

My new release is selling better at $2.99 than my previous release at $1.99. The second is a different story, but that's it.

Who's brave enough to raise prices at Christmas when so many indies will be dropping to 99 cents in the hopes of snagging holiday shoppers?

I might leave the two I have where they're at, but price the sequels a buck higher.

Like Elle, I've found that my worst reviews or comments are when I've lowered the price to 99 cents. The higher priced book is getting the most fantastic, breath-taking reviews. Is it the price-value perception? I have no idea, but I'm not lowering it to find out!

Juli Alexander said...

Fascinating and makes a lot of sense. Thanks for sharing your experience!

Cyn Bagley said...

I started my books at 2.99 and didn't sell one - I was promoting on twitter and FB. Then I dropped to 1.99 and sold a few. No reviews yet. So I am thinking of dropping my ebooks to .99.

So not sure - maybe it is because I am not known yet, and I write in the supernatural category. I do have a biography that I started at 99 cents because I wanted it to be easily bought by people who have my disease. That one was my bestseller.

Pricing drives me crazy too.

Cyn

Marta Szemik said...

Hi Elle, congratulations on your success and thanks for sharing the information. It's exactly what I needed. Last week I released my first full length novel pricing it at $3.99. 'Two Halves' has a professional cover and has been edited thoroughly. I sold 1 copy since then with some marketing (emails to friend/family, facebook, twitter, goodreads, shelfari, some kindleboard chatting and my blog) which still took a lot of time. I have almost no platform and I knew it would be an uphill battle in the beginning. I think it's too early to lower the price, especially since the $3.99 for a full length YA fantasy does not seem like a lot. Indie competition in my genre has theirs at $0.99 and $4.99.

I have a novella almost complete that will follow in early 2012, so hopefully the second title will help with the sales. Right now, I'm lacking reviews and exposure so that's what I'm working on (as well as learning about internet marketing). I'm glad to hear your story. I cannot wait until I can too write for a living, finish the other novels I started and concentrate on more releases. (with some luck:))
Hopefully the Christmas season will pick up.

Buck Winthrop said...

amazing piece.

Veronica - Eloheim said...

This has been on my mind a lot lately. My book, "What Will Happen in 2012 and Beyond?" is priced at $0.99. It's only 57 pages.

It's starting to gain speed. I sold 70 copies in September, 113 in October, 211 in November, and have sold 43 so far this month.

If you search for 2012 on Amazon, my book is the result right under 2012 the movie. Very good placement!

Is it time to raise the price? I can't decide. I believe interest in 2012 will increase in the next few months. That said, once 2012 is done this book is probably done too.

Do I try to make more now by raising the price? What would I raise it to?

I keep hearing, "It's only 57 pages" run through my head.

hmmmmmmm

What Will Happen in 2012 and Beyond?

jakeescholl said...

You have to be lucky to make money if you sell your book for $0.99 (unless it's a short), mainly because as a reader, 99 cents makes the book sound like it's of a lesser quality. I wouldn't complain if it was a little higher. (due to the fact I don't drink coffee, thus more money for books!) But it's ridiculous that books by traditional publishers are priced so high. $12.99 or more is crazy.

SBJones said...

Interesting read. I think in the end, as long as you have a great book, it will sell well.

S.M. Boyce said...

This is amazing. LOL. Thanks for this insight and for being so open with your numbers -- I'm running a little experiment now to see if my novel LICHGATES is a green tea frappuccino with a pump of blackberry.

-S.M. Boyce
Author of The Grimoire: Lichgates
“Once you open the Grimoire, there is no going back. You will be hunted. You have been warned.”

Alan Tucker said...

If there was a "magic pill", of course, we'd all take it. Hell, we'd probably ask for direct injection! But, all these things: pricing, exposure, reviews, genre — mix together to create a convoluted, chaotic mess.

In the end, I think each author has to perform their own experiments to see what works best for them. I sold as well or better than all the other authors at a book fair this past weekend, mostly because I put a sign on my table advertising the price at "2.49 savings for one, 4.99 savings for two or more". Many more people went ahead and bought both books in the series for the extra savings, even though they hadn't read the first one yet.

J.D. Cannon said...

Excellent and very timely post. I'm about to launch my first book, Just By Chance, this week and have been struggling with the pricing issue. And...I've heard/read similar things about $.99 and bad reviews on other sites.

Sean McCartney said...

Great post and very interesting. I four titles on kindle. Two with my publisher and selling at $1.99. The last two months they have outsold my paperbacks. However, my other two, have sold 4 copies! I went with sage advice of pricing my short story tie-ins to my novel series @ $.99 and sold a whopping 3! I then used all of Joe's people, cover art, editing, formatting, and published a new fantasy series which went live last month and sold 1. :) I am smiling because I don't know what else to do. I have gone the PR route and got nothing. (Should have listened to Joe on that one)

I don't mean to complain because I know it is a marathon not a sprint but does anyone out there have any other advice? Thanks. :)

Sean

Christopher John Chater said...

Just put out three books. One mystery at 2.99, a sci fi at 3.99, and a short for free. The free short is leaving them all in the dust so far in downloads. Pricing is a bitch but thankfully self pubbers can experiment. I think the 2.99 might have some stigma, but if there are a lot of good reviews readers will enjoy the price. I used to buy used books on amazon for a penny and the price never affected my opinion, but if i bought a lot of crap at 2.99 i might equate the price with poor quality.

bettye griffin said...

Love the title of your post, BTW.

I was selling my three eBooks for $2.99 and my 3-book bundle for $7.99. Last month, when I introduced my fourth eBook, A Kiss of a Different Color, I priced it at $3.79, then raised my prices of two of my earlier eBooks to $3.29 and $3.49, keeping the last one at $2.99 (that's an eBook reprint). The new book is doing beautifully, but I think that's due to the subject matter (interracial romance is very popular among black women). Sales are still lagging a bit on the others, all of which have been around awhile. I'm glad I priced the new book higher. I'll probably eventually go to $3.99.

R. K. MacPherson said...

Eerie. I was just blogging about this yesterday. You expressed the idea with greater precision and clarity, however. EXCELLENT post. Thank you!

Steve Peterson said...

One of the really great things about ebooks (as opposed to print books) is the ease of changing prices. No need to price-protect retailers; just change the price. Thus experimentation has little downside, and you can learn a lot if you set up the experiment carefully.
It's also important to realize the market is continuing to change, so the "right" price six months ago may not be the "right" price today. Or six months from now.

Merrill Heath said...

I'm raising the price on all my books to $24.99. I'll let everyone know how it works for me.

OK, not really. But I do have what I consider mid-range pricing on my books - $3.99 for the novellas and $4.99 or $5.99 for the novels.

I tried pricing my novella at $.99 then $1.99 then $2.99 and the numbers remained consistent at each price. I just increased the price to $3.99. I don't plan to take it higher than that, but it will be interesting to see what happens.

Merrill Heath
My books on Amazon

Mary Ann said...

I'm going to address this as a reader -- a voracious reader as a matter of fact -- rather than a writer. At this point, I don't have anything published as an eBook so I have zero to say about that aspect.

However, I have a Kindle and I download books regularly. If I'm considering a writer with whom I am unfamiliar (and even more so a writer whose book I'm considering is his/her first published book), I will pay 99 cents easily; I will pay $1.99 quickly; I will think about $2.99. Unless a friend whose opinion I trust has raved about the book, I won't pay more for an unfamiliar, untested writer.

I am perhaps cheap, er, excessively frugal. If so, it's because I have a limited budget and I have to stretch it till it not only squeaks but howls.

Coolkayaker1 said...

You should all consider pricing your full-length books at $9.99.

Mark Asher said...

I bet for every anecdote about sales picking up with a price raise there will be opposing anecdotes about sales dropping with a price raise.

I'd say in general there's downward pressure on pricing. Amazon now has their Prime Lending Library with free books and they are going to expand that. The big publishers have been running more and more sales with cheap prices. Even libraries are expanding their ebook collections. In general there seem to be more ebooks at $0.99 and $2.99.

And as more and more ebooks are published -- indies, traditional publishers and veteran writers putting up backlist, etc. -- there will be more and more ebooks jostling for attention. As supply increases I'd expect that to put pressure on pricing.

Blake Crouch said...

@Mary Ann....this insight is worth its weight in gold. I've been following a number of Kindle discussion threads about pricing from the only people who really matter--the customers. What Mary Ann is saying is widely echoed. The question isn't "how much is your average customer willing to pay for an ebook?" It's "how much is the average customer WHO HAS NEVER READ YOU OR HEARD OF YOU willing to pay for your ebook?" Most sales, the important sales...are to potential new readers who are going to give you a shot based on the reviews/cover/product description, whatever. I like the $2.99 price point because I believe it gives customers who don't know your work at all a comfort level when it comes to giving you a try. Every writer (hopefully) has a fan base of people who would probably pay between $5 and $9 for their book. But I don't believe my fan base is big enough to support selling my books at that level...yet. Even with selling over 150,000 ebooks this year, I'm still very much in growth mode. Until my base (the guaranteed customers) gets large enough, I can't justify selling for more, because I don't think books priced over $5 win a lot of new fans without massive amounts of promo.

David Gaughran said...

Great post.

I think about pricing a lot. It's a subject we will always have to return to. The market is growing fast, and new entrants will continue to distort it in different ways. The readers entering now may be less price sensitive, and it would be prudent to test higher prices.

I raised the price on one title to $3.99 a couple of weeks ago. It's too early to say for sure, but so far, sales are UP. Although, I felt confident I would at least maintain revenue, as it has just one shy of 50 five star reviews.

My next release in a couple of weeks will be priced at $4.99. We'll see how that goes, but I'm reasonably confident. If it doesn't sell well (for me), then I can always drop the price.

Yuwanda Black said...

Congrats on your ebook sales Elle; for so generously sharing real numbers; and finally, for being able to quit your day job and pursue your writing career fulltime.

You've achieved the American dream :-).

I would buy your book based on your title of THIS POST alone.

As a caffeine junkie, I found it hilarious!

Sarah Woodbury said...

Congratulations to Elle for her sales and for this conversation, which is always interesting.

I've experimented more than is probably good for me on prices, and settled on the higher price of $3.99 for four of my seven books. I have not noticed a qualitative difference between $2.99 and $3.99 in terms of sales. My new medieval mystery published in late September has only ever been $3.99 and sold over 400 copies last month. I don't think it would have sold better at $2.99, quite honestly. Am not brave enough to put it up to $4.99 just yet!

Elle Lotlhorien said...

Thanks for the opportunity, Joe, and to thanks to all for the great comments. Joe pointed out something that I think is worth expanding on. He wrote: "But I ran into a snag. Because the prices had not gone into effect on Smashwords, Amazon didn't raise my prices. They simply stated my new price then discounted them back to the original price. I don't know which price I'm earning royalties on, the higher one or the discount, but I'm guessing it is the discount."

First of all, I can answer you question: It IS the discounted price you're earning royalites on. The same thing happened to me when I was experimenting with the price (up and down) for FROG PRINCE. One of the Smashwords distributors had not changed the price on their site, so of course the little "Amazon pricing robot" found it and discounted FROG PRINCE on its site. So the "list price" on Amazon was $6.99, but the "discounted price" was $4.99. Below that it read "You save $2.00."

BUT (and this is important) when this happened, sales went up even more! It's pricing psychology at work again. Everyone loves a sale, right? In fact, I PURPOSELY manipulate my Amazon pricing so that it shows a discount. The customer doesn't know that you are pricing it at $6.99, and then purposely pricing it on another site (where you don't sell that many books anyway) at $4.99, forcing Amazon to "put it on sale." All they see is "You save $2.00."

This can be a little nerve-wracking because, of course, you have to wait for the Amazon pricing robot to FIND that lower price out on the internet somewhere, so your novel may be "overpriced" for as long as two days. Two days is a loooooong time when it's your only income, but it can be worth giving it a shot. I would suggest doing this on a Monday so that by the weekend the book is "discounted" to the price you intended.

Anonymous said...

All authors are different. Some are talented, some are terrible. Hence their works are of different values to readers. Terrible authors will not, in the end, sell much although there may be some initial sales until readers figure out there isn't much of interest between the covers. Talented authors will sell at higher prices.

As a starting point, the price of an ebook almost has to be viewed by a potential reader as reflecting the author or publisher's perceived value of the book. Lower prices smack of desperation (unless it's obviously a loss-leader in an otherwise higher-priced collection). People who value their time will likely avoid them, especially if they've already been burned.

There's more, though. Sometimes a reader will be savyy enough and/or familiar enough with an author's work to know that the work is good and is simply being offered at a very good price. In those instances, sales will be very very good at a lower price point. That doesn't happen overnight. There's an educational curve at work.

Anonymous said...

"...pricing it at $6.99, and then purposely pricing it on another site (where you don't sell that many books anyway) at $4.99, forcing Amazon to "put it on sale."

Technically this violates our KDP agreement with Amazon: Anything we sell via Amazon must have an Amazon LIST price equal or lower than a LIST price anywhere else. (Note that I'm making the distinction between List price and selling price.)

Personally, I've used this tactic before and may do it again. I don't see it as something that's a big deal since Amazon reserves the right to drop the selling price to match a lower price.

So it's technically a violation, but I think it's a rule that can be broken to the extent that you advocate without worrying about Amazon banning you from their site or anything. It doesn't really hurt anyone.

Interesting post. Thanks, Ms. Lothlorien.

Nancy Beck said...

I don't mean to complain because I know it is a marathon not a sprint but does anyone out there have any other advice? Thanks. :)

Keep writing and putting up more stories. The more you have up, the more chance you have of snagging your readers.

Got that from Dean Wesley Smith.

I haven't sold very much, but it's still early in the game for me (started just this July); I rarely check how much I've sold because it's more important for me to keep writing and putting up stuff.

Which I'll finally do a little later this month when the 3rd in my novella series comes out.

Really, go to Dean Wesley Smith's site, and you'll come back with a boatload of knowledge and no b.s.

caroline hanson said...
This comment has been removed by the author.
efitzgeraldpublishingdotcom said...

Great post, thank you Elle, and thanks Joe for presenting it. Pricing, oy!

I was just inspired to raise my $4.99 political thriller -- two women vying for the Presidency, blackmail, suspense, sex, drugs, a secret past, and some comic relief -- to $5.99. We'll see!

http://www.amazon.com/RUNNING-ebook/dp/B005AJA43O

But I have a short story at $2.99 which I should probably drop in price.

Big game changer coming up, of course, when all those new eReaders land under the Christmas trees...

John Perich said...

Ha! Ironic timing that I came across this quote from Swiss art dealer Ernst Bayeler today:

"If I can't sell something, I double the price."

(source: http://www.thedailybeast.com/newsweek/2011/12/04/why-is-art-so-damned-expensive.html)

Michael Kingswood said...

I concur.

This is a business. In business, cash flow is of prime importance. While I was working on my MBA, I took classes that were taught by a number of successful entrepreneurs, and one thing that they emphasized is you can look at your balance sheet and your income statement every so often, but you better look at your cash flow statement every day. So yeah, the constant obsession with sales rank as opposed to cash flow is a bit silly.

Not to sound like Mr. Uppity, but I never even considered pricing my novel at $.99 or even $2.99. I think a reasonable pricing structure is as follows. Short stories $.99. Novelettes $1.99. Novellas $2.99. Short novels (< 75k) $3.99. Novels (75k - 100k) $4.99. >100k $5.99. So far that's working out alright for me. Sales aren't much to brag about. They're pretty tiny, actually. But that's ok. I'm continuing to write more and get better at it. The sales will come in time. As Joe says, ebooks are forever and forever is a long time to find an audience.

My $.02. Thanks!

Michael Kingswood

Masters of the Sun - Post Apocalyptic Fantasy

Lewis Perdue said...

Just raised Kindle price of my new thriller, Die By Wire to $4.99. Incredible thoughts and thinking on this blog !

Jon F. Merz said...

I raised all my Lawson novel prices to $3.99 some time back during the summer slowdown in sales. My novellas are set at $2.99 and my stories at .99

THE FIXER is usually the only one of my Lawson series that makes the Top 100 list and frankly, I don't much care about those lists. I know everyone likes to tout them as important for getting eyeballs on your stuff, but I've found that as long as I consistently sell a certain number of copies per day, my daily income and then monthly income will be about what I need.

Granted, my sales have been way off since the summer, but I'm still making a very decent living with my ebook sales. And January will see the release of the next Lawson novel, my first Lawson story collection, and a new short story - all timed to make a big splash. I've been lucky enough to find a blogger who is devoting the entire month of January to my Lawson series on her blog, so I'm hopeful that will give 2012 a really nice jump start on sales. We'll see...

When February hits, I'll be collating all my monthly sales sheets from when I started getting really serious last February and charting sales over the year - month-by-month stuff, units sold per titles and the like. That should make things clearer as I head into the future.

Great post!

Marta Szemik said...

Just raised the price of Two Halves from $3.99 to $5.99 on Amazon (full length novel over 98K) We'll see what happens. I can always lower it later...

Todd Trumpet said...

The Starbucks comparison got me to thinking about wine.

Analogously.

Repeated studies have shown that oenophiles will consistently report greater enjoyment of a higher priced bottle of wine...

...even in blind taste tests where they've been lied to.

Château Lafite Patterson, '11?

Todd
www.ToddTrumpet.com

JoanneL said...

This is fascinating. I'm e-pubbing the first novel of a detective series in March. I had planned to do $2.99, but you've got me seriously thinking of starting at $3.99 instead.

Hiroko said...

The impression price leaves on consumers is very interesting--knowing a few cheapskates myself, you wouldn't expect buyers to be more eager to pay higher prices...All the same, though, higher prices for more buyers makes sense. It's the implied quality that draws them in (perhaps because the prices are more similar to traditional prices?), where it could be simply reviews and positive sneak peeks or whatnot.

Not that you care, though. You're making more money that way.

Jude Hardin said...
This comment has been removed by the author.
Jude Hardin said...

I've been in favor of higher prices since the beginning...

I'm not saying gouge the reader and charge $12.99, but $3.99 or $4.99 seems reasonable.

Take a look at the Amazon page for Lee Child's latest. Or for any bestseller's. Child's The Affair is $13.99. Most of the also-boughts are at least $9.99. There's a HUGE segment of the reading population willing to pay ten bucks or more for an ebook they perceive to be of high quality. That's the segment I'm interested in. It's not gouging, IMO, when you sell the identical IP as an ebook for half the price of the dead tree version.

Of course established bestsellers can get away with charging higher prices than most of us can, but it's comforting knowing that the sweet spot for a full-length novel of publishable quality is likely to be WAY more than $2.99.

Thomas Knip said...

Elle, you just made my day! While I appreciate Joe's insights, he's talking from an ebook bestselling author point of view. Which is what most of us not likely ever will be.

Your story is the kind of "look what happened to my neighbor". So your experiences with pricing and a modest but solid succeess is both fun to read and helpful. :)

Anonymous said...

When it comes to reviews, if I, a reader, notice that a book has all 4 and 5 star reviews and there are a boatload of them, I immediately start thinking that there is sockpuppetry involved. If I see a mix of 5,4,3,2, and 1 reviews then I start at the bottom and read all the 1 star ones. If the complaints in the the reviews are something I don't care about or not adequately supported then I go up to the next level and read those.

As a self publisher you have to look to credibility.

Prices? I'm cheap. If I don't know and like your past work then I'm not going to pay more than $2.99 for it.

I know I J Parker's novels. She's a known quantity. I would assess her books more on story because I feel like I would be risking less.

Dale T. Phillips said...

Pretty much Jungian frog synchronicity, as I made my first foray into self-publishing today, with a story on Smashwords called "Froggy Went A Courting."

Best of luck with your frog prince!

And I blame Joe (among others) for driving me crazy! http://daletphillips.blogspot.com/2011/12/joining-revolution-going-nuts-with.html

Joshua Simcox said...

"Take a look at the Amazon page for Lee Child's latest. Or for any bestseller's. Child's The Affair is $13.99. Most of the also-boughts are at least $9.99. There's a HUGE segment of the reading population willing to pay ten bucks or more for an ebook they perceive to be of high quality."

Absolutely. I've been thinking the same thing all along, and I've also long been a part of that huge segment of the reading population that routinely spends $10 or more on ebooks.

Legacy publishing simply will not collapse due to high ebook prices.

--Joshua

Nadria Tucker said...

Hmm I just raised the price on my debut from .99 to $2.99 because of this article. I hope this makes a difference in my very modest sales, but only time well tell. Very persuasive article either way--I thought .99 was the magic number for ebook miracles.

Patrice said...

I love Elle's name for the Starbucks drink (with yak's milk). Too funny!

Danielle Blanchard Benson said...

I tried the pricing experiment with Death Wish, my newest novel, last month. At $4.99, I sold 5 copies, at $3.99, I sold 2 copies and at $2.99, I sold 3 copies. I then settled on $4.79 and decided to leave it there. It was featured on Kindle Lovers on Facebook and sold a total of 28 copies at that price.

It is a new book and not many people know about it. I have interviews, reviews and guest blog posts planned this month on several different book blogger websites and I thought I might be a bit generous and lower the price back to $2.99. I sold 1 copy (I've sold 3 copies so far this month, two at $4.79)

Moral of the story: I will be staying at $4.79 for a while because that is the price that makes money and that is the price the book seems to sell. If it goes well and I start to see numbers similar to Ms. Lothlorien, I will definitely be raising the price to $5.79. Thank you for sharing your story, Elle. ;-)

Jeff Faria said...

Ms. Lothlorien's observation about price and perception, at this point in time, are well-founded. I say 'at this point in time' because there was an earlier point in time, maybe a year or so ago, when self-pubbed e-books were fewer in number and price didn't mean what it does today. But now there is - let's call it a glut - of e-books. Many reviewers are refusing to even consider self-pubbed e-books now - they assume, sight unseen, that they are dreck.

So I suspect that view (the reviewers' view) is now shared by the public at large - that is, that the bulk of the low-priced fare they're seeing on Amazon to feed their Kindle is dreck. They can't even be bothered with the free stuff (and there's LOTS of free stuff). Obviously they're not concerned about risking money on the free fare - they just don't want to waste their TIME.

There does seem to be a real law of diminishing returns in terms of lowering prices in hopes of raising sales. There may also be certain TIMES at which it makes sense to go with a lower price for a time. For example, 99 cents may make sense if the book is unknown and newly released (to build word of mouth?), whereas it may make less sense if the book has been on the market a while (sending the message that time has passed the book by, it's yesterday's news). In fact I would guess that cutting a book's price after a few months undercuts word of mouth and sales momentum.

It's hard to discount that Ms. Lothlorien saw an IMMEDIATE jump in sales when she first raised the price. But the subsequent price raises were coincidental with time having passed, and the book having a chance to build word of mouth. I would not discount that as a (possibly) more important factor than the secondary price rises.

Back to that initial jump, though: She may be on to something if in fact buyers, like the reviewers, are trying to avoid ebooks that compete mainly on price, like so many generic canned goods.

Speaking of which - remember the advent of generic foods, back in the day? Plain white cans, black type. People by and large rejected that. Today the bargain shopper looks for 'store brands' with labels that at least resemble the better brands. The white labels with black type now seems delegated only to government food handouts.

There seems to be a rock-bottom of a market that people (if they have a choice) tend to avoid.

Ida said...

I agree. You have to value your art and talent if you expect others to. Don't get involved in a race to the bottom. I make a point of not 'buying' free e-books.
$4.99 should be the minimum.

Jeff Faria said...

FWIW, just went over and checked the Kindle Top 100. Lots of them were free, but most of those were Christmas-related, so that's a factor. I notice that Stephen King does well in any format, at any price, but surely that's not news.

Here's a friend of mine who posts her sales a couple of times a month. (Scroll down through the site to see the numbers.) She gave away a LOT of copies up-front, but doesn't count them. She's very into being transparent and open about her numbers. Her numbers started small and now seem to have grown into a pretty steady income.

Alastair Mayer said...

As a writer I like the idea of being paid more. I just released my first novel at $4.99 after previously releasing some shorter works (previously published) in the $0.99 range and up. Just in numbers, the novel is doing better over equivalent timeframes as the shorts. In dollar value, it's an order of magnitude better.

As a reader for far longer than I've been a writer, my idea of a "fair price" was fixed by all the paperback novels I bought when growing up (back when a new MMPB was less than a buck; I'm an old-timer). I ran some numbers (check my blog--click my name above--for details), and the adjusted-for-inflation price of a 65k-word paperback was $4.88 in 2010 dollars. 155k would be about $6.97 (averaged).

Back then my modest allowance bought be all I had time to read (often several novels a week). So yeah, that's a fair price.

Rachel Morgan said...

I love the comparison to the Starbucks coffee! Thanks for sharing your numbers here, Elle. Very interesting to see.

Mark Asher said...

"I love the comparison to the Starbucks coffee!"

I have another one for you. How much does it cost to see an $80M budget movie? How about $0.99 when you rent it from Redbox.

Pricing is just a number. It doesn't assign value.

Lovable said...

Thanks for your insights! I will make sure to come back to your post when I am ready to set one of my books free.

Scott Marlowe said...

Excellent post. Thanks!

Amazon must keep a database of prices on other sites. I raised the price on my Amazon eBooks and they were immediately discounted to match the lower prices on Smashwords.

Adam Pepper said...

I appreciate the sentiment of valuing our work, but I still dont buy it. Where are these people who will buy a book at 3.99 but won't be the same hypothetical book at .99? We are so programmed to shop by price it's almost hardwired. If you see two items, your instinct is to grab the less expensive one, unless you truly believe the quality is better. Knowledge of quality only comes by reading the book, or at least by referral of someone's opinion whom you trust.

As Blake pointed out, the goal is to reel in readers who have never heard of you. My feeling is your best shot is with low price. You may have to sacrifce some short term income to do that, so then the question becomes is it worth it to sacrifce income to maximize the number of units you move. That is a separate debate though.

the-time-capsule.com said...

I released a novel at the end of November. For a promotional period of 2 weeks, I sold Fram Gage and The Infinite Ability for $0.99. The sale ends today. After that, it goes up to the regular price of $3.99.

Why did I do this? I read that digital goods have greater success if they are discounted the first 3 days to 2 weeks of release. Then the price should go up.

Has it worked? The promotion ends today, but I have had my fastest sales of any book doing this. Come tomorrow, we'll see what happens when the price goes up. I'll post my results here in a month.

JS said...

Pricing is important to both author revenue & buyer quality perception, but be cautious about making conclusions from simple pricing changes.

Book sell-through rates are complex and any price testing needs to be done in a way to eliminate environmental variables.

Price your book low/high in December vs low/high in April will give you a completely different answer. Even if you compare the first two weeks of a month to the last two weeks you my find big variables you're not controlling for or protecting yourself against - there are some people running low on cash by the end of the month. I saw this all the time in the retail food business and even Ebay regularly sells more products Sunday night than Tuesday. And Kindle reader sales is growing rapidly due to Amazon marketing so ebooks in general will increase sales.

There is a story about Westinghouse that might even apply here .. they wanted to sell more industrial lights, so they studied a manufacturing plant by increasing light levels and "look! productivity went up!", more light and more productivity, up and up! They were ecstatic. Then someone thought about checking again going down in light levels .. and productivity kept going up! The issue they uncovered was the act of making changes and measuring were doing more to productivity than increasing the lighting.

So what test variables can we have in the pricing study? Author (established vs first time), Publisher (established with marketing vs indie-first-timer), Number of prior books (eyeballs already looking for the author), sales rank of the book before and after the tests, number of author's other book sales, genre, seasonal factors, and pricing change events. Are there other factors?

If anyone with multiple published ebooks has been considering price changes and is interested in being a little more scientific about the process, then follow the breadcrumbs over to my blog and contact me. .. day job is in Engineering and I've worked as a Six Sigma Quality Black Belt (so I've had a little statistical testing experience). If I get responses from several authors then the validity of the test will improve.

http://jgordonsmith.com/

Grant Palmquist said...

I've had mine at 4.99 for a while. Not many sales, but I saw from the beginning there's a problem with charging 2.99 for novellas and novels. I think readers prioritize by price as well. That is, a lot of .99 books probably never get read. I know I haven't read the few I have in my kindle.

I.J.Parker said...

I'm very grateful that someone here recognized my name and thinks I'm a safe bet. Hugely grateful, actually.
But the fact is that my sales do not compare to Elle's and are, in fact, rather flat. I'm determined to keep most of my books in the 4.99 range anyway. Perhaps I have to trust in Joe's promise that this is a matter of time. I only got started this past summer. (Blame it on an agency that procrastinated nearly a year!)

LK Watts said...

This is a great post for me to read at the moment. My first book is at 99c. It's 57,000 words but has been edited so it's decent enough to read. My second book that I'm three quarters of the way through, will be longer and I've already decided to price that at 2.99. Question is: do I raise my first book to match that price even though it will be shorter, or do I raise it by just a dollar? Maybe if I price my second book at 3.99 I will price my first at 2.99.

JAMES BRUNO said...

My first (100k) novel has been a consistent Kindle paid genre bestseller for close to a year now. I started out with $2.99. Sales continued to do well after I raised the price to $3.99. This fall, however, sales have sunk. After reading this and other blogs on pricing, I'm tempted to raise the price to $4.99 as an experiment.

I originally priced my second (85k) novel at $2.99. Sales were in the dumps. Then I lowered it to .99 and sales took off; the book also climbed onto the genre bestseller lists. Then I raised the price to $2.99. Sales remained high and income vastly improved. This fall, its sales, too, have slumped. I'm going to raise the price a buck and see what happens.

I launched my third (97k) novel in August at $2.99. Sales were desultory (though it has repeatedly hit the Political Fiction bestseller list, but not for long). I raised the price to $3.99 -- but no change in low sales. This book has received highly favorable reviews from NYT bestselling authors, Amazon Top Reviewers and respected book websites, but, so far, is selling poorly. I'm thinking of raising the price to $4.99 for the hell of it. I think planning strategically for Xmas ereader sales is important for us all. Higher prices should logically stand up to increased demand, I should think.

Rob Cornell said...

Just to be nit-pickey and weird, why always $X.99? I think Zoe Winters sells her books for $4.95. Why not $5.25 or #3.39? Do you think there's some psychology involved? Might an odd price draw attention from all the $X.99's simply for sticking out?

I dunno. I just raised prices on a number of my books to $4.95. As expected, Amazon is still selling them for $2.99 as a "discount."

Anybody's guess what works, right?

Merrill Heath said...

@LK Watts, I'm no expert on pricing (who is?) but I think you should check to see how other books in your genre are priced. See if you can find a book that's similar to yours that is selling pretty well and use that as a guide.

But there are so many other factors involved. People will pay more for a book from an author they know. If your books are part of a series, you may want to keep a lower price on the first book in the series to entice readers to give it a try. As is stated so often, you want to make sure your covers and descriptions are good. And length is important.

As a rule of thumb, I use the following for the books I publish:
Less than 100 pgs – .99 to 2.99
100-200 pgs – 3.99
200+ pgs – 4.99-5.99
(page count based on 250 words/page)

You might want to consider raising the price on your first book to 2.99 and going with 3.99 for your second since you said it's a little longer. Then, if you get some traction and sell some books, consider 4.99 for the other books you write.

You'll just have to play around with it a little and figure out where the sweet spot is for your books. I think it's safe to say that's what we're all doing right now.

Merrill Heath
Novels by Merrill Heath

Civil War Horror (Sean McLachlan) said...

Elle,

You provide some interesting points. I came to the same conclusion through a different avenue.

I have 10 traditionally published books, five of which are directly related to my self-published novel (Civil War/Missouri history) so I figured if people are paying decent prices for my nonfiction, they'll pay $4.99 for my novel.

I've only had it out there for a little less than 3 weeks so it's too early to tell if I'm doing the right thing. Sales are slow, but from what I've heard they always are in the early days.

In the meantime I'm preparing a collection of two short stories and a novelette that I'll price at 99 cents. Hedging my bets, you see. :-)

Krista D. Ball said...

Re: "I avoid the $2.99 and under books because they're usually the self-pub crap."

*cough*

Um, I think it was me.

*cough*

Um, sorry. I was in a bad mood that day. Basically, ignore 90% of what I saw on Kindleboards because I'm usually in a bad mood when I'm posting there!

Tara Maya said...

"As Blake pointed out, the goal is to reel in readers who have never heard of you. My feeling is your best shot is with low price."

Actually, for those of us with series, the goal is NOT to reel in new readers. It is to sell to readers who love you already. The first book in my epic fantasy series The Unfinished Song is free on Amazon, and has had over 25,000 downloads. Lots of those people never read it or decide it's not their cuppa, and that's fine. But enough enjoy it enough to pay for the next books. And a few enjoy it so much they become my raving fans.

I did have one reviewer, who got the first book free, say something like, "it was ok, but I wouldn't pay more than $.99 for the sequels." To me, that's an excellent reason NOT to lower the price to $.99. Why would I want a lukewarm reader when I have raving fans begging for the next book?

One thing about charging a little more is that I can always lower the price... as a reward to my fans. Right now, for instance, I'm offering the next book in the series free to anyone who signs up for my monthly newsletter. I'd rather have a 100 readers who love my books than 1000 who can hardly be bothered with them.

I am a reader as well as a writer. I won't clutter my kindle with a cheap book I don't like, but I will pay more for authors I love, and gladly.

Tara Maya

Stephen T. Harper said...
This comment has been removed by the author.
Stephen T. Harper said...

@Adam
"If you see two items, your instinct is to grab the less expensive one, unless you truly believe the quality is better. ... the goal is to reel in readers who have never heard of you. My feeling is your best shot is with low price."

I think you may be over-generalizing here. What you say is true in some cases, but certainly not all.

Elle's point is about appealing to certain customers. The ones who are more discerning like to read excellent books as opposes to cheap ones.

For example, when I go to a nice restaurant, I don't start looking for the cheap dishes.

"Hey! I can get a plate of sautéed string beans for only $6.95!"

Personally, I think that people who read a lot should be among the least likely to favor cost over quality. Reading takes a big investment of time and attention. Seems much more likely that avid readers would be unusually discerning.

author Scott Nicholson said...

I don't know much but I know what I think I know. Enough to make a living, anyway.

And I don't believe there is a universal sweet spot. I don't care what is best for you or for Joe or for anyone else. All I care about is what is best for my readers and me.

I don't even believe "what makes the most money" is the best price point. Maybe there are some people out there who can't afford $3.99 ebooks. Hell, I won't pay that much for one myself. Almost every book I ever read I got from the library or a thrift shop. So what were those books worth? Nothing?

I've had lots of books out priced at all different rice points. For statistical purposes, I don't think 99 cents does you any good unless you are in the Top 100 or maybe Top 300 and are getting the Happy Algorithms of Joy. And you're going to get a lot of one-stars because it will be bought by people who didn't really want it (but you got their 35 cents so I guess that's some sort of weird revenge).

But here's something many people don't understand: it's not the bestseller list that sells your books, it's the algorithms that sell your books. The algorithms create the bestseller list, not vice versa. So the bestseller lists are just the ego trap. Nobody goes to the bestseller list to shop for books, they shop from the "Also bought" windows. SO be careful of the company you keep.

If you make your book free, there's a cavernous gap between "readers" and downloads. I wouldn't be surprised if you get one person reading it for every 100 downloads. Yes, it can bring you more readers. So can blog hops and ads.

Heck, I was going to run most of my prices to $3.99 until I found out Amazon was releasing Chronic Fear at $2.99, so I decided to just stay with what they are doing. (Let's not forget that $2.99 was an arbitrary number picked by Amazon).

For me, the goal is not "What makes the most money" or "what gets the most downloads," but finding a nice balance that I am comfortable with that also helps me find the most real readers who value their time and money. We all have to find our own transaction value and exchange value if we want to keep doing this.

Sean McCartney said...

@Krista
Kindleboards can be tough. :)

Sean

Adam Pepper said...

Tara, it sounds like you are using a free book to do the same thing others are using 99 cents for: to reel in new readers.

Stephen, I agree. I am being overly simplistic. Perhaps to my own detriment. Maybe there is something to be said for the readers who are willing to pay more. Maybe they are more likely to actually read the book. Maybe not. I'm of a mind to think, sight unseen, all readers are created equal and a sale is a sale. Putting aside the obvious, that a 3.99 sale pays more.

Scott, I think I agree with everything you said. And yet, I feel like you've only raised more questions and havent offered any conclusions!

Bartholomew Thockmorton said...

Great heavens!
So many strategies...so many purposes!
Higher! Lower! Sooner! Later!
I get a headache just reading all the comments!
Warmest congrats Elle!

Lilian Darcy said...

"When it comes to reviews, if I, a reader, notice that a book has all 4 and 5 star reviews and there are a boatload of them, I immediately start thinking that there is sockpuppetry involved."

Okay, so will someone PLEASE go read my CAFE DU JOUR and give it something other than a five star review? (whiny voice)

Alan Tucker said...

@Rob Cornell - aside from the obvious psychological advantage (2.99 sounds less in our minds than 3.00) I believe it's Apple that is driving the 99s. They want anything in their catalog to end in 99. I don't know why.

Is anyone here writing YA that is not romance? I'm curious about teen buyers. How many of them have ereaders? (I'm guessing a lot more after Dec. 25) What are they willing to spend on a book? Do they have different perceptions of value/dollar than adults?

I qualify the YA not being romance as I believe a large portion of buyers for those novels are older women and not teens. YA romance is another beast entirely. (See Amanda Hocking)

Tara Maya said...

@ Adam

Yes, and I didn't mean to say that one doesn't want to reel in new readers at all. I only wanted to make the point that return buyers, not new buyers, are the bread and butter of most authors. I have no problem with the .99 price point as a loss leader, or for a short story, or for a book with a huge target audience. In those cases, it makes perfect sense.

lokisarrow said...

Thank you for the time you invested in sharing your experience with us. you could have kept it for your self.
Great advice.

Write On!!!

Fabien

Jamie Sedgwick said...

@Alan Tucker

I write fantasy and I have several YA/MG novels (no romance, no sparkly vampires), all priced at .99. I started at 2.99 this spring, but by summer Amazon had started tweaking algorithms and dropping prices, and I decided to go lower and stay there for a competitive advantage. The result was that over the summer, while many Indies experienced a slump,I experienced slow, steady growth.

Bear in mind that I'm no Joe Konrath. I sell a few hundred books a month, not thousands, but that number is still climbing. In fact, it's climbing much more quickly as we enter the holiday shopping season, so I can only hope and pray what might happen over the next few months.

I believe more and more children will become e-book shoppers and the price point is important here. When my kids come to me with the Kindle, asking for the latest sequel to a series they like and I see the $9.99 price tag, I balk. I wonder how many other parents feel that way? I think lower prices are an easy sell to the YA market but the hard part is getting on their radar.

D Bassiti said...

@Adam Pepper

Consumers are different. I buy lots of books but have never bought a 99c novel. I also have never bought a 99c coffee.

No-one will be able to have a single sales strategy that encompasses the whole market.

JD Rhoades said...

Interesting... here'a another idea: perhaps having a higher price on the new one and leaving an older one (or more) cheap will encourage people to try you out on the older on, then spur sales of the more expensive items if they like you.

okay, I've raised the prices on GALLOWS POLE (the brand new one) and BREAKING COVER (the e-version of the last treebook in my backlist) to 4.99. We'll see what happens.

Nathaniel Matychuk said...

Excellent read. Not sure that raising the price is something everyone could pull off, but your take on reviews being damaged by a low price is something I have suspected while reading books I picked up for free or for 99c.

One book, Daniel Arenson's Gods of Dream, a well written fantasy novel that was available for free for a short while, it got some harsh reviews on Amazon that were based on subjective nonsense, something that I doubt would have happened if it was even being offered at $2.99.

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Catherine Bybee said...

I went round and round with price before setting one on my latest romance release. I started at $2.99 and didn't have that bad of a show in the first two weeks of release. But being an author that has a back list of books readers can grab onto I decided to jump to a smaller price and see where it lead.

My numbers doubled overnight. I went from selling 10 to 20 copies a day to 40... then that doubled and so on and so on. Once my book was on my genre's bestseller list it shot to #1 in Romance and #2 on Amazon E-Books - I've stayed in the top 5 ebooks on Amazon for the last 2 weeks and counting. At my max I sold over 5,000 books in a day. A Day! We're talking nearly 70,000 books in two months. I wouldn't have reached that many readers... or so I think, at a higher price.

My backlist is now selling again. 7 of my 10 titles are back on their genres bestseller list.

I will completely agree that when a lower price draws in a reader they will pick it apart like crazy and in my case I've seen returns. But when speaking with other indie authors out there my percentage of returns is relative to the amount of books sold.

Will my next indie be .99 - probably not. I do think there is a group of people who will always look for the bargin book and if they enjoy what they read they will then pick up the next more expensive book. The opposite is true as well... If I like an author I will spend 20 bucks on a book. If I don't know them I might only spend a few bucks. Sad, but that's the times we live in.

And yes, doors are opening because of my books success, but I too am stuck with the 'do I sell my next book to a publisher or do I go it alone?'

This could be a total one shot deal... who the heck knows. But it it's super damn exciting!

Paul Mannering said...

I've had two books on Amazon at $0.99 and $2.99 for Kindle. Just raised the price of both to $4.99.

I'll be interested to see if they keep selling.

snowman said...

This is good information for me, about to self-publish my first novel. Keep the information flowing!

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Peter said...

Elle, the sheer number of comments you've received shows just how much of a hot topic you've hit.

I have two novels, both at 99c, one of which, called Anomaly, is #2 best seller in hard sci fi on Amazon, selling around 9000 last month. But, to be honest, the writing style and characterisation is not where it should be and so the book gets mauled in reviews by the serious readers. Still, it's a good story and plenty of people like it. If it were a movie, it would be a popcorn flick, like Transformers (ugh!) so I need to grow as a writer to reach a more mature market.

Your insights are fascinating and thought provoking. Like others in this list, though, I'm chained to the Smashwords slow pricing change, but I will give a price rise a go, as it may help focus on the target market that will enjoy this book for what it is and avoid the reader that's looking for War and Peace style characterisation. Keep up the good work.

Cheers,
Peter

Jeanettethewriter said...

Loved your insights Elle and everyone'e comments. Although I sell my novel NO STONE UNTURNED every month on Kindle at $3.99, I've never had such good sales as yours. I played around with pricing, first starting at $8.99 (yes I actually sold some at that price) then dropping it to $4.99 after reading some Kindle threads on pricing, then $2.99, finally settling on $3.99. I seem to get my most sales at this price. It's cheap enough for someone to take a chance on me, but not so cheap as to diminish the novel's value. I have a blog, am on Goodreads, Twitter, and recently Linked-In. but I can't seem to boost my sales, in spite of good reviews. I'm now doing a sequel which should be out next year.

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Lorraine S said...

I thought I would buy the Frog Prince on KOBO.com and this is what I got! (can't even bookmark it!)

Oops!
Something happened and we weren't able to get the requested content. Sorry, please try again.

If you continue to receive this notification, please contact our Customer Care department for assistance:

Call 1-866-204-4714 (8am-12am EST)

Email: help@kobo.com (24 hours)

Elle Lotlhorien said...

Mike Langlois said: "Note that going this route is going to require a professional cover and hopefully, a top-notch, expertly proofed book underneath...Just don't disappoint after the sale."

Agreed! My first published version of FROG PRINCE still contained many typos. I was fortunate that early readers liked the story so much that they mentioned the typos in their review, but still gave it four or five stars (save one). I was so embarrassed that I (and several editing-minded friends) went through it with a fine-tooth comb. I still cringe when I think of those early reviews, and wish I could give those readers their $2.99 back.

Elle Lotlhorien said...

Eva Hudson said: "So I have upped my marketing and dropped my price - though I'm only 24 hours into the 'campaign' nothing has changed with the rate of sales..."

Eva, I've experienced the same thing again and again. Even when I lowered it to 99 cents, all I did was lose money even though sales increased. There's just not much difference between $3.99, $4.99, $5.99 to readers I don't think. I'd be interested to hear about what you've seen ten days later (you posted your comment on Dec 6th).

Eva Hudson said: "Elle - what did you do to market The Frog Prince?"

I have to admit that Amazon did the marketing for me. When it became a best-seller, I didn't have a Twitter account, or author FB page, just a simple website. I think it was the cover that caught readers' eyes because many chick-lit covers are pink and the green frog sort of stood out like a sore thumb!

Elle Lotlhorien said...

J.R. Tomlin said: "Anyway, I'm just pointing out that there may be differences in genres."

I agree, J.R. I've heard this from authors writing in other genres as well. I believe there is a "sweet spot" for each genre, and you just have to experiment to find it.

Steve Moore said...

Thanks Elle...interesting article and interesting comments.
I've been struggling with my eBook prices. The experiences noted here tell me that this is at least as complicated as investing in stocks and the volatility of the markets are also comparable. I have two problems. Since I'm a Luddite, I need to at least eventually recover the cost of formatting and covers. The other is I can't say giving away a book when I've spent so much time plus brain and butt sweat writing it. Other than ensuring my eBooks cost less than my pBooks (something the Big Six often ignores), it seems that pricing is the proverbial roll of the dice. Everyone's tale is different and there are no simple rules. Maybe I'm asking for too much?
All the best,
Steve

Paul Mannering said...

I put the price of one of my ebooks up to US$4.99 and went from selling 3 copies a week to selling 300 in the last two weeks. The internet is so weird!

http://www.amazon.com/Could-Stairs-Strange-Stories-ebook/dp/B005QYXU3Y

Linda Banche said...

Elle, I like your approach to pricing. An author with a backlog can afford the 99 cent full-length books. I don't think a newbie can.

But I don't believe any author should price his/her books too low, or horror of horrors, just give it away. Look at the Smashwords Top 100. All but a handful of those books are free. I heard of one author who gave away 40,000 downloads of her full-length book. 40,000? Those readers couldn't have spent $2.99 or $3.99 or even $4.99 for her novel? Like you said, a Starbucks coffee, which lasts a half hour, costs more.

99 cents may be fine for a novella, but I think it's too low for a full length novel, especially for a newbie.

A book represents work. I think the author has a right to make some reasonable money from it. I also think authors should start with the higher price, and then have a sale for a limited time. People love sales. And with the sale mentality of "if I don't buy it now, the price will go up", you may make more sales to offset the lower price and snag some more readers.

And with the limited time, you may garner sales because if readers don't catch it now, the price will go up.

Suzanne LaGrande said...

Marketing has very little to do with the commodity and everything to do the image surrounding the commodity. Does a higher price help create an image of higher value? In part, I think it does. I appreciate how Elle also connected this to the stake that the reader has in liking the book. I have found that giving things away for free or low cost often conveys to people that it isn't worth much to start out with. That may not be true at all but in this society, the higher price, the higher the perceived value.

Nick Russell said...

I ponder this every day. I priced my first mystery novel, Big Lake, at 99 cents and sold 33,539 copies in December alone. So far in January, my sales are holding at over 1,000 books a day.

The sequel is coming out soon, and I keep debating whether to price it higher, maybe $2.99, or to go with the formula that has worked for me so far.

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