More fun with pricing

So the question of how much to sell my book for is a pretty constant one among indie writers. We don’t want to devalue our work, but we don’t want people to think we’re gouging them, either. We don’t want to race for the bottom, but we want to find the sweet spot for pricing that maximizes revenue and doesn’t leave any sales on the table. Some folks do very well with a $4.95 price point, some folks do well with a $2.99 price point, and some folks are moving a ton of books at $.99 each. If you read a bunch of indie writer blogs, all this pricing hoo-ha will be old news to you and you’re probably tired of hearing us whine about how hard it is to figure out where to price our books. I can almost hear some of you now – “just put a price on it and get it out there! The market will figure itself out!” But it won’t. Since I am the market, I need to figure out at what price point my books will maximize my revenue.

So let’s look at the different pricing tiers. I’m going to use Amazon numbers, but the rest of the sites are close. For an ebook of $.99 (the minimum price you can set on Amazon) to $2.98, the royalty tier is 35%. That means that if I sell a book for $.99, I get $.35. Not much, right? But it’s actually pretty good in the publishing world, where royalties typically hover in the 8-15% range.

Some months ago, Amazon introduced a 70% royalty tier (I think it was after Apple did the same thing, but I didn’t have any books out when this happened, so I might be wrong about the cause & effect). For books priced between $2.99 and $9.99, the author gets 70% of the sale price. This is HUGE. This means that for an ebook that sells for $2.99, the author gets $2.00! I know, still doesn’t sound like much money, but it’s close to what that author would make on a $25 hardcover in the traditional publishing world.

So this lead to a bunch of authors who were selling books at $.99 or $1.99 moving their prices up a hair. And it set a line in the sand for some people mentally who thought that anything under $2.99 was “devaluing” your work, because the writer was on a lower royalty tier. This thinking has been shifting for a while, as more authors play with pricing and find success at different levels. One theory that seems popular is to price the first book of a series at a lower intro price,to get the readers hooked on a series, then go to the higher royalty rate with the subsequent books.

Since I happen to be working on a series, I kinda love this idea. Hard Day’s Knight has been floating along selling about one book per day for a while now, not really gaining much momentum but not losing me anything either. But since Back in Black (I’ve dropped the Blue) is almost ready for release, I decided to do a little tweaking. So yesterday, with no fanfare, no FB messages, no blog or message board posts, nothing to announce the change, I dropped the price of Hard Day’s Knight to $.99.

And sold 8 copies. Now I need to sell 6x as many copies at $.99 as I was selling at $2.99 to make the same money, because my royalty is so much lower. But if I can continue to sell 8x as many copies, and it can serve as a lead in for the other books in the series, then we might have something. And really, even if I sell 6x the number of copies and stay revenue-stagnant, the book is getting out there more and I can develop a wider fan base.

So if you haven’t bought your copy of HDK yet, now’s a good day.

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