Let’s start off with some recent market studies…
During the survey for the United States in 2017, 16 percent of respondents stated that they were willing to pay between two and 3.99 U.S. dollars for an e-book if the price of the corresponding paperback was 14 U.S. dollars. During the same survey, 20 percent of female respondents stated that they were willing to pay between four and 5.99 U.S. dollars for an e-book if the price of the corresponding paperback was 14 U.S. dollars.
Also, 21 percent of respondents aged 60 and older stated that they were willing to pay between two and 3.99 U.S. dollars for an e-book if the price of the corresponding paperback was 14 U.S. dollars. During the same survey, 56 percent of respondents stated that they completely agreed with the statement that e-books should be cheaper than the printed version.
According to Statista’s analysts, you would sell more ebooks if you use a price structure that passes on the cost advantage that ebooks have compared to printed books to the readers. Looking at current bestsellers in the United States reveals that the ebook editions of the Top 10 bestsellers in the U.S. are roughly 20 percent cheaper than the corresponding hardcover editions.
A few years ago Amazon gave the public a peek into its data around prices and e-book sales. The Amazon Books Team posted on the following on the Kindle Forum:
For every copy an e-book would sell at $14.99, it would sell 1.74 copies if priced at $9.99. So, for example, if customers would buy 100,000 copies of a particular e-book at $14.99, then customers would buy 174,000 copies of that same e-book at $9.99. Total revenue at $14.99 would be $1,499,000. Total revenue at $9.99 is $1,738,000.
Shoppers Price Psychology
In the general psychology of shopping (not just in the world of books), people learn to associate price with quality. If product A costs twice as much as similar product B, then product B must be lower quality than the expensive brand. There may be zero evidence to support this conclusion, but some people still believe it.
For this reason, you’re not doing yourself any favors by selling your 400-page novel for only 99 cents. The low price could lead readers to conclude that there must be something wrong with the quality of the book.
On the other hand, having a 99 cent sale for a limited time is an entirely different story. When you let the reader know that your average sales price is $7.95 and you have a 48 hours 99 cents sale, then this sends a different message to your reader. They understand that you have a great book and you have it on sale.
Reasons to Price Your Book at 99 Cents
A 99 cents price point is a no-brainer, and an impulse-priced book allows a reader to take a chance on a book that looks interesting. If you’re an unknown author trying to build your readership base, this might be the answer.
To rise to the top of Amazon rankings is the goal for any author. Amazon counts book sales units, not revenue. Setting your price at the impulse level of $0.99 could help you glide up in the ranking and gain visibility there. With that visibility, other people in the publishing field may take notice.
When you visit your book page, you’ll see a section that says “Customers Who Bought This Item Also Bought.” The real value for you is when your book appears in that section on other successful books. Amazon will list up to 100 books in this section and readers will often scroll through that list to discover other books that look interesting. A drop to a 99 cents sales price may be the incentive to increase your sales to place your book in a popular section with more exposure.
In the last few years indie authors engaged in a price war to sell their books and find new readers. Where before you had not seen many books priced at 99 cents, there are now thousands of books available for that price. I only recommend selling your book for 99 cents if it has a low page count of mate 10.000 words. Besides that, you can use a 99 cents price if you do a book launch, or have it a few days on sale.
Many websites promote your book for free or with a fee if it is priced for 99 cents. You will find a list of them in the resource section at the end of this book.
Best Price Range for Maximum Revenue
You’ll find countless authors who are enjoying success at the currently popular price levels of $4.99 to $9.99. To encourage more readers with a low price and still get the 70% royalty, you would set your price to $2.99.
However, writing and publishing an ebook is more than just numbers, dollars, and cents. These kinds of royalty calculations are only one factor in the success of your book.
According to WrittenWord the price that maximizes author royalties is the same this year as it was last year, $3.99. Readers are more discerning at higher price points and are unwilling to spend $3.99 on titles with poor book covers or no or few reviews.
They were looking at sales that came through Amazon, and on Amazon, authors receive 70% of every sale they make when their book is priced between $2.99 and $9.99, and 35% of the sale when their book is priced below $2.99. This means that you need to sell much more copies at $0.99 or $1.99 than you do at a higher price point in order to make the same amount of money.
KDP Select Affects Your Earnings
Authors enrolled in KDP Select are more likely to be able to achieve high sales numbers and high earnings when they choose to run price promotions. The reason for this is these two factors:
- Kindle Countdown Deals
- KENP Payouts.
Based on tests performed by WrittenWords, authors on average see a 1300 bump in KENP reads the day of the promotion, with reads increasing into the weeks after the promotion. With the current payout per page amount averaging $0.0045, that’s an additional $5.85 in earnings per day that an author earns off the promotion.
Here are a few more interesting results from their market survey:
Psychological thrillers are still all the rage. Many of the best performing books at higher price points ($3.99 and $4.99) were psychological thrillers. Reviews and backlist help readers make purchasing decisions. Also on the lower end of the sales spectrum were the books with few to no reviews.
Presumed Price Points From a Buyer Perspective
A price between $0 – $0.99 is a no-brainer if I am interested I may give it a try without even looking further into ratings and book description.
A sales price between $0.99 – $2.99 sounds reasonable, and the price will not engage me into hitting the buy button right away. I may look closer at reviews and book description. I may put it on my wishlist of interesting books.
A sales price between $2.99 – $5.99 reflects a good value, but it’s not a bargain. Is this a well-known author? Any other books that the author has written?
A sales price between $5.99 – $9.99 may seem on the upper end, even if this is from one of the five big publishers. If this is fiction, it better be on the New York Times top 10 sales list. If it is non-fiction, I may take a closer look. My interest may switch over to the Paperback edition.
If your sales price is above $10.00, it’s probably for a niche market. I really need it for work or my business. I may buy it because I am in a hurry to read it and I don’t want to wait until it arrives in the mail.
Look at Similar Books
You could also look at other books that are similar to yours and collect some details about them. Start by looking at the category on Amazon where you think your book fits. Then write down the following:
- Kindle selling price
- Paperback selling price
- The list price for the paperback (discounted price)
- Page count
- Number of reviews
- Rating from reviews
Here is a link to FixMyStory, where Jordan Smith provides a spreadsheet template to fill in with all of those details.
Make Your Book Free
Why would you do that? There are several good reasons for making your book permanently free. Yes, you can price your book for free on Amazon. However, the only way I know of right now is contacting them and requesting to set the price to zero.
One reason to do this is lead generation. You or your business may offer something else than books. Maybe you have a video course, or you sell a web service. Creating a book or booklet about a specific topic could send interested people to you. Of course, that only works if your free book is somehow popular on Amazon and you have included an additional offer in your book. For example, a discount code that’s not available anywhere else.
I have my financial terms dictionary ‚100 Most Popular Financial Terms Explained’ permanently free on Amazon, and it refers to my other 12 books on that series. It supports selling them very well.
Creating it was easy by merely extracting the content from my other books. The most work was going into research and deciding what the 100 most important financial terms may be. Once in a while, someone orders the Paperback version for $12.95! The Kindle ranking is most of the time between 10.000 and 20.000.
Another reason to make a book free is author exposure. If you have several other books on Amazon, you could use a freebie to spark interest in your other books. You send them to your website and let them sign up with their email address to get the latest author information and maybe an expert from your next upcoming book.
However, even you may use your book as a lead generation you may still sell it for $0.99 or even higher. It all depends on which niche market you operate and how high the demand for the information is that you provide.
Use the KDP Pricing Tool
You can also use Amazon’s Kindle pricing tool to get price suggestions. Go to the KDP Edit Rights, Royalty and Pricing section of your book’s details and click the big View Service button under the Pricing Support header. This will show a tool that examines books similar to yours on the Kindle store, then suggests a price that can maximize your earnings.
It also tells you what price might maximize the number of sales you’ll get. This tool won’t tell you how many books you may sell, but check it out and consider it when you set the price of your book. The recommendation of this tool changes over time as the Kindle store data changes. You may check it once in a while to see any shift in the market.