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A Word on Ebook Pricing – Where’s the Sweet Spot?

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by Nick Stephenson in Books and Writing

First off, it’s worth remembering that there’s no one-size-fits-all answer when it comes to book marketing – other than to say that pricing is an important part of any author’s overall strategy. Personally, life would be much easier if there were a clear “market price” for books, but we all know that’s not the case – especially not for ebooks. Prices range from free to $20+ and nobody has (so far) been able to provide a definitive answer on what works best – in fact, most people can’t even agree what “best” even is – and that all depends on whether you’re looking for more readers or more revenue. It’s all a giant crap shoot. In the dark. With a gun to your head. And crocodiles.

Fortunately, it’s easy enough to do a little experimenting for yourself. Price changes at most major retailers go through within hours, so it’s pretty straightforward to test the market without exposing yourself to too much risk. So that’s what I’ve been up to in the last few months, and I figured some of you out there in author-land might be interested in some numbers.

I’ve tried three major price points in the last three months; $2.99, $3.99, and $4.99. I’m currently experimenting with $4.99 on 2 of my novels, leaving the first novel in the series at $3.99 and a novella at $2.99. I also have a box set of the first 2 of my novels priced at $6.99. I’ve found that this blend of prices has worked best overall – pricing the shorter work at $2.99, and the first novel at $3.99 with the others at $4.99 and the box set at $6.99. For those strange people who like charts, here’s how my overall daily sales and daily revenue were affected:

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sales vs price

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Here’s a breakdown:

  • With all single titles at $2.99 and the box set at $4.99 my average daily sales were 33 copies. Average daily revenue was $69.
    .
  • Keeping the novella at $2.99, moving all the novels up to $3.99 and the box set up to $5.99, my average daily sales went up to 39 copies, with average daily revenue of $97.
    .
  • Increasing the price of the latest 2 novels to $4.99 and the box set to $6.99 led to average daily sales of 47 copies and an average daily revenue of $163.

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Interesting… I had expected overall sales to go down after raising my prices, but the opposite seems to have happened. It’s early days yet for the $4.99 price point, and my data-set is hardly definitive, but initial signs are good. It’s also worth noting that sales ranks on the books have stayed roughly the same or slightly improved since prices went up, suggesting that the new pricing structure seems to be working. So far.

But, like with anything in this game, things can change overnight. The only advice I’d give is that you should take a look at what other books in your genre are selling for and try to edge towards the upper end of the midlist. I would avoid looking in the top 100 overall and focus on the authors with a solid presence in the more popular subgenres – Crime Thrillers, for example. You’ll probably find some genres are priced differently – Romances tend to be a little cheaper, and Fanstasy books are almost always more expensive. Take a look and see what you can find.

I based my move to $3.99 and $4.99 on some of the top-selling Thomas & Mercer authors – and who better to model pricing on than Amazon themselves? Makes perfect sense to me.

How about you? I’d love to hear from you in the comments about what price points work for you as an author – and, as readers, how much are you happy to pay for an ebook, and what drives you to hit “buy now”? Just drop a comment below and I’ll look forward to passing off your thoughts and opinions as my own…

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66 Comments
  1. Richard Schiver says:

    As a reader I have no objection to paying up to 5.99 for a book from an author I’m familiar with. For new authors I hesitate to spend that much preferring to keep my purchases in the .99 to 2.99 range and that’s after reading the sample. Once they’ve proven themselves to me with their work I have no problem with a higher price range.
    As an unknown self-published writer I’ve priced my first six release at .99 just to get customers to take a chance on my work. My latest release a short collection of stories is priced at 2.99. Future releases will be priced from 2.99 for novellas to 5.99 for full novels with three novella bundles at 6.99.

    1. Nick_Stephenson says:

      thanks for the comment, Richard – the serial short stories / omnibus approach seems to be working well for a lot of authors, so good luck! I agree with your point about unknown authors – that’s why I think it’s good to keep a couple of titles at the $2.99 / $3.99 point, just to get the ball rolling. I tried permafree (there’s a post on here somewhere about it) and found it didn’t work great for me. I also found $2.99 to have higher unit sales than $0.99 for even my novella. Go figure.

      1. Trish McCallan says:

        Thanks for sharing this data Nick, very interesting results.

        1. Nick_Stephenson says:

          Any time, Trish

  2. Great post, Nick. Thanks for sharing your numbers! These are some interesting findings. I wonder if this means readers are growing wary of the cheaper price points and equate slightly higher cost with much higher value. I’ve only dipped my toes into this, but I’ll be publishing my second book later this year and look forward to playing around with the numbers.

    1. Nick_Stephenson says:

      Any time, Gavin – hope you found it vaguely useful. Good luck with the next book, just keep on testing until you find what works best for you, and try not to get too sucked in to the daily spreadsheets (like I have – you should see the state of it… so many columns).

      1. I already seem to gravitate toward tracking everything on spreadsheets, so thanks for the warning! If I wasn’t careful, I’d spend more time tracking my writing and my books’ progress than I would writing.

  3. Carolyn Warren says:

    Thank you for sharing this interesting insight.

    In the past, I’ve sold nonfiction e-books for the same price point as trade paperbacks: $17.95, $12.95, and $8.95; and have done well. But I think that is because they were nonfiction (info people needed), and I offered a satisfaction money-back guarantee.

    I am against giving away books for free. I think it is disrespectful of the author’s time and talent.

    Moreover, it seems that a high percentage of people who download a free book don’t read it. They take it thinking, I’ll grab this for free now and read it someday in the future. As a result, authors give away hundreds (even thousands) of books and receive only a handful of reviews in return.

    The authors say, “It sure is hard to get reviews!” They don’t realize it’s because people aren’t actually reading their book.

    I understand the concept of offering a first book for less to gain readership, and I think that’s okay. But people hold the belief that “you get what you pay for,” so too cheap means poor quality in their minds.

    1. Nick_Stephenson says:

      Thanks for the comment, Carolyn. I’ve tried permafree and not seen much benefit from it (even with said book in the top 100, sales on the rest of the series didn’t really budge) – I still find that 24 hour free promotions can work well (only if you can hit the top 20 though) often selling a couple hundred copies in the following couple of days. But very little happens during the free promotion itself – it’s what happens when you drop back onto the paid charts that makes all the difference.

      My own figures suggest around 5 – 10% ever actually read a free book. So, it’s not that great at building a readership. I suspect any lingering benefits of giving away tons of books is going to be pretty much non-existent by the end of 2014, if not sooner.

      You’re right about non-fiction though – a totally different beast!

      1. Carolyn Warren says:

        Interesting numbers! I’ve just joined your blog subscriber list today. You do an awesome job at tracking sales.

        1. Nick_Stephenson says:

          much obliged 🙂 though this particular post blows everything else out of the water: http://jakonrath.blogspot.co.uk/2014/02/me-hugh-howey-and-legacy-john-on.html

          An indepth study of the top 7000 titles on Amazon – 86% of which are ebooks, with 45% of profits going to indies!

  4. AFN Clarke says:

    Interesting results Nick! Can I ask, were you taking these stats over the Christmas/New Year period? Just wondered, because I tend to see increased sales during that time anyway, with people getting new Kindles etc … and I definitely saw a greater increase in average daily sales this year than the year before – so am wondering if there’s a way you can distinguish between that kind of seasonal increase in sales, and sales that directly relate to your price-point?

    I have been hesitant to put my books up beyond $2.99 as I think stability in pricing is a factor for creating loyal readers and I have read a lot of comments from readers who hate to see authors changing their prices every month like a roller coaster ride – not that that’s what you are doing at all, I totally get that. But there is something to be said for readers knowing that if they go to buy your book and the next and the next, that they can rely on the price being consistent. That of course has to be balanced with natural increases over time and, as you are doing, finding a sweet spot that works for both author and reader.

    Would love to know how this trend continues for you, I am wondering if I should have had the courage to increase my price at the beginning of this year to make it a 2014 kind of thing or if it matters when that happens? Will ruminate on that ….. thanks again for being so open with your own stats and experiences.

    1. Nick_Stephenson says:

      Thanks for the comment – I didn’t find December or January to be particularly different in terms of volume to other months, and now we’re in February things are still strong – so I don’t think the Christmas boost affected me, particularly.

      Stability of pricing is a good point – I think changing prices across the board every month could cause some issues with existing readers, but a couple of dollars increase over a few months / one quarter hasn’t elicited any negative reaction for me so far. I’m sure there will have been a few people who may have thought twice about snapping up more books, but I am hoping that people want to read them enough that the pricing change isn’t a big issue. I think, long term, competing on price is not a sustainable approach – people are getting more and more savvy about the books they read, and, for many, they would prefer to spend a little more on something they know they’ll enjoy. On that point, I have noticed a general increase in positive reviews since upping prices, so I guess that’s a positive effect!

      1. AFN Clarke says:

        Really interesting about the positive reviews going up – that’s great and very encouraging! We have all been trying to figure out the psychology of pricing in relation to reviews and so many authors, myself included, have seen how giving away tons of books for free often attracts more negative reviews, when many of us thought the opposite would be true, so it’s great that we can have faith that hopefully people who pay a little more for a book are going to maybe be more into reading and savour reading and be more thoughtful and take care when writing a review – again, go figure …. but it seems to be so 🙂 Thanks so much for sharing your research and experience, it’s a huge help.

        1. Nick_Stephenson says:

          any time 🙂

          I also think it’s a case of exposure, not just price – with free, you’re exposing your work to (potentially) a much larger audience, many of whom might not normally go for the genre or style. As a result, you get a higher proportion of negative reviews. That’s a good thing, in a way, as it shows people are at least giving you a chance…

  5. Frank Daley says:

    Just found you Nick.
    Excellent work and thanks for sharing. I have just one (non-fiction) book on kindle. It’s a self-help, psychologial advantage thing on problem identification. I’ve priced it a $2.99. I’m torn between making sales and making money FROM those sales! The value of this book is far above the $3.(but I suppose we could all say that!).
    The usual question of price vs value..
    I’m interested in your results re fiction at the various price points. A few people have made a lot of money at the .99 cent rate too but I like your prices better.

    I’m serializing my first novel, The Battle of the Long Sault, (historical adventure) on my own site (novelideas.ca) and on wattpad.com, a relatively new site that might be useful for promotional purposes and for free reads.

    The majority of books on there are by very young people with the vampire, young love etc. genres getting the most attention. However, there are other cateories and it’s a place for authors to check out.

    The reads are free but people cannot copy and paste anything so no one will steal any books. So perhaps a decent lead generator. They also proivide a sharing/announcement device for Facebook and Twitter etc.

    1. Nick_Stephenson says:

      Thanks Frank 🙂

      Evidence points towards the days of 99c as a permanent price point being more or less over. It still works great as a promotional tool (when combined with an ad spot somewhere) but I’ve just not been able to sell enough at that price to make up for the massive drop in royalties. I’d have to sell 9 times more at 99c to make the same money, which just doesn’t happen. Maybe 1.5 to 2 times as many, but that’s about it.

      It was a big deal in the early days, but most people use it as a loss leader or a limited-time price these days. For non-fiction, many find $4.99 to $6.99 works best, because you can be much more targeted. But mileage varies, as with everything 🙂

      If you want to model a good serial author, take a look at Hugh Howey – he released the recent “Sand” novel as 4 parts plus an omnibus. Wattpad gets a lot of eyeballs, but I’ve not seen many people turn that into $. Can’t hurt though 🙂

      Noisetrade is a good option also – you can offer your book for free, but in return you get readers’ email addresses. Same with offering a free copy via your own website – set up an autoresponder to send out the book in return for an email address. It’s a good way to build a list up.

      Historical fiction is an interesting genre – not a massive niche, but people are prepared to pay more than usual. You might find $4.99 works best there – I’d recommend checking out David Gaughran’s blog. He writes Historical Fiction as well as non-fiction, so his approaches might be right up your alley!

      1. Frank Daley says:

        Right. Wattpad is just for promotional opportunities. I don’t expect much from it or from my author site, novelideas.ca. It’s to get some feedback, perhaps a little name recognition/ Primarily it is to get the attention of an agent and/or publisher (although i will put it on Kindle after the serialization is nearly complete.

        Question. Have you thought much or researched any about the value vs price idea? Your work on price differentiation might apply here.

        Forget the pure marketplace and competitors pricing for similar material concept for the moment.

        If price is what you pay and value is what you get and you are offering more value than similarly priced books (just accept this for argument’s sake!) should you price your book higher? I tend to think so but if you are not known it probably won’t work.

        Points to consider:

        1.You (Nick) are getting good results by raising your price by a dollar or two. You sell fewer copies but make more on each and the price is set, so over time it should/ might pay off?

        2. If your work is not simply a commodity, that is, if you can differentiate your products by demonstrable quality and results, should you price higher, hope for better quality buyers and gradually, as your reputation grows, have the readers come to you? (I’m using non-fiction here.)

        3. Re value and price. Now add length. Many kindle N-F books are short—25-50 pages– but they might contain something truly valuable. Priced at up to $3 (or $5 or more) they are enormously worthwhile. (Most aren’t, of course!) I guess in this example we should think of it as over-delivering for the price thus encouraging new buyers.

        4. Re fiction.We’re trapped by the lowest common denominator here as you suggest with the .99 cent price. Some people have made a killing with this price but I see you have several novels priced higher which I think is good. I w a s going to say that’s a helluva lot of work for $2-3 but it’s good given what you receive from big publishers.

        1. Nick_Stephenson says:

          It’s a difficult concept with digital media, because there’s no inherent cost built in to the product. I personally think that the value idea goes both ways:

          (1) Value for the author – what price will bring the maximum revenue over the lifetime of the product? That might be 99c, or it might be $9.99. Price to maximise revenue where possible (outside of limited-time discounts)

          (2) Value for the reader – we know readers don’t like paying high prices for ebooks. They understand there’s no printing or shipping costs, and that the product isn’t tangible, and they don’t “own” it. So they won’t pay more. Let’s say the ceiling is $9.99. So, I need to compete with all other entertainment goods in that price bracket. And, lets face it, people are going to be more inclined to watch a TV show or a movie or play a computer game. So, I need to attract not only new readers, but new readers who wouldn’t normally choose a book.

          Factor in that 99% of my market don’t know me yet, and I’ll want people to give me a go with little risk. That puts me under $5. I consider my work high quality, so I’ll aim for upper-middle at $3.99. As I write more titles and grow my audience, I’ll step that figure up for new releases, and edge more towards that $5 point. With a bigger backlist, it gets easier to step those prices up as people get through your other books.

          That’s the theory. Hell, I might make a killing at $9.99 but the figures don’t support that. But I’ll keep experimenting…

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