How Much Should You Charge For Your eBook?

Pricing High Vs. Pricing Low?

 

How much should you charge for your ebook? It's a question that many authors spend a lot of time thinking about, discussing and often worrying over. You may very well be asking yourself whether you should you set your price at a bargain basement 0.99 or perhaps even lower. You might be thinking that your book is worth more, 4.99 maybe 9.99 or higher. So what price is a sure fire way to guarantee success?
Well now, that all depends on your interpretation of success. Before we attempt to answer the million dollar question we'll start by doing some basic calculations. We'll use Amazon's KDP publishing platform as a base for pricing and royalties. A loose guide to Amazon's royalty structure is as follows; for books priced between 2.99 - 9.99 authors receive 70% of the list price. For books priced above or below this range they offer 35% of the list price.
Let's say you have two ebooks that you want to sell, but you've decided to sell them at different prices. The first you set at 0.99 and the second at 4.99. Based upon Amazons royalties you'll receive 35% of the cheaper book earning you 0.35 per sale, and for the more expensive book you'll receive a 70% royalty earning you 3.49 per sale. To earn the same in royalties from selling just one book priced at 4.99 you'll have to sell nine copies of the 0.99 priced book. Everything clear now? Have you made your decision? If only things were that simple. In actual fact there are pro's and con's to pricing high as there is to pricing low.
Pricing High Vs. Pricing Low?
The ebook market is fluid, with no set standards. Just go take a look at Amazon's bestsellers list and you'll see that there are no rules for how much or how little you should charge for your book. So why are some authors setting their prices so low while others are charging two, three, even five times as much? Here are some reasons to explain why so many authors have chosen to go low:

• Lower priced books usually sell more copies. A recent Smashwords survey showed that ebooks priced between 0 - 2.99 generally sell more books than those that are priced higher. What this demonstrates is that readers are price sensitive, meaning unless you already have an established readership, people are going to be wary about spending money on an unknown product. By pricing low, more people are likely to take a chance on your book even if they've never heard of it.

• More book sales equals more visibility, and more visibility equals more books sales. If for example, your sales increase by pricing your book low, so will your best-selling rank. On Amazon as your rank increases, your book will be more likely to appear in the 'Customers who bought this item also bought' section. By appearing in that section you will receive more visibility and most likely more sales, which will push your best-selling rank up even further, and so the cycle goes on.

So there we have it, some key reasons as to why pricing your ebook low could work for you. However, the truth is there is no "one size fits all" solution to pricing an ebook. If you already have an established readership you can charge more because you have already proven yourself, you are a known quantity and your readers know what to expect. A common pricing strategy that is used when publishing a series of books, is to go low on the initial book to gain interest and then charge more on the remaining books in the series.
Just to add another curve ball into the pricing game. The same survey that showed that lower priced books sell more than those that are priced higher, also found that the 2.99 price point was the most popular (apart from free books that is) selling 4x the amount as a book with a 10.00 price point. Granted that's not much of a surprise, but what is surprising, is that it outsold the lower price point of 0.99 of which only sold 3.9x. What this can be interpreted to mean is that authors don't have to feel pressured to go really low in order to tempt potential readers and gain sales.
The Best Things In Life Are Free
Decided on a price? Hang on just a minute because we haven't talked about giving your book away for free yet. Yes I'm being serious. Free books blow all competition out of the water by earning almost 100 times more downloads than books at any price mark. Wait, zero out of a zero is still zero right? Well technically yes, this is true. However offering your book for free is one of the most powerful marketing tools you have to get your book discovered.
A sure fire way to build readership quickly and increase your best-selling rating, giving your book away for free means that once you have achieved a fair amount of exposure (only you will be able to judge exactly how much this would be) you can up the price and hey presto, with your newly found visibility you'll be earning money in no time. Not only that, it's a great way of introducing your new readers to your back catalogue. Now they've taken a chance on your free book, if they've liked what they've read they'll want more. It's a classic strategy employed by many authors.
J. A. Konrath, a successful author with an impressive back catalogue of books, decided to opt in to Amazon's KDP Select programme, which offers authors the ability to set books to free for 5 days (Amazon asks for exclusivity for 90 days, after the term is up you can choose to opt in or out as you wish). Konrath began by enrolling all of his books into the programme and setting them all to free for maximum 5 day promotional period. After six weeks he was surprised to discover he'd earned $100,000, more than he's ever previously made before in that time period. Attributing the sudden increase in sales to his decision to give his novels away for free (his novel Whisky Sour was downloaded over 100,000 times), leading his readers, he believes to his back catalogue which is what racked up his impressive sales figures.
The statistics and sales figures don't lie. Offering your book for free is pretty much the best way to gain visibility, and as we now know visibility generates sales, which in turn generates more visibility, which leads to yet more sales and so on, and so on. It really is as simple as that.
So, to answer the question how much should you charge for your ebook? Earlier I asked what was your interpretation of success? Is your primary publishing goal is to make money (and lots of it) from your ebooks, or is it simply just to get your work out there to be enjoyed by as many people as possible? Whatever the answer, here's the rub - there is no exact science to pricing. With so many variables and outside factors that could affect sales (cover design being just one example), more often than not it's a case of setting a price that feels right at the time and seeing what happens, then adjust as you go.

 

About the Author:

Katie Woodbine is the co-owner of ebook buddy, the self publishing and eBook specialists. Create, publish and sell your eBook around the world. Offering a range of services for independent authors; from cover design and formatting to promotional tools, if you're looking to self publish, ebook buddy can help!