Posted in E-publishing | Posted on 28-01-2014|
In the indie author world, there are few topics as hotly debated as that of ebook pricing. You don’t have to spend long on a self-publishing forum to hear all sorts of advice:
- Don’t price too low or it shows you don’t value your work — if you don’t value your work, how can you expect anyone else to?
- Don’t price too high because people won’t spend that much on an unknown author.
- 99 cents is dead — don’t bother with 99 cents because you only get a 35% royalty.
- Never ever price your ebook at $1.99 — it’s the Bermuda Triangle of pricing!
- Price the first book in your series for free to draw in readers who might end up liking the book and buying the rest in the series.
- For crying out loud, don’t give anything away for free — people just download free books and never read them, and if they do read them, they’ll probably give you a crappy rating.
So… confused yet?
Long-time followers of my blog (or people who look me up on Amazon), will see that I take a middle-of-the-road approach. I have the first ebook in my Emperor’s Edge series permanently free, and most of the rest of the novels in the series are $4.95 (I do have Book 2 at $2.99 at the moment, which may or may not stay that way). For short stories, I either go with free or 99 cents (if it’s free it’s because it’s something I posted on my blog for free first, such as my recent holiday story, which was a thank you to readers). For novellas and short novels, I’ll price somewhere in between (these days, I try to write things that are long enough that I feel justified pricing them at $2.99, for the 70% royalty, or I’ll put the shorter things together in a collection).
Does that mean you should do the same thing? Nope. You should either do what makes you content (allowing that you might be leaving money on the table, because you’re pricing based on your own opinions rather than experimentation) or you should experiment to see what earns you the most money per month.
That last bit sounds kind of obvious, doesn’t it? Yet a lot of authors balk at the idea of trying different prices and seeing what the market says. They price based on their own hunches and prejudices.
They think, “Oh, I wouldn’t value a 99-cent book, so I’m sure others won’t either.” Or maybe they think, “I put XXX hours into writing and preparing this novel, and there’s no way I’m selling it for less than $X.XX.” Or perhaps it’s, “Nobody’s heard of me, and I doubt they’re going to pay much for an unknown author, so I’m going with 99 cents.” The argument I’ve seen most often and which is, quite frankly, one of the more short-sighted ones, is: “If I don’t sell my book for at least such-and-such, I’m not going to have a chance of making minimum wage for the work I put into it.”
I want to address the last argument, because I see variations of it so often. First off, before we jump into numbers, I want to point out that very few authors make any significant money on their first book — nobody owes us minimum wage or any other amount of cash. This whole process is like building a business, and for most of us the income grows over time as we get more books out, especially when we’re talking about e-publishing, where titles can remain out there and can continue to sell indefinitely.
The second thing I want to point out is that the price of the book is only half of the earnings equation. The other half is how many copies you sell.
Price * Units Sold = Total Earnings.
We’ll keep it simple and not worry about royalties and what the store makes vs. what you make. My point is that it’s possible to become a millionaire on a 99-cent title, just as it’s possible to make absolutely nothing. You may make more money selling your books at less than your ideal price (i.e. what you feel the book is worth). That’s just how it is.
But anyway, let’s talk numbers and kick around a couple of scenarios (AKA how do we get to minimum wage, anyway?). Let’s say you go bargain basement and make your first novel 99 cents. Because it’s at the 35% royalty, you’re only making about 35 cents on each sale. Let’s say you bust your bum on marketing and sell 100 copies in your first month. That earns you… $35. Yeah, cringe, right? Not even close to minimum wage. If you keep that up for the whole year, you get $420. Still not that impressive. Latte money, maybe.
But — and here’s where so many people get tripped up — you really have to consider earnings over the life of a book, not over a month or even a year. Over ten years, that title could bring in $4,200 if nothing else changes. There’s always the possibility that it will start selling better as you get more titles out and gain more of a following as an author, but let’s assume it stays the same.
$4,200 in ten years still isn’t that impressive (and it’s why I’m not a big proponent of the 99-cent novel unless it’s part of a sale or on-going strategy to get readers into a series). Let’s say you had priced that novel at $2.99 instead. It would earn (at a 70% royalty) $2.05 a sale. Maybe you’re only able to sell 50 copies a month, instead of 100, because of the higher price point. That brings your earnings up to $102.50 per month and $1,230 a year. A little better. At $5 it gets better still, though you may or may not sell as well at the higher price point. This is where the experimenting comes in. Try a month with it at one price, and then try a month with it at another price.
Some authors actually sell better (more books) when they raise their prices, though most of us find it easier to move more copies as the price lowers. If we want to maximize our monthly income, we have to play around and find the point of diminishing returns. I want to emphasize again that for those of us who can take emotion and pride out of the equation, the focus should be on monthly income and not on the price of the book at all.
*This is the point where I admit that I might be leaving money on the table because I don’t experiment all that much. I’ve sold them for less, but I’ve never tried selling my ebooks for more than $5. Remember up above where I said some people prefer to do what makes them content, even if it’s possible they’re not making as much as they could? That’s me. I’m comfortable with what I make, and I like the idea of keeping my ebooks a good value for readers. I’m not sharing my earnings with an agent or publisher, so this just seems fair to me. But if you’re not content right now, and you want to be earning more… I urge experimentation.
The more books, the more potential you have to earn
Here’s another one that seems obvious but which again gets overlooked, especially by those who bring the “But I want to at least make minimum wage” mindset to the table. Remember that $1,230 a year we’re earning from our $2.99 ebook that’s selling 50 copies a month? Let’s jump forward to the point where we have 10 novels, some novellas, and a few short stories out (that’s me right now, after three years of self-publishing). If all of your novels are selling 50 copies a month at $2.99 (for the record, I’m a mid-list author at best, and my worst selling novels sell quite a bit better than that), you’re now making $12,300 a year from your novels and probably a couple of thousand extra from your shorter works. So, yay, we’ve reached minimum wage.
That’s a pretty conservative estimate of what you could make with that much work out. If, in the process of publishing these novels, you’re able to gain some true fans, the types of people who tell their friends about your work, you might find that 50 sales a month per novel is very beatable (with a little spent on advertising here and there, my EE novels are still selling 300+ a month, though I’ve completed the series and moved on to other things).
You might also find that you have a break-out novel or two in the bunch. A couple of years ago, JA Konrath published his stats for his $140,000-month and we saw that a handful of his 40+ titles were responsible for the majority of his income. I talked about the Pareto Principle in that article, also known as the 80-20 rule. In our cases, it may very well end up that 20% of our work results in 80% of our income. My distribution isn’t quite so lopsided, but my EE series does account for the majority of my earnings. Back when I built websites and wrote content for a living, two of my 10-15 sites brought in the majority of my income. This kind of distribution happens all over the place. For most of us, the only way to have those breakout books is to publish a lot of books. It’s very hard to predict what will become a winner, but the more titles you have out there, the better your odds.
But I’ve drifted off topic a bit here. It never hurts to point out that for the majority of authors it’s going to take a lot of novels to build a full-time income, but my ultimate message here is to try and maximize your overall monthly income rather than getting hung up on the price of a particular book. Try free. Try 99 cents. Try 2.99. Heck, try 7.99 or 9.99 if you want. Experiment. Keep track of what works, and if you find that you make the most money pricing your ebooks at $0.99 or $4.32, then by all means, do so.