Pricing of anything is not an exact science, but it seems like eBooks have even further to go than other media as eBooks do have a "perceived value". On the other hand, it is possible to drop too low, the fact being that most people in a capitalist society interpret "free" as "low quality". After all, if it was any good, why wouldn't you charge money for it? By the same token, how often do you hear, "you get what you pay for"? Most consumers are going to think that a $1 eBook won't be as good as a $10 eBook. It's the way we're conditioned. If you charge too little, people think it's not going to be good enough to be worth their time in the first place.
So what's the answer?
The first thing to ask yourself in pricing is what are you charging for? I agree that authors should be compensated for their work, and that publishers have to pay their bills as well. Maybe content should have some sort of base price, the value of the information itself. Onto that publishers could tack on the actual cost of producing the media.
Let’s set up a model as an example.
Let's suppose the "base price" for a typical novel is $4.00, split evenly between the author and publisher (to cover editing, publicity, etc.). That's already much more than most novelists make per copy sold. So onto those four dollars, we add:
For an eBook, which has minimal production cost, and just the cost of maintaining the server and ecommerce system as overhead, we'll tack on one dollar. EBook Price: $5.00
For a paperback, which costs about a dollar to produce and another to distribute, we'll add two. Paperback Price: $6.00
For a hardcover, we'll add about four dollars to cover production and another two for distribution. Hardcover Price: $10.00
For an audio book, we'll add about four dollars to cover the production and cost of media. Audiobook Price: $8.00
In this model, writers get what they'd currently get just for hardcovers for every copy sold, publishers get a fair share of the pie, and the rest of the saving are passed on to the consumer. The actual content costs the same, regardless of media, and the price differentials are based only on the consumer's choice of medium.
So how does an author set the price of their eBooks?
Lots of ideas came to mind. Below is just a few of what I thought about.
What is my book worth to me as an author?
Everyone will be different with their thoughts and it will depend on many factors. I have included the time it takes to write a book. The cost preparing the book for publication- inexperienced writers can take weeks designing book covers, formatting, self-editing and proofing their book. Professional services are invaluable but come at a high cost. Most writers with little capital will defer turning to an editor at first.
What will customers pay for a book written by a relatively unknown author?
With a relatively unknown author, quality is an unknown part of the equation. The reader’s perception of the quality of the work is a serious obstacle for the author of a new book to overcome.
Can I change the price?
Whatever price is set, it can be changed to either increase, or decrease the retail price. I would think that a writer could become known for their pricing, so strategy could be a problem.
Does the market place govern price?
Pricing strategies have changed rapidly in the eBook market. Traditionally more eReaders on the market increased eBook sales. Last year Amazon announced commission structure changes, many authors reduced, or increased their price to the minimum $2.99 to give them the 70% commission ($2.00 royalty). Others stayed at, or reduced their prices to $0.99, which would only give them 35% commission ($0.35 royalty.) Two things happened. A lot who increased their price saw a dramatic drop in sales (but not necessarily income.) while others who chose $0.99, saw their sales take off (but not necessarily their income). Those authors with books set at 0.99′s seemed to win out as their books gained higher rankings, which can escalate the overall sales of a book. The inevitable happened and many reverted to a $0.99 price, together with new authors joining and setting this price to gain a reader base. Now the $0.99 price no longer has the same effect. For traditional publishers, the reverse seems to be happening; with quite a few of their new eBook releases priced the same as their printed books.
If I set a low price, how will my work be perceived?
Some readers’ opinions as to the quality of cheap books are. “You get what you pay for.” Some say they will never buy books at $0.99 after a bad experience. Reviews and word of mouth go a long way in the writing place. Some readers will purchase at this price point to give the author a chance. From my understanding, readers will generally pay up to $5.49 for an indie book, but only after looking at every aspect of what is on offer, which may include reading a sample.
Why would I change my price –what would make me do this?
Indie Writers are at the mercy of the eBook distributors. Up until now they have been quite happy to allow Indies to publish their eBooks at low prices and sometimes to offer books for free. For some readers new to buying devices, it makes the offering tempting against buying printed books when they see the low prices of eBooks. This situation is changing as the market matures. There is nothing for the distributors to be gained by offering books free in terms of revenue and it would be easy for them to alter commission structures, or have minimum prices to generate additional revenue when the market becomes stale. They could also alter the algorithms of their system to favour the visibility of higher priced books, or newly released books. I think it is worth experimenting with price. There is nothing wrong with trying a higher price first, or moving the price upward once a book gains momentum by achieving a rank.
Why do some writers put their work out for free?
7. Saying all that, free can be a useful marketing tool, it can be used to give away short samples of your work, in the hope of convincing readers that your longer work is worth buying and create a following for yourself. Before you do though, think about the following. Some people will only ever download free books and will not buy your other works. Some will download everything in sight, to the extent that they will never get round to reading it. This is the same for other price points.
For me, at the end of the day I wish to be fair, honest and not avaricious. I also have to eat! So I have priced my book, The Assassins’ Village at $2.99. My other book, The Crossing is published in London and the price is controlled by my publisher, so it may be slightly higher – but at 130,000 words it is a Quality, long read!
Last year, Amazon decided it wanted to negotiate prices for with traditional publishers to retail at no more than $9.99. McMillan and others fought this. The result was that Mc Millan’s catalogue was pulled. The loss of McMillan meant that Amazon no longer had the number one best seller, other than through third parties. As the largest retailer of books, for Amazon, this situation would have given consumers a reason to buy other that the kindle platform. This year they caved in to McMillan. This is the reason customers are now complaining as new releases are coming through at prices in some cases of dearer than the paper book.
Traditional publishers see the future as flexible pricing for their products. e.g., starting at say$15.99 at release and reducing over time to $5.99. This situation gives the indie a price point to work with between $0.99 and $5.49, to remain competitive and to overcome the notion of quality to price for indie books.
It also gives the indie a price point to work toward when formatting for POD to remain competitive and to be able to retail a paper book at $9.99.