By drcorneilus (beginning reader)
[CC-BY-2.0 (http://creativecommons.org
/licenses/by/2.0)],
via Wikimedia Commons
I wanted to do a simple post about income to authors from sales of e-books, and how much a typical author may make per e-book sold on Amazon as the main example.

As I began to write it I realised there is much more to this blog post than just black and white sums on money.

Pricing in the ebook industry is an emotive subject, and as an author and a reader I can see both sides.

I personally consider that how much someone will pay for an ebook depends on what their perception of value is.

Does the purchaser equate the cost of a book with the cost of a coffee? Or are they using their last $3 to buy a book?

Either way, as an author it is vital to be in that middle ground where people perceive your book as being good value. This could be as simple as setting the perfect price. Or as nebulous as understanding your own value as an author. 

Kian's Hunter is out today and I am charging $2.99 for it. It is 26,000 words. I probably won't make many sales on it as people tend to prefer me for my contemporary writing, but it is a story close to my heart and I wanted it back out there. Cover art, editing, marketing, it all costs money. I will need to sell quite a few copies to cover those charges, but it doesn't matter, that story is available and I can smile that it's done and with readers. The price is the one that Love Lane place on any Novella up to 35,000 words... or thereabouts... ish...

That being said, having discussions with hubby on price got me thinking about the whys and wherefores of pricing.

"Ebook sales have surpassed printed books on Amazon.com, but the publishing industry continues to wrestle with the issue of how to price ebooks competitively, while still providing a reasonable profit for authors and publishers." (1)

Did you know?

On Kindle - an author/publisher will receive 70% royalty if the ebook meets certain requirements, one of those requirements is that the book is priced between $2.99 and $9.99 (although there is a new category which complicates it further!). If the book is outside this range the author/publisher only earns 35% instead of 70%.

Therefore you will find a lot of authors have their books at a minimum of $2.99.

Example

By Kgbo (Own work) [CC-BY-SA-3.0
(http://creativecommons.org/licenses/by-sa/3.0)],
via Wikimedia Commons
For example, the following illustrates the incomes for a non-agent represented $2.99 Kindle book sold on Amazon.com to someone in the US.

Self Published authors:

Sale price: $2.99
Amazon percentage: $0.90
Amazon download charges etc: $0.04
Income to an author who self publishes $2.05 per kindle book sold

Authors with a publisher who offers a fairly standard 40/60 split on royalties:

Sale price: $2.99
Amazon percentage: $0.90
Amazon download charges etc: $0.04
Income to the publisher: $2.05
Income to an author with a publisher is $0.82 per e-book sold

Proviso, these are rough amounts, not specific, and there are differences along the line, not least of which are conversion rates on currency.

Setting a price

There are factors helping to decide on how to set a price. I can't talk for the publishers and how they set their prices but there are interesting questions to answer for the author who self publishes. There are whole discussions to be had on supply and demand, perception of value, whether your heart rules your head or the other way around and so on.

What is a book worth to the reader?

From my point of view as a reader, I have auto buy authors and I pretty much don't care what they charge, I will buy them... looks pointedly at my list of auto buy authors on the right hand side of this blog! Would I think differently if their book was low at 99c or high at 9.99? No, because I have a perception of there being a 'good value' in the reading of anything they write, and I know these authors will deliver me a good story, a 99c price doesn't devalue them to me, and a higher price won't put me off. My latest autobuy for example was a book priced up at over $8.

Talking of the 99c book

Another question is whether an author selling their book at 99c makes more sales? Does this price devalue the book? Are people suspicious of content or quality? Is there in fact an actual price that people see which means they feel the book will be *good*? There are a lot of authors, both in our genre and outside, who successfully use the 99c price point. Especially when the 99c book is the perfect impulse buy for people to try out your writing. 

Fireman/Cop is at 99c, as a hook for the rest of the series. This was a marketing initiative from Totally Bound, I probably need to discuss whether it worked, to inform my own pricing strategy! 

Thoughts on 99c books?

Buying from a publisher vs buying from Amazon

Another hot question is whether a reader should buy direct from a publisher, or whether they should go to Amazon/B&N/ARe etc.

I can't speak for other authors, but my major market is Amazon. However, I know for example one close author friend has her biggest market on All Romance. It seems to depend on the author. 

Thing is, and this is only my opinion, I would prefer sales through Amazon, just because you are then more able to sell enough to get at least into the top 100. The visibility of being on that list can then lead to more sales. So even though the author makes more money when someone buys direct from a publisher, at the end of the day, you may drop from visibility there and sales will drop.

It seems you can't fight the behemoth that is Amazon.

Returns

I have no words on Amazon's policy on e-book returns... ROFL... literally... don't get me started...

Piracy and price

I'm not sure you want to get me started on how many MM books are pirated either... Some people say the pirates wouldn't have bought the book in the first place so we're not losing anything. I don't know. I'm so over it now...

But... there will always be pirating, simply because $0.00 is a very good price to pay for any word count! But like returns, every book lost is income lost, which could potentially affect the price of the book to those who pay. Sighs...

Summary

At the end of the day, the 'balance of pricing' is maximising profit vs the possible kudos of big sales vs loss leaders vs getting to the top 100 on Amazon and being visible. I wish I could say it is easy being able to find that perfect price, or having a valid opinion on what prices should be... if anyone feels they have the answer, please tell me!

And yes, I know I went on a bit, but I'm hoping there are some points to debate in here... :)


(1) http://bookmarketingmaven.typepad.com/ezine/ebook-pricing-strategies.html

Useful articles:
http://jakonrath.blogspot.co.uk/2011/03/guest-post-by-john-locke.html
http://www.thecreativepenn.com/2011/04/24/99-cent-ebook/



8 comments:

  1. This is a very interesting topic. With my latest self-pubbed piece, I set the price at 99 cents for the first five days, then put it up to the regular price of 2.99. It got a lot of exposure that way. I also made it exclusive to Amazon; I sell most there, and I am convinced Amazon shows your stories to more people when they are exclusive. (I don't have evidence except from watching how my own books do.) So I tried three things for that book: 99 cent launch, exclusive to Amazon, and 2.99 regular price.

    It worked. It got exposure and has sold well. But...I don't know if it would have sold well with another strategy, too. Maybe people just liked the cover art! :-)

    The important thing is to keep trying new stuff, I think. When working with a publisher, they set pricing and launch date and everything else. But when you do it yourself, you can experiment, and I think it's one of the reasons everyone should consider at least dipping a toe into self-publishing.

    The hard thing for a writer is to get your book noticed. If people notice, some of them will try and like your writing. So the more eyes you can get on your work the better. I'm not good at a lot of stuff that gets people to look at your stories, like connecting on Facebook and Twitter...but getting noticed on Amazon is really important.....

    Any more talk on this subject from me and this comment would become a tome, but thanks for sharing your thoughts here :-)

    ReplyDelete
  2. Sooo Kian is available today??? Love Lane says available yesterday but wont allow purchasing.

    I know Amazon is a good place for authors, but as a reader I absolutely hate it, being tied to Kindle apps/programs.

    Especially using Kian as an example, my own ebook filing system is a folder for each of my favourite authors, within said folder I name the book, for example - Fire 01 - Kian - R.J. Scott.

    However once I put that book within Kindle programs the series name/number is gone, trying to remember the read order for series can be very frustrating, so much so I have recently given up on all Kindle Apps/Programs, and now have a Tablet and a book app (Moon Reader+), upload my books to dropbox, and hey presto they keep the names I give them and can easily read books in the order I want

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  3. As I get my copyrights returned to me at the end of their contracts, I'm self-publishing them, at a fair bit less than the publisher charged. They've done quite well - given that I'm not anywhere near RJ's sales level - and Amazon is where they sell the most, with ARe in a distant second place and Smashwords trailing in last. As long as I make enough to cover the cost of the cover art *g*, I'll be happy. One of the books coming back to me soon is a m/f paranormal romance, so I'll be going for Amazon only and its 70% royalties with that one, and maybe even a paperback so I can get it into libraries. It's a 78k novel, and the ebook is currently priced by the publisher at $7.99 - I'll probably slap a price of $4.99 on it and hope for the best...

    ReplyDelete
    Replies
    1. You mentioned libraries. Thank you! I love my library. It has an extensive digital book collection. Including titles from Dreamspinner and Riptide. A couple other publishers send both M/M and M/F books. Borrowing is so easy. I could go on for days about libraries. But, I won't. ;)

      ~ jillw

      Delete
  4. This is quite an interesting post, RJ! I've decided to try my hand at self-publishing, as soon as I get money to pay for edits, and pricing ebooks has been one of the things I've been researching. I do believe most publisher's are a bit pricey, so I will set up my own wordcount--->price list. I don't want to price anything too high.

    Your examples on the earning of royalties... That's a big reason why I have decided to self-publish. I earn only a third of what I could've earned if I'd self-published and it's kind of aggravating. ^^;;

    I think 99c books are a great price for short stories. Also as sales prices on longer works, for a short period of time. Or, as with your Fireman/Cop book, as an intro to a series.

    I like Amazon, I do. I always buy paperbacks and such from them, but I'm not much fan of Kindle. I have an iPad mini I do all my reading on, and I much prefer iBooks. Maybe Kindle would work better for me if I had an actual Kindle, but for now, I don't like to buy ebooks off of Amazon. (I also think Amazon should post word counts on books, because I have no idea how many words a book are out of page counts ^^;;)

    ReplyDelete
  5. I'm one of those people who has to carefully watch what I spend, so I appreciate reasonably priced books. To me,value counts but if there's no money, there's no money. I miss a lot of books because of it.

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  6. As a reader I will take a chance on a new series or author if I can find a 99 cent book. Otherwise, a new to me author has to be highly recommended by my reading buddies. Once I decide that author writes what I like, then I'm pretty flexible on price. Although, there are times I don't have the option to spend money and depend on my library for books. :-( Thankfully, that's not always the case.

    ReplyDelete
  7. By the way, I'm finding this book very helpful when it comes to writing keywords and descriptions for Amazon. :) I haven't done much of what he suggests, but what I have tried has been quite helpful so far. (It's not about pricing, just getting discovered on Amazon.)

    http://www.amazon.com/dp/B00E04F6D8

    ReplyDelete

 
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