Most writers are pretty good at writing, but when it comes to figuring out how to price our books, we flounder.
Here are a few tips on how to set the price of your e-book:
- You can no longer get away with offering different prices on different websites. You guarantee Amazon that you will not price your book lower on any other distribution channel.. Now the other retailers are taking a similar stand. So you have to choose one price for everyone, else you risk being banned, particularly by Amazon.
- Don't under-value your book. True, the electronic copy doesn't cost anything in terms of printing and shipping, but your time and your knowledge are worth a great deal.
- Don't over-price. With so many ebooks available at really low prices, readers are not likely to pay the same price for an ebook as they would for a paper copy.
- The happy range of prices seems to be settling itself out at between $2.99 and $9.99. But give yourself room to lower the price when you need to stimulate lagging sales. If you start at $0.99, you have nowhere to go.
- Remember the advantage of also selling a paper version of your book. If the hard copy costs $19.95, as it may have to to cover costs, then your $5.95 ebook will look like a real bargain.
- Occasionally offering a book for free may gain you more readers, but there are other ways to do the same thing. Consider offering the book for a set price but adding something else for free -- an electronic autograph, an "insiders" peek at your next book, an informative newsletter, or the password to a website exclusively for your readers.
Authors also need to be smart about their royalties, particularly on Amazon. The 70% royalty seems like a no-brainer, but it's really not. Here's what Amazon doesn't tell you unless you read the small print:
- If you choose 70% , they will subtract from your royalty any cost for distribution. For a simple ebook, here may be very little cost. But a huge book, or one that is full of photographs, may result in a hefty charge that wipes out the additional royalty. If you choose 35%, Amazon pays all distribution costs, no matter how high.
- With the 70% option, if Amazon is forced to "price-match" your book to other retailers, they will pay royalties only on the reduced price. If you are at 35%, they pay royalties on the original price.
- Here's what happened in my case. I had a $2.99 e-book on Amazon. B & N offered a special promotion that dropped price temporarily to $0.99. Amazon followed suit. Since I had the 70% option, they paid me 70% of $.99 = $0.69 per book. When I changed my royalty rate to 35%, they paid 35% of $2.99 = $1.05. And yes, they did so even though they were only getting $0.99 for each book.
- That option only exists if you are NOT enrolled in KDP Select, of course, since there's no price-matching if you only have one sales channel. But do note that you can change your royalty rate at any time, although the change will result in your book being put back into "draft" status" for a day or so.
Tip #14: Money really does matter. You need to pay attention to pricing.