How to price your book - $2.99 or 99c?
One of the best features of amazon Kindle DP is that as the author you can set the price of your book. But that raises the question, what is the best price to set? I've tried to answer that question in a 'controlled experiment' with my thriller 'Take No More'.
For three months 'Take No More' had been on Kindle at $2.99 (£1.71 in the UK) and I'd been promoting it through the usual channels available to an indie author – Facebook, Twitter, amazon Discussion Forums, Kindleboards, etc. Sales were reasonable but unspectacular, as shown here for the months of March, April and May. (Note that $2.99 /£1.71 is the lowest price that can be set to qualify for the 70% royalty rate offered by amazon and that all the UK prices here include VAT, a 20% local tax levied on ebooks but not on print books!)
March ($2.99 /£1.71) 76 UK 14 US
April ($2.99 /£1.71) 106 UK 16 US 1 DE
May ($2.99 /£1.71) 84 UK 67 US 0 DE
I decided to experiment for one month by reducing the price to 99c / 86p. This is the minimum price that can be set at amazon and it qualifies for a 30% royalty rate. Would this produce more sales? Would it produce a better result?
Because of the lower price and the lower royalty rate, six times as many books have to be sold at 99c / 86p compared with $2.99 /£1.71 to get the same financial return. However, set against this is the satisfaction and publicity value of getting more books into the hands of readers.
Here are the figures for June:
June (99c / 86p) 274 UK 62 US 12 DE
The reduction in price has produced an over three-fold increase in sales in the UK compared with May. But it has produced a slight decrease in sales in the US. The level of promotion was essentially the same in both countries. Another surprise was the beginnings of meaningful sales in Germany. (The market there for books in English is always going to be small, but perhaps it is price sensitive).
It appears that US readers do not respond well to discounted books. Perhaps there is an overexposure to heavily discounted print books that are known to have failed to sell at their published price and discounted ebooks are then in the same way regarded as books of poor quality.
In contrast, UK readers react well to the lower price. This does not seem to be anything like as much associated with the idea that low price books might be of poor quality. UK readers grab a bargain if they like the look of what they see. But, as the June numbers show, from a financial point of view, this is not a good deal for the author. Three times as many books were sold but the result is to halve the royalty.
So, this is the beginning of the dilemma in setting the price for your book. Certainly, for 'Take No More', the best combination would appear to be $2.99 in the US and 86p (or lower) in the UK. But amazon does not allow these prices to be set independently in the two countries. You must choose one or the other - $2.99 /£1.71 or higher for the 70% royalty rate or 99c / 86p or higher for the 30% rate.
Much will depend on the motivation and the position of the author. Do you want to get your book into the hands of the most readers possible? Apart from author satisfaction, this may be particularly useful if you have a large number of books on Kindle or a series of books based around the same character. Selling more books at the lower price might allow readers to get to know your work and then buy your other titles. That might be thought of as the conventional wisdom on this. But there are at least two complications.
It is by no means clear that US readers respond to discounted books in a positive way. OK, there may be an artifact in the result in June for 'Take No More'. There were some extraneous factors. Amazon introduced a 'Summer Sunshine Sale', discounting the price of big name authors from the large publishers. It ran for the first two weeks of June with an advert for the Sale on every indie authors book page! This was rightly regarded as a low move by most indie authors. However, there was no real difference in sales for 'Take No More' in the US between the first and last halves of June, suggesting that the Sunshine Sale had little effect. The second artifact is that amazon enforced a tightened policy over what is allowable as promotion by indie authors on its Discsussion Forums in the US. It is probable that this depressed sales of the book, but the extent of this will only become clear in future months. (There is no space here to write about amazon policy in this area – I'll save it for a separate article.)
The second factor that mitigates against a straightforward adoption of the lower price comes from an observation of J A Konrath in a different context – how do you know that readers actually read your book once they've downloaded it to their Kindle? A Kindle can store up to 3,000 books. It's like a mobile library. People don't read all of the books in a library. How many books do you have on your Kindle that you intend to read but haven't got round to reading yet? So, the point is, if readers get the offer of your book for 99c, do they put the same attention into the decision to buy than when the book is offered at $2.99. And if they give less thought about buying the lower price book, are they less likely to be committed to reading it once they have downloaded it? If the answer to these questions is 'yes', then selling more low price books may actually lead to less, rather than more, actual readers of your book.
The result for 'Take No More' in July is that the price has gone back to $2.99 on the 70% royalty. I set the UK price at £1.66, expecting that the 20% VAT added would then bring the displayed price to £1.99. However, a small surprise, because the book had been doing well in terms of sales in June, amazon offered its own discount on the book so that it now appears at £1.58! Perhaps that's another reason for a short period at the lower price, increased recognition of the market potential of your book by amazon!
Overall, I would judge that the case for offering the book at the lower price is not made. There may be advantages in short periods at the lower price. However, this will require careful management if readers who buy at the higher price are not to be alienated when they then see the lower price offered.
So, I hope that this experience of mine over the last month will prove useful in setting the price of your book.
I know that there are many views on this, many counter to the above, and I'd love to hear them.
I'd also like to thank those readers who've bought 'Take No More' so far for their interest and support.
I'd also like to thank the wonderful author friends (you know who you are!) who've helped to get the word out about the book. I hope I'm able to be as helpful in getting your work known as you have been with mine.
It will be interesting to see how 'Take No More' fares in July at the new price. Can the US sales be increased? Can the UK sales be maintained or increased?
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