What to Charge for my Book?
How price to set the price for your about-to-be-published book is a question all self-publishing authors have to answer, and a common source of confusion for the first-time author.
Fortunately, there is precedence, and there are guidelines that you can follow. The market has done the testing, Amazon sets price incentives for ebooks, and there are fixed costs for print books below which you will be making a loss.
However pricing your book can still be confusing and potentially counter-intuitive, and what you see is not necessarily what you should do.
So, how to decide? When does a 99 cent ebook price make sense in the context of your business, versus going at the $9.99 you see in the listings next to yours? Is it better to go higher or lower for a print book? And what the heck's a wholesale discount?
There are multiple pricing options to fit different book and market environments. You need to do is understand how it works, so that you can decide what price(s) to set for your books.
Let's take a look at how to do that with our six simple rules of book pricing.
Rule 1: Factor in Cost of Production
For print books you must consider the cost of production. Although you may be tempted to print a higher quality book as a way to stand out from the competition, be aware of the impact on your retail price if you do this.
Will you still sell as many if your book is $25.00 compared to another author's (very similar) book priced at $11.99? Is $12.99 OK? $13.99?
It makes sense that you want to get the best price possible but, at some level your book is priced out of the market.
As you research the costs of self-publishing, it's vital to research the format and construction of other books in your genre.
A customer will appreciate the better quality paper, and the color images -- but -- only after they buy the book. Your top priority is to ensure that your book gets into the hands of readers, and therefore straying too far from the price of your competitors takes a lot of justification.
If the other books in your genre are small paperbacks with no color images then this might be the way you want to go as well.
Rule 2: Customer Expectations Count
The same goes for low pricing. Too high a price will take your book out of the market, but too low a price might give customer reason to pause and wonder if your book is sub par.
The same holds true for the materials you've chosen and the standards you've maintained when producing the book. Don’t try to undercut your competitors with sub-standard paper, bindings, poor formatting, or image quality.
Shoppers will notice, and even if the cover price is slightly lower, consumer reaction to your corner cutting will likely be unfavorable.
Book pricing is definitely one area where it makes sense to follow the herd.
Rule 3: Set The Wholesale Discount
You will need to align your final retail price so that it not only correlates to what competitors are charging and covers your production cost, but also leaves room for the middlemen (and women) to take their cut.
This is what's usually called the wholesaler discount -- it's the difference between what you (or your publisher) is getting, and the recommended retail price. It's also the reason why the royalties on print books are lower than you might expect.
The standard rate (more or less) that you offer your books to the retailer is at 55% off the final retail price (this is called the wholesale discount), and you, or your publisher, receive 45%.
If there is a distributor in the mix then their cut is between 15% and 20% of the wholesale price and the retailer will get a 40% discount from the retail price (leaving you a 40-45% share).
Let's look at some numbers: if you plan to sell your book with a $10.00 retail price then, with this model, the wholesaler would get the book for $4.50 and the retailer would get the book for about $6.00. Subtract a distributor fee of about 80 cents, assume the printing cost was about $1.20 and you are left with $2.50 in profit.
If you use the print-on-demand model it works slightly differently because there are fewer steps in the process -- there isn't usually a distributor, and the retailer and the wholesaler are often the same entity (as with Amazon) -- but print costs are higher, so the end profit for you is likely to be similar.
Phew, confusing I know, but the basic lesson is that with print books there are more factors to consider than just the print costs. You need to give a decent margin to retailers so that they can run price promotions and offers, and this all has to be factored into your selling price.
Rule 4: Not All ebook Prices Are Equal
When it comes to ebook earnings, it can be just as complex.
Whether you're publishing directly with Amazon kindle direct publishing, or you're working with a self-publishing service, the model is very similar and pricing incentives are set to bring pricing into a range that retailers have found to be the sweet spot for sales.
At the bottom end of the range, most online ebook retailers won't sell your book for less than 99 cents.
And most have a sliding royalty scale, based on price. With Amazon for example, if your kindle book is priced between $2.99 and $9.99 (or the equivalent in other currencies), the royalty share for the author / publisher is 70%. (there are some exceptions where it's lower, but these are a tiny minority.) At any price above or below this range, Amazon pays a 35% royalty.
It's very tempting to go at the higher end of the range, thinking this will lead to more income and better credibility.
But the top priority for a new author is usually to establish your author platform and build a loyal fan base, and lower prices can entice a customer to take a chance on an unknown author. And more customers usually means more favorable reviews, all of which helps later sales.
Try pricing at $2.99, or even below, maybe as low as 99 cents for a period -- all for the sake of wider reach.
Rule 5: 'Ask' Your Audience
Consider gathering some market intelligence about what prices people are prepared to pay. Segmenting emails to your email list, or running an ad campaign with split tested ads leading to different landing pages need not be expensive and can be very insightful.
The versatile demographic targeting options make Facebook the perfect platform to run this type of test. In a way, you will be surveying your audience but with direct results.
Create a series of three ads for your book that target the demographics appropriate to your genre, selecting people who like authors similar to you, for example. Set a different price to display on the ad, or to have on a dummy page after the click, and watch what happens. You can always reward those people who do actually click through with a free book, or sell a pdf copy so they are not disappointed.
Rule 6: High Prices Can Hurt You
It's a good idea to align price with authority, but outlandish prices can turn customers off. Book pricing has been a tightly controlled sector and even now publishers operate similar pricing strategies, with little or no experimentation.
Don't break the mold on this. Keep the price of your book -- whatever the format -- in line with what the industry deems 'normal' for your type of book.
Your goal should be to refine at a micro level to find the optimal price, that brings you the best results.
Bonus Rule: It's Not Life or Death!
Even though the price at which you set your book may seem like a life or death decision, don’t let it intimidate you.
Stick with what works, do a little experimentation to optimize and test, and see what happens.
If the price is not working out then change it.
Consumers are used to seeing prices change on products from all industries. Just make sure to avoid sticker shock by going too high any cheapening of your brand value by going too low.
And you'll probably have the best results by having fun with it!
This post is written by James A. Rose. James is a writer for Instant Publisher, a self-publishing company that specializes in transforming author dreams into reality. Instant Publisher has been providing exceptional and affordable service to writers for the past 15 years and aims to make the publishing process is efficient and painless.
We'd love to know how you decided to price your book -- and what results that's had for you.