How To Price Your Book - 99c or $2.99? July Update

As noted in the earlier article, 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 tried to answer that question in a 'controlled experiment' with my thriller 'Take No More'.

For three months 'Take No More' was on Kindle at $2.99 (£1.71 in the UK) and sales were:

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 in June by reducing the price to 99c / 86p. Sales were:

June (99c / 86p) 274 UK 62 US 12 DE

The reduction in price had produced an over three-fold increase in sales in the UK compared with May. But it produced a slight decrease in sales in the US. It appeared that US readers do not respond well to discounted books while, in contrast, UK readers reacted well to the lower price. Three times as many books were sold in the UK but the result was to halve the royalty.

Taking everything into account, it was concluded that $2.99 /£1.66 was the best price combination and this was used for July. When VAT was added the UK price was £1.91. The Germany price was €2,99.

So, what happened in July? Here are the sales figures:

July ($2.99 / £1.91) 168 UK 24 US 19 DE

In revenue terms, this is a big improvement over June. Because of the difference in royalty rate (70% in July compared with 35% in June) and price, each book sold in July would have required sales in June of 6 books in the US and 4.5 books in the UK. Or, put another way, to achieve the same royalty in June as in July would have required 144 sales in the US and 756 sales in the UK. Overall, the July royalty is over double that of June.

Within this, the US sales are disappointing. Does this reflect the effect of increasing the price from 99c to $2.99? I don't think so. There is an additional factor coming into play and that is the tightening of promotional opportunities in the US. This is progressing with such rapidity that many indie authors risk being frozen out of the US market.

Amazon changed its policy on its discussion forums during the period. Allegedly bowing to pressure from customers complaining about excessive self promotion from authors in its forums, it banned self promotion of any kind in all forums, setting up a new 'Meet Our Authors' (MOA) forum where self promotion is allowed. Discussion threads from other forums, many with posts going back several years and initiated by amazon themselves (e.g. Esmie) where self promotion was the norm were shifted into MOA.

The problem? MOA is a ghetto. Readers want information on what they want to read – tell me about thrillers or mystery or romance or suspense – they don't want to meet authors for the sake of it, well not that often anyway. We don't have discussion forum visitor numbers but it is likely that these are low for MOA. And since there is now a large number of authors all posting in the same forum, the 'life' of each post is low; your post gets sent down to page two or three within a few minutes.

Elsewhere, on the 'cleaned up' forums, the policy against any self promotion is strictly enforced, even down to preventing authors from leaving a link to their book as a tag line. Go to a forum like 'Thriller' and you'll find a trail of posts 'deleted by amazon….' If your post is so deleted, you're in danger of receiving an email rebuke from amazon. Mine, from 'Jamie' treated me like a miscreant and threatened to 'remove all posting privileges' if I was found to be self promoting outside of MOA again. And, without the indie author input, the large majority of these posts is devoid of content and the liveliness that was once there.

Why is this important? Well, simply, while no author can be sure where sales derive from, a significant fraction of sales for indies derive from these forums. In all probability, it is this change, rather than the price increase, that has resulted in decreased sales for 'Take No More' in the US in July. On the impact of the introduction of MOA, you don't have to take my word for it. Check out the thread 'Sales Dropping like a Stone' where, in 4,000 posts and rising, indie authors are lamenting the change.

Why has amazon done this? Well, on one level, it's their show and they have money to make and they can do what they like. Period. But why would this change benefit them? We can only speculate.

Is it simply functional? The terms and conditions of using the discussion forums clearly prohibit self promotion. This is meant to prevent someone marketing, say, shoe polish, from continually posting that their shoe polish is great. That is sensible. The idea of the forums is that you or I buy the shoe polish, use it, think it's great and, good amazon customers that we are, post to tell others about it. Why should authors be treated any differently? Their books are mere products, after all. Add to this the small number of users of the forums who object to posts from writers that self promote and, the case would be, that amazon has been forced to respond to keeping the integrity of its forums by setting up MOA and 'cleaning up' the remaining forums. Hence my email warning letter from Jamie.

As authors, we would want to claim that our books are not like shoe polish, mere products. We need to let readers know what's in them since, unlike shoe polish, that's not going to be readily apparent. And we need to do this in the places where readers are asking, which is the best thriller, the best romance….? But, amazon does not buy this. We would say this, wouldn't we? Why should we get special treatement.

Is it something deeper? It's not difficult to see this as a wider attempt to freeze indie authors out of the picture. We were useful when the game was all about establishing Kindle as the premier e-reader. All those free books – and all that new writing talent. But saturation of sales for the Kindle device cannot be far away and the focus shifts from selling the device to making money from what goes on the device. Amazon does not make much money from indie authors. We're all too keen to compete with each other by lowering our prices or even coming up with schemes to give our work away for free. Meanwhile, look a those big publishers over there. They sell their books at reasonable prices; selling just one of those could net amazon ten or twenty times what they would get from selling an indie book. So the big publishers, many of whom have been slow to 'get' the ebook thing, have become attractive and those big publishers now want a slice of the action. So freezing out the indie authors makes economic sense. They've done their job.

That's the case for a wider conspiracy. It's strengthened when amazon launches campaigns like 'Big Summer Sale' and places an ad and a link to it on each and every indie author book page. It’s a pretty sure sign that amazon has other priorities. The pace of movement is so great that it is possible to see a situation in, say, a year's time when nearly all ebook sales on amazon will be controlled by the big publishers, along the way, delivering more revenue for amazon than indie book sales ever did. That's going to appeal to a company that is currently long on turnover and short on profits.

Why is this connected to the discussion forums? Indie authors have little or no budget for promotion. The big publishers have deep pockets and can assign a promotion budget to each book. Take away the discussion forums and you take away the main no-cost promotion tool and that shifts the balance decidedly in favor of the big publishers.

And you can deepen the conspiracy theory if you wish. It would take little for a few unnamed individuals to drum up a campaign of complaint against indie author posts that self promote. Whether by accident or design, amazon has lent an appreciative ear.

So, this has been a longish diversion from the discussion of the sales figures for one particular book ('Take No More') in one particular month. But, I hope you will agree, it raises some important issues. As indie authors, we may have to get wise to the fact that, like indie film makers or music makers, we're going to find it increasingly difficult to compete against the majors. We may have to find new outlets as we get progressively squeezed out of what had seemed like a secure comfort zone.

And that's a shame.

Jeff Bezos' wiki page gives the following: 'As described by Condé Nast's Portfolio.com, he "is at once a happy-go-lucky mogul and a notorious micromanager. ... an executive who wants to know about everything from contract minutiae to how he is quoted in all Amazon press releases."

So, Mr Bezos, if you're listenting, why not have a rethink on this?

I'd like to finish by thanking everyone who's shown an interest in 'Take No More' since it's release and especially to those readers who've bought it. I am very grateful. And, yes, I remain grateful to Mr Bezos and amazon for the opportunity to publish with Kindle.





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11 comments:

S.L. Pierce said...

Wow, what a fantastic post Seb. First, thanks for sharing the results of the price change. Second, you would think Amazon would love the less than 2.99 books since they keep 65% of that money. Amazon should realize there is room for everyone and making 65 cents per dollar is nothing to dismiss! And yes I realize that you have to sell more 99 cent books but still 65 cents on the dollar is a great profit.
Again, Thanks Seb!

Errol Black said...

Great article Seb. Your sales figures are very impressive 99c or $2.99. Keep up the good work, buddy!

Simon

Linda Acaster said...

Wow, indeed. I was expecting a simple figures post. If your take on the future, and you're not the only one, is halfway correct, we indies are going to be in for a very bumpy ride. It will, in fact, just be like dealing with the print industry.

And Seb, your figures are impressive regardless. Well done.

Seb said...

S L

Hi! That's a good point I hadn't thought through. I guess the 65% that amazon keeps on the low price books offer it some compensation for the low price and makes that more attractive to them. But the odds are still against us, I think, if we price cheaply. 65% of 99c is about 65c. 35% of $2.99 is about $1.05. So, amazon is still making more on the higher price. Plus that $2.99 is still bargain basement for a big publisher. They're happier with $4.99 and above and then amazon is really in pocket!

Hope all goes well with you, and thanks for posting!

Seb said...

Errol

Thanks for the post. I'll keep working at it!

Best wishes

Seb

Seb said...

Linda

Hi!

Yes, that's a very god way of looking at it. The print industry will be on top of ebook publishing just as the record and film industries are ruled by the concerns of the majors.

It's not all gloomy though. Perhaps realistic would be a better word! I want to write a piece next on how J K Rowling is a stand out example of how indie publishers can respond. Her decision to market her ebook versions of the Harry Potter series is a key moment, in my view.

Linda Acaster said...

I've not been keeping up with JKR; is she doing it indie (can't believe her publishers would allow her to). There again, the estate of Catherine Cookson decided to go it alone, with appalling covers in my estimation. How they expect to sell overseas & to a younger generation who haven't seen the tv series I don't know.

Regarding Amazon's slice of 99c/$2.99 pricing, and following on from SLPierce, Amazon did make the decision to raise the author's royalty to 70% on $2.99... and the majority of authors raised their cover price to suit. Amazon gets $0.897 + transmission fee of 4-5c for mine. We don't, of course, know how much of that is profit for Amazon, but when e-sales outstrip all print sales it falls into the 'stack 'em high, sell 'em cheap' slot.

Amazon are beginning to push Singles, originally for non-fiction. If the kdp conversion system is up to it, it will be interesting to see if another division will appear, whereby shorter than X can be priced at 99c but longer than X (ie novellas+) will have to rise to ??

Linda

Robin Sullivan said...

I applaud you for doing experimentation - it is great to see indie authors thinking about pricing and adjusting as that's what "real publishers do". My only complaint...is that you are only considering $0.99 and $2.99. My small press prices our books at just under $5 ($4.95) and we sell thousands (and tens of thousands) of books each month. Some examples: Nahtan Lowell 9,500 books in July, Marshal Thomas 19,500 books in July, Leslie Ann Moore 5,500 books in July, Michael J. Sullivan 11,500 books in January). None of these are "big names" they are essentially "indie" unknowns but with the proper marketing you can make some really good money even above the $2.99 price point.

Just wanted to point out that there are other options in pricing - but as I started remember - to test and document your experiments.

Robin Sullivan | Write2Publish | Ridan Publishing

Seb said...

Robin

Thanks for those comments and congratulations on those impressive sales figures.

Can I ask: are they for print books or ebooks?

I agree that it would be useful to test the market at higher price points. The problem as I see it is that most indie authors lack promotion resources and hence attempt to sell largely on low price alone since this is something in their control. This leads to a race to the bottom with 100,00 word novels offered at 99c or less - and even the resort of giving work away free to get attention.

So, what is it, do you think, that indies need to know to more effectively market their work and move away from low prices? If they knew that, I'm sure they would want to ask for higher prices, especially if they might lead to excellent sales figure like yours.

I agree with you on experimentation over price. Do I have the courage to try 'Take No More' at $3.99 or $4.99? That's one to think long and hard about!

Ms Kitty said...

I made up my mind when I hired a copy editor that I was going to sell 'Swallow the Moon' my paranormal, at $4.99.

I've got too much invested in it to sell it at pulp fiction prices.

Almost a year ago I found a table of prices by length - and posted it to my blog. It's the #1 read and tweeted post.

My books have to pay for themselves, and at $.99 they are going to take years. I sell just as many books per month at $.99 as I do at $2.99 or $4.99.

Robin is right. (waves at Robin)

Best wishes,
Kat

Rick Taubold said...

Let's just be sure we don't get caught up in the idea that just because the Big Guys sell their books for more we should follow suit. They're doing it out of greed to be sure, with the philosophy that people have no choice if they want the book.

As for me, if I consider a book overpriced, I simply won't buy it, no matter how badly I want it. For me this is especially true of overpriced trade paperbacks, but it also applies to e-books. There are enough good low-priced books out there that I'm not forced to pay higher prices for enjoyment.

I do think 99 cent books are often underpriced, but I also feel that more than $5 for an e-book is excessive.

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