The Price Point Problem

Now that you have finished your magnum opus, you are faced with the dilemma all independent authors must address. How do you decide the price for your masterpiece?

Traditionally-published authors don’t have to worry their pretty little heads about such things. Their publishers set the price, just as they also lift the burden of selecting cover art and distribution channels.

Indie authors have to do all that for ourselves. With print books, you know you have to set the price over the cost of production. At least you have a beginning point.

With your eBooks, you have to weigh the supposed virtues of the KDP Select program against whatever you could make if you risk testing the market appetite with some sort of price.

Lots of people have looked at this issue. Recently, David Biddle wrote an excellent piece on the subject.

As I see it, the problem with fixing the price point is that the more widely understood principles of markets do not apply well to books, and even less so to eBooks. The inherent value of a book is more akin to that of art. The value is perceived by the buyer rather than as a calculable sum over cost of production.

Like art, books are unique. Oh, we have our genres, the same way that painters have their various disciplines. Still, each author renders words to page from pure imagination. No two romances, police procedurals, or twinkling zombie books are quite alike. We each bring singular visions to our work.

This also means that there may not actually be a “sweet spot” in the price spectrum. Whether books similar to yours are priced at a certain range may have nothing to do with whether your book will move well at the same price.

I find the statistical analyses of these data to be suspect for those very reasons. Sure, somebody out there can tell you that books priced at such-and-such outsell books priced at this or that.

What they can’t tell you with any degree of confidence (I’m speaking of statistical confidence here) is how your book will do at any given price threshold. Your book will do whatever it does, and all a statistician can really say about that is that your book is over-performing or under-performing compared to other books in the same cohort.They won’t know why, and it may have nothing to do with price at all.

In a way, books are like tires on an icy road. They may sit and spin. They may inch forward, backward, or sideways. They also might just suddenly bite into the pavement and take off.

Though setting the best price for your book may be baffling, we do have the luxury of being able to change the prices of our books almost instantly. Experiment. If you want to do a giveaway, do it. Raise the price, lower the price, find your own sweet spot if there is one.

I don’t have the answers. The only thing I can really say is that the very top end of the spectrum didn’t do much for me. That doesn’t mean it wouldn’t work for you.

Author: Stephen Hise

Stephen Hise is the Evil Mastermind and founder of Indies Unlimited. Hise is an independent author and an avid supporter of the indie author movement. Learn more about Stephen at his website or his Amazon author page.

27 thoughts on “The Price Point Problem”

  1. E-Books end up being rather screwed in the price area, simply because the near-intangibility of them. As a “writer”, even I often have a very difficult time of spending more on an e-book than a DTB. If you go on Amazon, you see all the editions and the lowest prices laid out; it’s hard at times to trump that one cent plus shipping price from a Marketplace seller.

    Most of the books I buy are for research purposes (for playing trivia, writing quiz books, working on my long-delayed and mostly imagined OTR and comic book encyclopedias, etc.) so there are times when an e-book trumps a paperback: Searchability. If I need to be able to find a fact or passage at random, then I’ll buy the ebook first.

    It shouldn’t be that difficult though, when you look at a mass market paperback going for $8 at Wallyworld. $3 for an ebook should not be too high a price to pay for the same level of enjoyment.

  3. I’m setting my price at $1.5 million. Call me stupid. Call me dumb. But I only need one customer. And who cares if they actually read it. Maybe they just want to show someone they have it on their Kindle.
    Stephen, let me know if that’s unrealistic.
    Alternate plan: someone willing to spend $3.50 on a Grande, Deluxe, double decaff, upside-down, mocha machiato with a shot and skim milk, should be willing to spend $0.99 on my short story to read while drinking that bad boy.

      1. Rich, must be the same folks who demand their money back for bad tasting coffee.
        I am aware that my belief that people who spend that much on coffee should spend a buck on reading material–that belief is not the way the world works. Stephen is right. In the minds of the buying public, the cupajoe is standardized commodity and the books are not.

      2. Doesn’t that SUCK??? The only returns I’ve gotten were for dollar books.
        It looks like I had a FREE one returned.
        Ah well, at least it doesn’t cost anything to give them their money back.

  5. It’s even more frustrating when you consider the spinning if not whirling dervish to be your best work. My “100 Years of Brotherly Love” is a perfect example. Originally “Tiwa Valley Brothers in Blood” (a name change was done in effort to get it some attention) is one that spins and spins and spins. At $2.99, $4.99 $3.99 it spins and spins and spins. Up and down in price she went. Spin spin spin… I thought folks saw it as too western because of the cover, so I changed the cover. Spin spin spin…I changed it back. I did a giveaway one weekend. EVERYONE (and I do mean absolute strangers) who reviews this one gives it 5 stars, but that’s what? 6 copies in 3 years? I mean it is THAT slow!

    Finally, at $1.99 she’s getting traction! Whew! As they say, “I could write a book…”

    1. An excellent point, Linda and it underscores why I think it is a mistake to try to think of books as we do other commodities. The price may figure into the whole scheme of things, but I suspect the cost consideration weighs much smaller than many believe.

      Thanks.

  6. I jumped on the “we’re all undervaluing ourselves and our books!!” train at one point last year and raised the price of all my books by a dollar. Sales tanked. I guess I was at the sweet spot to start with.

    Unless my sweet spot is really $1.5 million. I haven’t mustered the courage to try that route yet. 😉

  7. I saw a piece of art at a fold festival last summer that was priced at thousands of dollars, and I made a comment to my family about how it took writers as long if not longer to write their books, yet they a expected to all but give them away. My mother said, but the artists only get to sell theirs once. I think of that often, because writers at least have the option of selling more than one copy and finding that combination of price and volume. I refuse to give mine away any more, but I am not holding them for ransom, either. So, $4.99 it is.

    1. I guess that’s true for the originals, but I know a number of artists also sell limited edition prints of their work. Maybe the analogy breaks down at a point, but the idea that the value is in the eye of the beholder is still generally true. I think. What do I know?

      1. Stephen, maybe a lot. When the demand is high enough, the value is in the eye of the seller (coffee). When the demand is not so high (readers of novels/short stories) the value is in the eye of the downloader.

        1. True, but in the case of books, overall demand may go this way or that, but the demand for a particular book is what makes it a real bestseller. Close doesn’t count. Nobody shopping for a Picasso is going to settle for a Picardo just because it’s cheaper.

  8. I agree that there is no forumla, Blue Book, or statistical answer.
    But I think there models that are emerging as workable for most books.

    Starting off low-end, then bumping new books as they come out makes a lof of sense. If you hit a fall-off, bring them back down. You found out people will buy it for $2.99 but not $3.99 so you’re ready to mega-pimp.

    Having a free or 99 cent loss leader in your line makes sense, as well.
    It’s all getting understood (and mutating) right before out eyes these days.

    1. You’re probably correct in that models are emerging. It is easy to forget how new all this is. In reality, a lot of the dust hasn’t settled yet. Great comment. Thanks Lin.

  9. The one stat I’d like to see, which is impossible to calculate, is how many free downloads actually get read. I’m really cynical about the value of that method. On my Kindle I can download more free books than I can hope to read, but even if I read a terrific free book, and then go in search of the author’s other work, I’m going to expect that to be for free as well – or wait till the author offers it for free.
    I think you once wrote, Steve, that giving free books away CAN build a fanbase – or it can just attract lots of people who like free stuff.
    It’s a minefield out there.

  10. Only time will tell what the perfect price point is … or maybe it won’t. I agree with you Chris, would love to know how many reads we get on the downloads. All I can go by is the reviews that keep showing up. Not a ton, but growing every time I run a promo. I’ve also started to see “highlights and shared notes” from the book showing up on the amazon.kindle page. That’s kind of cool.

  11. After studying the form, before launching my eBooks, it appeared that the most expensive eBooks were selling for $10 or $12, and the cheapest were 99¢, or free of course. I took a punt and put them on the market for what I thought was the middle, $4.99. After several months, when I thought sales could be going a lot better, I dropped the price to $2.99, after which sales dropped to almost nothing. My wife always says that people don’t appreciate anything they don’t pay considerably for. I actually agree with the majority consensus, the price is definitely not the determining factor. It doesn’t matter what the price is if you get the right exposure.

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