Pricing Your E-Book

on July 2, 2014 in Books

Whether you are running a small garage press or self-publishing, if you are putting out an indie book one of the issues you must address is what the price point for your book(s) will be. The benchmark for legacy publishers is $9.99, while many indie e-books are sold at the rock bottom price of $2.99. If you are in indie publishing and have a worthwhile book, going either route is a major mistake.

Comparative Advantage
Comparative advantage is a basic concept in economics, referring to when one enterprise can deliver an as good or better service at less cost than its competitors. As an indie publisher, comparative advantage is the sole objective advantage you have, so make use of it to underbid the big book industry.

Legacy publishers are like big conventional armies relative to your light guerilla force. They have all the heavy advantages of big budgets, promotional connections and leverage, and distribution. Yet they also have the overhead that goes with having office space, 9 to 5 office employees, warehousing, and failed projects with big, expensive advances.

By contrast, as an indie publisher working out of your garage or off your kitchen table, you have low overhead and aren’t paying out five, six, or even seven figures in advances for books that don’t sell. You shouldn’t need to charge $9.99 per e-book to make a profit, and charging less for a professionally produced book that can compete in terms of standards with the legacy publishers attracts buyers.

Going Too Far
Unfortunately you can go too far in cutting costs. First, the law of diminishing returns dictates that cutting your price to attract buyers only yields benefits up to a certain point, and beyond that you are simply sacrificing revenue without attracting enough new buyers to compensate.

Another thing to realize is that the discriminating e-reader owner has become wary of books priced $2.99 or less, and for good reason. An uber-low price point screams “self-published trash,” simply because many such books are poorly written, poorly edited, and poorly produced. In other words, a lot of $2.99 books are crap, and the more demanding Kindle-owner knows it. If you are a serious indie publisher with a professional-quality book, you don’t want to get lumped into that category, not ever.

How To Price Your E-Book?
Only you can answer the question of what your e-book price point should be, because only you know what your expenses and goals are. However, I earnestly recommend not exceeding $7.99, the lowest price I see regularly from legacy publishers. And if you have written a good book produced to professional standards, have confidence in that and show it by with a price above $2.99.

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