Thursday, September 19, 2013

What Are You Worth? (Pricing Indie Books)

I’m sure you’ve all heard the expression, “You get what you pay for.” But, how true is this phrase? In the literary world, this phrase doesn’t seem to apply. For example, I’ve found some real gems in the Kindle slush pile for only 99 cents. I’ve also paid thirteen dollars for a traditionally published book and felt ripped-off long after I read it. When you buy a book, you won’t know whether the price you paid is worth it until you’ve read that final page. Even if you utilize the “look inside” feature on Amazon and read a sample, there are no guarantees you’ll enjoy the entire book. A disappointing 99 cent book will leave you feeling as if you lost time and money, while an enjoyable book priced at $13.99 can leave you feeling as if it were worth every penny.

A reader’s concept of value is dependent upon many factors. So, how do we decide how to price our books?

If your book is contracted with a publisher, you probably won’t have any control over pricing. If you’re an author who acts as your own publisher, pricing is a huge consideration. What price point do you use? Do you give away your book during free promotions? How important is pricing?

Amazon offers an incentive for Kindle books priced at $2.99 or more. Books priced below $2.99 receive a 35% royalty while books priced higher can receive up to a 70% royalty. Books that are exclusively on Kindle are eligible for free promotional days. If you publish on Smashwords, you have the ability to generate coupon codes in order to offer free promotions. There are lots and lots of options for pricing and promotions.

I’ve heard conflicting opinions on pricing. Some authors/publishers believe a 99 cent price point is appropriate for an e-book by a brand new author. They believe that in a market where hundreds of e-books are free every single day, 99 cents has become premium pricing. Other authors/publishers believe charging 99 cents for a novel not only cheapens that particular book, but also cheapens books in general. While pricing a book at 99 cents might encourage a few readers to take a chance on your book, the low price also means you’ll have to sell more books in order to make a little bit of money. Which school of thought is correct?

There’s no proven method to pricing. Assigning value to your book can feel like assigning value to yourself, and in many ways, that’s exactly what you’re doing when you price your book. How do you value your time? Your talent? It’s isn’t just about your book and your cost associated with hiring an editor and cover artist–it’s about the time you spent writing your book.

As anyone in sales or marketing can tell you, assigning a price involves more than determining how much money you want to make. You also must consider how much the reader will be willing to pay.

Story time…. A few years ago, my son wanted to have a garage sale so he could make some money to buy an Xbox. He gathered up some old toys including his old Playstation 2. He decided to sell the Playstation for $200. Why? Because that’s how much money he wanted and that’s how he valued his Playstation. Would anyone in their right mind pay $200 for a old Playstation when they could buy a new one for less? Absolutely not. My son was very disappointed when I explained to him some basic concepts of sales and marketing. While he didn’t want to undervalue his old Playstation, he still had to sell it at a price others would be willing to pay.

The Kindle market is like a garage sale.

Part of the reason books sold by major publishers can sell for $13.99 is because these are books readers already want. The authors of these books already have a readership. The books are talked about. There’s a buzz surrounding the new release. People are willing to pay top dollar because they believe the book is worth the price.

A new, self-published author who prices an e-book at $13.99 is going to be facing an uphill battle. Though you might feel the book is worth that price (and it very well might be), you will have a hard time convincing others to invest in your book. Without a proven track record, without an advertising campaign, without the backing of a major publisher, $13.99 is going to be a hard sell. Like my son and his Playstation, you can try to sell your book at a price that reflects the way YOU value your book, but you probably won’t be able to convince anyone else to buy it.

You might be wondering,”What’s the perfect price?” Ah, good question. There’s no perfect answer. While some writers won’t worry about pricing because they “just want to get their book out there,” others spend a great deal of time researching their pricing options. Pricing your book will depend on many factors–the length, genre, intended audience, the amount of time you put into writing the book, and your costs associated with producing it. If you’re an author who is interested in one day making a living from the proceeds of your books sales, pricing is extremely important.

While sifting through the massive inventory of Kindle books, I’ve seen thirty-page e-books priced at $4.99 (or more). I’ve also seen full-length novels being given away for free on a permanent basis. Some authors price the first book in a series at 99 cents and then increase the price for subsequent books. There doesn’t seem to be a consistent pattern in pricing and Amazon doesn’t offer any guidelines.

What’s your opinion on pricing? If you’re a publisher/author, what has worked for you? Do free promotions kick-start sales? Should pricing reflect the value of your book? Or, should authors price the books to sell? Is cheaper better? Or, do cheap/free books devalue authors? I would LOVE to hear your opinions on this issue. Maybe we can figure it out together.

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