Smart Strategies for Pricing Your Ebook

Guest Expert: Dana Lynn Smith

There’s no doubt that ebooks sales are sizzling, and ebooks have even surpassed sales of printed books on But the publishing industry continues to wrestle with the issue of how to price ebooks competitively, while still providing a reasonable profit for authors and publishers.

Consumers expect ebook prices to be much lower than printed books because there’s no cost for paper, printing, warehousing, and shipping. Quite true, but publishers incur many other expenses, including author royalities, acquisition, editing, design, marketing, and overhead. As the proportion of books sold in the cheaper ebook format rises, there’s less revenue to cover those expenses.

These days, new releases and bestselling fiction titles from large publishers tend to sell for about $9.99 on Kindle, with older backlist titles often selling for less. Many nonfiction ebooks sell for more than $9.99.

Pricing flexibility is one area where self-publishers have an advantage over the big guys. Although self-publishers incur some of the same types of expenses as traditional publishers, their costs are lower, allowing them to price their ebooks lower.

Here are some considerations in pricing your own ebooks:

There is plenty of evidence that consumers want low prices on ebooks and they will buy more ebooks if they are cheaper. Many avid readers go through one or more books a week, so price is very important to them. Think about it – would you rather buy one $9.99 novel, two $4.99 novels, or five $1.99 novels? Low prices also encourage readers to take a chance on new authors that they aren’t familiar with.

The royalty rate that you’ll receive on ebook sales is another consideration. On the Kindle platform, you can elect to receive a 70% royalty if your ebook meets these requirements:

• The list price is between $2.99 to $9.99
• The ebook list price is at least 20 percent below the lowest list price for the printed version of the book
• The ebook is an original work, not primarily composed of PLR (private label rights) content.

The Kindle royalty for books that don’t meet these requirements is 35 percent.

From what I have seen, $2.99 is a popular price point for self-published fiction. But some novelists have lowered their price to $1.99 or 99 cents to increase sales volume. Some authors find that they make even more money selling at the lower price, even with the lower 35 percent royalty. Other authors set a very low price to maximize sales volume for the purpose of attracting readers to their other books or products.

“When I lowered the price of The List from $2.99 to 99 cents, I started selling 20x as many copies—about 800 a day,” Joe Konrath pointed out in this article. In this blog post, Joanna Penn explains why she lowered the price of her novel from $2.99 to 99 cents.

Nonfiction how-to books are less price sensitive, because people are buying information that they need, rather than entertainment. Still, customers expect ebook prices to be lower than print. And nonfiction buyers often compare several different books before choosing one, so you may be at a disadvantage if comparable ebooks are priced substantially lower.

If you publish both print and ebook versions of the same title, consider the relative profit margins of the two products when making your pricing decisions. With a 70% royalty and no printing or shipping costs, you are likely to make a higher profit selling your ebooks at a lower price than the print version.

Savvy Tip: It’s best to post the same list price every place that your ebook is available, and I recommend setting a price ending in 99 cents because that’s required in some ebookstores. If you set different prices in different stores, some stores may discount your price to undercut other stores.

There’s no “right” price for ebooks, and each author or publisher will need to take several factors into consideration. Don’t be afraid to experiment with more than one price and compare the results, but be sure your sales aren’t being affected by other factors, such as the type of promotions you are doing at the time.

Photo Credit: goXunuReviews

Dana Lynn Smith, The Savvy Book Marketer, teamed up with Shelley Hitz to produce Ebook Publishing Success, an in-depth training program that teaches authors how to format and publish their books for Kindle, Nook, Smashwords, and more. To learn how to promote your ebook, visit the Savvy Book Marketer blog and follow Dana on Twitter and Facebook.

Guest posting on BookBuzzr blogs will definitely boost your business and possibly earn you more clients. However, your writing must be unique and engaging to the audience. If you have an article or even just a topic in mind, relevant to writing, publishing, selling, or marketing books, we would love to see your proposed content! Feel free to submit Here!
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8 thoughts on “Smart Strategies for Pricing Your Ebook

  1. Excellent post! Proves my point in one of my older posts E-price and Format. Been following your blog for a while now. I think ebooks should be no more than 6 dollars and word count should be a factor in pricing. A larger novel can be 6 dollars whereas a novella can be 2 dollars. E-readers have made ebooks a mere commodity. Readers read and forget ebooks far easier than print books and hence want to pay a lower price for them.

  2. Excellent advice! The other great thing about ebooks is that you can test your price points. If your book isn’t selling well at a higher price, lower it and see if that makes a difference. Conversely, if it’s selling well at a lower price point, see what happens when you raise the price. Thanks!

  3. Sabine, thanks for following my Savvy Book Marketer blog. You make a good point about the length of a book – that does seem to be one factor that buyers consider when deciding if the price is reasonable. But in most cases, buyers can’t tell the length of an ebook because there is no “page count” listed. If you’re writing very short ebooks you can indicate the word count in your product description (although many people don’t know how to equate that to “pages”) or you can call the book a novella, short story, or short ebook.

    Stephanie, thanks for your note. Price flexibility is definitely an advantage of ebooks. It’s easy to change the price of an ebook, but sometimes it’s hard to measure the effects because of other factors like the type of promotion that’s going on a the time.

    Tracie, thanks for stopping by. I recommend writing in MS Word. For my nonfiction books, I write each chapter in a separate Word doc, then combine them all together at the end. I find smaller documents easier to work with. There are some software programs that some novelists find useful, but I don’t know anything about them.

    Thanks for your comments everyone!

  4. Good suggestions. Thanks.

    @Tracie: Use either Word or Open Office (saved in Word format). I used Open office and had no problem (can’t afford Word). Just remember to limit the number of paragraph style to only a couple to insure a smooth transition with their publishing software.

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