The 3 Golden Rules to Perfectly Pricing Your Ebook!

When the first eReader came out of its box, I bet there were two guys in the back of the room arguing about eBook pricing ... one yelling that they should be free, and the other shouting back that they should cost the same as print copies.

It's a sticky situation that is near and dear to my heart (as this year I've published a novel in both print and eBook formats, and a novelette solely as an eBook), so I have been doing some research.  There are dozens of articles available online, and more in print magazines and books, all of them with contradictory advice and guidelines and rules.

My research and subsequent meditations brought me to:

The Three Golden Rules of eBook Pricing
  1. Free eBooks make sense because they are downloaded by more people
  2. Cheap eBooks make sense because they cost less (per unit) to produce
  3. eBooks priced like their printed counterparts make sense because the value of a book is not in the paper

Yes, these three rules are contradictory ... deal with it!

The rules apply to every author and eBook differently at different times, depending on lots of different factors.

There is no one pricing structure for every eBook, but a thoughtful application of the Three Golden Rules (TGRs) will guide you in coming up with the right price for your eBook at every stage in your (or your eBook's) career.

All of this presupposes a pair important details that many writers skip over in their rush to fame and glory and wealth ...  in order to fully explore and exploit the TGRs, writers need two things first:
  • a number of eBooks to offer their readers
  • eBooks of a quality sufficient to bring readers back for more
 Quality and quantity of writing makes all things possible ... with it and the TGRs, a huge readership and wealth beyond the dreams of avarice is possible ...without it, even with the best possible application of the TGRs an author will likely languish in obscurity and poverty forever.

Golden Rule #1: Free eBooks
make sense because they are downloaded by more people

There are gazillions of eBooks available on the internet, without a readership and proven track-record, getting people to take a chance on paying for yours is difficult.  Building and/or expanding your readership is important to all but a few dozen of the most successful writers on the planet (and if you're reading this, you're not one of them ... they have minions to read for them).  Giving away your eBook is a great way to increase the number of eyes that read your writing, and also to bump you up the free-ebooks bestsellers lists.

I gave away my newest eBook for 2-days, before bringing it back to its regular price, and was happy with the number of downloads that I was able to get in that time.  I would certainly consider doing it again with my next eBook.

If you are giving your eBook away, you should be driving satisfied readers towards something when they finish reading your work ... another book (this one not for free), your website or blog, your fanpage on Facebook or GoodReads, ... something.

I think that even as your readership grows, it's still worth your while to give some eBooks away for free to keep finding new readers.

Golden Rule #2: Cheap eBooks
make sense because eBooks cost less (per unit) to produce
 Printing a book costs money, every time, for every copy.  The same is not true of eBooks. 

 Paper, ink, printing, storage, shipping are all ongoing costs of printed books that are essentially zero for eBooks (it costs something to store and ship eBook files, but so little as to effectively make my point for me).  A logical argument can be made that since the per unit costs of production are so much lower for eBooks, there should be a similar reduction in price for them as opposed to printed books.

This argument carries some weight with me (and many other writers who publish their work in both print and eBook formats).  A reduction in price seems logical on the face of things.  A lower priced eBook can encourage more people to buy your writing, and still make you the same amount of money as your printed books.  My novel is less expensive in eBook format than the print version; working out the price-point that seems most equitable to my readers and me is still a difficult question though (for me).

I do, however, question selling my novel in eBook form for substantially less than the print version for a couple of reasons ... it feels less than (or on sale, or remaindered), and unfair to print owners (who have to support the printers and Amazon and me).  The truth is however, that print version owners can sell their copies to someone else, and access it regardless of the state of their technology or wifi-access or the powergrid, so it probably works out to be fair (or better) for them.

There are lots of eBooks available for 99 cents, a price which on Amazon will make the author about 30 cents per copy.  This feels like a half-step up from giving the book away for free, but without the convenience of it being free.  I find myself suspicious of a 99 cent eBook (I understand giving eBooks away for free, but 99 cents seems more cheap than inexpensive, if I can be allowed the distinction), and as such I choose not to place my eBooks at this price-point.  

Some short eBooks of mine may end up for sale at $1.99, an in-between price that doesn't make the KDP minimum ($2.99) for the 70% royalty, but is enough above 99 cents to shake free of the stigma of the bargain-basement book.

I'm a big fan of pricing eBooks in the $2.99 to $7.99 range, and the industry number crunchers tend to bear me out.  This price range is cheap enough to maximize sales without seeming too-low for quality eBooks.  I very much like the idea of buying a book for the price of a coffee at Starbucks or a cheap lunch at Subway.  

I've currently got an eBook for sale at $2.99, which is a price I'm comfortable with for a shorter eBook, although I (along with other eBook sages) think that $4.99 to $7.99 is more appropriate for full-length novels (which is where my novel is priced).

Golden Rule #3: eBooks priced like their printed counterparts make sense because the value of a book is not in the paper

 Books are magic, and the magic comes from words not paper and ink and backlit e-ink.  A fantastic book is just as fantastic whether your picked it up at a local bookstore or downloaded it, so why should one cost less than the other? I don't buy this argument the majority of the time, but an exception could be in the case of a Stephen King or Lawrence Block, who are masters of their markets; they can set their prices wherever they want, and people will pay it.

Another reason for charging the same (or even more?) for an eBook as compared to a comparable print version would be convenience:
  • I can carry hundreds of eBooks with me in my backpack, no longer needing a wheelbarrow of SmartCar to accomplish this task, as I did in the days when print books ruled the Earth.
  • I can get an eBook sequel to a book I love within seconds (not days) of finishing the first book (I've done this while away on vacation, and it felt like magic).
  • I can search the text of the eBook for specific words and passages, and check the definitions of words while reading.
  • I can loan my eBooks (some of them anyway) to a friend, and never suffer the anguish of  having the eBooks not returned, or returned covered in grape jelly.
There is a pervasive belief (feeling?) in the book-world that eBooks are somehow inferior to print books; I don't believe this to be true ... they are simply different.

That being said, for the time being, all of my eBooks will be priced lower than print versions of the same books.

I hope that this exploration of the TGRs of eBook pricing is useful in highlighting current thought and the reasoning behind the pricing of eBooks as of April 2013.  

The rules are all useful, but contradict each other ... and that's OK.  

It's perfectly acceptable to pick your price-point anywhere along the continuum discussed above, so long as you're aware of the background and have a reason for making your pricing decision.

I will likely stick with free giveaways through the KDP Select program with my new eBooks, to give them (and my readership numbers) a bump, accompanied by longterm pricing in the range supported by market data (until such time as I'm bigger than The Beatles, can pick whimsical prices, and take daily money-baths).

I'd love to hear back from readers and writers with your experiences in the world of eBook pricing.



3 Good Articles for Background & Reference & Further Reading

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