(e)Book Pricing

If you’ve been paying attention to my various hints, missives, and clue-by-fours, you know that I have a book coming out real-soon-now. Since it will be available in both print and electronic form, I’ve stumbled onto the hot topic of e-book pricing.

Ok… maybe it’s no longer such a hot topic. If anything, it’s been beaten to death. Then again, it’s also been raised from the dead, beaten to death again, and finally animated. To paraphrase an old D&D friend, “Undead topics don’t get tired.” Ultimately, I think we’re two the three years away from a long-term consensus on e-book prices, so the debate rages on.

So where does that leave me today?

When researching this, I ran into three common price-point arguments: the paper discount, the freebie, and the quality.

The paper discount argument is most common among traditional publishers, and it focuses on all the work involved.

We put a lot of investment into each book, the selection process, the editing, the proofing, the cover, the layout, and so on. The prices on our paper editions (hardbacks, trade paperback, and mass-market paperback) reflect this. All of those costs still apply to the electronic edition. So we’re just going to knock off a little to cover for the fact that we didn’t have to print a physical copy.

This leads to hardbacks going at $17 and the e-book editions going for $13. Eventually, the paperback comes out at $8 and the e-book… also coming out at $8. I don’t find too many people complaining about the $8 e-book, except that they still think it ought to be cheaper than the paperback since they only got bits instead of pages. And at $13, I still hear a lot of grumbles, though probably not from people who made it a habit to always buy the hardbacks.

The freebie argument is common among self-publishers.

Sell it for as little as possible – free if feasible. I’m trying to make a splash and get as many sales as I can. The higher up I go on the sales charts, the better my chance of becoming the next Amanda Hocking. So here, 99-cents rules the day, with as many shots at free promotions as you can.

This may work for some – it certainly did for Ms. Hocking – but I think it fails for most. Why? Because inherent to this argument is the readers’ notion that “at 99 cents, I’ll give anything a shot.” It’s not someone who is really interested in the book’s subject. The cover or title caught their eye, and they figured they’d plop down a buck to see if the author actually knows how to write.

The problem is that many of them can’t, and that 99-cent price range has become a cesspool of crappy books. Most readers aren’t willing to risk that dollar, opting for the sample instead. And what’s more, an increasing number of readers are realizing that what they’re really risking is their time, and the 99-cent price tag is a red flag that this one is very likely a waste of their time.

The quality argument is a reaction to that.

If I think I have a quality product, I shouldn’t price it into the bargain bin along with Gigli and Superbabies. Instead, I should set the price for what I’d be happy to pay for a book of similar quality. This tends towards prices in the $4 – $7 range.

Yes, these books tend to sell fewer copies than some of their 99-cent cousins, but in this case the author is not going all out to make an immediate splash. They’re focused on the long term. Selling a thousand copies today is not what matters. Selling twenty thousand copies over the next twenty years is what matters. With e-books and print-on-demand, that book can sit on the virtual shelf for decades, so its profit window is long. This kind of thinking favors the long-tail of sales rather than the initial velocity.

And it’s that last argument that resonates most with me. I think I have a quality product that the right readers will really enjoy. It’s been through multiple beta-readers, and their feedback has gone back into improving the story and the writing. I’ve gone through the text, carefully proofreading. I had a professional copyeditor mark it up as well. I put a lot of care into the layout, both for print and e-book editions.

So I settled on a price of $4.99 for the e-book. I know a few folks who would tell me to go for 99-cents or rely on Amazon’s free promotions in KDP Select, but I don’t think that path is for me. It will take time to grow it, but I think the story can build a fan base without resorting to short-term gimmicks. And of course, there will be other books to come along after it, and that fan base should grow with each new book.

Now comes the question of how to price the print edition. Personally, I’d like to put out a mass-market paperback, because for dead-tree editions, that’s the format that fits my hand the best. Unfortunately, print-on-demand can’t work at the scale economies of the mass-market paperback, so I’m looking at a trade paperback format which is always more expensive.

There’s also the matter of list price vs. retail price. For e-books, I am currently setting the price, and I get 60% – 70% of that money. For print books, however, I set a list price and then discount it heavily to the retailer, and they mark it back up to some percentage off the list price. So, I have to price high enough to still make a profit after the retail discount. In the end, I guess I used the reverse logic of the traditional publishers. I started with my e-book profit, added the cost of printing the book, and then added a buffer to cover the retail discount.

Here I settled on a list price of $14.95, though it looks like the actual retail cost will be closer to $11 or $12, depending on which store/site you shop at. $14.95 might seem like too much, but again that’s the list price. Those hardbacks you buy at $17 actually have a list price of $26.

So that’s where I am: $5 for bits or about $11 or $12 if you want to kill a tree. Either way, I get about the same amount. It might be a touch more for the dead tree, but not much more.