Category book pricing

Jul 21 2014

Will $5.99 be the new FREE?

Free Reading

Book Pricing Strategies

Amazon recently launched Kindle Unlimited, which allows customers to download multiple books all for just $9.99 per month. The selection includes all 500,000 KDP Select books plus an additional 100,000 books, including Harry Potter. (Read more about Kindle Unlimited by clicking here.)

If Kindle Unlimited really catches on—it looks quite promising for readers—it could be a game-changer for pricing Kindle e-books.

Many customers are indeed trying Kindle Unlimited out, and as more customers do this, it will surely impact sales ranks of Amazon e-books.

Let’s look at a little history:

  • 99-cents has often been a popular price-point. It’s cheap enough that customers can buy on impulse and not worry too much if it doesn’t work out. But many also believe that you get what you pay for, and believe this more strongly after a few books don’t work out.
  • When KDP Select first launched, FREE was a popular promotional strategy that worked for many authors. But then FREE lost its luster.
  • $2.99 has been a popular price point. You have to sell 6 times as many books at 99 cents to make the same royalty at $2.99, plus the higher price suggests higher quality than 99 cents.
  • Recent studies have shown that $3.99 to $5.99 is a profitable price-point. Indeed, many customers shop this slightly higher price range, expecting to find better quality here. (The study also showed that $9.99 was highly profitable, but nonfiction and big-name authors have lent popularity to that range.)

In the past, many books have sold in the free to $2.99 price range because many customers have been thinking about saving money—and about the risk of a higher-priced book not turning out well.

Kindle Unlimited customers are likely to have a different mindset:

  • Kindle Unlimited customers aren’t asking, “What’s affordable?” Once you spend $9.99 for the month, every book you want to read is essentially free.
  • So they are instead asking, “What’s the best book I can read?” They are looking for the best book, not the best price. If they do look at price, it’s as a guide to value.

The value of e-books may be changing. It is, at least, for Kindle Unlimited subscribers:

  • Cheap price-points have no value to Kindle Unlimited readers. Free isn’t a good deal to them. Instead, low prices may suggest low quality.
  • Higher-priced books may have more value to Kindle Unlimited readers. You have to read ten 99-cent books to get your $9.99’s worth for the month, but if you read ten $5.99 books, that’s a $60 value.

Since Kindle Unlimited has just launched, it still remains to be seen how much Kindle Unlimited customers will impact book pricing strategies and Amazon sales ranks.

Here are some things to look for:

  • Will 99-cent thru $2.99 books slip in the Amazon rankings?
  • Will $3.99 thru $9.99 Kindle Select books rise in the Amazon rankings?
  • If higher-priced Kindle Select books do rise in rankings, will that improve their sales, too?
  • Will KDP Select freebies and Countdown Deals become less effective?
  • Will BookBub and other promotions become less effective?

Even if $2.99 and lower books are enrolled in KDP Select and receive downloads, if other books—such as $5.99 books—are receiving even more downloads than they are, then those $2.99 and lower books will still fall in the rankings despite the downloads. There may be a lot of books that used to have sales ranks in the 100,000’s moving up to the top and pushing other books down in the ranks.

The effect may not be immediate. Customers also look at reviews. Covers, blurbs, and great beginnings will always matter. Books at the top probably have good packaging and many reviews, and books at the bottom may still need to build reviews. But as more readers try out higher-priced books, their popularity may grow and they may gain more reviews. Many Kindle Unlimited readers will approach the book-buying process differently, and it will eventually have some discernible effects. If the cover, blurb, or Look Inside have problems, this will deter sales regardless of the price-point.

Either way, the book must command the price it has. If you simply take a 99-cent short story and reprice it at $5.99, it’s probably not going to be perceived as a better value suddenly. Plus, if customers think the book is worth much less than the list price, it’s likely to show up in a review.

Rather, if a book really is worth $5.99, but has been priced lower based on how the market had been prior to Kindle Unlimited, if that book is enrolled in KDP Select, it might be a good time to reconsider its list price.

It depends on two things. First, will Kindle Unlimited customers favor higher-priced books? Second, how popular will Kindle Unlimited be? Time will tell.

If sales ranks of lower-priced books slip over the next two weeks, this will become food for thought.

The other side of the coin is that KDP Select borrows pay the same regardless of the list price. Books priced $3.99 and up would earn higher royalties for sales than the KDP Select borrows have historically paid (about $2 per borrow). But if their inclusion in KDP Select generates additional sales because of the perceived value, it may well be worth enrolling those books in KDP Select.

It remains to be seen how popular Kindle Unlimited will become and how much (and what kind of) impact it will have. But authors need to decide which side of the fence to stand on, and how to best plan their marketing strategies around the introduction of Kindle Unlimited, and so authors must make many decisions, such as whether or not to enroll in KDP Select and whether or not to change the list price. These decisions won’t be easy, but they may have a significant impact on a book’s sales in the coming months.

Chris McMullen

Copyright © 2014 Chris McMullen, Author of A Detailed Guide to Self-Publishing with Amazon and Other Online Booksellers

  • Volume 1 on formatting and publishing
  • Volume 2 on marketability and marketing

Follow me at WordPress, find my author page on Facebook, or connect with me through Twitter.

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Nov 1 2013

Kindle Countdown Deals—Better than the Original KDP Select?

Countdown

Amazon’s Kindle Direct Publishing (KDP) sent out an email announcement today about the new Kindle Countdown Deals—a new promotional tool for KDP Select users.

This looks very promising. It will entice some authors who’ve left to switch back to KDP Select; and any who have been contemplating leaving KDP Select may be swayed to stay.

The drawbacks to the KDP free promo are well-known:

  • You don’t earn any royalties for your promotion.
  • The freebies affect your free rank, but not your paid rank. So your sales rank goes up while your book is free.
  • Changes in Amazon Associates’ policies have greatly discouraged sites from promoting the freebies.
  • People who loathe the KDP Select freebies can take out their frustrations by leaving one-star reviews, and they don’t even have to buy or read the book to do this and get it to show as an Amazon Verified Purchase.
  • Many customers from outside your target audience are attracted to the free price; since they aren’t familiar with your genre, they’re less likely to leave a favorable review.
  • When the book is free, many shoppers won’t bother to read the description and check out the free sample, so they are more likely to be disappointed with your book.
  • An abundance of freebies and 99-cent books makes it difficult to create the perception of value.

The new Kindle Countdown Deals solves these problems:

  • Your book won’t be free—but it will be at least $1.00 less than the list price. So you don’t have to worry about not earning royalties during your promotion.
  • You can even earn 70% if your sale price is lower than $2.99, but you do have to contend with the usual delivery fee. Your book must have the 70% option to begin with, of course, for this to apply.
  • Websites can promote your discounted book through Amazon Associates without having to worry about the penalty for linking to freebies.
  • You will have paid sales during the promotion, so this should affect your sales rank, unlike free promotions.
  • If anyone wants to slam your book, at least they’ll have to pay for it if they want it to show as an Amazon Verified Purchase.
  • Shoppers are more likely to read your description and check out the Look Inside, so they are less likely to be frustrated with a book that’s really not for them (provided that your packaging is clear).
  • Customers are more likely to be in your target audience since they actually have to pay for your book.
  • There won’t be as many free books because many authors who ordinarily use the free promotion tool will be using the countdown tool instead (you must choose one or the other for any 90-day period). Similarly, many of the books that are always 99 cents will now be $2.99 or higher for 83 out of every 90 days. Amazon has given everyone an incentive to choose a higher list price.

Here are some more notes about the new countdown tool:

  • You can use the tool for up to 7 out of every 90 days, with as many as 5 price increments.
  • You can only schedule one Countdown Deal per 90-day enrollment period. (You can schedule one in the US and another in the UK). Unlike the free promo, you can’t run two or more separate sales. The only way to use all 7 days is to use them all at once. See https://chrismcmullen.wordpress.com/2013/12/07/kindle-countdown-deal-limit-one-per-90-days/
  • The regular list price must be between $2.99 to $24.99 (or 1.99 to 14.99 pounds).
  • The promotion can be as short as one hour or as long as one week.
  • You must wait 30 days after joining KDP Select and since you last changed your regular list price.
  • It looks like you can schedule the promotion without having to republish (like you do for ordinary price changes).

Some people are infamous for complaining about too many free and 99-cent books. Some of these people are already talking about how the new countdown program will drive even more books to the bottom. But that’s crazy!

The new countdown program encourages the books at the bottom price point to move up!

The minimum regular list price must be $2.99 in order to be eligible. The books that participate in the countdown won’t be free. The books that are 99 cents through the countdown program will only be 99 cents for 7 out of every 90 days. Right now they are 99 cents for 90 out of 90 days.

Many authors are already doing special short-term promotions. Now there is a tool for this, they can earn 70% instead of 35% royalties during their promotions, and all customers will see the discount at Amazon, even if they hadn’t heard about the author’s promotion.

If you have several pictures and your book is on the 70% option, the delivery fee may be significant. What you want to determine is whether your royalty would be greater at 70% or 35% for the discounted price (because of the delivery fee, if the file size is large, it may actually be greater at 35%). Note that you can’t change the royalty plan during the promotion or for fewer than 24 hours prior to the promotion. So you must change this, if needed, 24 hours before the promotion (and then change it back afterward, if desired). This would be the case if you normally earn a greater royalty at 70%, but would earn a better royalty at 35% during the promotion. If you have several pictures, you should check into this.

You still need to promote your sale if you want the promotional tool to be effective. Just dropping the price won’t have nearly the impact as effectively marketing the promotion.

This also looks like a great tool for Read Tuesday—a Black Friday type of event just for books.

Click the following link to learn more about the new countdown tool:

https://kdp.amazon.com/self-publishing/help?topicId=201298260&ref_=pe_445910_34749920

Publishing Resources

I started this blog to provide free help with writing, publishing, and marketing. You can find many free articles on publishing and marketing by clicking one of the following links:

Chris McMullen, Author of A Detailed Guide to Self-Publishing with Amazon and Other Online Booksellers

  • Volume 1 on formatting and publishing
  • Volume 2 on marketability and marketing

Follow me at WordPress, find my author page on Facebook, or connect with me through Twitter.

Sep 22 2013

Red Tuesday: Initial Brainstorm

Red Tuesday Pic

The idea behind Red Tuesday is for authors to get together and provide a book-oriented version of Black Friday and Cyber Monday. You can learn more about the idea here:

https://chrismcmullen.wordpress.com/2013/09/21/red_tuesday_idea_for_boosting_book_sales/

The purpose of this post is to brainstorm the ideas that we’ll need to get started. Most of this should be done in the comments section below. We’ll need more brainstorming sessions as we go. Here we should focus on just getting things underway.

Red Tuesday is an opportunity for otherwise ‘independent’ authors (we largely behave this way when we sit down to write and when we market, even those of us who are traditionally published) to organize together and form something special – without, hopefully, too much more work than we would do just to have our own separate promotions. Here at WordPress, there is a strong sense of community among authors and artists. If we participate and harness this community feeling, we may all benefit from Red Tuesday.

It’s not about one person succeeding from the work of many others, and it’s not about one person being in charge. It’s about several people collaborating together. The beauty of the marketing involved is that every author can promote his or her own books while simultaneously promoting Red Tuesday.

BRANDING IMAGE: We want to brand the concept of Red Tuesday. Therefore, we need an image that we can use to help brand this visually. We want to include this image on all of our marketing materials for Red Tuesday. The more people see this image, the better.

We want to use the same image over and over, but we’ll need it to come in a few different forms. We’ll need a couple of headers for blogs or social media, an image to insert into our posts, a sidebar image, a thumbnail image, a logo, and anything else we think of. Essentially, we’ll need a variation of the same image in various aspect ratios.

TamrahJo drafted a good concept (see below). It will be easy to produce the image in a variety of shapes and sizes, it’s really suggestive about the idea of gifting books, it matches the color of the event (red), it fits with the holiday theme, and it has a cute play on the color and verb homophones. I made a similar image for this post (above).

http://wp.me/aZNrI-WF

What we need is an improvement on our efforts (or a better idea, if anyone has one). If you can make a better present, bow, font, etc.

Whatever image we use, we will need permission for every author who participates to use the image for their Red Tuesday marketing (except for possibly putting in a restriction to prevent anyone from abusing the idea). This means that any images or text used must grant this permission, also.

Again, we’ll need the images to come in an assortment of sizes, suitable for various purposes. It may also be desirable for some of the images to include text (a slogan, for example), but others to exclude it.

BRANDING TEXT: We’ll need a slogan, catch-phrase, strapline, marketing line, blurb, and/or whatever other short text may be useful to help us brand the concept of Red Tuesday successfully. Again, we’ll need permission for every participating author to use the ideas that we decide to go with. TamrahJo included a suggestion for some text in the draft of the branding image (along with font effects).

WEBSITE: Unfortunately, it appears that the ‘redtuesday’ domain has already been taken as a .com site. We could throw in a hyphen, but then anyone who misses the little hyphen will go elsewhere. Perhaps we could add the word ‘books’ to the end of it.

We should have one website setup that’s geared to tell customers all about Red Tuesday. This is a link that we’d want to include with all of our promotional materials.

I don’t mind springing for the domain name. I could put together something basic, or add basic materials that others prepare. But if there are any volunteers with web skills, maybe that could lead to something better. I guess we could start with a WordPress template, or I could get something from GoDaddy, for example.

To begin with, we want to include our Red Tuesday branding image and a description of the program. What else could we put here?

Perhaps catalogs (including subcatalogs) listing books by genre (or subgenre) that will be discounted on Red Tuesday. (We could also highlight a few books that have very deep discounts – good examples that may help to draw interest.) Depending on how many books wind up in the program, this could be an extensive catalog. We want to make it easy for customers to sort through it, appealing to look at, and easy to update as new authors join in. If there is an easy way to do this, maybe where authors can add their own books yet the formatting still looks nice, it would be nice to find it. It will probably take some volunteer efforts to put this together, but hopefully we can think of some automated services to help do much of the work…

Maybe an extensive catalog isn’t worth the effort. Being buried in a long list – if the list becomes long – probably isn’t the most helpful marketing tool. What will be helpful is when authors individually promote their own books while simultaneously promoting Red Tuesday.

(We could also have a humble page that gives credit to any volunteers who provide valuable services.)

What else should we have on the website? For now, we just want to get it started with the minimum, and we can add to it as we go along.

We want a different hub to direct interested authors rather than the website designed for customers (though some authors, like me, will be shopping for books on Red Tuesday, too). Our blogs can help with this. Remember, you’re welcome to create your own posts about Red Tuesday (reblogging isn’t the only way to spread the word, though you’re also welcome to reblog Red Tuesday posts).

MORE: There are other things we’ll need soon, but these are a few things that we’ll need right away. Can you think of anything else that we’ll need immediately? If so, please bring these up in the comments.

COMMUNITY: Through our involvement in Red Tuesday, we can be part of something much bigger than ourselves. The magic word is participation. Please share and discuss your ideas in the comments section below. Brainstorming isn’t about one person coming up with ideas, but about many people bouncing ideas off of one another and discussing them to see where it leads.

Chris McMullen, author of A Detailed Guide to Self-Publishing with Amazon and Other Online Booksellers, Vol. 1 (formatting/publishing) and Vol. 2 (packaging/marketing)

Aug 9 2013

A Model for Pricing Books

Pick two.

If you want to go out to eat, the best you can hope for is two out of three.

The three options are:

  • Quality
  • Service
  • Price

If you want top quality – i.e. excellent taste, fresh food, amazing cleanliness, incredible ambiance, superb view – and awesome service – i.e. friendly greeting, quick seating, fantastic personality, everything you want just when you want it – then you should expect to pay for it.

It’s not reasonable to expect perfect quality, perfect service, and super low prices.

So if you want low prices, you should expect to sacrifice either quality or service to some extent.

Pick two. If you can get two of the three, that’s very good.

Sometimes you only get one. When it’s really bad, you strike out.

The ‘pick two’ idea has been around for some time. It’s worth considering when pricing books.

The first step regarding price is to try to find other books that are very similar to what you’re selling. Customers will be comparing your book to other books like yours when they shop.

Now the question is whether you should be at the high end or low end of this price range – or somewhere in between.

Don’t assume that you need to be at the bottom end of this price range in order to sell books. Don’t assume that you can’t compete with top selling authors or big publishers.

It’s intuitive to most people that a lower price should lead to more sales. It seems like a basic law of economics, right? But it often doesn’t work out that way.

One major reason is that so many people believe that you get what you pay for. Another issue is that several buyers have some experience with poor quality.

Thus, there are cases of authors selling fewer books after lowering the price or actually selling more books after raising the price. It doesn’t always work out this way, but sometimes it does.

Price doesn’t drive sales.

Look at it as two out of three. Price is only one factor.

Quality and service are two other factors.

If you have a high-quality book, setting the price at the low end of the range for similar books may be a problem. People who are looking for better quality may not be browsing the low end of the price range. Where are the readers who are thinking, “Nah, I don’t want quality”? Readers who’ve had a poor experience at the low end of the price range may be exploring somewhat higher prices, hoping to get something better.

Quality doesn’t just mean one thing. It includes good editing, good writing style, good formatting, good characterization, good plot, ease of understanding, entertaining, creativity, professional touches, evoking strong feelings, etc. It also includes a great cover, great blurb, and great Look Inside – since these features help readers judge quality when they’re about to make a purchase.

Then there is also service. For authors, this comes through marketing.

Marketing drives sales. Price doesn’t drive sales. Price may deter sales, if too low or too high. But price doesn’t create sales. Quality and service (i.e. marketing) help to stimulate book sales.

Marketing can be a service. For one, marketing helps bring the book to the customer, whereas it’s such a challenge to find the right book through a search.

A good review online or at a blog from a credible source helps customers find a book in a genre that they read, which may potentially be high in quality. That’s two out of three already, so the price shouldn’t be at the bottom end of the spectrum.

Personal interaction helps to sell books. Interact with the target audience in person. That’s a service that the author provides to the reader.

Readings and signings are services, too.

If you have a quality book and you market effectively, your book shouldn’t be at the bottom end of the price range.

If your book is at the bottom end of the price range, shoppers may be wondering what the book may be lacking. If it’s not lacking anything, it should be worth paying for.

If a cup of coffee made in less than a minute can sell for three bucks, a book that reflects months of hard work should be worth more than that. 🙂

One last word about price. Just having a low price doesn’t suggest a great deal. It suggests that quality is lacking.

But having a sale may stimulate sales. If the price is normally higher, a temporary reduction in price may have this effect. Not from the random customer who just discovered the book – this customer doesn’t know that the price is usually higher. You have to promote a sale for this to work.

Promotion is a form of marketing. As long as you’re going to the trouble to spread the word about your book, you might want to earn a higher royalty for your effort.

A sale can be useful if the copies sold at the promotional price are likely to draw in additional sales. Promoting the first book in a series or discounting an omnibus may have such an effect, especially when the first book is very good at compelling readers to want more (this isn’t the case with all series).

A sale is also more effective when it’s not too frequent. Otherwise, people will just wait for the sale, and it will be hard to sell books in between sales.

Finally, you want your promotion to be targeted at new customers. If you’re advertising your sale to people who’ve already bought your book, you’re not reaching new customers – instead, you might be frustrating buyers who’ve paid more.

Chris McMullen, self-published author of A Detailed Guide to Self-Publishing with Amazon