The following just arrived in my email from Book Marketing Tools. I think it contains excellent analysis and information.
Many self-published authors tend to price themselves out of sales.
This happens because:
1) You know how much time you spent to write the book, time or money spent on editing, time or money spent on the cover, time spent on learning to self-publish, plus the priceless view you have of your own work (rightfully so), all which combine to make you put a higher price tag on your book,
2) Self-publishers aren’t making many sales, so they often price their book higher to earn more per sale since their sales are infrequent. We get that… but we’ve always been a proponent of the fact that you can sell more books with a lower price, and while you’ll earn less per book, you will make more in aggregate than you would with a higher price book.
Now we have proof, with numbers directly from Amazon!
Amazon is usually pretty guarded with their stats. They don’t share much, but they recently shared some numbers regarding book sales at different price ranges here.
Here is the quote relevant to book pricing:
“It’s also important to understand that e-books are highly price-elastic. This means that when the price goes up, customers buy much less. We’ve quantified the price elasticity of e-books from repeated measurements across many titles. For every copy an e-book would sell at $14.99, it would sell 1.74 copies if priced at $9.99. So, for example, if customers would buy 100,000 copies of a particular e-book at $14.99, then customers would buy 174,000 copies of that same e-book at $9.99. Total revenue at $14.99 would be $1,499,000. Total revenue at $9.99 is $1,738,000. The important thing to note here is that at the lower price, total revenue increases 16%. This is good for all the parties involved.”
This is directly from the largest marketplace in the world, who specializes in ebooks. How much clearer can it get?
Sure, we would all love to sell at $14.99 or even $9.99, but that’s not the reality for the self-published author. But, you can still make good money selling at $0.99, $1.99, $2.99. Especially for the new author, with so much competition out there, you don’t want price to be the reason people aren’t willing to give you and your books a shot.
Once you have a strong following of readers who love your books and want to buy more (you’re building that mailing list, right?), then, you can experiment with $3.99, $4.99, even $5.99. Many self-published authors are now able to command those prices, but they were not always able to sell their books for those prices. If you try to start at that price, for whatever reason, and you have very few reviews and hardly any fans, you’re going to continue to not sell many books, and you will earn less than you would with a lower price point.
Your goal is to reach as many readers as possible, and to get them to want to buy every other book you come out with in the future. The bigger fan base you are able to build now, the easier it will be to sell books in the future with every new book you write.
Get people in the door with a lower price, build a readership, get them to fall in love with you and your books, THEN price your books higher.
Here’s to selling more books!
-Shawn & R.J. from Book Marketing Tools