How to Price My Book

You’ve done everything you’re supposed to. You wrote a great book. You had it edited and professionally produced. Your marketing strategy is in place. Now it’s the big day—time to launch. You’ve got several choices to make when you put the book up for sale, but one stands head and shoulders above the rest: what to charge.

Here’s the short version: you should experiment.

We know; that’s not terribly helpful. Luckily, there’s a longer explanation. Let’s dig into e-books first, then cover physical books.

 

Ebook Pricing: Basic Things to Know

For a physical book, you’ll calculate your costs per unit and then work from there. But for an e-book, you have no cost per unit. This is possibly the e-book’s greatest strength in a broader sense—they allow you to make your book available indefinitely without further investment to a wider variety of readers. In a traditional publishing model, you’d worry about print runs, keeping up stock, and competing with shelf space with new releases. E-books (and Print on Demand) books are always there, waiting to be bought, and it takes no future investment to keep them available. As such, you’ve got total freedom to price the book however you’d like.

What you need is a strategy. Always have one. A few steps will help you get one together:

1. Consider the reader.

For readers, there is an element of risk in any purchase. Nobody wants to spend money on a book only to find out that they totally hate it. Therefore, it’s best to keep the perceived risk low—you want to keep the price low enough that they can impulsively snag a copy without feeling too worried about the money.

On the flipside, pricing the book too low suggests a lack of quality. You want to find a good middle ground wherein you’re still making a little bit of money, but readers can still feel like picking up the book is a no-brainer.

After you finish reading this, it’s worth perusing a pretty influential article Smashwords released in 2013 attempting some broad pricing analysis. That study is now three years old, and much has changed, but it does serve to elucidate one important point: pricing too low suggests a lack of value, and pricing too high creates an additional perceived risk in purchasing.

At the risk of getting sidetracked, there’s a major exception to this rule: free books. In the Smashwords study, free books saw 92 times more downloads than books at any other price. The power of a zero-dollar pricetag cannot be understated. What’s the point of giving the book away, you might ask? There are plenty of good reasons to do so. The most common is that it gets you readers. If this is your first book and you’re an unknown author, it’s not a bad idea to release the book for free and then raise the price later. In the e-book itself you can put a reminder to readers to please review the book if they enjoyed it. Then, once you’ve got a few dozen positive Amazon customer reviews, you can raise the price a bit.

2. Consider the genre and the nature of the book.

Peruse the competition in online stores. This market recon is important, and you should probably do it earlier in the publishing process rather than later. You’ll find slightly different pricing trends in different genres, especially those with die-hard genre-specific fans. It’s a common opinion, for example, that romance, sci-fi, and fantasy fans tend to buy a lot of books within those genres (as opposed to reading across diverse genres and/or buying less frequently), so a higher price tag can deter them more quickly—even $3.99 e-books add up when you buy dozens of them. Things like textbooks, books with lots of art, etc. tend to fetch a higher price in bookstores, and e-books may reflect that pricing.

Likewise, the perceived quality of the book affects how much anyone is willing to pay. Readers are accustomed to paying higher prices for big-publisher releases. These are authors with a track record of success and an established audience, and their books go through an intense vetting process. It’s a sad fact that if you’re buying a book from a first-time self-published author, you can’t count on it having been edited, formatted correctly, etc. Hopefully this will change. But in the meantime, if a book screams “self-published,” chances are the customer is less ready to pay a higher price for it. Bad covers are the most common culprit, but the book’s sales page, description, and other text are also places to watch. It’s excrutiatingly common to find obvious typos or grammar errors in a book’s Amazon description. Pay attention to the details in all of this. A book that is indistinguishable from that of any Big Five publisher can fetch a higher price every day of the week.

Is your book part of a series? If it is, one common strategy is to make the first book available inexpensively, then raise the price for the sequels—invested readers will pay a little more if they’re engrossed in the series.

3. Consider the author.

We’ve touched on this, but ask yourself: do readers know who you are? Do you have other books with positive reviews? Do you have an audience already? If you’re writing nonfiction, do you have any particular credentials that might help assure readers that they want to read your book? If readers are taking a chance on you, price accordingly.

 

Ebook Pricing: The Bottom Line

$3.99 was the magic number a few years back. Then, 99 cents. Now, the sweet spot seems to be to go with $2.99 or $3.99. But take all of this with a grain of salt. Every year, people try to figure out the “magic bullet” pricing model, and there isn’t one. We’ve spent the last several paragraphs discussing several factors that can affect the optimal price of a book, so take them into account. Our quick and dirty recommendation is this: start with $2.99 or $3.99 (choosing based on the criteria we’ve discussed in the previous steps), and adjust from there.

Remember, it’s pretty trivial to change the price of a book on the fly. Publishers and retailers alter the price of books all the time, and so should independent authors. It’s part of the work of being an engaged, active writer invested in their own success. Lower the price occasionally, advertise a sale, and see what trends develop over the course of a month. Or, raise the price and see if sales drop. The sweet spot is different for every book, and it changes over time. For best results, remain engaged.

 

Paperback/Hardback Pricing: The Basics

Everything we’ve said for e-books applies here, too—at least the more philosophical aspects. In addition, you need to factor in the base cost per unit, any additional fees online retailers may take, and (where applicable) retailer discounts. You’re looking for the price at which you “break even,” then adding a bit on top for yourself.

There are some nice tools out there to help you play with the numbers, like this one for CreateSpace (click “Royalties”.) When you set up a book for Print on Demand, regardless of which printers or services you use, you should at some point be told how much the base cost per book is. Just for example, let’s say it costs $5 to print the book. This will depend on the cover (paperback or hardcover), trim size, paper used, etc.

Now, from there, the numbers are going to vary depending on where the book is sold, so you’ll want to charge enough to allow for those variations. Let’s say Amazon takes 15% of the revenue—75 cents, if you were selling it at production cost. So, you’d want to leave some wiggle room in the price to account for that.

What of brick and mortar stores? If you want to get into them, they’ll typically expect an industry-standard trade discount, and among self-publishers these may range from 20% to 60% (55% is normal.) So, let’s say they’re only paying roughly half of the wholesale cost—once they do, and the base cost is deducted, how much is left for you? You might theoretically lose money on each book sold if you don’t charge enough.

You’re probably seeing a trend here: the more organizations involved, the more people taking their cut. Like virtually all product supply chains, those costs are traditionally passed on to the end consumer: your readers.

 

Paperback/Hardback Pricing: The Bottom Line

It sounds complicated, but it doesn’t have to be, so long as you charge enough to make sure everyone gets their piece of the pie. Calculating a price at two to three times the base production cost is a good place to start. Hopefully, that will fall somewhere between $9.99 and $14.99. Of course, there are further considerations specific to every book that depend on your distribution model and goals—your retail discount settings, for example, which Print on Demand services you’re engaging, etc. For most books, however, somewhere in this range is a price that is both a) attractive enough to the customer and b) still leaves you with a pretty good royalty earning on your end. You’ll have to play with the numbers a bit to see what’s right for your book.

And again, we can’t stress this enough: don’t be afraid to experiment a little. You can change the price of a book, in many cases, without much trouble. Try out a few different pricing structures and see what options perform the best for you. And if you need a little guidance, just get in touch.

 

Further reading:

PBS: How to Set the Right Price for Your Self-Published Book

Publisher’s Weekly: Surprising Self-Publishing Statistics

ALLi: Ingram Spark vs CreateSpace for Self-publishing Print Books

Click here to download your FREE Publishing Guide!