One of the most contentious issues among indie writers is how to price our books. With self-publishing, the decision is left up to the author, which can lead to some wacky rationales for pricing. Here are just a few of them:

My book is worth more than a cup of coffee.

This is clearly a rationale that is driven more by emotion than by reason, yet most of us fall into it when we first start out. I know I did. The idea that people would spend more for a cheap hamburger than for a novel that took me months of agony to write was a blow to my ego, one that took me a while to get over. But I’m glad that I did, because this reason is just silly.

Books are so different from hamburgers or ice creams or lattes that comparing them is like comparing apples to oranges–no, like comparing apples to transistor radios. So what if people are willing to spend more for cheap fast food than for your awesome, amazing, life-changing book? That fact is irrelevant, because the two are not analogous. The quicker you can learn to suck it up and disconnect your prices from your ego, the sooner you’ll learn to treat your writing like a career.

I have to price my books low because I’m a new, unknown writer.

This is another rationale you may be tempted to fall into when you’re first starting out. It grows directly out of impostor syndrome–the fear that you’re really just faking it as an author, and that someone is going to call you out on it if you don’t first.

This also comes more from the emotional side than the reasonable side. Believe it or not, there are readers who have never heard of Stephen King, or James Patterson, or J.K. Rowling, or Brandon Sanderson. Tracy Hickman is fond of pointing out that there are whole provinces in China where no one has ever heard his name. Everyone is an unknown to someone, but that doesn’t mean that your fans will love your books any less–or not be willing to pay any more for them.

For most readers, I think price is just one factor of many, and not nearly as crucial a factor as we might think. When I released my first Star Wanderers omnibus, I priced it at $4.99 while the other parts were at $2.99, and priced myself for the fall in revenue as readers abandoned the individual parts for the omnibus. Instead, both the omnibus and the parts sold about equally, even though the omnibus was clearly a better deal. I have no idea why that was, but it told me that not every reader pinches pennies, at least at price points under $5.

If I price my books too low, I will devalue my work.

This rationale grows out of the idea that sometimes, people are more willing to buy something that costs more because the perceived value is higher. Starbucks does this with coffee, and Apple does this with their devices. The idea is that consumers are conditioned to attach a product’s value to its price, or at least to correlate the two.

I used to believe this, but I don’t anymore. Instead, I think this is the kind of thing that authors want to be true, but they want it so badly that they blind themselves to how things actually are. I recently dropped my prices across the board, and I not only found that my sales increased, but that my overall revenue increased as well. In my experience, readers attach value much more to things like blurbs, samples, and cover art than they do to price, and that “devaluing” your work is a great way to hook more readers with a great deal. In fact, I now believe that the best price is the one at which other writers scream at you to stop devaluing your work.

I need to price my book high enough so that I’m earning at least minimum wage.

Books earnings don’t work like wage earnings at all, and confusing the two will cause even more problems than confusing your book with a cup of coffee. Seriously.

Writing isn’t about getting paid for putting in your time, it’s about getting paid for the value that you create. If you create something that the market deems has value, it becomes an income stream that will continue to pay you for years, perhaps even decades. With a wage job, on the other hand, all you get is a paycheck.

The two paradigms are so dissimilar that I don’t even know where to begin in explaining how stupid it is to compare indie writing to a wage job. When you are a self-published writer, you are not an employee–you are the boss. You don’t merely have a job–you own a business. Your earnings don’t come from payroll, they come from revenue. At a certain point, higher prices lead to lower revenue, and sometimes that point puts you below minimum wage. It sounds tough, but that’s just how the market works.

You’re not entitled to a living wage just because you wrote a book. Write more books, write better books, and keep on publishing them until your revenue does exceed minimum wage. Pretty soon, you’ll be shocked to find that you’re still getting paid for work that you did years ago, and still making money even when you take a day, or a week, or a month off. I know that I certainly am.

There are other weird and wacky rationales for book pricing, but those are the biggest ones that come to mind. As for rationales that actually make sense, I can think of only two:

1. I want to maximize my revenue with my current books.
   
2. I want to build a following for my future books.

Once you’ve figured out which one you want to follow, the only rational way to figure out what prices work the best is to experiment with them, even if the experiments make you cringe. You have to be data driven, and not emotionally driven, if you want to find the sweet spot.

For the past few months, I have been experimenting with the prices of my science fiction books, collecting the weekly data from Amazon and watching the trends. Here is what I’ve found:

Perma-free — The best price for attracting new readers, but only if the free book leads directly to another book, such as the next book in the series. This is also the easiest and most effective price point to promote.

$.99 — The best price for building an audience, and the most effective way to create a sales funnel in conjunction with a perma-free book. When I dropped the prices of my Star Wanderers stories to $.99 from $2.99, I saw a marked increase in the percent of readers who went on to buy Part II after buying Part I. I also saw an increase in positive reviews, both on Amazon and Goodreads.

$1.99 — A dead zone. It really is. This price point has all of the drawbacks of $.99 and $2.99, with none of the benefits. When I briefly priced my Star Wanderers books at this price point, sales AND revenue fell below what they were at $.99.

$2.99-$3.99 — The best price points for maximizing revenue, at least in science fiction. At $2.99, you jump from the 35%-40% revenue rate to the much more lucrative 65%-70% rate. And even though $3.99 might seem low, I’ve generally found that I sell enough copies at that price point to more than make up the difference from the increased earnings per sale (but lower sales) at a higher price point.

That said, when the Star Wanderers books were all $2.99, they didn’t sell nearly as well, even with the first book in the series perma-free. And the fall in revenue when I dropped the price to $.99 was not nearly as dramatic as I had expected. Instead of falling to 1/6th of what it had been at $2.99, it fell to more like half, due mostly to increased sales of the omnibuses, which stayed up at $3.99.

$4.99 — I’m not sure what I think of this price point. I priced my Gaia Nova books at $4.95 for years, and never saw many sales come from it. Then again, those books have yet to really take off, so I can’t say with any authority that this price point is really bad. However, I will probably avoid it in the future, except possibly for omnibus works.

$5.99 — Again, I can’t really say that this point is dead, but I can say that my sales were much more sporadic here than they were at $3.99. At best, though, I’d generally earn as much revenue per week at this point as I would at $3.99. At worst, I’d earn nothing.

I can’t say anything about the higher price points because I haven’t experimented with them. As for print books, I don’t sell enough to really be able to say. Again, this is only for science fiction–pricing varies widely from genre to genre, so what works for what I write may not work for what you write. Even within science fiction, I’m sure there are some differences.

At the end of the day, though, I think it’s important to recognize that pricing is an important part of the author-reader relationship. You don’t want your readers to feel like they’re getting screwed–you want them to feel like they’re getting a good deal. For a long time, I think I priced my Star Wanderers books a bit too high, and generated a bit of ill-will among readers for it. Even though I want to earn a living, I hate it when price becomes an obstacle to readers enjoying my books.

As David Gaughran put so astutely in one of his recent posts, value is something that readers attach to a book, whereas price is something that we as self-publishers attach to it. If the price is lower than the value, readers will be satisfied enough to keep coming back for more–and that right there is the key to building a career.