ebook pricing – One Thousand And One Parsecs

Here’s my new pricing strategy

A few weeks ago, I had an impression that I needed to revisit my overall pricing strategy, not just for ebooks but for audiobooks too. So I sent out a few feelers, trying to see how other indie authors are pricing their books, and also ran a reader survey (thank you to everyone who participated in that, by the way!)

After all of that, I’ve put together a new pricing strategy that I will probably keep over the next few years, inflation notwithstanding. It’s not that much different from what I was doing before, but it is worth sharing with you, especially if you’re on a tight budget and you want to know the best way to pick up my books. So let’s go through each format, and I’ll share my plans.

Paperbacks

Until now, I’ve basically just been pricing all my paperbacks at a flat $14.99 USD, with equivalent price points in each of the major currencies. For shorter books, this meant that I took a hefty profit. For longer books, a hefty loss.

Moving forward, as I move to distribute all of my titles through Ingram via Draft2Digital, I am going to price my paperback titles such that I take at least a $2 profit through wide distribution. For most titles, this means they will fall somewhere in the $12.99 to $15.99 range. Some of the larger books may go as high as $18.99. This does not include shipping costs.

As always, if you purchase a paperback on my store, I will sign and personalize them for free if that is what you want me to do. Not all of them are up yet, but I hope to get them all up there over the next few weeks.

Audiobooks

Until now, I’ve been pricing my audiobooks on the lower end of the price range that human-narrated audiobooks can command, which means that most of them were either $8.99 or $16.99. That was just the list price, though, and I frequently ran month-long sales where they were all discounted to $2.99. And of course, if the ebook was already free, I also made the audiobook free.

But this was before AI-narrated audiobooks began to come out on the major platforms in large numbers. Now, it looks like one of the biggest trends in the book world is the explosion of AI-narrated audiobooks. I forget which podcast I heard it on, but some industry experts are predicting that within 10 months, most of the audiobook market will consist of AI-narrated audiobooks.

Obviously, it costs much less to produce an AI-narrated audiobook vs. a human narrated audiobook. In fact, without AI, none of my titles would be available in audiobook format, since they are all AI-narrated. And after asking around some of the author communities I follow, it appears that most authors are pricing their AI-narrated audiobooks closer to their ebooks, rather than their human-narrated audiobooks.

What was more surprising to me was to learn that of the readers who took my reader survey, those who listen to audiobooks felt fairly strongly that an AI-narrated audiobook shouldn’t cost more than the ebook. So it’s not just the authors who are driving this trend, but the readers as well.

With that in mind, and the data I gathered on ebook pricing points, I have decided to make the list price of all of my digital books, whether ebooks or AI-narrated audiobooks, priced at $4.99 moving forward. That’s just the list price, though: occasionally, I will run a $2.99 sale, where either all my audiobooks or all of my ebooks are discounted to the $2.99 price. And for certain titles, like my Sons of the Starfarers books, I plan to keep them on a $2.99 sale permanently, since it’s a nine book series and that’s what they were priced at before. Also, if the ebook is free, so is the audiobook.

And as always, if you buy an audiobook from my online store, you automatically get the ebook free as well.

Ebooks

Before, I used to price my ebooks at either $2.99, $3.99, or $4.99, depending on the book. In general, first-in-series books were permanently at $2.99, while the later books were all at $4.99.

Moving forward, however, I plan to keep all of my ebooks (except for the Sons of the Starfarers books) priced at $4.99, regardless of where they fall in the series, though I will occasionally run $2.99 sales across the board.

(The exception to all of this is box sets, which I plan to keep at $9.99. At this time, I only do box sets for the ebooks, and I don’t want to price those so low that they undercut my regular titles. I may discount them during a $2.99 sale, but I haven’t yet decided on how much.)

My goal with this is to make it so that price isn’t a factor in deciding which book to buy next. If they’re all the same price, then it shouldn’t make much of a difference—and if $4.99 is too much for your budget, then you can just wait until I run the next $2.99 sale, which should happen approximately every third month or so.

As always, you can get $1 off of the ebook with the coupon code “buy direct” when you purchase it from my store. This only applies to $4.99 books, however—if the book is currently on sale for $2.99, the coupon does not apply.

$2.99 sale November-December 2024

With all of that said, I am currently running a $2.99 sale on all of my ebooks and audiobooks, from now to the end of 2024. If you’ve wanted to read my books in ebook or audiobook format, but have ever balked at the price, now is a great time to pick them up! I have somewhere north of 20 novels out right now, and in the coming months, I plan to publish a lot more (which is another reason to run $2.99 sales, so that my readers don’t have to spend upwards of $100 to read all of my books).

Inflation and book pricing

So with inflation being what it is, one of the questions on my mind these last few months has been whether I should raise my book prices to keep up with the increased cost of living. We’re definitely feeling it every time we go to the gas station or the grocery store, and I’m sure that all of you are feeling it too—and those of you overseas are probably feeling it much worse than we are.

Short answer: No, I do not plan to raise my prices in the immediate future. In fact, I’ve actually lowered some of my prices. When I do raise prices, it will be because Amazon and the other retailers have changed their printing costs and/or royalty structure.

Long answer: My books are currently priced according to the following schedule (all prices in USD):

Free or 99¢: Short-term sales and permafree books.
$2.99: Ebooks only, typically novellas.
$4.99: Ebooks only, typically novels and collections.
$8.99: Audiobooks only, where the ebook is $2.99.
$9.99: Ebook bundles and some paperbacks.
$14.99: Paperbacks.
$16.99: Audiobooks only, where the ebook is $4.99.

Every year, I conduct a reader survey around October-November. A couple of weeks ago, I got the results back from this year’s survey, and the answers to the pricing questions are largely unchanged. If anything, it seems like readers are more price conscious than they were last year.

And that makes sense, when you consider that books—especially genre fiction books—are a luxury item for most people. When the budget is being squeezed by the increasing price of food and gas, it makes sense that readers would cut back on their book buying habits. After all, paperbacks have very little nutritional value—ebooks and audiobooks even less so—and burning them is a very expensive way to keep warm.

All joking aside, though, I don’t think that now is the time to raise my prices. From a business perspective, the data just doesn’t support it, but also from a human perspective it just seems like a bad thing to do. I like my readers. I don’t want to put the screws to their wallets just because everyone else is, too.

(In fact, the data indicates that I’ve been making a mistake by pricing all the first books in my trilogies at $4.99. One of the questions on my survey was “from which of my series have you read at least one book?” and none of my series received more than a 45% response. This tells me that there isn’t enough series crossover happening, and that I need to treat the first book in every series as a potential entry point into my catalog. So I’ve decided to drop my ebook prices to $2.99 for every first book in a trilogy, even where I haven’t finished the trilogy yet.)

The other side of that, of course, is that my own wallet is getting screwed. Jeff Bezos famously said that “your margin is my opportunity,” and as much as we indies may love Amazon, Amazon is definitely not our friend. But so far, the screwing has not been much of a problem, at least as far as inflation is concerned.

When Amazon essentially created the indie ebook market, they did it on an agency model, where publishers set the prices and receive a percentage from the sale in royalties. For the last decade, that royalty structure has not changed: ebooks priced between $2.99 and $9.99 get a 70% royalty rate, and everything else gets 35%.

Things are a little different on the print side of things, which follows a wholesale model and delivers a physical product. Printing costs are definitely creeping up, though so far it’s only been by a few cents. At $14.99, I’ve got a fair amount of wiggle room, but if per-unit print costs go up by a couple of dollars, I will have to raise my prices.

Same thing with the digital products. If inflation continues to accelerate, or even if it continues at its current pace for a sustained period of time, there is a very good chance that Amazon will change their royalty structure for ebooks, and all of the other platforms will likely follow suit. If/when that happens, it really will put the screws on us indie authors, and you’ll probably see most of us raise our prices as a result.

I don’t know how I’ll respond when that happens, but I’ve decided that until it happens, it will be better to keep my prices where they are. So until the increasing print costs or changes to the ebook royalty structure force me to increase my book prices, I plan to keep them where they are.

Print vs. Ebook vs. Audiobook: Pros and Cons

Print

Pros:

A printed book is a hard, physical copy that cannot be altered, edited, deleted, revoked, remotely accessed, or otherwise tampered with by a third party who does not have physical access to the book.
The reading experience is totally private. Governments, corporations, and other third parties cannot easily know about what you read or how you read it.
Marginalia is easier with a print copy. All you need is a pencil and maybe some tabs or sticky notes.
It is easier to flip through a print book than any other book format. Much better for reference.
Print books are fantastic for sharing and borrowing. You don’t need any devices, permissions, or anything. Just take it off the shelf and put it into the borrower’s hands.
Does not require any sort of power source or electricity to read. Works perfectly fine when the power is down.
Print books can be quite collectible, and some are worth quite a lot, depending on first editions, cover art, etc.
You can get your copy signed by the author(s), which is always fun. It also makes the book more collectible.
When you finish reading the book, you have a totem or artifact to commemorate the reading experience.
The books that you choose to put on a public shelf can be a way of expressing yourself: your tastes, opinions, and any fandoms or communities to which you belong.
Used copies are typically very cheap, even for bestsellers and signed copies, and with enough patience and resourcefulness they are not too difficult to find.

Cons:

Because they exist in the physical world, print books take up space, and can be quite heavy and bulky.
Print books are prone to damage from things like water, mold, food, drink, fire, blood, parasites, etc.
Even though you don’t need electricity to read a printed book, you do need some kind of light source.
Print books are easy to lose, especially if you loan them out. A portion of the people who borrow your books will invariably lose them or forget to return them.
Because of their bulkiness, it is difficult to transport books, especially in large quantities. Even a single book has limited portability, especially if it is a hardback.
If you want to borror a printed book from the library, you have to go to the library to get it.
Print books are not text-searchable.
Print book$ can be quite expen$ive to buy new, e$pecially the hardback edition$.

Ebook

Pros:

Ebooks are the most portable format, by far.
The file size is tiny, typically just a few megabytes.
You can read an ebook on almost any digital device.
You can read ebooks in the dark, especially with an ereader that has a backlight. This makes it possible to read in bed when your spouse/partner is asleep.
Fonts are adjustable, so if you need large print to read, you can do that with any ebook.
It is very easy to borrow an ebook from the library. All you need is a library account and an internet connection.
Footnotes can be hyperlinked, so they don’t take up space on the bottom of the page (or worse, interrupt the narration).
You can easily save comments, highlights, notes, etc, and share them all with your friends.
Marginalia is not permanent with ebooks, nor does it mar or deface the book.
It’s easy to look up unfamiliar words using the ereader device’s (or app’s) dictionary.
If you’re reading something potentially embarassing, people in your immediate vicinity can’t tell.
Ebooks are length agnostic, meaning that the reading experience is the same for a short story as it is for a novel. No having to lug around a bulky chihuahua-killing doorstop of a tome. You can read a massive million-plus word box set just as easily as a pamphlet.
Indie books are typically very cheap, and you can fill up your ereader with free books quite easily.
With enough patience and a keen eye for good deals, you can even buy traditionally published ebooks at a good price.
Ebooks are text-searchable.

Cons:

Ebooks require a power source. While most ereader batteries hold a charge for quite a while, you do eventually need to recharge them.
While you don’t need an internet connection to read an ebook, you do require internet to download it to your device.
Legally speaking, when you purchase an ebook, you’re actually just licensing it and don’t technically own it.
Ebooks can be changed remotely by third parties, or even deleted and removed from your device.
Privacy is a potential issue with ebooks, as third parties can see what you’re reading, and corporate entities can—and often do—gather data on your reading behavior.
PDFs and images are clunky and difficult to read, at least on some devices.
Bad formatting is much more of an issue ebooks, and can actually make the book unreadable.
It is a lot more difficult to flip through an ebook.
Traditionally publi$hed ebook$ are ridiculou$ly expen$ive.
Sifting through all of the crappy self-published ebooks to find the few good ones can be quite a challenge.

Audiobook

Pros:

Unlike print books and ebooks, which require your eyeballs to read, you can listen to an audiobook while your attention is focused elsewhere.
Because listening is a more passive activity than reading, you don’t need to concentrate as much to listen to an audiobook as you do to read a print book or ebook.
It’s easier to get through (most) longer or more difficult books in audio than it is in print or ebook format.
Borrowing audiobooks from the library is easy: all you need is an account and reliable internet.
Audiobooks are as portable as your smartphone, tablet, or other device that you use to listen to them.
Audiobooks can fit reading into the interstitial spaces of your day, such as when you are commuting or doing chores. Time that would otherwise be spent in mindless activity can now be used to fit in your reading time, making it possible to read a lot more books.

Cons:

Audiobook file sizes are enormous. It’s difficult to fit a sizeable library of audiobooks on a single device.
It is almost impossible to browse or “flip through” an audiobook, so they aren’t great for reference and good luck if you ever lose your place.
Marginalia is difficult with audiobooks. Most apps allow you to take little audio clips, but it’s still quite clunky.
Just like ebooks, audiobooks can be altered or deleted by remote third parties.
Just like ebooks, privacy is a potential issue, with third parties gathering and selling data on your reading behavior.
Just like ebooks, you don’t technically own your audiobook. What you’ve purchased is the license, not the copy itself.
Audiobooks are much more temporally constrained. You can listen on 2x speed and higher, but that isn’t the same as skimming or speed-reading.
Because the reading experience is more passive, audiobooks tend to be more forgetable than print/ebooks.
A bad narrator or performance can kill an audiobook, much more than a bad presentation kills a print/ebook.
Because it requires less mental concentration, the reading experience is not as deep with an audiobook as with an ebook, and you may have difficulty recalling details.
Mo$$t audiobook$$ are ridiculou$$ly expen$$ive, even more $$o than traditionally publi$$hed ebook$$.

Did I miss any?

Seven years of ebook pricing data

Last October, Dean Wesley Smith wrote an interesting blog post on the subject of pricing. As an indie writer (or really, as a small business owner in general), pricing is one of those things that’s constantly on my mind. Pricing too high can be fatal for any business, but pricing too low can be a terrible mistake as well.

Dean Wesley Smith’s pricing strategy basically went like this:

Novels

$3.99 to $6.99
Price according to genre, not length
Romance on the lower end
Mystery on the higher end
SF&F in the middle

Short Stories

$1.99 to $3.99
Price according to length, not genre
$1.99 for under 3k words
$2.99 for 3k to 10k words
$3.99 for 10k to 20k words
Over 20k words price as a novel

From November until now, I’ve basically followed this strategy, with a few tweaks for short stories. Under 1k words, I’ve priced at $.99, and between 3k and 20k words, I’ve priced at $2.99. It’s only at 30k words that I’ve priced my books as novels.

This isn’t my first time experimenting with prices. I’ve been publishing since 2011, and have all of the sales reports and other data in one form or another. So last week, I decided to crunch that data and compare it with the last four months.

Genesis Earth is my first novel, and the book on which I have the most data. It’s a 70k word YA science fiction novel.

Crunching the data, I found that on average, the book performed best when priced at $3.99, with a few outliers at $2.99. However, most of those outliers are from 2011, before Kindle Unlimited or KDP Select, and before the book had fallen off of the 90 day cliff. Excluding the first two quarters of 2011, those outliers fall away.

Bringing Stella Home is the first book in the Gaia Nova series, and the book for which I have the most data that is also part of a series. It is a 110k word space opera novel.

Interestingly, the book appears to perform differently as a standalone than it does as part of a series. As a standalone, it appears to perform best at $4.99, but the series as a whole performs best when it’s priced at $3.99.

By the way, I tend to price all the Gaia Nova books at the same price point, so except for $.99 and $1.49, it’s fair to assume that all the books share the same price as Bringing Stella Home for any given datapoint.

Interestingly, the data tend to confirm the results of an ebook pricing survey I sent out to my email list about a year ago. The results are pictured above. More than half of respondents said that they were only willing to pay $3.99 or less for an ebook from an author they trust, and more than 80% weren’t willing to pay more than $2.99 for an unknown author.

Unfortunately, I don’t have enough pricing data for my novellas and short novels (under 50k words) to draw conclusions for any other price points besides $.99 and $2.99. Obviously, the $2.99 price point performs vastly better than $.99. There’s a little more nuance than that when it comes to series pricing, but I’m keeping that data close to the chest.

I have yet to crunch the data for my short stories. When I do, that will probably be the subject of another blog post.

From these results, it appears that $3.99 is the sweet spot, both for series and for standalone novels. The data from the last three months are not included in the graphs, but from what I’ve managed to gather my books do not perform as well when I use Dean Wesley Smith’s pricing strategy. It was worth trying out as an experiment, but four months during the prime bookselling time of the year is enough to conclude that it doesn’t work, at least for my books and my readership.

Here’s the pricing strategy I’ll be using from now on:

Novels (over 50k words)

$4.99 to $5.99 for frontlist and new releases
$3.99 for backlist
99¢ and free for promotions

Novellas and Short Novels (10k to 50k words)

$2.99 for frontlist and backlist
99¢ and free for promotions

Short stories (under 10k words)

I have no idea. Still need to figure that out.

Dear Ms. Reader,

Dear Ms. Author.

I really like your books. I think they are well-written and I enjoyed reading them. (So far, so good, right? Hang on.) However, I have returned them all because you priced them at $0.99 to $2.99, and that is too much to pay for them. I can’t afford to pay that much for a book, even though I liked it. In the future, can you make sure you make all your books free so I don’t have to return them?

Dear Ms. Reader,

Thank you for reading my books. I appreciate your patronage. However, this is why my books are not all free:

What have you done to serve your fellow man?

Sincerely yours,

Joe

Why my books are not in Kindle Unlimited

Last year, Amazon came out with a book subscription service called Kindle Unlimited. As a reader and an Amazon customer, I’ve noticed that they’ve been pushing this service quite aggressively. As a writer, I’ve been following it quite closely, especially with some recent changes with how they compensate their authors.

However, if you check my Amazon catalog, you will find that none of my books are available on Kindle Unlimited. And if I had to tell you why, I could sum it up in just one word:

Exclusivity.

In order to enroll your books in Kindle Unlimited, Amazon demands that the content of your book cannot be available anywhere else. Not on competing retailers. Not on your website. Not on a site like Wattpad or posted on social media. It’s KU and KU only, take it or leave it. And you can’t get around that by doing separate editions, since it’s the content that must be exlusive, not the book.

Recently, Hugh Howey argued that KU’s exclusivity doesn’t really hurt writers or readers, because all of Amazon’s competitors in the ebook market suck so hard that it’s no big loss to lose them anyways. I disagree, though. Different readers have different needs, and as great as Amazon is, it isn’t the best choice for everyone.

I believe that readers should be empowered to make their own choices, not only in what they read, but in how they read it. Some readers would rather sideload their ebooks, and don’t want to deal with Amazon’s proprietary .mobi format. Others would rather keep their books native to their device and not deal with Amazon’s apps. Others live in parts of the world where Amazon tacks on an arbitrary $2 USD surcharge to every kindle store purchase, and that obviously doesn’t work for them.

Put simply, I believe that exclusivity is a bad deal for readers—and that because of that, it’s also a bad deal for writers. The less control that readers have over what they read, the less they are going to read. The more control that middlemen have over the market (and for all the wonderful things that it does, Amazon is still a middleman between readers and writers), the less pressure there is for them to innovate and improve.

On many of the indie writers forums and communities that I frequent, it appears that other writers are more interested in short-term monetary gains than in doing what best serves their readers. And that’s unfortunate, because Kindle Unlimited is structured in such a way that it pits writers against each other in a zero-sub game. Instead of paying a fixed rate for each page (or KENPC) read, Amazon sets a “pot” and pays each author a share of it, in proportion to how many borrows/pages they got. Thus, if one author gets more reads than another (or games the system to make Amazon’s algorithms think that he had more reads), that means less money for the other author.

A lot of writers argue that it’s not really a zero-sub game because Amazon usually adds to the pot after the month is over, thus manipulating the borrow rate to hit some undisclosed target. Even if that’s true, though, it makes things even worse. If Amazon has a target borrow rate in mind, why not tell authors up front? It basically amounts to not telling authors how much they’re going to be paid until after their books have been sold. In any other supplier relationship, this blatant lack of transparency would be insane.

From what I can see, it’s all about control. Exclusivity gives them a great deal of control, not only over the marketplace but over authors as well. The lack of transparency and ever-changing borrow rates make it difficult for authors to gather the data they need to decide whether to stay in KU or to publish their books widely. And authors who decide not to opt into KU are punished by having their books rank lower, thus achieving less visibility in the Amazon ecosystem. In the year since KU came out, my Amazon income has fallen by at least 60%.

Even with all of that, though, I would be happy to enroll all of my books in Kindle Unlimited if Amazon dropped the exclusivity requirement. There are a lot of readers who prefer Amazon’s KU subscription service, and I would love to make my books available for them.

But exclusivity is a bad deal.

Print, pre-orders, and points of business

For those of you who are reading the Sons of the Starfarers series, I have a few updates and points of business that I think you may be interested in.

First, Sons of the Starfarers: Omnibus I-III is now up for pre-order on most of the ebook sites. It will go live on November 1st, but the print edition should be available on Amazon and CreateSpace about two weeks before that. All I have left to do for the print edition is the typesetting, but that takes a lot of time, so I’m shooting for October 15th to have the print edition ready.

Now, here’s the interesting part. Amazon has a program called MatchBook where people who buy the print edition can get the ebook edition for cheap or free. For the omnibus edition, I’ve set the discount ebook price for $.99, which means that if you buy the print edition, you can get the ebook for just $.99 extra.

The big question is how this applies to pre-orders. If you pre-order the ebook and buy the print edition before the ebook comes out, will Amazon charge you the full $5.99 or the $.99? I don’t know yet, but I plan to ask an Amazon representative to clarify. Because if ordering the print version while the ebook is still on pre-order means that you get the ebook at the discount MatchBook price, I will do everything I can to get the print version out in time so you can do that.

For links to the omnibus, keep an eye on the front page: I haven’t added it to my blog yet, but I plan to do that shortly. Or you can just go over to your favorite ebookstore and search for “sons of the starfarers omnibus.”

Finally, I’ve decided to drop the price for Brothers in Exile (Sons of the Starfarers: Book I) from $2.99 to $0 and make it permanently free. The trick now is getting Amazon to price match with the other retailers, since you can’t technically set the price of an Amazon book to $0 (you have to mark it down on a competitor and let them know). So if you have a few moments to help, I would appreciate it! Just follow these steps:

Go to the Amazon page for Brothers in Exile and look for the link that says “tell us about a lower price.”
When you click the link, it should bring up a submenu that asks you where you saw the lower price. Click on “website.”
Where it asks for the URL, copy and past either the link to iBooks, the link to Nook, or the link to Kobo (or all three!).
Where it asks for the competitor’s price, enter “0” and click “submit feedback.”

That’s it! If you could take a few moments to do that, I would greatly appreciate it. And if you haven’t read Brothers in Exile yet, here’s a great way to get it for free!

For those of you waiting for Friends in Command (Sons of the Starfarers: Book IV), I’m happy to say that progress is coming along very, very well with that one. I hope to have it up for pre-order before the end of October, and the tentative release date will be January 3rd. It’s going to be a bit of a crunch to get it all done in time, but I’m really eager to write this story and I think I can get the first draft done in the next couple of weeks.

That just about does it. Back to writing!

Cover reveal for BROTHERS IN EXILE!

I just got the cover art for Brothers in Exile (Sons of the Starfarers, Book 1) and it looks pretty sweet–check it out!

The cover designer is Kalen O’Donnell–he’s going to be doing the covers for the rest of the series. The scene here is from the first chapter, where Isaac and Aaron arrive at the derelict station in the Nova Alnilam system.

The book is coming along quite well–I should be ready to publish it before the end of the week! Just have to go through the edits, make a couple of small changes, and format it for publication (but that part doesn’t take too long). With luck, it should be up in time for Memorial Day.

I’m going to try something a little different with this book and launch it at $.99 for the first week, then raise the price up to $2.99 afterwards. That way, I can give my fans a good deal, and hopefully move it up on some of the lists to gain some visibility. That means it will only be available on Amazon, Smashwords, Kobo, and Barnes & Noble for the first week, though, since it’s harder to make price changes on the other sites, and Amazon will send you a nasty take-down notice if the book is selling for less on any other site.

That’s just about it. Back to work now–I’ve got a book to publish!

P is for Pricing

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:

I want to maximize my revenue with my current books.
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.

Experimenting with prices

So now that the last Star Wanderers novella is out and I’m hard at work on the next book, I’m thinking very seriously about experimenting with my prices. I haven’t done a lot of price experimentation, especially since writing became my main source of income about six months ago. I just recently landed a job to save up some money, though, so that gives me a little more space to try things out.

Right now, I’ve basically got three pricing tiers for ebooks: novels and omnibuses at $4.95, novellas at $2.99 (especially Star Wanderers), and short stories at $.99. My best sellers by far have been the Star Wanderers novellas. Now that Part VIII is out, though, I’ve noticed that fewer people who start the series are going through and finishing the whole thing. I’ve also got a fair amount of pushback in the reviews, saying that the $2.99 price for the novellas is too high.

The tricky thing is that at any lower price point, my royalties take a huge hit. At $2.99, I get a 70% royalty from Amazon and a 65% royalty from pretty much everywhere else. At anything less, I get a 35% royalty. That means that at $1.99, I have to sell three times as many books to make the same as I would from one $2.99 sale. At $.99, I have to sell six times as much.

But wait, it gets trickier. The general consensus (inasmuch as there is a consensus about any aspect of epublishing) is that $1.99 is a dead price point. In other words, a book priced at $1.99 will sell so many fewer copies than a book priced at $.99 that they earn less revenue. A $2.99 book may also sell less than a $.99 book, but the increased royalty rate makes up for the shortfall.

Up until this point, my pricing strategy has been to maximize revenue, so that I can have more time to write. That worked fairly well: I put out one novel and four novellas in 2013, finished up the Star Wanderers series, and started a number of other projects that will hopefully bear fruit in 2014. But now that Star Wanderers is complete, I think it might be time for a change in strategy.

What I’ve learned in the past month is that readers will drop out of a series early if 1) the series is long, and 2) the individual parts in the series are priced relatively high. A lot of readers either drop out after Part II or pick up the omnibus, but the ratio of sales between Part II + Omnibus I-IV and Part VIII frankly isn’t that great. From Part V to Part VIII, it’s almost 1:1, but a lot of readers are dropping out right at the beginning–a lot more than when there were only four parts.

Part of this may be that the story just isn’t engaging that many people, but another part may be that the price has become something of an obstacle, especially as readers look ahead at all the other books in the series. Length probably also plays a role–my Star Wanderers books are fairly short, leaning more toward the low-end of the novella spectrum. Combined with the fact that many full-length sci-fi novels are now priced at $2.99, that probably only makes readers balk all the more.

I want to see what will happen if I drop the price low enough that it ceases to be an obstacle. Will fewer readers drop out after the first couple of books? Will more of those readers move on to my other books? Exactly how much of a hit will my revenue take?

For all of these reasons, I’m going to drop the price of my individual Star Wanderers novellas to $.99 for a month to see what happens. To keep the omnibus price competitive, I’ll drop it to $3.79 and release the second omnibus at $3.79 as well. I will raise the list price of the print editions, though (mostly to shoot for extended bookstore distribution), and probably raise the price of my novels from $4.95 to $5.99.

I have no idea how this is going to turn out, which makes me kind of nervous. Since I want to move on to other projects, though, including a spinoff series that I hope to launch later this year, I think it’s more important to encourage readers to read through Star Wanderers as a whole without putting any potential obstacles in their way.

So yeah, that’s the plan. We’ll see how it goes. I’m open to any feedback or ideas, so if you have any thoughts to share either as a reader or as a writer, please don’t hesitate.