Wednesday, August 10, 2016

The Business of Writing: Ebook launch pricing strategies #ASMSG #MFRWOrg

Pre-decimal till, Museum of Liverpool.
Photo by Reptonix; free Creative Commons
license via Wikimedia Commons.
Welcome to The Maze's second installment of a three-part series on book pricing. 

For your convenience, if you missed part 1 about print edition pricing, you may view it here.

This week I tackle the trickier concept of e-book launch pricing.

Why is e-book pricing trickier?

Because with the establishment of a vendor account for digital publishing comes the relative ease of controlling your book’s pricing.

There exists a great temptation to set a price and leave it in perpetuity. That’s the easiest approach, but unless you have decided to make your book permafree, in the long run that practice will cause more harm than good for its sales figures.

The launch price of an e-book depends upon a number of factors, including:
  • An author’s popularity. The bigger your fan base, the more you can get away with pricing your books higher than your book’s competitors.
  • Whether the book is fiction or nonfiction. Like it or not, digital fiction is now being perceived almost as a commodity, with readers demanding to read an author’s blood, sweat, and tears for nothing or next to it. Not so with nonfiction e-books, which can attract a fair number of readers even when priced at $9.99 or more.
  • The popularity of your book’s genre or subject matter. In general, books written for more popular genres can enjoy more sales at higher prices, but in a decision between two books by different authors, where both authors are unknown to the customer, she will usually opt for the lower-priced book unless influenced by other factors such as reviews, cover appeal, or synopsis.
  • If part of a series, its sequence number. Most authors discount or make permafree the first book in their series after other installments become available. This entices readers to acquire the earlier works for a modest investment, potentially earning the author more fans along the way.

When establishing the price of your book’s digital edition, you need to ask yourself whether you would rather maximize the number of downloads, or maximize your royalties.

Among the major e-book distribution platforms—Nook Press, Kobo, and iTunes, in addition to KDP—Amazon is the only one that forces authors to set a certain price in order to earn its highest royalty payout percentage. For all Kindle e-books, the minimum price to earn 70% royalties is $2.99 and the e-book must be priced no higher than $9.99; otherwise, the author earns only 35%.

If you wish to maximize your Amazon profits, then, you need to price your e-book to fall within the 70% royalty window. At a 70% royalty rate, a $2.99 book will earn the author $2.09 per download. At $0.99 and an enforced royalty rate of 35%, the Kindle edition of your book will earn $0.35 per download. It will take six sales at ninety-nine cents to surpass the royalties earned from one sale of a $2.99 book. If you think your title will perform well when priced at $2.99 or more, then go for it!

But if you’re like most independent authors whose work struggles to bob above the ocean of books available to readers, then you may be better advised to launch your title at $0.99 and hope to attract proportionally more readers at the lower price point.

That’s how I, as a relatively unknown author at the time, was able to get almost two thousand paid downloads of my medieval paranormal romance Snow in July during the first three months following its July 2014 release with no advertising on my part except for two blog tours. Those aren’t astronomical numbers by any stretch of the imagination, but the performance was good enough to keep Snow in July lodged in Amazon’s top twenty for the category of Teen and Young Adult Historical Romance for several weeks running, earning many more downloads by readers who habitually shop off the first page of the category rankings.

The ninety-nine-cent book launch strategy is by no means a proven formula; so many other factors affect buying decisions, including a book's cover, genre, synopsis, keywords, release date, and its author’s popularity. But in today’s climate of digital fiction being perceived as a commodity, it’s not a bad plan to follow.

Breathing new life into an older title is trickier still, and I will tackle that subject next week.


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  1. Great read. As someone who's recently published her first ebook in the non-fiction category, pricing is something that I struggled with. I look forward to the rest of posts on ebooks!

  2. The trouble is that Amazon seems to remember your initial price. Price your book at $0.99 and you have no room for price adjustment other than to make it free. Price your book at $3.99 and you can have a 'special offer' of $2.99 and be seen to make a worthwhile reduction yet still retain that 70% royalty rate

    1. Amazon bases royalty payments on what looks to be a 30-day rolling average of your book's price. So if you've been offering it at $2.99 for 90 days and then drop it to 99 cents, you'll get a bit more than 35 cents per download for the first few days. The trick is to bounce it back up again as soon as possible after the sale period ends; you'll only get about 50 cents royalty on a $2.99 download for the first week or so after you've raised the price again. Kind of a good-news-bad-news thing. It would be better if Amazon didn't treat us all like below-minimum-wage monkeys, but I digress. (I'm a Seattle native, so I'm allowed to take pot shots at the hand that feeds me my bread and water. :D)

      In my experience, readers aren't impressed enough with a price drop from $3.99 to $2.99. These days I go from $2.99 (or $3.99) to 99 cents for the biggest "wow" factor. The math works out better for me that way. But then I'm also advertising on BookBub, which is a "wow" unto itself. :D

      Thanks for visiting and commenting, and best of luck with your work!


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