This is the eight part of my continuing series INDIE PUBLISHING FOR INTERNATIONAL WRITERS, a step-by-step guide to getting your stories into (digital) print. I’ll be doing each step with you, learning as you do, because I’ve never done this before either. I will be compiling all these steps into a free e-book for my blog-readers when I am done.
Step 8: Pricing Strategies
There is a lot of debate about pricing. Today, I want to avoid a discussion of the ethics of various strategies. Instead, I would like to talk about their respective pros and cons for the writer employing them.
This means we won’t talk about whether it is right for authors do give away work or price it low (or high). We won’t get into emotional arguments about how your novel took you three years so it’s worth a lot more than $2.99. In a strict business sense, it’s worth what people are willing to pay for it.
Instead, we will discuss what works and what doesn’t depending on your respective goals.
The only firm belief I have with regard to pricing is that you should be flexible, and find the right price for your own book free of ideology or any other such nonsense, depending on what you hope to achieve.
I will round off this post by outlining my pricing strategy and the reasons I have chosen it. Not everyone will agree with my choice. That’s fine, you should choose a strategy that suits you.
Maximising Readers – A Free For All
If your #1 goal is to maximise readers – at the expense of everything else – then the best way to achieve this is to give your work away for free.
You can do this in several ways, but for an all-encompassing free strategy, you should upload your work as normal to Amazon, pricing it at the minimum – $0.99. Then, when you upload to Smashwords, you price at at free. You can also make it available on your website.
Once your book has entered the Premium Catalogue, the “free price” will be pushed out to all the partners (Barnes & Noble, Sony etc.). Amazon will then reduce it to $0.00 in a matter of days.
They don’t tend to reduce the price if it is only free on Smashwords, so you must get into the Premium Catalogue for this to work (and select distribution to Sony at the very least).
The pros of this strategy are obvious, you get a huge increase in readers. Writers on Kindle Boards have reported going from a handful of sales a month to thousands of downloads. This strategy tends to be used by writers whose goal is not to make money, but to just get readers. That’s fine if that’s your goal.
For writers who hope to make money, their aim is that readers of the free work will go on and purchase other titles. A lot of these writers have written a series, and they are hoping the reader will get hooked on the free title, and pay for the rest.
For others, it’s a short story they are giving away, and they hope readers will like their writing and pay for longer work.
The obvious downside is that you don’t get any royalties. On top of that, there are a lot of people out there who will just download anything that’s free so they can say they have 1,000 books on their Kindle. They may never read it.
Finally, one thing to keep in mind is that there is a possibility that you are creating a negative value perception of your work in the mind of the reader. People may assume that it’s rubbish because you aren’t charging for it. Unfair? Maybe, but it happens.
Maximising Readers – 99 cent
I wrote extensively about 99 cent pricing last month. As a strategy, it is clearly a viable one, with many authors having success at this price. Some, like John Locke, price all their work at 99 cent. Others, like Amanda Hocking, use the first book in a series as bait, price it at 99 cent, and charge $2.99 (or more) for the rest.
It seems that this “baiting” strategy is more effective with a series than having a mixed price range with stand-alone novels.
If you are using 99 cent pricing as any part of your overall plan, you should note that the minimum price you can set in Germany is 0.99 Euro (about $1.40), and in the UK it’s £0.86 (about $1.40 also).
However, if you tick the box that allows Amazon to match your UK price to your US price, this will drop your price down to £0.70 (depending on current exchange rates). This trick doesn’t work for Germany.
The pros of this strategy are that it’s an impulse buy for a lot of people, so you don’t have to work as hard to get them to try it. There are many blogs dedicated to “cheap reads” that will highlight your work, and many Kindle owners exclusively hunt for such bargains.
The cons are that you only get 35 cent per sale, and to make a living off this strategy, you will be needing to hit numbers that only a tiny fraction of writers do. If you have higher priced work and this is part of a baiting strategy, you need to get a good portion of readers making the leap to your other work. It doesn’t always happen.
Also, once you have set a price in the readers mind – that your novels are worth 99 cent – it can be hard to get them to adjust upwards. It’s possible, but not easy, and you should keep that in mind.
For novels, the $2.99 price point is favoured by indie writers who want to maximise profit. It’s the lowest price point that allows the higher 70% royalty rate, which means you will get over $2 per copy sold.
Many writers pricing at this level test out sales at 99 cent. However, to maintain the same profit, you need to sell six times the amount of novels. Not all do.
In fact, some writers have reported an increase in sales when they shifted to $2.99, or at the very least, an increase in profit. After all, you only need to sell 16% as many copies to make the same money.
The main advantage, aside from increased royalty rates, is that you have increased flexibility. If your sales drop, or you want to run some kind of promotion, you can drop your price. You can’t do that at 99 cent, unless you decide to give it away.
Also, at higher price points, you can use Smashwords coupons, which can be a very effective marketing strategy. Smashwords allows you to generate unlimited coupons giving a percentage of your choice off the price of your work, or to sell it at a fixed price of your choice to the coupon holder.
However, while you can always give your work away for free with a 100% coupon, outside of that the minimum price the buyer must pay is 99 cent. In other words, if your work is priced at 99 cent, you can’t generate a coupon offering 20% off.
However, if you are priced at $2.99, you have a range of options with coupons, and they can be useful when you tie it together with a review, a blog tour, a competition, or other promotional activities.
The drawback of the $2.99 price point is you will probably have less readers than 99 cent, even though you are making more money. This means less people to tell other people they liked your work, and word-of-mouth is crucial for indie authors.
Some authors attempt higher price points. (I’m not talking about deluded writers that see that price at $12.99 because Dan Brown does and they are way better than him.)
This is a tricky proposition, but not impossible either.
It’s all about positioning and perception. If you have a poor cover, editing, formatting, opening, or description then the reader think that your work is overpriced at $2.99 or even $0.99.
However, if you do everything in your power to make your book look like it came from one of the big New York publishers, if you run a clever marketing campaign, if you have professionally designed covers, a great opening that readers can sample, descriptions that will hook people in, and if your work has been professionally edited, you can price your work at higher than $2.99, and not only survive, but thrive.
Nathan Lowell is a great example of this. While he is not a self-published writer, he is one of Robin Sullivan’s writers at Ridan Publishing. She self-published her husband Michael’s books (and priced them at higher price points), and is now using the same strategy with the other authors she is publishing.
(If you want to read more about her self-publishing success with her husband – fantasy author Michael Sullivan – scroll down to the end of this post.)
Go and look at one of Nathan Lowell’s books on Amazon. Everything Robin Sullivan does is with the highest level of professionalism. To me, his books look as good, if not better, than anything coming from a large publishers.
Because of this approach, they have been able to price the books at $4.95 (that’s a $3.46 per-book cut for the publisher), and they have sold truckloads. In fact, Nathan Lowell’s latest book, is at #2 in the Science Fiction charts, and just outside the Top 100. If it cracks the Top 100, it will be the first $4.95 indie book to do so.
(As an aside, Robin Sullivan’s blog is a great resource for self-publishers – she shares a lot of figures and stats supporting her theories regarding what works and what doesn’t.)
In case you think Nathan Lowell is an unfair example, Katie Salidas, Amanda Brice and Katie Klein (amongst others) have had a lot of success at higher price points, and they are self-publishers. It’s possible.
The downside, of course, is that higher price points are clearly outside the realm of impulse purchasing. Also, the Big 6 are experimenting with sales at around $5 and that brings you both into direct competition with them, and the many smaller presses and e-publishers that price around this point.
On the other hand, if you have done everything else right, that could work in your favour. It’s all about value-perception.
As I said at the top, the only firm belief I have with pricing is that you must be flexible. By all means, decide on your pricing strategy, based on your goals, before you publish.
However, remember that it is not set in stone, experiment with different pricing in different titles, and find your own sweet spot.
Even though Robin Sullivan is reasonably committed to higher price points, she has experimented with some titles at $2.99 and 99 cent price points. It worked for Marshall Thomas, but it failed for Michael Sullivan (who ended up selling lots more at $4.95 than $2.99).
The point is, each writer will be different. Each title could be different. Be open to change, and you will find a way to maximise your income.
Another writer who has benefited greatly from experimentation is Vincent Zandri. While he is also published with a small press, self-publishers can learn lessons from what StoneGate Ink did for his titles.
They priced one of his titles at $0.99, and then after he cracked the Top 10, they jacked the price up to $4.99. Sales dropped, but he held on in the Top 100 (selling 800 to 1000 copies a day), earning the publisher $3.49 per copy sold. (Full numbers breakdown here.)
If you are willing to be flexible, it could bring you great rewards. Don’t change price too often, Robin Sullivan recommends a minimum of a month at a certain price before you can measure its effectiveness.
I have decided on the following price structure (as adapted from Dean Wesley Smith).
Short Story Singles – $0.99 ($0.35 royalties)
5 Story Collections – $2.99 ($2.09 royalties)
10 Story Collections – $4.99 ($3.49 royalties)
Full-length Novels – $4.99 ($3.49 royalties)
If I write anything that falls outside those categories (e.g. a short novel, a novella, or non-fiction), I will decide on a case-by-case basis, but this is the initial plan. Why?
First, I am a short story writer as well as a novelist, and I like to release my shorts on their own. I believe there is a market for it, and my first two titles are doing well.
Second, if you have stories on sale for $0.99 and collections of five for $2.99 (or 60 cent per story), there is perceived value there for the reader in the collection, which taps into the much higher royalty rate (and the same logic goes for collection of ten).
Third, if I build up enough anticipation, and enough of an audience, through the short stories, I might be able to catch enough sales at $4.99 to make it worthwhile. If I get the story right, and the covers, and everything else, it may seem like a bargain.
Fourth, this strategy allows a lot of flexibility. It’s far easier to run a sale for a month and drop your price to $2.99 or even $0.99 from a higher starting point than it is to go in the other direction.
But the key component is flexibility. I don’t expect all of my titles to stay in those ranges permanently, that’s just the starting point. I will experiment with all sorts of prices (and some free titles) in the future.
That way, with hard data rather than hunches, I can find my own sweet spot for each of my titles, which is what this is all about.