Indie Publishing For International Writers, Step 8: Pricing Strategies

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.

Maximising Profit

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.

Going Higher

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.

Flexibility

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.

My Approach

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.

About David Gaughran

David Gaughran is Irish, living in Prague, and the author of Mercenary, A Storm Hits Valparaiso, Let's Get Digital, Let's Get Visible, and this here blog.
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36 Responses to Indie Publishing For International Writers, Step 8: Pricing Strategies

  1. Good post; something all of us self-publishers need to think about and plan.

    Like

    • Thanks Richard.

      It is important to plan. It’s equally important to keep learning, see what other people are doing. This market is growing so fast and changing so fast that what looks like a redundant strategy today could be a winning strategy tomorrow.

      Dave

      Like

  2. JB Toner says:

    Another smashing post, David. I like the idea of publishing 5 stories for 2.99. Going to have a think about that.

    Typo: writers whose goal is not to make monet (shd be money)

    Like

    • It’s all about Monet.

      I think I was trying to put some of the “art” of writing back into this business talk.

      Thanks for the typo spot. I’m going to start calling you TypoHunter.

      5 stories for $2.99 is just one way of doing it. There are an infinite number of ways to skin this cat. The joy of self-publishing is you can experiment with all of them. You could do a “six-pack” of stories for $2.99. You can do 10 for $2.99. You can do anything you want.

      Like

  3. What a great article, and the information will surely help a lot of writers navigate the sometimes murky pricing waters. I tweeted it and posted it on Facebook. I just recently made one of mine free on smashwords so I’m happy to see that I’m learning something already. 🙂

    Like

    • Hey Jeanne,

      The thing about all this is, it’s very far from being a science. This is just a collection of musings on what has worked for some writers and what doesn’t work for others. The real key is to experiment. It will be great if you pick up some extra readers with the free story, and you can use that to your advantage down the road.

      Dave

      Like

  4. JJ Toner says:

    Another way of doing freebies, is via your web site or blog. I put three of my short stories on my blog and left them there for several months. One of them is still there (in January’s blogs – a 10,000 Sherlock Holmes spoof that I put up there in ten slices). I’m hoping that will have been enough and that I can expect the Monets to come rolling in when (if) I ever get this book published.

    Like

  5. Aonghus Fallon says:

    I think length would be an issue. I’d pay 2.99 for a novel (60,000 – 120,000 words) but not for anything shorter. 99 cents seems a reasonable price for a short story or a novella. But maybe that’s just me!

    Like

    • Length is definitely an issue.

      Some won’t pay 99 cent for a short story. Some will. But a flexible strategy will get more of them. I’m hoping to scoop up some of them with the 5-pack collection for $2.99. Barry Eisler sold thousands of copies of his short story at $2.99. Then when sales slowed he dropped it to $1.99 (it may have been $0.99 for a period too, I can’t remember). He made a lot of money out of it.

      I wouldn’t pay $2.99 for a short story, but some clearly would. Some people do well pricing novellas at $1.99 and $2.99, but again, lots won’t pay that price. But an author can capture some of those with a month-long well-advertised sale, then revert to their original price, or not.

      This is one of the many positive aspects of self-publishing – having control over these things and being able to react nimbly to correct a drop in sales or to capture a shift in the market.

      Like

  6. Thanks for this post. I just start to meditate on the pricing of my upcoming short novel collection (7 different stories, multiple genre.). Do you believe a 3.33USD is a good price for it or should I push it lower, to the 70% minimum, 2.99USD?

    Like

    • You can try $3.33. Why not?

      Something different can catch the eye too (Robin Sullivan deliberately used $4.95 rather than $4.99), and you can play that up in marketing.

      Give it a go, and you can always experiment with other prices in the future.

      Like

      • Yep. I’m going to play an experiment with the prices. Actually this short novel collection is an experiment before I publish the flagship project as I don’t want to make a mistake with that one. This short novel experiment will be a good learning curve.

        Like

      • It’s an excellent idea to launch a shorter work first before the pride and joy. I made a couple of mistakes with my first release, and the fact that it was a short story rather than the novel I have been working on for so long, the freak-out was kept at Level 3!

        Like

  7. I like that suggested pricing strategy. I tend to write longer short stories (9,000 words is typical), so ten of those would be about the same length as a novel. Makes sense to price a collection of that size the same as you’d price the novel.

    I think it’s Zoe Winters who was also making a case for slowly increasing the price of (well-done) ebooks, even if it meant losing the 99-cents-only impulse buyers.

    I am one of those people who fears there is a perceived value issue with going too low with a novel’s price. That’s one of the reasons why I decided to try out short stories first and price them at 99 cents (each). I’m hoping it’s a good way to get people to take a chance on someone they probably haven’t heard of before and hook them for the novel in future. But do I have the guts to go $4.99 for a full-length novel? What the heck; I can bring it down if I need to. Three cheers for flexibility.

    Like

    • I agree.

      My first release was 2 short stories for 99 cent, but only because they were short – just under 2000 words each. Some writers sell those individually, but I think an unknown writer would struggle and/or receive poor reviews. I only received one, thankfully, but the total length (4000) was considered on the short side by a lot of reviewers, and they mentioned in otherwise positive reviews. I think that’s the limit or that feedback would become negative.

      For 9,000 words that shouldn’t be an issue at all. Just make sure it is clearly labelled as a short story, and put the word count AND the page count (many readers don’t have an instinctive grasp of word counts), otherwise you will get in trouble.

      Once you label it clearly, there’s rarely an issue.

      Overall, I’m happy to lose some readers at 99 cent for a short story, if I have the opportunity to gain some back with collections, and if it allows me the freedom to – at least initially – price the novel higher. That will give me a lot of scope for sales, and promotional things such as Smashwords coupons (which are VERY successful for self-pubbers), which I can’t do at the moment with the 99 cent short stories.

      Like

  8. J. R. Tomlin says:

    Dave, this is a fantastic post that everyone should read!

    Like

  9. This is a well-thought-out post with, as you noted, the emotion removed. So many writers seem to go through a thought process of, “I want to make a reasonable amount of money, so I must charge a fairly high price,” and they ignore the fact that in many cases $.99 prices earn more money.

    I think it’s essential to experiment. As you mentioned, in some cases a higher price actually brings in more readers. If it’s that expensive, it must be good, right? Anything really cheap must be terrible.

    Like

    • Thanks Brent,

      I think it will vary from genre to genre and change a lot over time to as different demographics with different buying habits make the switch to e-books. Which is another reason to be flexible.

      I don’t have an emotional fixation on one price or another, I will settle with the one that gets me the most profit and the most readers. But even after I find the sweet spot, I won’t be afraid to change again based on what new titles I have out, or whether sales drop, or anything else that may happen.

      If it turns out that $0.99 earns me far more money for my novel than anything higher, that’s what I’ll do. I don’t think it will (now), but I am open to it.

      Like

  10. josephinewade says:

    Great post! You cover a lot of good information in here. It’s nice to see all this brought together in one spot.
    I’ve always wondered why 1.99 and 3.99 price points never panned out? I know some authors who do well in the 3.25-3.50 range I’m not sure why they choose that over 2.99, but it seems to work well for them.

    Good information.

    Like

    • $3.99 has worked for some, and I am considering that for my novel. Perhaps $4.99 works for some because it looks more like a discounted novel from a trade publisher than an expensive indie.

      But to succeed at that price, you don’t only need a great cover, formatting, editing, blurb, and story, you need your marketing to position your e-book as a quality purchase. I’m looking into what value I can add at that price with extra content on a website, which might help.

      With $1.99, I guess it’s neither here nor there. You are missing out on the $2.99+ 70% royalty rate, and I think most writers feel that if you are going to do that, you may as well go for full volume sales at $0.99.

      Like

  11. josephinewade says:

    It’s kind of strange how when you buy something it is done on so many levels, yet you make those decisions so quickly. Yet when you price something these same factors come into play, yet so much more time is spent trying to find the right niche for your book (of course this is hypothetical pricing until I have something to actually price).

    Like

    • It’s just like pitching your book, but instead of using a blurb or a cover design, you are using price. Ideally, you want all those elements, plus title, plus marketing, plus the actual writing, to create a picture in the readers mind. It’s amazing how we automatically judge the same product differently depending on the price tag.

      Like

  12. Amy Tupper says:

    I have a question about your series as a whole- do you have any plans to do an article on marketing for an international audience? I ask because I have written for an international audience – my main character is a girl who moved around a bit growing up and she brings this perspective to the book.

    While Amazon.com has the nice uploads to the UK and DE and Google ebooks (when they get around to it) are posting my book in Australia and a few other nations, any suggestions for other websites, forums etc that are not US based? France, Spain, Japan, Korea, etc.

    My business case is a band called A Silent Film out of Oxford. They were stuck after several years in the UK and then some radio station in Portugal picked them up, and it breathed new life into their band and now they are touring the US and Europe like gangbusters. Any ideas on how to find my Portugal?

    Thanks! Love your writing!

    Like

    • In one sense, even if you find your Portugal, you will never even know it.

      Amazon lumps in all global Kindle sales under the US (except UK and the Amazon Germany countries).

      I could write something about marketing to the rest of the world, but I do believe it is a cash of allocating your time and resources appropriately. While the book business is a global one, estimated at $80bn to $90bn, e-books are barely registering outside of Europe, America & Australia – so far.

      Even in Germany, the second most advanced e-book market in Europe, e-books have captured less than 5% of the market.

      I think some time should be spent marketing directly to UK readers, and perhaps Australian readers, and a small amount of time on German marketing – but not much.

      That will change as the market develops, and the Spanish language market could become huge – but that is a few years off.

      Like

  13. Amy Tupper says:

    Oops, found your other posts regarding Amazon expanding in Europe.

    Any leads on Korea, Japan, China?

    Like

  14. Amy Tupper says:

    Found this web page from an ebook reader manufacturer in Australia:
    http://mybebook.com/a4/links/article_info.html

    Like

  15. Pingback: Publishers Skinning Authors, Eisler & Konrath, and The Never-Ending Blog Tour | David Gaughran

  16. Selena Blake says:

    I agree that you need to be flexible. I too created a table of price points for my books depending on the length. But I’ve also played around with promotional prices. Recently, I wrote a post on my blog about the $1.99 price point and why it’s a no mans land. As always, I’m learning and crunching the numbers and seeing what others have to say. The majority of the time though, I feel like I’m making the road map as I go.

    Like

    • Hi Selena,

      I’m afraid your comment got caught in spam – sorry about that. I agree with $1.99 being a no man’s land. It’s lose-lose (with very few exceptions, and I’m still not convinced about those).

      We are all making up the road map as we go, this is all so new, and what’s good advice today could be bad advice tomorrow. But you do begin to develop some instincts.

      Dave

      Like

  17. Kali Amanda Briwne says:

    One of your readers referred me here and I am so grateful to have found someone who, like me, is doing and learning from the experience of self-publishing. Thanks for sharing. You make some interesting and valid points that I plan to incorporate into my own strategy. And I wanted to add that the Smashwords coupons have been everything you profess here: a great tool to entice readers as well as a good testing tool for pricing strategy.

    Like

  18. Pingback: Indie Publishing For International Writers, Step 9: Discounts, Competitions & Blog Tours | David Gaughran

  19. Pingback: Indie Publishing For International Writers, Step Ten: What Happens When The Sales Just Stop? | David Gaughran

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