Thursday, July 7, 2011

The Price of E-Books

My sister and I were having a discussion the other day about the cost of e-books.  One of the draws of the readers or apps is being able to get books at a discounted price.  After all, you aren't getting a physical book.  That was my theory, especially since companies are asking you to first spend a couple hundred dollars on a reader, to me the books should be less than buying a bound copy.  Wow, was I wrong.  I do like the convenience of e-books and being able to download a book instantly and start reading it, so I found a book I wanted to read and went to one of my handy apps to price the book.  That particular book was $12 in e-book format.  Amazon was selling a used paperback version for $2.58.  Even with shipping and tax it was going to be $5.00.  Why would I pay $12 for a digital copy that I can't put on my shelf, or loan to friends, or even read while sitting in the bathtub.  (The latter doesn't really happen as often as I fantasize.)  So this led my sister and I into the discussion of what is a good e-book price.  I personally don't want to spend more than $5 on an e-book.  I have spent up to $9 on one, but it was an author I trusted would be worth it, and my mommy gave me a nook gift card.  (Yes, I'm a cheap skate.)  My sister said she doesn't want to pay anymore for a digital version than she would on a paperback.  My cheap skate habits have led me to alot of free or $.99 books.  Yes, quite often the quality is lacking, but I'm sometimes willing to overlook that for the discount.  This leads me to wonder if readers are going to begin to lower their standards in their reading choices and choose thrift over quality.

Now I know the publishing companies have lots of reasons as to why the e-books are so expensive even though the publishing costs are next to none.  But that isn't to say the publishing companies don't do alot to get these books ready.  All those other services like editing, marketing, etc. deserves compensation.  Though I don't think publishing companies have hit the right formula yet when it comes to computing those costs and still making e-books worth the price. 

What about a writer's point of view?  How do we meet this new market head on and find pricing that is right for our books?  Now if we are publishing with a company than we won't have a say on this aspect.  But if we are self-publishing we have the power.  So do you put your story out for free hoping to get your name out there?  Do you go with $.99 for the first book and $2.99 for each other book in the series like Amanda Hocking did?  I get an e-mail once a week from David Farland called the "Daily Kick in the Pants".  In this past one he talks about how to sell e-books.  I really enjoyed all the information, but I'm just going to share with you the part about pricing.  Please go to his website and sign up for his weekly e-mail, it's definitely worth it. 

"Price them cheap. Note that the authors who have succeeded have priced them at 99 cents. No one has gone out yet and self-published a novel at $15 and sold a million copies. No one has done it even at $3. The authors who use this method are trying to build an audience. They’re sacrificing short-term profits in the hopes of building a long-term audience.
If you give your novel away, no one is likely to read it. Why? Because you’ve just told us that your novel has no value.

Years ago, my family had the misfortune of having a litter of extremely ugly kittens. They were all calicos with grisly markings. Their fur was more like bristles than anything else. They were bony creatures, scrappy and altogether unlovely.

One Saturday morning, my wife came to me crying and begged, “Take these kittens up into the hills and put them out of their misery. I’ve gone all through the neighborhood, and no one will take any of them!”

Well, I didn’t want to commit felineocide, especially with kittens, so I came up with a plan. I dressed my daughters—age 6 and 8—up in nice clothes, then had them go down to the supermarket and try to give away the kittens. Now, my daughters were cute, so having them give away the kittens was the equivalent of trying to put a nice cover on a crummy book.
Well, my daughters went out, determined to give away the kittens, but after four hours they came home in tears. No one wanted our ugly cats. You just couldn’t con them into it. You couldn’t beg, whine, or wheedle.

So I wondered, maybe I could get rid of the cats if I suggested that they had a real value? I decided to sell the darned things. At the time, we were thinking of buying a beautiful little kitten for $200. I decided to sell the ugly kittens at a bargain price. On the cutest of them, I put a price tag of $20. Now, you have to understand, the cutest of them was still hideous. It’s uglier kin cost only $10. My daughters went out and SOLD all six kittens within a twenty minutes. As my wife put it, “People crowded around, fighting to buy those ugly kittens.” Why? Because I had the temerity to suggest that they had value.

Don’t let this lesson be lost on you. Charge for your novels.

Now I’m going to tell you a secret. This tactic won’t work on everyone: I won’t read novels that people are giving away. The author is telling me that “This book is such an eyesore, it’s not worth anything.”
In fact, I’m such a snob that I won’t even look at novels priced at 99 cents. You’ve got to raise your prices to convince me that you’ve got anything interesting.

So what’s your price point? I have a friend who runs a small publishing company. He told me last December that he was making about $7,000 per month off of three thriller novels, which he was selling for $10 each. In January he dropped the price to $3 each, and made $18,000—while selling seven times as many books.

Now, there are a lot of people who do buy 99-cent books and who read free books. I’ve read articles by people who say, “After getting my e-reader, I’ve bought 300 books in the past three months, and I only paid $325 for them.” Well, if you’re buying 100 books per month, you’re not really reading them all, are you?

If I sell you a book at that price, the chances are great that you will have wasted your money and I still won’t get a new reader. So I probably don’t want to go that low on my pricing.

Besides, I’m a multiple award-winning New York Times bestselling author. I think my books are worth more than a dollar. I might be willing to buy books for as little as $2.99, so that might be a better entry price for people like me.

But you can’t argue with success. The 99 cent price point is working for some authors. A lot of readers apparently will buy books at that price. So give it a try." -David Farland "Daily Kick--How to Sell a Million E-Books" July 2, 2011. 

I really enjoyed reading his opinion and it has made wonder, "What is my price point as a writer and as a reader?"  How do I reconcile these two roles?  That leads me to ask, what are your opinions on the prices of e-books?  What are you willing to pay for e-books?  What would you want to sell your books for if you were self-publishing e-books? 


  1. Haha! Nikki I did love our conversation about this topic and I think if it every time I take my Kindle out! First let me tell you I LOVE my Kindle! I love that it fits so nicely in my purse & that I have book just waiting on me to be read. What I don't like about e-books is the price of some of them. I went to get a book recently and it was 15.99... I LOVE this author and her series. There are 17 in this series and I want to own them ALL. I paused and didn't purchase it because it was so pricey. Later that day I was at a book store and saw the book I wanted in hardback for 12.99, really!!!!??? I was confused and upset with the publishing house. I still haven't purchased this book yet even though the price is now 12.99 for e-book format.
    My other thoughts turn to the authors of these books. If the publishing house is charging 12.99 for a book that has NO printing costs (although there are other costs, probably not as expensive) are the authors getting a fair deal? Are they getting paid enough?
    Anywho... My perfect e-book price is somewhere between 3.00 and 9.00 and there you have it my 2 cents!

  2. Tiff-Glad see you chimed in. You raise another point I forgot. The authors only make the same amount of $ on the e-books as they do on the printed books. Is this fair? I also think that the $.99 books are selling so well because of the expensive e-books from publishing houses. I think that the first national publisher that cuts all their e-book prices will rake in a fortune and change the game where $.99 books are concerned.

  3. I read almost exclusively self-published books and books with free offers. If I'm going to spend more than about 3-4$ on a book, it's a book that I went to the kindle store looking for. Since I have over 1000 books on my account, most of which I haven't gotten around to reading yet, I *rarely* ever go searching for a specific book I want to read. (Out of those 1000 books, I'm guessing that fewer than 40 cost me more than 4$... And probably over 800 of them I got for free).

    Whenever I finish a book (if I ever do...), it's going to be either 99 cents or 2.99. 99 cents is the lowest a kindle book by an independent author can be at by default, and 2.99 is the lowest you can set it at and get 70% royalties. :) I don't see any point to ever pricing a book over 2.99. I've seen quite a few authors play around with pricing, and nearly all of them discovered that they made more overall at 2.99 than even at 3.99 or 4.99. They were still in the 70% royalty range, but raising the price by even just 1$ dropped sales to the point that they were making less money...

  4. I completely agree. Ebooks must be cheaper! I rarely spend more than $3 on a book and it has to be guaranteed a good read before I will bother, otherwise I'll check it out from the library and if they don't have it I'll live without.

    When are publishers going to realize that we aren't going to spend more for an ebook than we are for the paper copy. We want something substantially less. As buyers we have the power. Don't buy books you think are too expensive and in time maybe the publishers will get the picture.

  5. Since most of the books I buy are around $12, I feel like I'm getting a steal to pay $9 for the ebook version, and I get the convenience of ordering it at midnight if I want and reading it within a minute or two. I balk a little bit at paing over $9 for an ebook though, so that would probably be my price point.

    I honestly haven't had much luck with .99 books because every one I've gotten has been such poor quality I felt like I'd wasted my dollar. I'd much rather pay for a great story that is formatted correctly with little to no typos and grammar errors, if that makes sense.

    And there's my two cents! :)

  6. Okay, looking at the misspelling in my last post is killing me. That should be "paying." Gah! *note to self* Always read your comment over before pressing the button. :)

  7. I'm really enjoying this conversation. So far I'm hearing that anything above $9 for an e-book strikes most of us as ridiculous. What do you all think about what the authors get paid for ebooks? I think I would be more willing to pay up to $10 on an ebook if I knew the author was getting a bigger royalty. I like buying the self-published books knowing the author is seeing most of that profit. Is that even a factor for any of you?

  8. Really enjoying this post! Keep the comments coming. So interesting.

  9. I've also heard about the authors who are selling their novels for 99 cents and making a mint--but I've also tried out a couple of those books as a reader and I'm disappointed. I priced my short story at 99 cents because it felt like a crime to price it any higher, but I put my full length e-book up for $2.99. Still, I feel like I'm doing something terribly wrong because sales are not fantastic. I like the $2.99 price for an ebook, a full-length one at least. I'm not a full blown book snob, but I do like my books to be free of formatting errors.

    Hopefully I'll get better as time goes on.



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