Tuesday, May 12, 2015

E-Book Pricing Strategies

It's fun to watch your e-book rise in the rankings when it's free. But is it worth the cost? 

A friend whose first book came out with Hatchette two years ago complains now and again about e-book pricing, wondering how she can compete with self-published authors who can discount their books as they choose, even making them free. It only got worse for her when Amazon and Hatchette went head-to-head over e-book pricing last year; for a while, her book was part of the fallout, stricken for several months from Amazon’s inventory.

But before writers get too excited over the freedom to set and adjust e-book prices, consider this: e-book pricing strategies are more complicated than ever.

Here, for those authors who do have the freedom (and responsibility) of setting their own prices, six factors to consider in ebook pricing:

That was then, this is now: Back in 2009-2011, when e-books were a new thing, hitting the market in a big way, authors found readers by setting very low prices or offering their work for free. Especially for authors of genre fiction—mystery, science fiction, erotica, crime, etc.—this strategy worked by getting readers hooked on the first book in a series, then offering the rest of the series for free. An added perk: a free book boosted rankings, or so it appeared, in Amazon’s ever-changing and mostly secret algorithms. Flash forward four to six years. We’ve got a content flood: three million plus books available on Amazon. At any given moment, there are thousands upon thousands of free and cheap e-books—and that’s with restrictions Amazon put in place (KDP Select) to stem the flood of free and cheap books. Apply basic principles of supply and demand, and you’ll see why a few hundred downloads of a free e-book have little long-term impact on rankings unless the book actually gets amply read and reviewed, and unless it’s so exceptional that it generates word-of-mouth praise among scads of readers.
What readers want: It’s not always something for nothing. Yes, if you’re writing for speedy, high-volume readers—primarily readers of genre fiction—your readers need to be able to access lots of books at a reasonable price. But these days, subscription services like Kindle Unlimited, Scribd, and Oyster offer the best deal for genre fans, with a set monthly fee for unlimited access to their titles. Overall, authors make less per download with subscription services they do through outright sales, which accounts for much complaining in author forums. If you’re writing something other than genre fiction, your readers may be a lot more interested in value than price. When an e-book comes cheap or free—especially if it’s perpetually priced that way—the perception among such readers may be that the item has little value.
Good data can be hard to come by: The publishing industry has been notoriously secretive with the types of sales data that inform things like pricing, and none of that has changed with newer players like Amazon. Hugh Howey has made some great headway with his quarterly Author Earnings Reports, but you still need to read these carefully to make sure the take-away points apply to your circumstances; mostly, the data relates to best-selling titles, and while every author would like to be in that category, most aren’t. Mark Coker (Smashwords) and Amazon’s KDP platform both have done analyses suggesting that an author’s return is greatest on e-books priced between 2.99 (KDP) and 3.99 (Smashwords). A survey of 1200 readers conducted by The Fussy Librarian indicates that most readers believe a “fair price” for a full-length e-book to be between $2.99 and $4.99. But all of this data is skewed toward genre e-books, which occupy most of the digital shelf space at Smashwords and Amazon, as well as most of the free/cheap e-book listings in The Fussy Librarian newsletter.
Pricing sets expectations: Discounts teach consumers to wait for even more discounts, as Black Friday retailers have learned in spades. Your readers are no dummies; why would they pay the retail price for your e-book if they know you’ll eventually offer it for free? Use discounts strategically and sparingly.
Friends and fans first: These are your loyal readers. When you offer a discount, let them be the first to know. I discount sparingly, only as part of a larger promotional strategy—in other words, with a reason—and when I do, I use a plain-text email to tell my friends and fans first, because it’s more personal than a newsletter template or generic social media post.
Consider the cost: In terms of time, money, and energy, offering your e-book for free or at a discount can run up costs quickly. Many newsletters that promote e-book deals to subscribers used to list deals for free; now, most of them charge for this service, and unless it’s a vetted newsletter like Bookbub, you’re unlikely to see any sort of return on your investment. Beware especially the scams that “promise” results; unscrupulous practices by these scammers can get your book booted out of the Kindle store altogether. Even if you don’t spend money advertising your free or discounted book, getting the word out takes time and energy. Would you be better off writing?

Through Wednesday, May 13, you can get Deb’s last-ever free e-book deal*: For writers and aspiring writers, Write Your Best Book is a practical guide to writing books that rise above the rest, including dozens of “Try This” exercises to demystify the process of turning good books into best books.

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