One of your highest marketing leverage points (once you’re consistently writing books that people want to read and building your newsletter) is pricing correctly.
And it’s probably the most frequently ignored.
This is common in most businesses.
We tend to fixate on prices as a consumer…then ignore their ramifications as a business owner.
There are three core reasons pricing matters:
- If you are making bad pricing decisions out of fear or arrogance or another emotional headspace, then you are likely applying these negative money concepts to other areas of your business.
- $3.99 is not $1 more than $2.99. It is 33% more. $5.99 v. $2.99 is 100% more. We ignore this because we don’t factor in scale: as a reader, we only purchase a book once. But as an author, we can sell that book an unlimited number of times. And if you sell 20,000 books, that is not an extra $1, but $14,000 (because you get 70% of that extra dollar): $56,000 versus $42,000.
- This extra $14,000 can be the difference between staying in business and folding. It can be the difference between being able to seize a rare opportunity and massively level up, or get caught in a cash flow crunch. It can be the difference between getting pro level covers and editing for your books (i.e., improving the experience for your readers) and having to settle for “good enough.” It can be the difference between getting a house in a good school district (or sending your kid to private school) and having to live somewhere else.
In other words, $1 matters.
If you can sell the same book for $3.99 vs. $2.99 (assuming volume/readthrough are the same), you have just given yourself a 33% raise with no extra effort.
There is nothing in this business more powerful than proper pricing.
But it’s a tricky art to master.
The best price is the one that maximizes long-term profits.
This is simple. But there’s more complexity lurking beneath the surface.
With a single book, it’s a matter of testing various price points. Send ads to the book and see which one is most profitable (if any of them are; advertising a single book profitably is hard).
The tricky part comes in when you have a series, where “loss leader” pricing for the first in series (or even first few titles, if it’s a long-running series) might make you more money on the backend.
You know, pricing Book 1 at free, $0.99, that sort of thing.
This requires more testing. A free Book 1 might make you more than a $4.99 one when factoring in readthrough. Or vice versa; you’ll only find out what’s best for a specific series by testing, tracking the numbers, then testing until you’re comfortable with the pricing.
I do this in two week to month-long intervals to allow enough time for readthrough. As a rule of thumb, about 70 – 80% of readthrough will come in the first 30 days (i.e., from Book 1 > Book 2, then the clock resets again from Book 2 > Book 3). So a month is enough time to see what impact our pricing is having on series profits.
As a final note, the takeaway from the whole “$1 matters” thing above may be construed as an argument against discounting.
This couldn’t be further from the truth; remember that our goal is to maximize long-term profits. Strategic discounting is incredibly powerful.
But we want to make sure we’re deliberate when we discount. And not handing out discounts just for the sake of doing so.
STRATEGY 1: LOOK AROUND
If you’re new, look at the bestseller charts and use standard indie prices in your genre as your starting point. It’s essential you look at your genre. Mysteries and thrillers have higher average prices than romance or urban fantasy novels. There is a ceiling in many genres, even if you’re well known. But also understand that this ceiling is often arbitrary. It only exists because all indies are just looking at one another, rather than testing their own prices to see what the market can actually sustain.
STRATEGY 2: PRICE LATER BOOKS HIGHER
This is probably the biggest pricing leverage point. Most people price later books in the series far too low. Later entries in a series can be priced higher, even if each book stands alone (i.e., thrillers starring the same character).
This is because the two main reader objections are not price-based.
They are A) quality-based (is this author good?) and B) like-based (will I like this?).
These essentially boil down to one key question: will this book be worth my time?
The main risk with books is temporal, in that you can waste five or six hours on a bad title. And it is very difficult to determine this beforehand. Once a reader knows the product they’re getting, this risk evaporates, and most will happily pay more for a proven entity.
This is why arguments centered around “my book costs as much as coffee” are nonsensical. If I buy a bad cup of coffee, I’m stuck with it for all of ten seconds.
If I buy a bad book, yes, I can put it down after two minutes.
Most people do not and thus force themselves through 5 – 6 hours of misery. That they could put it down is not the point; this is not most people’s reading behavior (after they start reading; obviously a great many books are purchased and then go unread). We are taught, through school and cultural expectations, that books are to be finished.
Paying to not have fun is a very unpleasant experience.
Thus, while on the surface readers may complain about price, most of their concerns are actually about risking $5 or $10 in return for the experience of being bored out of their minds.
This is a subtle, but important distinction.
Because if you can provide readers with a valuable (re: entertaining) experience, then your pricing power is greatly increased.
And since you’ve already proven this once a reader has gotten to Book 4, 5, 6, and so forth, they’re willing to pay more.
STRATEGY 3: MORE ESTABLISHED, MORE MONEY
Remember the main reader objection above: will this be worth my time?
That question has been answered when you’re an established author with a solid fanbase and brand. This means you can charge more, both for your backlist and for your frontlist. You may have initially priced new releases at $3.99 and discounted them to $2.99 at launch; with time, you may find that you can launch at $4.99 without any discount. Now that you have proven that your books are worth readers’ time, they are willing to pay you a premium for this quality (and peace of mind that you’re not going to hose them with a crappy product).
STRATEGY 4: SET YOUR REGIONAL PRICES
Most authors ignore other regions entirely, instead focusing the entirety of their marketing efforts on the US. While the US Kindle Store is the largest by far, that doesn’t mean that dollars earned from other territories don’t spend just as well.
Thus, making sure your prices are set manually in the other regions, rather than auto-converted by the retailer at the time you hit publish, can add a few extra dollars to your bottom line. Most other regions have fewer discounts and are more accustomed to paying full price, too.
STRATEGY 5: DO NOT PRICE BY LENGTH
No, you cannot charge the same for a novella and novel. But once you hit novel length (40,000 words), the word count becomes largely superfluous. Most readers do not buy books by the pound. Price based on what the market is willing to pay, not the length.
GENERAL SERIES PRICING TEMPLATES
These are pricing templates that I’ve found to be effective in my testing:
- For genres where most books (arbitrarily) cap out at $3.99 like urban fantasy or romance: $2.99 (B1) / $3.99 (B2) / $3.99 (B3) / $4.99+ (B4 onward)
- For genres with higher price thresholds like crime/mystery/thriller or epic fantasy: $2.99 (B1) / $4.99 (B2) / $4.99 (B3) / $5.99+ (B4 onward)
- For KU, can try Book 1 at $0.99 to increase ads conversion if having trouble at $2.99
- For wide, can try Book 1 at free to increase ads conversion if having trouble at $2.99 (not worth trying $0.99 wide)
These are flexible and are just starting points. $2.99 for Book 1 is an effective price for running ads – low enough to convert decently in many cases, while also getting 70% royalty. Your first book’s regular price impacts how you price the latter volumes. It’s more difficult to jump from a permafree Book 1 to $6.99 for Book 9 than it is from a $2.99 Book 1.
There is a ceiling to pricing the latter books in a series here that’s based largely on genre expectations. You can go up to $6.99, $7.99 in crime/mystery/thriller; pushing beyond $4.99 might be hard in most romance genres. [but again, test. Many barriers are simply illusions]
A FEW SPECIFIC NOTES
- Wide: you can generally charge more when you’re wide. This goes for shorter books as well, where you might be able to price novellas at $2.99+. Also don’t sleep on opportunities to price things like box sets higher than $9.99 at Kobo and Apple Books – you can still get 70% royalties on things over $9.99 here.
- Crime/mystery/thriller: for a series, my preferred pricing scheme is $2.99 / $4.99 / $4.99, then $5.99+ for Books 4 onward.
- Romance: most of these are priced at $3.99, but I’ve found little difference in $3.99 v. $4.99 in Kindle Unlimited, conversion wise.
- Urban Fantasy: like contemporary romance, $3.99 is fairly standard as a “ceiling” for many authors, but I’ve found little difference in conversion between $3.99 and $4.99 for latter books in a series.
BEWARE OF FALSE NARRATIVES
Pricing takes time to master, but it’s mostly just a matter of tracking the numbers and finding the sweet spot.
But most people won’t get that far. That’s because many have hang-ups about money and self-worth that manifest when trying to run a business.
Most problems surrounding pricing center around two (opposite) themes:
- I will not sell my book for less than X because my work is worth more.
- I will not sell my book for more than X because I think that’s price gouging or that my readers will or it’s otherwise morally wrong.
Argument #1 is saying: my books are worth what I say they are. This is almost always coming from a place of ego – either low (if I don’t sell my book for $10, that means it’s trash!) or high (this book is so damn good people better spend $10 on it!).
Either is delusional and ignores reality, which is this: the market does not care about your feelings. Your books are worth what people are willing to pay.
I refer back to my previous statement: the best price is the one that makes you the most long-term profit.
Argument #2 is saying: I will let others’ opinions dictate what my books’ value is. This is true even if this thought originates with you (rather than being left in a review or in a comment from a reader). Because that original thought was put there by someone else. It was just years in the past.
You may be thinking that letting the market dictate value is the same thing as letting opinions dictate value.
They are not.
Let me be clear: people’s opinions mean very little.
You cannot eat them.
You cannot pay the electricity bill with them.
Opinions will not matter when you are in the hospital and have a $20k bill to pay.
The only thing that truly matters is behavior: how people spend their money and time. This tells you people’s true opinion.
If readers spend $7 and read the book, that tells me all I need to know.
If they will not, then the outcome is the same, and I need to adjust the pricing, or the book, or the packaging, or build up my brand or otherwise solve the problem.
If you deliver what the market wants, you get paid.
If you deliver stuff that satisfies people’s opinions…you get paid nothing, and, further, you’ve pissed off a different group of people instead who have a different opinion.
It’s a zero-sum, no-win game that has no benefit.
The market matters.
Opinions do not.
And, quite frankly, most of them are imaginary. In that you, the author, are imagining objections that do not exist.
Many people do not remotely care about the price, so long as the book is good. I can’t tell you the last time I looked at the price of a book.[obviously you can’t charge $60 for a novel, but the general point stands]
DON’T BE AFRAID TO MAKE MONEY
There is a lot of morality nonsense about making money.
I think it is morally wrong to cheat yourself.
This goes against the grain of everything we’re taught in society.
Note that I didn’t say take more than your fair share. This is how making more or pricing higher is often construed.
Charging the price the market is willing to pay for your book is not price-gouging.
It’s not evil.
It’s not morally bankrupt.
It’s just good business. For both the consumer and the producer.
Anyone who believes otherwise is perfectly free to think so, of course.
They are also free to read one of the other 100m+ books written throughout the course of human history.
Many of these are free at the library.
Others are available via Kindle Unlimited or public domain.
There is no shortage of content; no author has a monopoly.
This is not the equivalent of selling a bottle of water for $100 in the desert.
Or a university charging $50,000 a year for a poetry degree.
If you are providing a great book and the market is willing to pay your price, why shouldn’t you be fairly compensated?
There is no moral superiority in pricing lower than the market is willing to pay you as a business owner.
If you are providing a valuable service, you deserve to be compensated fairly. Ripping yourself off and falling on your own sword is not fair.
And it’s not good for society, either.
If your books are great, and you go out of business because you priced too low to save readers $1 that 99.9% of them didn’t care about…that’s a net loss. Not just for you, but for everyone.
Now that I’ve touched the third rail with the radical ideas that pricing fairly is not evil, artists should be compensated, and $9 for an eBook is not highway robbery, we’ll continue up the tracks to perhaps an even more controversial topic.
In Kindle Unlimited, as we all know, you’re paid by page.
The longer your books, the more you get paid for a full read.
You may think that we’re at the mercy of the ~$0.0045 per page number it tends to hover around.
True: that’s immutable.
But we do have control over how much we ultimately get paid.
Because in KU, pricing boils down to word count.
A 40,000 word novel is about 200 KENP. That’s approximately $0.90 for a full read.
A 60,000 word novel is about 300 KENP. That’s a 50% increase in take home pay to $1.35.
In other words, that’s a 50% price bump.
That’s how you “price higher” in KU.
This is not a new concept. Working writers have always been savvy regarding this stuff.
In many ways, Kindle Unlimited is the modern equivalent to pulp magazines of the 30s/40s/50s, which paid writers by the word. In those days, writers would “write to market” – that is, the editor’s requirements based on what that magazine’s readers liked – and push out content at a brisk clip.
And since they were paid by the word, these writers would not only try to satisfy what readers wanted…but they’d try to write longer stories, too.
In Secrets of the World’s Bestselling Writer, Erle Stanley Gardner’s (author of Perry Mason) approach to writing the climactic scene is outlined.
I don’t have the quote handy, but paraphrasing, Gardner essentially made sure that every bullet in the hero’s gun was fired before he triumphed over the bad guy and Gardner typed THE END.
Each exchange of gunfire meant extra words.
And that meant that each bullet left in the chamber was money that didn’t make it into Gardner’s pocket.
Some may argue that this is padding.
I’d argue that, in general, all stories are technically padding.
I can sum up most movies in about 50 words.
Here’s The Matrix: Neo discovers reality is actually a simulation designed by machines using humans as batteries. He escapes, joins a resistance group in the real world, and fights the machines that have enslaved humanity.
Incredible. The producers could have saved millions in production costs if they had only thought of this ingenious approach instead.
Sarcasm aside, let’s return to the Erle Stanley Gardner example above.
It could easily be argued that by expending all bullets, you make the climax more exciting.
You build tension.
And make the payoff much more powerful as a result.
Thus there are two key considerations when it comes to word count:
- Extra pages are only useful in KU if they’re read. And you need readthrough to be good (which means people are getting to the end), otherwise you’re screwed. Everyone has a natural range in which they feel most comfortable. This can be extended with practice, but based on personal experience, there seems to be some upper limit. I’m most comfortable in the 40k – 60k range; my first book was around 35k. So I extended that, but when I tried to write 80k – 100k, those two novels probably would have benefited from being shorter. This was a good writing exercise (you can’t know your strengths unless you also know your writing weaknesses), but continuing to press too far beyond 60k, for me, would not be beneficial.
- Adherence is key. If you can write 40k, but can’t write 60k, then write the 40k novel. No one can read an imaginary 60k novel. They can read a finished 40k novel. What’s optimal is always secondary to what you can actually execute.
And finally, it’s only padding if the reader finds it boring.
Otherwise it’s just another chapter in the book.
…and after 2,800 words or so, that’s it for pricing. (padding free, I might add, since I am neither paid by the word nor is this newsletter in KU)
This can add tens of thousands of dollars to your bottom line. Price well, my friends.