Understanding Book Pricing’s Impact on Sales & Readership Growth
Online wisdom dictates new authors sell books less expensively than veteran or famous authors. There is little wisdom in this idea other than the false belief that someone will take a chance on a less expensive book from an unknown author. Amazingly enough, new authors will spend enormous effort and money writing and editing a book to sell for a few dollars or ninety-nine cents. Not only is this a bad idea since you will likely never recoup your cost but also harmful to growing readership.
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Understanding Online Pricing
Pricing books inexpensively is a practice exclusively driven by the internet market’s freemium pricing and marketing, seen in applications that provide basic services but cost when one desires the premium functions. Writers, inexperienced with marketing, apply this same view idea to books, believing that a low-cost book provides an introduction and will build readership for future higher-priced books if the reader enjoys the freebie. Authors compound this problem by assuming low pricing will increase book sales, which is not unreasonable, but these assumptions do not apply to most authors since the internet is not an open market.
Confusing Economics & Marketing
People confuse marketing and economics in the common wisdom dictated by the law of demand.
As the price of a good increases, the quantity demanded decreases.
The erroneous application of this economic principle stems from not fully understanding the law. When all conditions are equal, the quantity of demand decreases as the price of a good increases, meaning that when the good is equally available to the entire market, this principle applies. Publishing your book on Amazon does not make your book equally visible to the market as other books. Thinking that lowering a book’s cost entices readers wrongly assumes they see your book. No one sees your book on Amazon simply because you publish it there since you have not marketed the book. This confusion of economics with marketing drives the low pricing counterproductive to selling books online, even when marketing is in place.
If you have marketing behind your book, lowering the price does not always increase sales because people have many internet choices and purchase per the personal value they place on books. For this reason, you can buy a book on one website for a different price than on another site, and people will buy from the site they choose based on personal assumptions about the price and the site. This type of selling and buying occurs commonly on Amazon, with different sellers offering the same products for different prices. This form of dynamic pricing leaves the value of products as the prerogative of the consumers.
Authors selling books cheap with marketing on multiple sites often cheat themself because the sales volume changes little when priced lower. Even if sales volume increases, the lower prices typically do not create enough volume to make the same money as the book priced higher with fewer sales. To illustrate this problem, my book In Heaven had five hundred KENP reads last month, which amounted to $2.24. This 77-page novella, priced at the minimum $2.99 to be enrolled in Amazon unlimited, receives the 70% royalty offered by Amazon.
This book gets sales despite being part of a larger project that is not ready to be marketed.
This short novella has steadily produced approximately the same royalty for the last three of the seven months since publishing with no marketing and no reviews, outperforming many considerably longer and less expensive novels.
Just like assumptions about marketing, book performance can mislead people when assumptions are made based on reviews and social media. People think that getting their friends to review their books and putting a dozen reviews on the novel will make it sell more, but this is only true if the book price makes Amazon’s algorithm rank it higher.
Low-priced books with reviews do not rank as well as higher-priced books with reviews.
Understanding Algorithms
Amazon ranks books on popularity, reviews, sales volume, and dollar value. This algorithmic ranking makes sense for them because they want to make the most money possible, so you can bet that reviews coming from unverified purchases and cheap books do not carry the same weight for ranking as the reviews on higher-priced books. Selling ninety-nine-cent books harms selling because Amazon’s algorithm is more likely to present more expensive books to maximize profit. This ranking also applies to books not published exclusively through Amazon. Why should Amazon show your three-dollar book that someone can buy on Lulu or another marketplace for less? They don’t.
The algorithm also works against low-priced authors because inexpensive books invite trolls and negative people. This problem is especially true for authors who write about politics, religion, or other controversial topics. Trolls are much more likely to spend a buck than ten dollars on a book to leave a bad review.
Does freebie or low priced book marketing work?
Yes, providing you have a reasonable plan to make your low-cost or free book become a magnet; however, to make this happen, you need a considerable volume of books, a long email list, or advertising. If you have many books, you can make this pricing work because a large library requires less effort to market and will likely result in sales since they have more opportunities to sell on Amazon.
Without a large number of books, you will need that long email list and or paid advertising; however, using these marketing tools to get people to buy a low-cost book is counterintuitive.
If you have an email list and advertising, why short-change yourself on the price of the book?
Authors often market this way for the reason they confuse economics with marketing. The belief that low-cost selling equals a higher sales volume is misleading and often wrong. When you drop the price of a book below the Amazon threshold to maintain seventy-percent royalties, you drop earnings to thirty-five percent and need to sell even more books to breakeven, which your advertising may not support. If you are advertising at $100 a month and selling a book for the minimum amount of $9 to maintain the 70% royalty, then you need to sell approximately 16 books to break even. But if you drop that price to $8, which places you on the 35% royalty option, you will need to sell about 35 books to break even. Worse yet, you lose any KENP money because you are no longer eligible for Amazon unlimited due to low pricing.
For new authors, pricing lower makes no sense unless you have the money to mass-advertise books. Only the rich and publishers can leverage this advertising and spend far more than $100 a month. You could spend that much on Amazon or social media ads for a year and never get a sale, much less breakeven.
Working with Amazon
I try to work with Amazon by staying within their guidelines, publishing exclusively through their platform, and pricing books that meet at least the minimum to maintain the higher royalty option. I don’t see how this does anything but benefit me since people can still find my books through Goodreads, Barnes & Noble, and other booksellers. If you have the money to spend on ads, pushing books out to more outlets might work for you, but for most independent authors, building readership is a slow growth effort.
The effort needed to write a quality novel, novelette, or novella can often require years, depending on the author, making price a question of the value you place on your writing. This question is even more vital for the author with only one or a handful of books. Pricing will do nothing to sell a single book. My prior-mentioned book is a short book that sells for more than what many new authors sell three hundred-page books, and most get fewer sales than me. This circumstance occurs for the aforementioned reasons and because authors devalue their writing in the hopes of selling.
Price your book for what you’re worth because that value will only help you in the long run.
Photo by Guzel Maksutova on Unsplash
