Tuesday, May 24, 2011

Self-Published Novel: I Don't Get the $.99 Pricing

This isn't about greed. This is about belief in my product and questioning the economics of the $.99 price in consideration of building a fiction writing career. 

The $.99 opener. The argument goes like this: price your first novel at $.99 to grow a readership, then price future books higher. Maybe it's my experience as a non-fiction writer, but I can't stomach this. I can see offering a short period of time every month for a $.99 sale on one of my novels, but I can't see this as an effective introductory price. I do not dispute that more readers will probably buy a $.99 book. But what is the economical trade-off of this increase in readers when a writer does not have additional books, just the debut?

I have sold thousands of dollars (not many, but still, it's thousands) worth of non-fiction articles since October of 2007 when I fell into writing. I make either 65%-90% of my price, depending on if I sell it straight to the customer or go through a type of gallery site. After 4 years, I'm bored writing about real estate, finance, taxessssssssssssss....oh I'm sorry. I fell asleep talking about it. :) 

But here's one axiom I learned: there's a buyer for every price. It's just a question of time, assuming the writing is of a good quality. On the gallery type site, that isn't an issue, as all articles are approved by an editor before going up for sale. However, my articles sit indefinitely until they sell. A 1,000 word piece on shopping addiction priced at $150 sat for 6 months before I sold it. In terms of $.99 books, that's 325 books sold in the same 6 months that article sat. (I sold it for full rights, meaning I cannot resell it.) But, it takes a great deal longer for me to write a book than a 1,000 word article. You're comparing hours to months. 

Price and perception of quality. I used to be a casual game addict. I bought games for $4.99 a piece, sometimes spending nearly $100 in a month because I would beat them so quickly. I played them on my computer, so I didn't have to fight my family for the TV like my video games on the Xbox 360 or Wii, even though those are a better deal ($30 or less for used RPG games I easily log over 60 hours on). 

I justified my spending by the number of hours of enjoyment I received for the money. 3 hours of fun for less than $2 an hour? Sign me up! Guess what? At $5 a piece, and every seventh game free (thanks to a stamp card you filled through the month), I didn't buy less than 6 games a month. That's a $30 monthly budget, or about half of a percent of our after tax monthly income. 

I never played all 6 games to completion. One unplayed game was $5 wasted. Who cares? I'm a frugal, but comfortable, stay-at-home-Mom with a husband who makes more than $50,000 but less than $80,000 who has limited avenues of escape. I was well within our monthly "entertainment" budget, and even a waste of $5 was far less than the overages associated with gas to drive to a store or other entertainment venue and extra spending on snacks or impulse items that plays to my gatherer instincts. 

My reader. I know not every reader is in this category, but based on my research into my target audience, these are men and women with a healthy monthly allowance for their own escapes. They don't generally have time to waste on failed avenues of lowering stress. It's not about the money, it's about the time. Most of their time isn't theirs to give. They have careers themselves, children, and other responsibilities. 

I buy ebooks to read on my computer. My limit is again, about $4.99 but that's more of a guideline. I do splurge on bestsellers because it's worth the extra money than driving 30 miles round-trip, kids in tow, to buy a book. It's never the price alone that gets me to buy a book. It's the cover design. The description. Occasionally, the reviews (I don't put too much stock in them, but they can make or break a borderline decision). 

After the cover and title grab my attention, I read the sample. If I get to the end and didn't see many mistakes, and want to read more, if it's $4.99 or less, I buy it. Again, I'm a Mom. Dragging my 2-year-old who won't sit in a stroller and browsing books in a book store is not fun for me. I can browse e-books while Mickey Mouse Clubhouse blares in the background. If I was still working outside of the home, I would buy them on my lunch break and read on my lunch break, etc. 

The consumer in me doesn't identify with this mantra that readers who buy $.99 can't afford anything more and won't buy a book priced higher. Maybe a handful of them won't, but if that was true, why are these readers buying the author's next titles for $2.99 and $3.99? I know when I buy a $.99 book, I don't think "great deal," I think cheap. To me, all ebooks technically are a great deal just in convenience!

The trade-off: readers for dollars. But here's the meat of the issue, and readers might be surprised about this: How much is an author truly giving up to increase the number of purchases by pricing at $.99? 

Let's just look at Amazon. Amazon pays royalties after 60 days of publication from what I can tell. My goal is to sell 100 books in those 60 days. If I price at $.99, I make roughly $.30 per book. There is a small charge I believe for the size of the file. Selling 100 books, I make $30. I make that much selling two short and sweet non-fiction articles that I write in about 2 hours. Even the argument of the infinite shelf life isn't selling me on this idea. I understand YA books using this price because their general audience, teens, have much more limited disposable income than my audience, grown women and men. But other genres, especially those aimed at productive adults?

Any book priced $2.99 to $9.99 is paid a 70%, not 30%, royalty. Same 100 books, higher price, I make $209. In fact, to make more than the $30, I only need to sell 15 books. In two months. 

Sell 100 books. Choose to make $30 or $200. 

How is this even a choice? $.30 is almost such an insult, I don't want a reader who only values my hard work at providing them an escape as worth slightly more than a quarter. A quarter. You can't even buy bubblegum at the machine in the grocery store for a quarter any more. No, a big, sugary ball of bubble gum costs $.50. My book would be worth less a piece of gum. 

To be honest, I was seriously considering making $2.99 or $3.25 as my introductory price, advertising that once the honeymoon period of 60 days was over, the price will go up to $3.99. I make $.70 more per book, and more importantly, since some back listed romance novels are coming out at $3.99, with a professional cover, description, and author photo, it will be more difficult for a reader to distinguish me from a traditionally published contemporary romance writer. That's what it's all about. Look professional, be treated like a professional. Give the reader a great story to lose the stresses of reality. 

But Elizabeth, what about losing readers because of the price point that's $1 more than $2.99?

If I sell 10 books at $2.99, I make $20.90. I only have to sell 7.5 books to make that same $20.90 at $3.99. So, I would have to lose more than 1 reader in every 4 seriously considering purchasing my novel to make less at $3.99 than $2.99. With so many other variables, such as the description, reviews, or sample turning readers off, I don't know that the difference of $1 will cause a mass exodus. 

There are bargain shoppers. People like my Aunt Sandi won't buy anything unless it's on sale. Those people will click the "Add to Wish List" link that Amazon so helpfully provides. When I advertise my book going on sale, they will snatch it up. 

The bottom line is price alone has never made me decide to not buy a book. I read the description and sample, and from that information, decide if I think the book is going to be worth the money. Price is only a tie-breaker vote. 

For me, my job as an author isn't to play games with my pricing, but to write a book and meta data that makes a reader think "This writer is worth the money." Now, if I had a "large inventory", I will happily price older novels at $.99 just to move titles. Then, it would make sense as a gamble on a $.99 price, or throwing that quarter at me, because when the reader buys one or two of my other books at regular price, it was worth the loss of $2.49 in royalties on the first book to possibly get two or three times the $2.09-$2.79 from the future purchases.

Now, I don't want to make it sound like I see readers as dollar signs. I don't. I don't want to insult readers by believing that they really see our hard work as worth slightly more than a quarter per book for a royalty. I know these $.99 book buyers, they are not people who walk around playing Fred Mertz. I've bought books at $.99 cents. I am not a cheapskate, but it was the price the author set. The books that were great, which I had a good idea would be from the description and sample, I would have gladly paid more.  

By pricing my work at an affordable price for the months of work and investment, here is what I can offer my readers:

  • I can invest in newer technologies as they come along for "enhanced" ebooks. 
  • I can continue my education in the writing craft, producing a better book with each release.
  • I can use my success to pay-it-forward to other writers, bringing more and more quality and affordable books to the market. 
  • I can afford to donate books and time to those who truly cannot pay even a penny.
  • I can justify my work to my husband and the IRS as a legitimate business, letting me stay in business and keep writing.
Word-of-mouth campaigns. On a final note, there is the question about word-of-mouth. Are readers who read $.99 books more likely to tell people about the book than readers of $2.99 books? I don't believe so for a few reasons. First, I suspect a significant percentage of $.99 books go unread, like one of my six games went unplayed. There is no sacrifice for the reader in neglecting the title. It isn't going anywhere. Like the unread pile of print books every reader has that he or she bought on clearance, the chances a reader will get to it is slim. Second, I think word-of-mouth comes down to writing quality. Is it fresh? Is it spunky? Was it fun to read? Who says "Read this $.99 book, it isn't terrible?" 

But time will tell. I publish Cancelled in August, the first book in my planned Red Ink collection. I will see my first royalty check in October. I will publish my sales figures like the many awesome writers who have come before me, just as I gladly shared my pricing strategies and sales with new freelance non-fiction writers over the years (my sales figures were public already). And when that first royalty check is more than $30, I will be very thankful I held onto my bravery in this new world of fiction.

"Cancelled" arriving Late Summer 2011A robotics engineer asks his business partner to marry him, but a previous one-night stand is having his baby.


  1. I'm going to assume that you've delved into this and read Konrath's blogs and Stephen Leather's as well. Amanda Hocking is another example of the 99 cent phenomena. I agree with your main points and feel your pain. My full length novel which took years to right was doing very little on Kindle at $2.99, it was doing much better (more than 6x worth) at 99 cents. Then I raised it again, and it sank. I lowered it again, but it never recovered. Some readers will stay away from literary novels at 99 cents and assume that they can't be good. It's damned if you do, damned if you don't. But in an atmosphere where many writers are selling their goods at 99 cents $2.99 feels like a lot for some readers to spend on writers with whom they unfamiliar. Sure, it's heartbreaking, but unless you have a following and you believe they are all waiting to buy your book on Kindle, you will probably sell many more at 99 cents.

  2. Thanks Marion for your comment. :) I know all about Konrath and Hocking, bless their souls they are the poster children of self-publishing. while $.99 does work for them and many others, I don't think it's just the price point that makes or breaks their stories. Even in your case, it could be a change in algorithms or the age of your book that bumped it off the "latest out" or some other unseen force. I bet once your next title comes out, your older book will gain traction again.

    So much is changing in the ebook world on a weekly basis, it's really hard to make the hard and fast rules that will sustain the business model. I've looked into my genre (another posting here) and know that what is expected by readers at the $.99 and $2.99 are very different things. My book is not a wham-bam, hot heat where the plot is secondary. I've read many of those titles in the Romance section :) Absolutely nothing wrong with a novella that revs the engines, so to speak. My book just isn't one of those. My book is a straddle between a modern romance and women's fiction.

    I also have rather low expectations. I will pour my heart out into marketing (because I enjoy it) but I only require my book to sell between 200-300 copies. Anything more is WOOHOO, royalties.

    I also think the key is to keep writing. When I churn out a novel, with the best quality of writing I can offer, every 6 months, I will grow a following. The readers can count on me to produce, so it's worth their time to keep tabs on me.

    Overall, my writing career goal at the moment is to write three novels and make $3,000 in one year for my fiction writing. Once I do that, I will take a step back and see if this is worth pursuing further. At $2.99, that's 1400 novels in one year, slightly less than 500 sales per title in one year, or 40 books per month per title. At $3.99, that's 1,100 books total, 350 books per title per year, or 30 books per month.

    The $.99 side? 10,000 books in one year. Ten thousand. 3,333 per title, per year. 277 books per month per title.

    I have far more confidence in my ability to find and touch 120 people per month to buy my novels than nearly 600.

    But every writer IS different. I just wanted to give a voice to those who are nervous/skeptical about the $.99 phenomenon everyone talks about. And I don't even have issues with a $.99 sale. But I know I can't be the only one out there, and who knows, maybe rising your price to $3.99 will get it noticed by an entirely different set of readers.... you never know ;)