Friday, July 22, 2011

Kindle Book Pricing

There's a discussion going on right now on one of the Kindle publishing forums about whether it is best to cut prices and increase volume, or charge a higher price and make more money on a smaller volume.  It turns out that one author has done the math with a number of his Kindle books:
We can draw some simple conclusions looking at these numbers.

Ebooks priced at $4 sell an average of 1100 ebooks per year.

Ebooks priced at $8 sell an average of 342 ebooks per year.

Ebooks priced at $2 sell an average of 4900 ebooks per year.
I don't know how applicable this is to non-fiction (the subject of current concern for me), but it suggests that doubling the price (at the low end) reduces volume by slightly more than 1/4th (inverse square)  (22.5% of the sales when going from $2 to $4).  At the higher end, it is not linear, but it is a bit less than inverse square (31.1% of the sales when going from $2 to $4).

5 comments:

John said...

One thing to note is the price break. E-Books (on Kindle) that sell for less than $3.99 garner a 35% royalty for the author. E-books that sell for more than $3.99 get 70% royalty.

You would have to sell twice as many e-books at $3.99 to make the same royalties as you do at $4.00

I recently published an e-book "Machinery Matters: John Henry on Packaging, Machinery, Troubleshooting".
It is a collection of 40+ columns and articles I have written for Food & Beverage Packaging Magazine over the past 10 years.

I priced it at $7.99 but I have no particular justification for this. It just seemed like a reasonable price.

Sales have been a bit disappointing. Or perhaps my expectations were too high.

I also published it as a paper book with Amazon's print-on-demand subsidiary CreateSpace.

My total out of pocket cost was less than $10. The only money I had to spend was to buy 1 copy for proof approval before they offered it for sale.

I priced it at $19.95 because that seemed like a price being charged for this kind of book.

It also allows me to offer a 15% discount to visitors who order it off my website. www.changeover.com

I can purchase copies to give to clients for a bit more than $4.

It is a brave new world in publishing. I am working on finishing a work for hire, a textbook on packaging machinery under a more standard contract. I also have a contract with a major publisher for another book on Changeover. This will be the standard kind of publishing deal.

I have some more ideas for book projects and am not sure how I will pursue them. Via a publisher or self-publishing.

John Henry

Mace said...

Looks pretty darn elastic. No surprise.

LibertyNews said...

I'm not sure how that would work for non-fiction where I assume there is a smaller market. But for fiction I'll drop $2.99 for anything that looks reasonably interesting. At $9.99 I have to really think about it first.

Clayton said...

Thanks for the tip about print on demand. Very good!

edna, grandma, GG said...

I see lots of well informed readers. I hope that you will profit from that knowledge. Good publishing, Clayton.