Pricing Strategies

So I was talking to a few people earlier this week about Kindle pricing, and everybody was basically pointing at the same strategy as always. It goes like this.

Join Kindle Direct Publishing Select, so you get access to five days a month of promoting your book for free. Set the price of your book to $5 and then after a couple days do your free promotion. After your free promotion is over, set the price of your book to $3.

This usually makes your book a best seller in its category and then you can take a screenshot and start advertising it as a best seller. Also you can now call yourself the "best-selling author of" your book or just a "best-selling author."

In other words, both of those things mean absolutely fucking nothing anymore.

But let's concentrate on the idea of just plain setting a price. You have a book, and you're publishing on Kindle, and you want to just set one price that is fair and walk away. You don't want to micromanage a bunch of promotions and shit because fuck that. This is how I feel about pricing - I don't want to go dicking around with "what if I do this and then that and then change it again?" because I am not a fucking sales manager.

I hate that crap. That's a full-time job that people get paid to do all day and if you talk to those people they not only hate their jobs but are also irrepressibly drab and awful. I just want to say "this is what it costs, pay it or don't, but I'm done."

So let's have a look at how Kindle pricing works.

Depending on the size of your manuscript, you can price the book as low as 99 cents and as high as $200. However, if you charge between $2.99 and $9.99 you can double your royalty rate to 70% which means:

Books between 99 cents and $2.98 must earn 35% or between 34 cents and just over a dollar. We'll call this low pricing.

Books from $2.99 to $9.99 can (and there is no reason not to) choose instead to earn roughly $2 to $7. We'll call this low-mid pricing at the under $5 mark, and mid pricing between $5 and $9.99.

Books from $10 to $20 earn between $3.50 and $7. You can earn the same royalty by halving the price, or simply reduce the price to $9.99 to make almost a $7 royalty. This will be high-mid pricing.

Books from $20 to $200 earn $7 to $70. So, you know, if you expect a royalty over $7 you're up here. This is your high pricing.

All of these have their place, so it's not a matter of choosing the "best" one for all purposes.

What we find most people doing is pricing in the low-mid range because it's your best tradeoff between money and sales. That's the best-seller tactic above: start at the top of the low-mid range, use the Select promo to get a bunch of sales, then drop to the bottom of the low-mid range. If you have written a reasonably low-quality book that you don't really expect anybody to be looking for, this is your price range.

Pricing in the low range will obviously get you more sales, but unless it's going to get you two to six times the sales you are not going to make as much money. Which means when you price here, you are looking for sales at the expense of profit. This is throwaway stuff. It's something you expect to make entirely impulse sales from people going "ahh, fuck it, may as well." A good candidate for this is free giveaway reports you might have used for listbuilding in the past. This is also the key area for schlocky pulp fiction and erotica.

Pricing in the mid range is really where you want everything that you can't put in low-mid. This is the beginning of price discrimination, and the perception of the buying public is that this is what real books cost. You are now pricing yourself at the sweet spot for "real" authorship. It is here that the customer perceives you as comparable to a print author. Anything here should look and feel like a "real" book, because that is what you are competing with. You should be checking - and complying with - the submission guidelines for major publishers, because that's the game you're playing now even if you don't submit for real publication.

Pricing in the high-mid range is not a strictly-Kindle strategy, but it can fit into a broader marketing plan. If you want to sell your print book, pricing your Kindle version the same will lead a lot of people to buy the print version instead. If you have a PDF version on your site, pricing it the same on Kindle allows people to get it on their device easily without devaluing the product. You are no longer driven by sales or profit, but by setting a bar for the customer: the information costs this much because that's what it costs. You're leaving the "text as commodity" realm. This is where the customer begins to perceive you as comparable to a print author with a major publisher. It's not enough to just look and feel like a print book, anymore, you need to actually hold your own next to them. Your book has to not only be sufficiently professional to be considered by a major publisher, it must have sufficient quality to be accepted.

Pricing in the high range is about nothing but price discrimination. That's a strategy which effectively means you have a captive audience that will pay what you tell them to pay, full-stop. The mid-high range is similar, but in the high range you're actively topping the level of most print books. This is establishing a position as a brand or thought leader, with premium pricing. This is where you're targeting professional organisations and academia, where the price of the content is simply not relevant. You're not playing with competition anymore because people have to get your book, even if alternative authors and formats exist.

Depending on your personal goals, any of these strategies could work. What makes the difference is where you're trying to position yourself. Concentrating exclusively on money, or on copies sold, may not get you where you want to go. So give some thought to where, exactly, that is.