Welcome to the second part in this series on choosing the right price for your book. This time, we’re going to look at the concept of markup, specifically when it comes to pricing a paperback and leaving room in your price for sales. But first, let’s take a quick look at the concept of “pretty” pricing.

“Pretty” Pricing

“Pretty” pricing is the idea that certain prices look better to customers than others. You can obviously choose any price you want, but research has indicated that ending a price in .95 or .99 may psychologically influence customers to feel like they are getting a better deal. For that reason I will be rounding all prices in this post to the nearest .95. (Why not .99? Well, because this is “pretty” pricing and I think .95 is prettier.)

And with that out of the way, let’s look at how to choose a price for a paperback.

Pricing Your Paperback

Pricing a Kindle book seems relatively easy. There are no printing costs to recover, and Amazon even pushes you toward a certain price with its royalty model. But physical copies usually don’t have those niceties, so when authors approach the paperback, it often feels like a realm of mysticism and strange magic. But once you learn how best to take the cost of the book into consideration, it becomes much easier.

When it comes to your paperback copy, there’s a very basic factor to consider. You need to figure out how much it costs you to make a copy of your book, then decide how much money you’d like to earn on top of that. This is called markup.

Many publishers want to earn at least 100% of a book’s cost. Or, to put that in hard numbers, if your book costs $5 to print, you should price it at $10. This sounds like a really good method until you look at the real costs of the print-on-demand world. Most of us are using CreateSpace, which means we have a higher per-book cost to deal with. For a typical 300-page paperback, you could be looking at a cost of something like $9 or more. With that cost, you’d end up charging $18 for your paperback to get a 100% markup. Ouch! Clearly, we’re going to need a different strategy. Here are a few possible ways to approach this conundrum.

Use a smaller percentage

This is one of the simplest ways to approach the problem. Lower your profit expectations and use a smaller percentage for your markup. You could pick a 50% markup, or maybe even something like 35%—the same as you would make on the lower royalty tier in the Kindle store—depending on how the final price comes out. A book with a $9 cost at 50% markup would sell for $13.50. To make the price “prettier,” you can round up to the nearest dollar and make it $13.95. That’s a much more acceptable price for a paperback.

Tack on a dollar amount

Another way to do this is to decide how much you want to earn, then add that amount to the cost. For example, let’s say I decide I’ll be happy making $3 on a sale. So I’ll take my $9 cost and add $3, to get a price of $12. Again, I might change that to a “pretty” price of $11.95 or $12.95.

Try to earn what you get from an e-book sale

This is similar to choosing a dollar amount to add to the cost—it’s actually a more informed way of picking the right amount to add. With this strategy, I would look at my Kindle edition, figure out how much I will earn from a sale, then try to match that earning with my printed book’s markup. So if my Kindle book is $4.99 and I earn a 70% royalty, I make $3.49 when I sell a Kindle copy. I could add that earning to my $9 printed book cost to get a retail price of $12.49, or $12.95 in “pretty” terms.

Leaving Room for Sales

Another big pricing consideration is making room in your book’s price to allow for it to go on sale. Your chances of zooming up Amazon’s charts and getting noticed rise greatly with a well-run Kindle Countdown or Free Promotion, and you might be able to sell more printed books if you can offer it at a discounted price. You’ll certainly want to think about setting a price that gives you room to discount it.

Leaving room for a Kindle Countdown promotion

If you price at $0.99, your only sale option is to make the book free. And while free is great for exposure, you’re not going to earn anything on it. Plus, a Kindle Countdown promotion can be even more effective for generating sales since Amazon splits its Top 100 charts into Paid and Free categories.

Okay, so let’s say you raise the price to $1.99 to leave room for a Countdown deal. Now you can run a Countdown promotion at $0.99. But a Kindle Countdown gives you the option of up to four price increments during the promotion. It’s worth using at least two of those to go down to $0.99, then back to 50% of your regular price. If you’re planning to promote with a Kindle Countdown, you’ll want to consider choosing a price that can be discounted at more than one tier.

Allow for discounts to the paperback

The Kindle store isn’t the only place where leaving room for sales matters. Your paperback price should also include room to be discounted. CreateSpace gives you the option of creating coupon codes to use in their store, and you might also want to offer your paperback directly on your website for a special price. In my case I offer my mailing list subscribers a coupon to save 30% off the paperback retail price of my book Finding the Core of Your Story. I couldn’t do that without losing money if I priced it at the minimum.

It’s also worth mentioning that Amazon often discounts CreateSpace books from the retail price. But you still earn the same royalty as if you’d sold a copy at full price! This is fantastic news for authors. You might think about taking advantage of this by pricing your paperback a couple dollars higher than your ideal price, then waiting to see if Amazon will try to beat that price. If you leave room in the price for Amazon to offer a discount, it can lead to increased sales when Amazon makes your book look like a great deal.

Price influences perception of sales

While we’re talking about looking like a great deal, it’s also worth noting that a higher retail price will often make a sale feel like a better bargain to a potential customer. If your Kindle book is usually $6.99 and you run a sale for $0.99, the customer’s brain immediately thinks, “Wow! I’ll save $6!” You’ve done this in the grocery store with sale prices. It works the same way for your book, so think about how you can use the human “great deal radar” to your advantage as you price your book.

I hope you now feel more confident as you approach pricing your paperback, and that you might begin thinking about how to leave room in your book’s price for it to go on sale. Next time, I’ll talk about some ways to research the best price for your book.

Series Navigation