One of the biggest challenges we indie authors face is pretty much the entire process of setting a price for a book. I know plenty of authors, including myself, who have spent days or weeks agonizing over which price to choose. And then once the price has been set, these same authors still wonder if they made the right decision.
I believe that while choosing the right price is a difficult part of self-publishing, it’s not something you have to do blindly. And so in this mega-post, I’m going to explore a number of ways you can gather data to help you price your book without so much second-guessing. I’ll also show you how to do market research that will give you incredible amounts of insight into what price your market expects.
Since this is a huge post full of many different ideas, here’s an index so you can quickly jump to any section.
- The Two Typical Attitudes of Self-Published Authors
- Three Reasons to Price Kindle Book Below $2.99
- Market Research
- Pricing Research
- Consider the Message Your Price Sends
- Putting It All Together
The Two Typical Attitudes of Self-Published Authors
Before we dive into all the nitty-gritty of pricing, I need to spend some time talking about typical author attitudes regarding self-worth. When I talk to authors about their book’s pricing, I typically see a couple of attitudes. Let’s look at each one.
“I don’t feel like my book is great, so I’m not going to ask very much for it.”
I actually don’t see a lot of authors say this in so many words. It’s often disguised as something closer to, “I don’t think anybody would pay that much for my book, so I’ll price it lower.” But I think at the root of this is the thought that my book isn’t good enough to ask for a fair price.
Let’s confront this attitude. Here are a few things to think about:
- You wrote a book! Now, if you have taken the care to edit it well and present it professionally, you have nothing to be ashamed of. You’ve done the work, so get out there and act like your book is worth a fair price.
- How much would you pay for somebody else’s book? Sure, you might be a starving author who prefers to buy books used or get them from the library, but when you’re drooling at a new novel from your favorite author on Amazon, do you feel like it’s priced too high? Probably not. Remember that when you think about pricing your own book.
- If you price your book too low, think about whether that’s sending a message to your potential readers about the book’s quality. Price like you have no confidence in yourself and potential readers will believe you. (We’ll talk more about the message your price sends later on in this article.)
Here’s the second attitude I see a lot when talking about pricing:
“I put a lot of effort into writing this book, so I’m going to make sure I get a high price for it.”
You might think after all that discussion of self-esteem and not pricing too low that I would be in favor of this second attitude, but I’m not. This is the other extreme. This is where the author believes that they deserve a premium price, without stopping to think about whether their target market will support it. That’s a very not-book-selling position to put yourself in. If you feel like you might be leaning this way, make sure you do some research into typical prices for your market before you slap that premium price on your book. (Again, we’ll talk more about this later.)
Let’s move on to the concept of markup. What is markup? It’s the part of the book’s price that you get to keep.
Think for a minute about your book’s cost. The cost isn’t the price you sell it for; it’s what you paid to make one copy of the book. For an e-book, this is pretty much zero, but for a paperback, you have printing costs and shipping fees. Say your book costs you $5 to produce one copy. If you sell that book for $5, how much did you earn? Nothing. That’s why you mark up the cost of your book before you sell it. Markup is what you add to the cost so that you actually earn some money. Since that keeps you from being a starving author, I think you’d agree that it’s a pretty good thing!
Before we dive into this, let me make a quick note about “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 can psychologically influence customers to feel like they are getting a better deal. Throughout this section, I’ll be adjusting prices to make them “prettier.”
Marking Up 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 ($2.99–$9.99) 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.
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. But since most paperback books on Amazon are priced below $15, we’re clearly going to need a different markup strategy to compete with the big publishers. 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 earning $3 per book. So I’ll take my $9 cost and add $3, to get a price of $12. Again, I’ll 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 about $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 in Your Price for Discounts
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 paperback copies if you can offer them at a discounted price. You’ll 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 and building a following, you’re not going to earn anything on it. Plus, a Kindle Countdown promotion can sometimes be more effective for generating sales since Amazon splits its Top 100 charts into Paid and Free categories.
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 might be worth using at least two of those price increments 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, 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.
Also, thanks in part to Amazon, the world now almost expects free shipping on everything. But of course, free shipping actually costs the seller something to provide. So if you want to offer free shipping on signed copies of your book, you’ll want to factor that shipping cost into your paperback price. Get an estimate on how much it costs you to ship one copy of your book, then add that to the printing cost. That’s now your baseline cost for the book, which your markup will need to be added to when you determine the selling price.
It’s also worth mentioning that Amazon appears to sometimes discount CreateSpace books from the retail price. But you still earn the same royalty as if you’d sold a copy at full price! You might think about trying to take advantage of this by pricing your paperback a couple dollars higher than your ideal price, then waiting to see if Amazon will discount it. 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 it’s on sale.
Price influences perception of sales
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. (“A can of beans is normally $0.69 but this week it’s two cans for $1. I’ll save $0.38 by buying two!”) 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.
Three Reasons to Price a Kindle Book Below $2.99
When you’re talking about Kindle books, you need to consider Amazon’s royalty model. If you price within a certain range (currently between $2.99 and $9.99), you’ll earn a 70% royalty instead of just 35%. Obviously, Amazon is trying to push you into the 70% bracket where they believe most e-books belong. When should you ignore Amazon’s siren song of higher royalties? Here are three reasons you might want to go for a lower price.
Your book is very short
It’s a pretty safe bet that if your book is a short novella or even just a short story or two, the general public isn’t going to be willing to pay $2.99 for it. In this case $0.99 or $1.99 might be the best option to sell the most copies.
The book is an add-on to a longer book
Maybe you’ve written a “bonus” story that adds to your novel’s world or briefly continues a character’s journey. In this case, you’ve already made a sale on the novel, so you don’t want to alienate your loyal readers by asking them to pay again for bonus content. This is a case where $0.99 (or free!) is probably best.
It’s the first book in a series
This one is a common strategy that seems to be pretty effective. You put the first book in your series at $0.99—or even free—to make it very easy for somebody to start reading the series, but then you price the rest of the series over $2.99 to get into the 70% royalty bracket. The sacrifice of smaller earnings on the first book then pays off when readers get hooked and subsequently purchase all of the remaining titles at full price. Plus, you can add to your mailing list by giving something away, which is the best way to build your author platform.
Now let’s consider how to look at your market on Amazon to find data that will help you choose a good price for your book. This process can be a little bit time-consuming, but it’s very much worth the effort.
Look at Similar Books
When you’re bringing your book to market, it’s important to consider the expectations of the market based on existing books for sale. It’s highly unlikely that your book is something in a completely new category—and that’s to your advantage. It means you can look at similar books to get a feel for what price is acceptable to this particular market. Here’s how you can gather data from books similar to yours to help you decide how to price your own book.
Check books in your category
You probably already know what genre your book is in, so jot that down. Then write down a few keywords that fit your book. For example, you might have a book that fits in the fantasy and mystery genres, and your keywords could be fairies, urban, and supernatural.
First, check on the genres. Go to the Kindle store or the Amazon book store and select each of your genres from the category sidebar. (You may have to choose a top-level category and drill down from there to get the one you want.) You should see a list of popular books in the category. Open up tabs for some of those books.
You’ll also want to check each genre’s Top 100 list in the Kindle store. Again, pick the genre in the sidebar. The Top 100 list will give you the 100 best-selling books right now. Just like before, open up tabs for several of these books. I’d recommend at least the top ten if not the top twenty.
Now run a search in Amazon’s Kindle store for each of the keywords you chose. If the books that come up seem to be similar to yours, go ahead and open tabs for those as well.
Gather the data
Now it’s time to gather some data. For each book you’ve clicked on, write down the following:
- Kindle selling price
- Paperback selling price
- List price for the paperback (this the price that’s crossed out)
- Page count
- Number of reviews
- Overall rating from reviews
You can use the page count and review data to help you find books that are similar to yours. You don’t want to price your 150-page novella with five reviews like a best-selling 400-page novel with 500 reviews. Find books that have similar page and review counts to compare selling prices. You might even want to find the average price of similar books.
This research can also help you determine where to put your printed book’s price. The paperback selling price will tell you how much Amazon has discounted this book, while the list price will let you know what the retail price set by the publisher actually is. Look at the list price; it’s the most useful to determining a good printed book price. Remember, Amazon likes to discount things, so give them room to mark your price down!
Another tool that can help you choose a good price is research into what readers think is a fair price. Here are four ways to gather that information.
Read some articles
The internet is full of articles about the optimal e-book price and what readers will pay. Two very useful ones are from The Fussy Librarian blog. Keep in mind that this is an e-book deal site, so the data may be skewed toward lower prices, but both posts draw from a large sample size, making them decently accurate and worth a read. The first post asks what readers think is a fair price for a novel, and the second asks about shorter books.
Ask your friends or test readers
I almost put “ask your friends and fans” but this is one question that you probably don’t want to ask on your author Facebook page! This is something to ask people close to you and people who have read your book as you’ve worked on it. Find out what these people think is a fair price. When evaluating the responses, remember that your friends and test readers are probably on your side and want you to be rewarded for your efforts—they may suggest a higher price because they believe you deserve it.
Think about how much you might pay for a similar book
Ask yourself what you would pay if your favorite author put out a book the size of yours. This isn’t a foolproof method, since your favorite author is probably quite a bit more famous than you. You may or may not need to price lower to break into the market, but this exercise gives you an idea of the maximum price you could charge. Even if you ultimately decide it’s too much for right now, file this price away to use later when you have throngs of fans who want your autograph.
Use the KDP Pricing Support tool
Finally, you can use Amazon’s Kindle pricing tool to get price suggestions. Go to the Edit Rights, Royalty and Pricing section of your book’s details and click the big View Service button under the KDP Pricing Support header. This will bring up a very neat tool that examines books similar to yours on the Kindle store, then suggests a price that can maximize your earnings. It also tells you what price might maximize the number of sales you’ll get. Certainly, this tool can’t tell you for sure how many books you’ll sell, but it’s worth a look to check out the data. It’s also worth noting that the recommendations change as the Kindle store data changes, so you might want to make a note to check the tool every so often for each of your books.
Consider the Message Your Price Sends
Now that we’ve looked at pricing from an earnings standpoint and from an audience expectations angle, let’s come at this another way. What does your price say about you, the author? What messages are you sending with the way you price your book?
Does a low price mean cheap content?
If your book is a substantial size, such as a full-length novel, you could be sending a message about its value if you price too low. Your potential readers might think you’re saying the book isn’t worth much, or that it’s low quality and doesn’t merit a higher price. This is where your research into how books like yours are priced can pay off. Give yourself a reality check. Don’t sell yourself short.
High price can set high expectations
On the other hand, a high price can raise the bar of expectations for your book. Check through reviews of similar books that charge a premium price. If you see a lot of reviewers mentioning how much the book cost, take note. That may indicate that your market is influenced by the price, and may be more willing to leave a negative review if your book doesn’t live up to very high expectations. You might be able to manage those expectations a little bit by lowering your price.
Low price can be perceived as a bargain
In favor of low pricing is the argument of seeming like a bargain. This is especially true if you have a high printed book price and a low Kindle e-book price. You could make your Kindle copy look like a great deal if it’s more than 50%—or even 75%—off the paperback price. Look at some similar books and see how the Kindle version is priced compared to the paperback copy. And again, check book reviews on similar titles and see how many reviewers mention buying the book while it was on sale or how much of a bargain it was. That might indicate a market that is out to get a deal. You would be wise to consider setting your price accordingly.
High price can be perceived as premium content
Finally, a higher price can give your book the perception of value simply by being expensive. I discovered this when I was experimenting with my book Finding the Core of Your Story. I found that when I priced the Kindle book at $4.99, I actually sold more copies than I did at $3.99 or even $2.99. It wasn’t just the Kindle copy that benefited from this. Sales on my paperback copies rose dramatically when I went from a barely-break-even price of $6.99 to nearly double that at $12.95. This strategy may work better for nonfiction, but it’s worth trying with a fiction title as well.
Putting It All Together
Now that we’ve looked at all of this theory, you might be wondering how it looks in practice. Good question! To answer that, let’s do a little exercise with a hypothetical science fiction novel as an example. This hypothetical novel can also be classified into the time travel sub-genre, and it’s about 350 pages long. We’ll also say that it’s been on Amazon for a little while now and has five reviews.
Looking at Similar Books
Let’s start by looking at some books that are similar to this hypothetical novel and gathering some details about them. Since it’s in the science fiction genre, let’s start by looking at that category on Amazon. I’ve gathered the following data about 25 books from the Top 100 list for science fiction:
- Kindle selling price
- Paperback selling price
- List price for the paperback (this is the price that’s crossed out)
- Page count
- Number of reviews
- Overall rating from reviews
(And if you want to do this on your own, you can download this spreadsheet template to fill in with all of those details.)
I chose to look at the top 20 books in the category, plus five others I chose from the bottom 20. Here’s a chart of my findings:
Now, since this hypothetical book is also in the time travel sub-genre of science fiction, I’ll look at 25 of those books as well. Here’s what I found out:
Whew! That was a lot of effort! What did it teach us? Well, let’s look at our data.
Weeding Out Irrelevant Books
First off, we can remove some of these book because they simply won’t help us. The ones I’m going to get rid of are the ones in the science fiction chart that have less than 100 pages. Those books are very obviously aimed a different market than my hypothetical novel, plus most of them seem to be sci-fi romance. That leaves us with this chart for science fiction:
I’m going to leave my weeding at that, but you might want to also look for books that are obviously anthologies or that have vastly more pages than yours. For example, I could have also weeded out anything that’s over 600 pages. However, for our purposes today, I’m actually very interested in the fact that length doesn’t seem to fully dictate price for full-length novels on the Kindle store, so I’m leaving the longer books in my data.
Crunching Some Numbers
What’s going to help us most here is finding the average price in these categories. Happily, spreadsheet software will do those calculations automatically, so this won’t take long at all.
Average Kindle price: $5.08
Average paperback price: $11.69
Average paperback list price: $13.91
Average Kindle price: $5.10
Average paperback price: $12.65
Average paperback list price: $14.85
From those averages, we can draw a couple of conclusions:
First, a good Kindle price for my book might be $4.99, which is what I get if I round either average Kindle price to the nearest “pretty” price. Now, it’s possible that I should price lower to try and break into the market, since I only have five reviews right now. For some insight into that, I can sort my spreadsheets by the number of reviews each book has. That will let me see what prices are working for books that don’t have all that social proof in their favor. In this case, it looks like $4.99 is still a good price, but perhaps $3.99 could help me get some extra exposure early on.
Second, remembering that I don’t have any control over where Amazon decides to set my book’s paperback price, I’ll look at the paperback list prices. It looks like I can list my paperback at probably $13.95 or $14.95. It’s also worth noting that the average selling price in both categories is about 15% off the list price. Perhaps (but this isn’t guaranteed) we can expect Amazon to knock 15% off my list price. That would be interesting to check back on a few weeks after I set my list price.
So, to conclude this section, I’ve decided that my optimal Kindle price is either $4.99 or $3.99, and a good paperback list price is either $14.95 or $13.95.
Polling the Market
Research into existing Amazon books is certainly useful. But we also need to think about audience expectations. And while looking at best-selling books on the Amazon charts will give us some details on that, it never hurts to double check with some additional data.
To help us with that, I’m going to look at a poll conducted by The Fussy Librarian deal site. This poll asked over 1,200 people what they think is a fair price for a full-length novel in e-book format. Reading through the results, it looks like the price that got the most votes is $3.99.
Does that change my research results, though? Well, I don’t think so. Remember that this poll was conducted by a deal site, so it’s likely that many or most of the people who responded rarely buy an e-book at full price anyway. Taking that into account, I think my optimal e-book price is $4.99. I’ll have room with that price to run a sale later to capture some of those deal-site readers.
The Marketing Factor
Of course, you can set my price anywhere you want, but it won’t do you any good if you don’t have a fantastic cover or a great Amazon description. And if you’re not getting the word out to people who might buy your book, you’re not going to sell many copies and get on that Top 100 list. With that in mind, here are some articles from the Fix My Story archives that can help you start thinking about how to promote your book to the world:
- Five Ways to Promote Your Book That Won’t Cost You a Dime
- Five Ways to Promote Your Book for Five Dollars
- How to Find Bloggers Who Want to Review Your Book
- The Number One Way to Build Your Author Mailing List
I know this whole process of gathering and reviewing all this data seems like a lot of work, but believe me when I say that it’s well worth your time. You’ll begin to understand how the pricing the in Kindle store works, giving you a frame of reference for setting your own book’s price. It’s a great tool to have, and all that keeps you from using it is a bit of effort.