As an e-book publisher should your rankings be based on your low-ball rates or on the merit of your work? Coming from the traditional side of e-book publishing, I'm a fan of the latter. I believe in premium pricing when you put out quality work. And I believe in letting your individual market help determine your rates -- not Amazon or the general masses.
Nonfiction e-books are my specialty right now (although I'm working on my first novel). You'll never see me engage in the Amazon-induced pricing wars because I'm a big believer in the quality of your customers over simple quantity (although having both doesn't hurt).
I've made it work for me quite well, selling e-books at price points of $9.97, $17, and $37. Because I have a strong promotional background, had a solid platform already built when each e-book was published and intimately knew my target markets, this was a successful strategy for me. Then again, I can't speak to the fiction side. There's a big difference between selling e-books for entertainment versus selling nonfiction to readers who see it as an investment because they'll get a real financial return from the information you provide.
Knowing I'll have to price my own novels in time, the fiction side of the e-book pricing conversation is of interest to me. I saw Zoe Winters talking about this very issue over on the Keyboard Hussy blog, and just had to pick her brain. She kindly agreed to an interview. And here's what she had to say.
Jenn: What convinced you to initially price your e-books at 99 cents and stick with that price for a while?
Zoe: I was basically trying to build audience. I thought it was important to get as high as possible in the Kindle store so that when the wave hit, I would be well-positioned. I did do pretty well, and in May 2010 all three of my novellas got into the top 200 of the Kindle store and stayed there for six weeks. Mated got all the way up to 105, but it was too hard to maintain those types of sales, and the money was crap (for all the copies I was selling). Though, it felt like a lot of money at the time, since I'd never made that much in a month before doing anything (sad, I know).
Jenn: What triggered your first e-book price increase, and how did you choose that price point?
Zoe: I realized I couldn't maintain decent earnings at that price because although I sold a little over 6,500 ebooks in June of last year, that's just hard to maintain. If you aren't the ebook flavor of the month, it's just not sustainable for most people. I started raising my prices, partly in response to the realization that to make a living I needed higher prices. I also got tired of people who read Kept at 99 cents and complained that it should be free because it was "short". That was ultimately what made me raise prices when I did. That attitude from some readers was the last straw for me. I noticed that 99 cents drew some unappealing customers.
I'm not saying everybody who buys 99 cent ebooks is "bad", but, there is a big number of readers who buy at 99 cents just to hoard. They don't read, they just buy thinking maybe they'll "get around to it". But they didn't invest enough money in it to really care if they ever read it or not. And many who do read, act "entitled". A strange but true rule of business is that the customers paying the least amount for a product or service always complain the most and try to squeeze more out of you. I really don't want to participate in the Walmartizing of literature or cater to that audience.
Then there was the fact that I wanted to cultivate a loyal following and most people who expect ebooks to be 99 cents aren't that loyal. They're shopping by price as their main deciding factor. I just don't want those readers. Anybody that price sensitive just isn't the demographic I'm going after. (And there are plenty of readers who pay 99 cents who would gladly pay more, but when you're priced at 99 cents, there is no way to separate that demographic out.)
I want people willing to invest in my work and in me because I work hard at what I do. And I want readers who respect that. I made my novellas all $2.99 because I felt that was a reasonable price point. I raised Blood Lust to 3.95 in the effort to slowly ease it up to it's final price point of $4.95. Eventually it went up to $4.95 as did Save My Soul. With my novels I intend to do a $2.99 intro price for the fans/newsletter subscribers, but raise up to the full price as soon as possible with each book.
Jenn: If you could start over again and price your e-books differently from the beginning, would you? If so, how would you handle things differently?
Zoe: I'm really not sure. Right now I think 99 cents isn't a great idea. I feel like it drives the prices down, and it's hurting everybody. I'm not sure 99 cents has a huge positive result for most authors right now anyway. There are plenty of indies priced at 99 cents who are hanging out in the 200,000's in sales ranking on the Kindle store. So clearly price isn't the only factor of why people buy.
Often what determines whether or not someone buys a book is cover, description, if it was recommended to them, etc. Your book can be 99 cents, but someone still has to find it. Then, most of the types of readers you want, will have to get over their fear that it is "probably crap". Most of the loyal long haul type of fans are going to look at 99 cents and be suspicious. Why not just price higher, avoid suspicion, and make more money?
I also know several authors have started at higher prices and done well, like Michael J. Sullivan.
But I don't know. I can't really say it would be better for me to do something different "at that time" because there weren't that many people indie publishing when I started. 99 cent ebooks were actually a strategy at that point. It was a totally different landscape than it is now. I think it's a bad idea now in general and for me, but that's now. I can't go back in time, and even if I could, doing things differently may or may not have been beneficial.
Jenn: Do you think low pricing schemes for e-books will prove to be sustainable in the long run? Why or why not?
Zoe: I think what will happen is many indies will train a lot of readers into entitlement and "expecting" super cheap ebooks, which will make normal prices like $4.95 seem like "too much". I think almost no one can make a solid living with 99 cent ebooks because you have to have huge volume for that. When I sold 6,500 ebooks in June 2010, that was around $2,300. Well, most people can't live on that, especially after you take out Uncle Sam's cut.
I'm not saying that everybody or even most indies will be able to make a living anyway, but if it's your goal, 99 cents might not be the way to go. You only have to sell 677 ebooks in a month to make that same $2,300 if you are selling at $4.95. And while that may still be hard for a lot of indies to accomplish, especially if they don't have a backlist, the math just doesn't favor 99 cent ebooks for anyone hoping to make a living. And I think writers should be able to make a living. Or at least have the potential to do it. If everything goes to 99 cents, I just don't see that happening. I see publishing becoming little more than a hobby for most.
Jenn: What differences have you seen, if any, in audience response to your e-books after prices were raised?
Zoe: I think the readers I attract now are truly interested in MY work, and not just a bargain. I feel like the readers I'm attracting are the types of readers who are going to be passionate about the work and tell other people. I also think that people don't expect it to "probably suck anyway" if it's $4.95. That negative assumption with 99 cents devalues the work because human beings are psychologically wired to get the experience they expect with many things. Fiction is one of those things. Reading fiction is a totally subjective experience, so any attitude you bring in up front about a book or author is going to color your experience. So to those who think 99 cents doesn't devalue the work, think about the people who will click "buy" but think: "Well, it's only 99 cents. It'll probably suck, but who can pass that bargain up?"
That's just not a thought I want a single one of my readers to ever have. At the higher price point, people just expect it to be good. And I work hard to deliver on that expectation.
I'd like to thank Zoe Winters for taking the time to share her thoughts on e-book pricing. Check out her author site to buy her books or stop her blog to say "hi."