How should you price an e-book?

I was interested to read The Real Problem With $.99 Ebooks. That author suggests an e-book pricing structure that begins at 99 cents and ends at $5.99.

In spite of the fact that my e-books all fall into the pricing range he suggests, I'm not sure he's right.

Let's back up a bit. I originally priced my books at $14.95 with discounts for multiple purchases. The sales were fair - I sold a little less than 300 copies at those prices.

I then decided to drop the prices. There were several reasons for that decision. First, sales had slowed down. The books were still selling, but at a reduced pace. Second, I read John Locke's How I Sold 1 Million eBooks in 5 Months! and agreed with most of what he had to say about e-book pricing.

There was one more reason. I think that the common practice of pricing e-books similar to their hard copy versions is indefensible. There are no distribution costs and an e-book has little or no resale value. E-books often cannot be legally loaned at all and if they can be, they will usually carry stringent provisions. For example, Amazon's lending policy allow you to loan some e-books ONCE with a two week reading window for the person you loan it to. E-books should be much less expensive than physical books.

Price drop

So, I dropped my prices. I did something a bit odd, though: I dropped the prices to $4.99 for the PDF versions sold through my web site and down to $2.99 for the Amazon Kindle versions.

Does that sound odd? There's a method to my madness.

Fixed costs vs. percentage from sales

The books I sell through my website are actually sold through E-Junkie. I like E-Junkie, but there is a fixed $5.00 monthly fee for their service. That was insignificant when I was selling dozens of books each month; it is not so unimportant when selling two or three. Amazon takes a percentage of my sales (E-Junkie does that also), but there is no monthly charge. Therefore I would prefer to channel sales through Amazon.

So far, that's not working well. It may be that people don't understand that they can get a Kindle Reader app for almost any computer operating system or it may be that people don't like the extra step of going to Amazon. Or maybe I'm just not making the Kindle price obvious enough. I don't know, but it's early yet, so I'll keep trying.

I also think that it might be advantageous to drive sales through Amazon for publicity reasons. Although I have not begun to sell enough there that they'd "push" my books in any way, that possibility at least exists and Amazon has far, far more visitors than I could ever hope for here.

Why not 99 cents?

One reason is that Amazon increases the percentage that they take if you drop below $2.99. However, I'm still not sure that 99 cents is not the right price.

I don't disagree with the per-word structure suggested at the link I put at the beginning and I don't disagree with Locke's feeling that technical books should be priced higher than fiction.

I do think that both may be missing something. As I mentioned above, these $10 and up e-books are, in my opinion, way overpriced. The 99 cent books are an over reaction to that predatory pricing, but it may be a necessary reaction because $0.99 stands out against the $X.99 prices quite markedly. The "non-ripoff" is much more obvious at 99 cents so it might be that that pricing would generate more sales.

One thing is quite obvious: it's trivial to sort Amazon Kindle searches by price. There are a lot of free books to scroll through before you even get to the 99 centers - potential readers might never get to my $2.99 entries even when they might match their search criteria very well!

I obviously decided not to go that far down, but I'm still not sure that I should not. I'm still thinking about this and watching what others are doing quite closely.

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