May 13

The Price is Right– Or Maybe Not

There’s a lot of debate in the indie writing community about the “right” price for ebooks. There are advocates for free and 99-cent novels, all the way up to Dean Wesley Smith and Kristine Kathryn Rusch, who argue for pricing as high as $7.99 for novels. A few writers have attempted to quantify the “sweet spot” for ebook pricing, with many arriving at a range between $2.99 to $4.99.

As a writer, I’m all for higher-priced ebooks, since each sale means more money in my pocket. On the other hand, if readers in appreciable numbers are passing up my books because of price, then I’m losing money. Not to mention new readers, which I feel are even more valuable.

But there are so many variables at play in book sales– cover, blurb, visibility, subject matter, quality of the writing, how well the sample hooks a reader, formatting… I could go on and on. What part does price play in conjunction with these many variables? With my brief experience as a publisher and the size of my catalog, I don’t have a lot of data to go on. The only real experience I do have is that of a reader.

At one time, I picked up paperbacks all the time. They were cheap, and if a book caught my interest, I could afford to take a chance on it. About 15 to 20 years ago, paperback prices started increasing– a lot. Author Scott William Carter wrote a post about this. Not just the usual increases one expects to see year-over-year, but big jumps that put the cost of a paperback book at an hour’s wages or above. At these price points, my book buying slowed considerably, then pretty much stopped. I went to the library, the used bookstore or the stock of “favorites” on my own bookshelves for my reading.

I seem to remember reading in this same time frame about publishers complaining about declining book sales. It’s my opinion that book publishers simply priced themselves out of the market. I think the ebook revolution proves this. Now that readers can buy ebooks at what I consider reasonable prices ($5 or less), book sales have exploded. That strongly suggests pent-up demand. Certainly I buy more books now than I have in decades.

Back to my example as a reader. When it comes to buying books, not only do I have a limited budget, I’m also a picky reader. If I spend part of that limited budget on a book, I want to be relatively sure I’ll enjoy it. Put another way, I want the most bang for my buck. Even if the author is one I’ve read and enjoyed, I’ll think long and hard before paying more than $5 or $6. After all, every writer produces duds from time to time.

With ebook pricing, another issue comes into play. When I buy a physical book, I can lend it, sell it, trade it or give it away. Other than very limited-time lending, you can’t do that with an ebook. In a sense, it becomes a disposable product– after you’ve read it, you can’t do anything else with it. This limitation should be reflected in the price in the form of a discount.

So what’s the best price for an ebook of novel length? Traditional publishers price their paperbacks at $9 on up–much too high, as I’ve already mentioned. Let’s say the ebook should be discounted 20% for the reasons above. I can get more than 20% of the cover price for a paperback at a used book store, but if I give it away I don’t get anything. So I’ll split the difference. That puts it at $7.20, lower than Dean Wesley Smith’s suggested price. Assuming that many other readers share my opinion that traditionally published books are overpriced (a big assumption, I’ll grant you), let’s knock off another 20%. That puts an ebook at $5.76, pretty close to the high end of what I, as a reader, am willing to pay.

So what about that “sweet spot” range of $2.99 to $4.99? Too low? Too high? Or just right? You can see where I’ve come down on the question by looking at my prices. I’d love to hear what you think.

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