Episode 206: Ebook Pricing Strategies

In this week's episode, I take a look at different pricing tiers for selling ebooks, and discuss the pros and cons of each.

TRANSCRIPT

00:00:00 Introduction and Writing Updates

Hello, everyone. Welcome to Episode 206 of The Pulp Writer Show. My name is Jonathan Moeller. Today is June 21st, 2024 and today we are discussing ebook pricing and the pros and cons of different ebook price points. Before we get into that, we will have an update on my current writing projects and some discussion about Question of the Week.

First up, my current writing projects. I am pleased to report that I have finished the rough draft of Shield of Darkness. It came in at 111,000 words, which I wrote in 31 days. It’s amusing to look back. The book before that in the series, Shield of Storms, was 6,000 words shorter, but I actually wrote it in 35 days, but that was over December and January and I had taken an entire day off for the Christmas holidays back at the end of 2023. Next up, I will be writing a short story called Disciples that ties into the Shield War series and my newsletter subscribers will get that for free when Shield of Darkness comes out in ebook form, so it's a good time to sign up for my newsletter.

After Shield of Darkness is out and published, my main focus will then be Half-Orc Paladin, and I think I'm 25 or 26,000 words into it (I'm not entirely sure off the top of my head). That's where I'm at with my current projects. Good news: the rough draft of Shield of Darkness is finally done.

00:01:20 Question of the Week

Now let's move on to Question of the Week. This week's topic: what is your favorite food to eat while traveling? The inspiration for this question was the fact that I traveled somewhere around 1,200 miles in the last week before recording this episode. As you might expect, we had a range of answers.

Justin says: nuts. Almonds, peanuts, or mixed nuts, roasted and salted. High in sodium, but non-perishable and high in protein. Like nuggets and fries, you can drive while eating them. Another advantage is the ability to easily put away uneaten nuts for later. And finally, no whining from vegans about the evils of consuming meat while in airport lounges.

I have to admit I haven't had that personal experience yet, but I can see how that would be a plus.

Our next comment is from Surabhi, who says I'm South Asian, so my award goes to samosa and Pani Puri. I'm pretty sure I pronounced that wrong.

Our next comment is from Jesse, who says: hot dogs with pepperjack, jalapeños, and mustard. Weirdly cures most of what ails you.

Scott says: sunflower seeds pass time for a for a time consuming or passing the time snack. Beef jerky is a choice for me also. The hardier and saltier, the better.

John says: tacos as long as I’m west of the Mississippi and South of Dallas. Burger and fries otherwise. If I'm rolling cheap, I'll pack an ice chest to make sandwiches and chips.

Juana says: I like to eat different regional foods, like a candy called cherry mash with chocolate and nuts covering cherry nougat. It used to be available in Kansas only. They don't serve a BLT above Tennessee or sweet cold tea in Maine.

Michael says: well, I too am a fan of McDonald's. I usually go for the cheeseburger meal with fries and a Diet Coke. Usually consistent and my innards tolerate them well. Also driving friendly. The Diet Coke does tend to clear out the slight grease from the fries and the burgers- cleanses the palate, so to speak…fine dining at McDonald's. But if I'm near Philly, I always defer to a cheesesteak with fried onions.

Alton says: don't eat a whole bag of baby carrots. You won't eat them for years afterwards.

Good advice for us all!

Juan says: be a foodie. I enjoy finding your remote mom and pop places in towns I drive through and enjoying the atmosphere. Sometimes the food is amazing, sometimes food is bleh, but I get to sit in a quaint spot in some obscure town and read a book, scroll Facebook, or just people watch.

You could say that I’m more a “experience the travel” than a foodie person, I guess. I rarely eat in the car. I look for excuses to get out of the car. Typically for me is a 5 hour drive to a particular military installation a few times a year and stopping at different rural towns on the way.

Todd says: Jack-in-the-Box breakfast sandwiches, especially when it's not breakfast hours. So if they serve them all day, I know my order is made fresh and it's reasonably healthy. Then I ruin any concept of healthiness with a big old Dr. Pepper.

Roger says: bacon, brie, and cranberry mini baguette with rocket/arugula.

Gary says: I like tacos from food trucks, pop-ups, or little family-owned shops. Hotel desk clerks know a surprising amount of places to get such things.

Michael says: chocolate.

John says: burritos. Around the West Coast, In and Out.

And Bonnie says: I haven't traveled any real distance in years, occasional work trips under 150 miles. It’s usually a large Dunkin’ coffee and sausage, egg, and cheese wrap.

For myself, I think my favorite food to eat while traveling is the McDonald's Chicken McNuggets and fries. I know objectively that McDonald's Chicken McNuggets and fries are not super healthy and I try to avoid fast food in general in my day-to-day life, with varying degrees of success. For that matter, there are far superior fries and nuggets over those obtained at McDonald's.

However, McDonald's fries and nuggets offer several advantages to the weary traveler. I can eat them in the car without taking my eyes off the road or getting my hands messy. I don't need them with the dipping sauce. In the airport, I can eat them in the waiting lounge without making a huge mess. So for me that lands in the sweet spot of convenience, flavor, and not making a huge mess in the car while eating it.

00:05:09 Main Topic of the Week: Ebook Pricing

Now on to our main topic this week: the topic of ebook pricing, which is often a very sensitive topic, especially among newer indie authors. Newer indie authors will sometimes have spent years or a year or a considerable amount of time writing their book, and they feel they should charge accordingly. Like, this was a year of work. Why should I not charge you $9.99 for it or $14.99? A new Stephen King book is $14.99, so why shouldn't I have that price? If I put a year of work on this or more, then why shouldn't I charge for it accordingly? After all, you can go to, you know, Starbucks or Dunkin’ Donuts or wherever get a coffee for $5. Why shouldn't the book cost more than a coffee since it's more work to produce the book than the coffee?

I think that is thinking about ebook pricing the wrong way. You want to think of price as a marketing tool, not a statement on the worth or quality of your book. Some people will have checked their absolute favorite book out of the library and paid nothing for it and that doesn't mean the book is without value. I think you will want to price your books to move. Look for various options for promotional prices as part of your overall marketing strategy. Having a permanently free ebook isn't the instant guaranteed success it used to be, but it still works and we'll talk about that a bit more later in the episode.

How you price the first three books in the series is crucial for later books. Don't disappoint the reader with a giant price price hike like $10 between books one and two in a series. Give them a reason to get further into the series. For myself, for my long series, what I'll usually do is set the first book free, set the second book to $0.99, and then after that, the rest of the books in the series will probably be $4.99. The reason I do that is because if you read the first book for free and get the second book for $0.99, then by the end of those two books you have a pretty good idea whether it will be worth your time and money to continue with the series.

Charging the same amount as Stephen King or James Patterson for your book is not great marketing for a new, unknown author, or even for a relatively successful indie author. Stephen King and James Patterson can get away with charging that because they are Stephen King and James Patterson. I am not Stephen King or James Patterson and I'm pretty sure you are not, too. It's best to look at what the best-selling indie authors in your genre are charging and price closer to them when possible.

People will very rarely pay premium prices (i.e. over $10.00) for fiction that is not from best-selling trad pub authors and even traditionally published authors have seen resistance to pricing over $15.00 for their books. I noticed about a lot of new books from the Bane science fiction and fantasy publishing house tend to be around the $9.99 mark or even the $8.99 mark, which is much more palatable.

One thing to note also is that nonfiction readers are less price sensitive, especially in specialized or technical topics. Those readers are looking for a book that meets a need, so they're more concerned about finding a quality book on the exact topic than how much the book costs. Reviews matter more than price in this case. For example, a nonfiction guide about hiking the Grand Canyon full of instruction, maps, and so forth can command a much higher price than memoir about someone who hikes the Grand Canyon because the memoir is less interesting to that particular kind of reader than someone who needs any nonfiction book about the Grand Canyon.

So for the next part of this episode, let's look at the pros and cons of the different tiers of pricing and for the sake of this episode, we've organized pricing into 5 tiers.

The first tier of pricing is of course free. The purpose for that is obviously much easier to write a free book. It exposes the book to a greater audience than it might have otherwise. Since storage space is abundant, people don't hesitate if something looks interesting if it’s free because you don't have to worry about hoarding ebooks the way you have to do about hoarding paper books. That said, free has several substantial cons to it as well. You're obviously not making any money off a free book unless the book is free temporarily for promotional pricing or the book is perma-free to promote a longer series and entice people to read future books.

For a recent example from my own experience, Silent Order: Omnibus One was very recently free on BookBub and the only reason I did that is because it's the first three books in a 14 books series and I've seen excellent read through from that to paid books in the rest of the series, so it was a good marketing experiment that paid off. But if the only book I had was Silent Order: Omnibus One and there weren’t 11 follow up books in the series, then making Silent Order: Omnibus One free would have just been a waste of my time.

The second pricing tier is at $0.99 to $1.99. The pros of this include that $0.99 is a price point where for a lot of people, it would be an impulse buy. They don't think about it very much. It's a good price point for promotions such as BookBub and other book promotion sites like Bargain Booksy, Book Barbarian, and so forth, where if you lower your book to a temporary sale price like $0.99, you can advertise it much more effectively because as we said, $0.99 really is an impulse buy for many people.

There are a couple of cons to this, too. The Amazon payouts for this price range are not as favorable. If you set your book to $0.99 on Amazon, you will get only 35%, whereas if you set it between $2.99 and $9.99 you'll get 70%, which we'll talk about a bit more shortly. Some readers feel like books in this price range suggests that the book will be low quality. Again, that's a matter of taste, but if you are temporarily promoting your book, you can get good results for $0.99.

One thing to also note as well is that just because Amazon has a 35% rate, some of the other retailers do better. Google Play and Barnes and Noble will give you 70% of the $0.99 price point so you can do literally twice as well in terms of revenue from them and I believe Kobo gives you 45% of a $0.99 book. So you can make more money from them off of the other retailers as opposed to Amazon.

One note of caution from my own experience: I wouldn't bother with the $1.99 price point. It seems to be sort of the halfway point between $0.99 and $2.99, where people just generally do not like buying things at the $1.99 price point, at least ebooks. I've had better luck with both $2.99 and $0.99 than I have with $1.99. So that is something to bear that to bear in mind, that I've never had much luck with $1.99 price point.

That moves us up to our third tier of pricing, $2.99 to $4.99. The pros: over $2.99 is the more favorable Amazon payout range because then you get 70% of the sales price as opposed to 35%. Because of that, $2.99 is still a pretty common price for this reason, especially for the first books in many series. This price is still less than the smallest size Frappuccino at Starbucks, much less than a gallon of gas, so it is a price range that most readers accept.

For myself, most of my novels now are at $4.99. For a while, for like 10 years practically, I kept them at $3.99, but when inflation started getting really bad towards the end of 2021 and through 2022, I moved everything up to $4.99 and I really haven't had many problems with that. I think we're at the sweet point between what is a fair price for the book and a price that the readers also accept as fair, which is an important Venn Diagram to master if you are an indie author.

The cons of $2.99 to $4.99 are that the price is too high for promotions like BookBub. If you want to do a BookBub feature deal for your book, you are better off applying at $0.99 or free because BookBub is about discount books, not full price books. If your full price is $2.99 or $3.99 or $4.99, it's going to be hard to sell a BookBub, so $2.99 to $4.99 is generally a good regular price for your ebooks and then only go lower if it's part of a special promotion or if you want to make the first book in the series free.

Now on to our 4th tier, $5.99 through $9.99. The pro is that you are still getting good payout rate from Amazon at this price point; you're still in the 70% range, which stops at $9.99 and readers are generally comfortable paying this range if they are already fans of the author and series. I haven't tried to go above $4.99 for my individual novels, because I don't want people to feel like I'm trying nickel and dime them. But I do know indie authors who do, and that it basically comes down to a personal decision if you feel comfortable doing that and your readership would support paying the higher price.

The con is of course it's difficult to get new readers and do promotions at this price tier. If you want to do a sale where you make like the first book of your series free, you're dropping down to $0.99. As we mentioned earlier in the show, the jump in price from free or $0.99, to for example, $7.99 might be jarring enough that it will turn off readers and discourage them from buying the books later in the series.

Now we come to the fifth and final tier of pricing, $10 and up. Pro is that the readers often accept this price tier for specialty nonfiction or technical books, especially if they are long books with a lot of images, maps, and details. I am thinking about things like RPG source books, travel guides like I mentioned earlier, technical nonfiction that involves a lot of diagrams and maybe like, pictures of engine parts. However, there are a lot of cons with pricing your ebook over $10. The biggest one is that you will only get 35% from Amazon. So if, for example, you set your book at $9.99 and sell it, you'll get about $7.00 depending on the sales tax and size of the ebook file and so forth. But if you set the book at $15 instead of $7.00, you will receive only $5.20, give or take, depending upon conversion rates.

So it makes much more sense to price your e-book at $9.99 if you want to go that high instead of raising the price into around $14.99 or $19.99 because you will actually be making less money. You're selling fewer copies and getting paid less per copy, which is not a recipe for success. It also sets expectations sky high, because if you're paying that much for something, you want it to be perfect and it will repel all but the most devoted continuing readers, especially for fiction. If you're writing very specialist nonfiction, you might be able to get away with it, but you will sell fewer copies and probably not make as much per copy.

So those are the pros and cons of the five different pricing tiers we're talking about. My thoughts on book pricing have evolved a little bit over the years, but not very much. I think overall if you are an indie author writing genre fiction, the best recipe for commercial success remains to write a long series and then make the first book free, the second book like $0.99, and then the rest of the books in the series to whatever the usual price for the series you set is (whether it's $2.99, $3.99, $4.99, or $5.99). Though to be honest, I would not price an ebook novel $5.99 myself. Your circumstances may vary.

If I was starting out today, my advice to a new writer would be basically to do that: write a series and make the first book free, make the second book $0.99. and then keep writing books in the series. For myself, I don't think I would write another series with more than nine books in it because you get a little drop in read-through from book to book. I think Cloak Mage with Nadia is the last series I'm going to write with over nine books in it. I think ideally in the future, my length for a series would be 6 to 8 books and then once the series is over, I start over with a new series and then eventually once I get enough books out in the series, make the first one free, the second one $0.99, and the rest full price.

So that is it for this week. Thank you for listening to The Pulp Writer Show. I hope you found the show useful. A quick note of thanks to my transcriptionist for helping to pull together through research for this episode. A reminder that you can listen to all back episodes at https://thepulpwritershow.com, often with transcripts (transcripts are available for episodes 140 to the present). If you enjoyed the podcast, please leave a review on your podcasting platform choice. Stay safe and stay healthy and see you all next week.