Freudian Friday: eBook Pricing for Indies

On February 10, 2012, in Guest Posts, Opinion, The Market, by rsguthrie

One of the most interesting and arguable topics in the Indie (and traditionally published) markets is the price point for eBooks. While I haven’t yet made up my own mind completely, my own personal stance has been that the devaluation of all our hard work (i.e. the market presence that has been driving the price of our novels to less than that of one song on iTunes) is not a good thing.  As I am always interested in hearing another writer’s perspective on the subject, when I heard Sev Winters had a blog post regarding his new stance and strategy, I was more than happy to have him guest post it here. I think it makes a worthy addition to the debate. So without further stage-hogging by yours truly, here is Sev’s post!

(P.S. I don’t think there is necessarily anything Freudian about Sev’s post; the alliterative nature felt right to me this fine morn.)

~~~~~~~~~~~~~~~~~~~~~~~~~~~

Why I’m Raising the Prices on My Independently Published Kindle Books –and If You’re Smart, You Will Too.
By
Sevastian Winters

John Locke and Amanda Hocking made their mark selling cheap eBooks for anywhere from 99 cents to $2.99. Some of us even bought, read, and enjoyed John Locke’s book ‘How I Sold 1 Million eBooks in 5 months,’ a book in which he cautioned us to do our own math and to make sound business decisions. Most of us said ‘Wow, he sold a million books’ and set out, lock, stock, and barrel to replicate him. After all, we assumed, we’re better writers than him, and a $350,000 pay day for half a year of work is pretty good.

A few of us were even smart enough to sort out that our success would likely be different, so we extrapolated that if Locke sold a million copies in 5 months, that he sold 2 million in 10 months and 400,000 in two, earning him $840,000. We surmised that even if we did 1/10 as well as John Locke, that $84,000 is still a pretty good chunk of change – enough to live our dreams of spending our lives as novelists.

We got so taken in by the numbers, that we rushed off to duplicate his business model, without any deference to the most important thing he said – that we should do our own math and make sound business decisions.

Selling Kindle books for 99 cents, $1.99, $2.99, and $3.99 is stupid business. Here’s why:

Businesses have overhead, and you are not absolved from overhead just because you are independently published. Publishers pay not only the author’s royalties, but they also pay graphic artists, editors (content editors, line editors, and proof-readers (Two or three different people)), distributors, publicists, and advertising companies. There are absolutely some guerrilla-marketing-friendly ways of achieving some of those ends, but in the end, if you want quality, you’re also going to have to pay for it –either on the front end or the back end of your business. There is no way around that. Let’s look at those things one at a time:

1)      Graphic Artists: You are likely not a graphic artist. You have very little understanding of branding. You have less understanding than that of the purpose of book covers, and frankly, since 80% of a book sale to strangers (the people you are going to have to attract if you want to make your living selling your work) is decided on the book cover, I’m going to go out on a limb and say that it’s important not only to know those things, for purposes of imparting that wisdom to your artist, but it’s important to also hire an artist. A good book cover may cost as much as $300. But even if you cheap out and choose one of the $39 book cover offers from artists who don’t know the first thing about marketing, you’re going to have to sell a whole lot of books before you even break even on the cover. (By the way, I provided an excellent education on book covers in my book ‘How I are Becomed a Very Much Gooder Author.’ You won’t find it anywhere else. My book is worth the price, for that information alone.)

2)      Editors: If readers have learned anything about Indie books, it’s that they are fraught with editing problems. Mine have sadly been no exception, and I recently pushed my way through a series of less-than-qualified editors to find a few worth their salt (and by “salt,” I mean the money I have to cough up for their services) There is no way around it. You are absolutely going to have to hire editors. How you go about paying for them is your business. But like the man who has himself for a lawyer, the writer that has himself for an editor is a fool.

3)      Publicists and Advertising Companies: Publicists are over-rated until you make it big, but you’re going to have to do some marketing. Social media may be part of your marketing plan, but if it is the entirety of it, plan on getting or keeping a day job. You’re going to need it. You won’t make your splash in the social media pool. Yes, you’ll pick up some readers, some customers, and maybe even a few fans, but you are never going to earn a living selling only to your social media contacts. They have value, so don’t discount them, but if you want to earn your living as an author, you’re going to have to start selling to people that you’re never going to meet in any format. Period. Advertising costs money. Whether you use advertising specialty items, or Facebook/Adsense ads, or newspaper ads, or any of the other options available when marketing your book, you’re going to need to spend some money. There’s no legitimate way around that.

So let me ask you this: If you sell a Kindle book for 99 cents, your royalty is about 35 cents, which after paying 30% in taxes, yields you 24.5 cents per cover,  (and if you don’t think Amazon knows how to handle decimals you’re crazy) If you’re selling for $2.99, you do a little better. Your yield is $1.46. My question is this: How the heck are you going to pay for your business and your author, with that kind of scratch? NOT GOING TO HAPPEN.

There’s more to consider, than just the costs of overhead:

1.      You are the company you keep: Let’s face facts: When you sell your books for $2.99, you identify yourself with the Indie pool instead of with the pros. What do people know about the Indie pool? Firstly, they know that most Indie books suck. They’re largely written by people who don’t understand the importance of learning their craft, not to mention an ongoing dedication to further learning. Hell, most people reading this won’t even ante up a few bucks to read my book ‘How I are Becomed a Very Much Gooder Author,’ no less writing bibles like ‘Stein on Writing,’Techniques of the Selling Author,’Self-Editing for Fiction Writers,’ or ‘How to Write a Damn Good Novel.’

Most  Indie authors have heard terms like “show vs. tell,” but they don’t know what it means – at least not viscerally. They don’t know why adjectives or adverbs are bad. They don’t get it, but they’re writing books anyhow. The result is typically crap, and readers know it. They can’t afford editors, so they do it themselves, and they rely on their friendships to legitimize themselves as authors. I’ve been guilty of every one of those crimes, but no more.

2.      Prices matter more to authors than readers: I started out selling my books for $11.99. After reading Locke’s book, I lowered the price to $2.99 and in one case, $3.99. Guess what I found out? People who will spend $2.99 to read your work, will also pay $11.99, and if they connect with it, they will  pimp it every bit as much. I sold just as many books when I was selling them for $11.99 as when I dropped my pricing to try out the new fad. The result? I had no money for advertising, editors, graphics, or any of the other elements of what it takes to run my business.

3.      Higher pricing isn’t hurting the big guys: Stephen King, Dean Koontz, and James Patterson all sell their work for between $7.99 and $12.99 per Kindle cover, and despite that John Locke’s books made the Kindle best seller lists, so did King, Koontz, and Patterson.

Reader’s aren’t so cash-tight that they will reject a book that looks interesting to them, on the basis of a six dollar price differential. We live in a world where people pay $6 for a presumably special cup of coffee, which between you and me, usually tastes like it’s burned. We live in a world where cell phone users will pay $5 so their cell phone has a special ring-tone, and who will then spend $5 more just three days later because they’re tired of it. They don’t give a crap about price. They want QUALITY!

Do you want to make your living independently writing and selling books? Then, do these things:

1)      Learn and continue learning your craft. (For example, buy and read a copy of  ‘How I are Becomed a Very Much Gooder Author’…and do it RIGHT NOW) There is no substitute for excellent product…not even ridiculously low pricing. A 99 cent book is too fricken’ expensive if the book is written poorly.

2)      Run your business like a business. Evaluate the costs of overhead, and price your work appropriately. Right now, as I write this, my work is still too cheap, but starting February 15th, it’s going up… to $8.99. I’m not an Indie Author. I’m an author, and I’m not selling books. I’m selling Sevastian Winters books. No one else can do that! (Reason for the delay: my past work is being re-edited…one of the benefits of going Indie)

3)      Never stop improving! Apple would be but a distant memory had it stopped with the Apple II. Instead, it’s the world’s most valuable company. What’s remarkable about that is that not only do apple fans line up outside the doors of their stores excited for each new product launch, but Apple fans pay CONSIDERABLY MORE for Apple products than customers of similar offerings. Writers improve by continuing to learn, by constantly reviewing craft, and by reading and applying books like ‘How I are Becomed a Very Much Gooder Author,’ and similar offerings. It takes more than talent to write well. There are also skills to learn.

February 15th 2012, I’m raising my prices to $8.99… and if you’re smart, you’ll do the same… or something like it. Good luck with your business!

 

 

22 Responses to Freudian Friday: eBook Pricing for Indies

  1. Kilburn Hall says:

    Svea-
    Great article! You’re absolutely right about several points.
    1. Most of us said ‘Wow, John Locke sold a million books’ and set out, lock, stock, and barrel to replicate him. Thinking that instead of waiting six months for a rejection letter from traditional publishers we could be making $82,000 in those six months.
    2. Businesses have overhead, if you want quality, you’re also going to have to pay for it –either on the front end or the back end of your business. Graphic artists, website designers,website management, editors, advertising and marketing. Selling at 99-cents – you have no money for advertising, editors, graphics, or any of the other elements of what it takes to run your business.
    3. Run your business like a business. Evaluate the costs of overhead, and price your work appropriately. You are the company you keep: Let’s face facts: When you sell your books for $2.99, you identify yourself with the Indie pool instead of with the pros.People who will spend $2.99 to read your work, will also pay $11.99, and if they connect with it, they will pimp it every bit as much.
    Thanks again for this insightful article pointing out the true numbers of independent publishing on Kindle. The problem is- Locke may have lowered the bar sooo low that Kindle owners think they don’t have to pay more than 99-cents for a Kindle book. In other words, Locke may have pissed in the epub pool and polluted it for every new KIndle author. But your article is absolutely correct and I invite you to join my author network on Kindle which includes John Connolly, Lincoln Child, Doug Preston and other’s.
    Kilburn Hall

  2. Scott Bury says:

    Excellent points. It’s great to have this kind of real-world experience put down so clearly here.

    I can’t help but agree, and I’m very happy that I can tell you, Sev and Rob, that I did shell out for professional editing and cover design. And I’m not selling my book for 99 cents. It’s not 7.99, but now I’m thinking that it should be.

    But all that being said: any tips on WHERE we should advertise?

    • Scott, I think, as funny as it seems, given that I said social media shouldn’t be the entirety of your marketing plan, that Facebook ads and sponsored tweets, as well as google adsense ads may be some of the best bang for your buck…. Reasons being 1) You can target pretty specific markets easily. 2) You can spend as little as $10 at a time. 3) even if it goes to people you are already hitting on social media, it legitimizes you on their pages, 4) People who are internet savvy are also more likely to be eBook savvy. No promise on results, but that seems a sensible answer to me.

  3. Teri Heyer says:

    You’re assuming that the majority of readers, or at least those who want to read your books, can afford to pay $8.99 per book. In this declining economy, readers are struggling to afford books. You could be pricing yourself right out of the market. Of course, that’s your choice to make.

    • I assume nothing about the reader. My assumptions revolve around what it takes to afford the marketing dollar that it takes to bring the readers in. That has to come from somewhere. At the risk of sounding uncaring, people who can’t afford $8.99 for a book, shouldn’t be spending 5-8 hours reading a book, anyhow. They should be working.

    • Consider the alternatives. What is the cost of a movie? The cost of a book?

      Readers will never stop reading. Those who do not read will most likely never start.

      I read about 15-20 books a month. I read almost exclusively on my Kindle. I will buy a book that is $3.99 USD to $17.99 USD. I have my favorite house pub’d authors, and I have my clients. I d/l free indie books of the week, and I read poor Sevastian’s crap too. ;-)

      I don’t watch TV except for a few series.

      People will pay because it’s cheaper than the alternative these days.

      It’s all a matter of priority. Those who love movies will never stop going. They will use extraneous income for it. Readers will do the same. Adventure hobbyists will use their money to do whatever it is that they do.

  4. A refreshing take on the subject!

    My book has a non-linear format, including 50 different endings, and took an incredible amount of research, as well as YEARS of effort to get it to the point I’m ready to hand it over to a professional editor – and eventually a copy-editor – and a graphic artist.

    Combine that with using my extensive background in PR to devise and execute a promotional strategy, the costs associated with creative for an interactive website, and online marketing, and… well, the thought of selling my book for $2.99 is just heart-breaking.

    I understand it’s easy to get it into one’s head that self-publishing means “not good enough” to the consumer, and therefor warrants a less expensive price point; but if an author takes the process seriously; hiring professionals to assist with aspects beyond their depth, and is willing to put in the time to promote their work, then there’s no difference between a traditionally published debut author and first-time indie author…besides maybe an agent.

    We’ll sabotage our careers by under-valuing ourselves, and this is just one great example of that. If you don’t think your book is worth $X, then why would the consumer?

    I’d considered pricing my book at $5.99 as a nice compromise, but given your arguments, I think I might be, literally, selling myself short.

    Thanks for the great read.

    Cheers,

    Wordsmith & Wesson

  5. Ava Donja says:

    I listed my book for 99 cents because it’s a novella… but I do hate being grouped with all the 99 cent books out there (many of them much shorter than mine – mine’s 14k words). I thought the low price would also lead to more impulse buys. We shall see. I considered asking for more, but then I don’t buy regularly priced Kindle books unless they’re from authors I already love.
    I did make my own cover. I made a cover that would catch my eye if I were perusing book shelves. The thumbnail is not as dynamic though when viewed on my phone or computer. The image cost me a small amount (which I haven’t recouped yet) but my Photoshop skills improved by leaps and bounds.
    You post give much food for thought.

    • I’m glad you found this helpful. Impulse buys are great, but they won’t sustain a career. Sustaining a career means picking up fans, and doing that costs money. Novella… $4.99- $5.39 I think is a good sweet spot…. but make sure you underpay yourself, and devote some money to marketing.

  6. Col Bury says:

    Crackin’ article, Sev. So much food for thought, I’m stuffed!

    What’s your view on short story collections, and how much would you price, say, six 1500 word stories in one?

    Regards,
    Col

    Ps. No relation to Scott, or at least I don’t think so. :-)

    • I actually have a short story series called “Five by Sev.” I’ll be pricing it at $4.99…. but only because the average word count is only 10,000 words… but the same rules apply in terms of the fact that marketing needs to be part of the budgeting when pricing.

  7. I’ll be honest and say I was coming into this with a skeptical eye. Everything I had read up to this point talked up the idea that $2.99 is the sweet spot.

    But you’ve made some very solid points and backed them up. I’m still writing my novel, but will have an anthology of Science-Fiction short stories. I think you’ve helped me determine what I’ll need to set that price at. Thanks.

  8. Well, what can I say beyond “Excellent post”? You summed it up very nicely.

    Pricing is an issue I have discussed over and over with other indie artists. Many have no clue what cheap prices do to our careers. They see the shiny tip of the iceberg and think they can emulate that — without the proper marketing knowledge, of course.

    I am an indie artist, but I also work on the other side of the fence as a journalist and reviewer. So, I see what’s going on and understand why most indies cannot take their careers far.

    Good for you for increasing the prices of your book. You know what you are worth, unlike many indie authors.

  9. laura says:

    I am not a writer. Reading is my passion. I agree that lowering pricing on books may not be the best way to go, but many readers, like me, have a budget. I will buy books of interest at cheap prices, it allows me to discover new authors. I will then happily pay higher prices for authors I grow to love. I just wanted to give you a readers point of view. Thanks so much.

  10. It certainly is a vicious cycle. You want to attract readers, so you want to be competitively priced. But you also want to do more than break even (and it’s not just the editing/artwork services; I’ve got a HootSuite and Gremln service subscription, ContactMe services, web hosting, etc.–it all adds up). I’ve bounced between the low price and mid-range with very little change in sales.

    I once did the math, and even at $2.99, I need to sell around 80 books per day to make what I’m making at my day job. Honestly, I’m nowhere near that. I keep telling myself that more titles–and the series I’m starting–will help over time. That’s true, but I also wonder how much I’m kidding myself about pricing and potential sales numbers with the social media “advertising” I’m doing.

    I’ve made some great contacts (hi, Rob!) on Twitter and Facebook, but it has also occurred to me that most of them are in the same boat. I can’t rely 100% on indie authors to become my fan base. If they’re anything like me, they started out trying to help others by buying every indie author they contacted and quickly amassed a Kindle library of books that it’ll take years to read. We need to find a *reader* fan base.

    I’m also glad to hear others say they’re re-editing something already published. I’ve considered that for one of my books, but somehow felt I would be doing a disservice to those that have already purchased it. But, as a business owner, I also know that a better product results in happier customers, and happy customers return. I know I need to change some of my approach to the business. Thanks for the kick in the pants.

    Great post! Great points to think about! Thanks, Sev and Rob!

  11. Hmm…yeah some really salient points. I’ve been contemplating just this thing (along with some of the questionable marketing techniques that I’ve seen), and it’s good to see you put it out there in a more coherent form than my thoughts thus far. Think I’m going to try this with my next book, given how much I’ve shelled out on artists, editors, and proofreaders to this point. Thanks for sharing this.

  12. Caleb Pirtle says:

    Thanks for exploring one of the most perplexing issues facing today’s indie writers. I tend to agree that prices have been too low, and the market for eBooks will level out closer to $5 than $1.

  13. Dawn Torrens says:

    Fabulous post valid points too, I have also done the same as Scott above and shelled out for a prof edit for my second book! So it reads perfect and secondly a writer never sees there own mistakes! As I discovereed with my first book. I do feel it’s money worth spending too! And I also agree that Indie authors need to put their prices up, the amount of work that goes into writing a book, the months of writing, editing, proofing and interior design if you do it yourself is incredible. Surely all that hard work is worth a little more than 0.99p? Another valid point I agree with here is that if someone will buy your book at that price they will buy it at £1.99 or £2.99 also, which is still much cheaper than a paperback!!! Sometimes we have to be careful not to under value our work or it may be seen that way by the buying public! Thanks for this great post, a real insight into the indie world of pricing! Which right now seems to be a very hot topic!!! Love this blog I really do :)

  14. Sevastian:
    I always love your brutal but honest posts. I have chosen to dedicate myself to the indie author community as a professional editor, and continually espouse the need for professional editing.

    As you state in so many words, the issue is a catch-22. Indie authors cannot afford professional editing, and yet their work is professionally sub par. Readers will not return and read subsequent books, thereby disallowing them to pay for editing for the same.

    They don’t seem to take into consideration that readers can download (if not buying print obviously) a portion of their book to determine if they want to continue or not. Many readers take advantage of this. If you recall our discussion on Twitter, I did just that with your book while discussing it with you at the same time as I read it.

    Your point about the company you keep is further true. Why associate yourself with a market that is fraught with the reputation of poor quality?

    I have pissed off some people of late; people who have been responsible for making my career. It is my contention that one of the major players in creating the problem is Amazon. They have made it incredibly easy for anyone to publish. Have you read the disclaimers that are provided to those who visit the KDP site for the first time? In addition, you cannot revisit those pages after visiting them the first time (or at least, I have not found a way).

    I will not go into the problems with those pages as many seasoned editors have already published blogs about the inane statements that have been made on those pages. It is as if someone got drunk one night and decided to write them, never realizing that Amazon has a legal department in house. I will, however, state that they are fraught with so many mistakes that an editor would catch that I laughed throughout the entire experience.

    Because of the issues with the cost of editing, I provide potential clients with financial options. Even then, they shy away and edit their own material.

    And you and I both know that once they finally agree that they need editing, it is only proofreading that they agree that they need (please forgive my sounding general–there are those that know they need editing, but come up with many excuses why they cannot get the assistance that they need.) I will not proofread material that has not gone through line editing. I am sure that restriction has cost me more clients that I want to know about.

    I am going to get into trouble for saying this. So be it. I made the following statement in confidence to a close peer. Generally speaking (and again, this does not apply to every indie author), it is my belief that indie authors who have not gone through the pain of professional house publishing are spoiled. Let me explain before any of you beat me up. Then, feel free.

    Every author goes through substantive editing when they are house published. Every author–Stephen King, Kuntz, Kenyon. Now it is so easy to publish that authors never have to feel that pain. They never have to feel the rejection (of course, these are the authors who choose to go direct to self-pub.)

    There is the argument, and it is true, that house pubs are now interested in those authors who are successful after self-publishing and have gained an audience and loyal following. Whatever. Fifty percent of my clients refuse to listen to anything I state in my assessments. They fight me tooth and nail. There is weeping, wailing, and gnashing of the teeth. You will not find this in house publishing. They wouldn’t dare do that for fear of losing their contract.

    Why hire me if you already think that your precious work of art is perfect? You don’t have to agree with everything I provide you; I don’t expect it. However, how can it be possible that every single thing that I tell you is 100% wrong?

    I’m a writer. I would never edit my own work. I would hire an editor. I would go through substantive editing, copy editing and proofreading. I would hire a graphics designer. I READ Sevastian’s book. And you know what? I looked at the covers that he recommended, and the covers of my favorite authors. He’s 100% correct.

    This is not a complaint section. The point is that your work needs help. Your work needs to be edited. Your work then needs to be line edited (if it has not gone through substantive editing), then copyedited, and then yes, proofread. You must hire professionals. You will have overhead. If you don’t put forth the initial capital to be a professional, you will always be an amateur. I worked in corporate for 15 years just like Sevastian (although his tenure is longer than mine). If you are an author, regardless of self-pub or house pub, you must be a business person as well.

    Once you understand marketing, the business of publicity, the house pub business, and the reasons why you must out capital up front in order to make money long-term, you can play with the big boys.

    Then you can set a higher price point. Otherwise, you belong in the 99¢ price range.

    You have editing options. You just need to look for them. And you need to realize that your editor could possibly be right about some things when they provide you with an assessment.

    Feel free to begin the bashing.

    • Well said! (Especially the parts about Sevastian being 100% correct. I never get tired of that! LOLOL) The greatest thing about publishing in this day and age is that anyone can do it! But that said, the worst thing about publishing in this day and age is that anyone can do it. ;-)

  15. […] a bag of those delectable nuts costs more than a dollar). Last week I had a guest post from Sev Winters on the subject of book pricing. I had been itching to blog about this subject for a long while, so […]

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