Price high and aim for profit, or price low and aim for volume? It’s the dilemma facing every author and publisher since Gutenberg (probably) and created a dark art of book pricing. But the collapse of net book agreements and the arrival of Amazon changed all that.
The same Amazon that declared as far back as 2013:
“It’s also important to understand that e-books are highly price-elastic. This means that when the price goes up, customers buy much less. We’ve quantified the price elasticity of e-books from repeated measurements across many titles. For every (single) copy an e-book would sell at $14.99, it would sell 1.74 copies if priced at $9.99. So, for example, if customers would buy 100,000 copies of a particular e-book at $14.99, then customers would buy 174,000 copies of that same e-book at $9.99. Total revenue at $14.99 would be $1,499,000. Total revenue at $9.99 is $1,738,000. The important thing to note here is that at the lower price, total revenue increases 16%. This is good for all the parties involved.”
From the mouth of the largest book market in the world, it doesn’t get any clearer than that.
It takes fans, reviews and time to build a reader base willing to pay the higher prices. Competition is fierce. The market is crowded. New entrants struggle to create a profile.
Unfortunately few publishers and authors are in the position to charge either $14.99 or even $9.99 for e-books online. Most are looking to turn profits at $0.99, $1.99 and $2.99 – new authors in particular. Can you afford to set a lower price? Can you afford not to?