Revisiting 99 Cent E-book Pricing

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on May 10, 2011 in E-books
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This post was intended to be a comment on Joanna Penn's recent article explaining why she chose the 99-cent price point for her novel. My thoughts are directed at a comment she posted rather than the article itself. But my thoughts on the issue were extensive enough that I decided they deserved their own post. I think I should say up front that I have nothing against Penn or her decision on e-book pricing and nothing in this post is meant to be a personal attack. I've read the blog on and off and have been aware of her for quite a while because she has a strong presence in the writer community in general. And I have no reason to think she had any ill intentions whatsoever.

That said, in a comment she mentioned two things that are pretty big pet peeves of mine when it comes to advice and insights I frequently see shared with new indie authors regarding e-books.

So first, here is Penn's comment that I want to respond to:

Hi Adam,
as briefly mentioned above, you’ve got to think about the actual income for the book, not per sale.
John Locke is selling a book every 7 seconds for 99 cents each, so the return is not 99 cents, but thousands – and check out Konrath’s numbers. You are not getting 99 cents for your hard work, you need to multiply that by your sales FOREVER! These books never go out of print.

Note: This post is not me telling you that you shouldn't price your e-book at 99 cents. What any other author chooses to charge is of little concern to me. If you can responsibly do the market research and 99 cents feels like the right price to you in that it will cover the cost of contractors, production, and the value of the time invested and continue to earn beyond that, then go for it. If you're more than happy to attract hoarders in addition to real readers because you'll take any dollar given to you with a grin, then again, go for it. If you're publishing your e-book as a hobby and are in it for the joy of it or to get your creative juices flowing, and you don't care much about the money, go for it. Not all authors are looking for the same thing, and it's up to you to decide what to price your e-books. (If you want to read more on the 99 cent pricing debate, you can take a look at our past interview with Zoe Winters about it and the resulting discussion.)

The comment left me with two different concerns beyond the usual 99 cent rate debate:

  1. Stories of exceptions are mentioned as though they're the rule. This is a much wider concern I have about what new indie publishers are told to expect than just Penn's comment.
  2. There's an implication that because there's no limiting print process, the lifespan of an e-book is indefinite (in theory, okay; in practice, not so much).

But So-and-So Made $X,XXX,XXX...


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Your average indie author is not Locke, Konrath, or Hocking. Nor do most have Penn's existing platform. There will be exceptions to every rule. And there will be countless who follow expecting to be the next, and most of them will be disappointed if that's the level of success they're hoping for. This happens every time the "next big thing" comes around in pretty much every industry, especially on the Web.

That's not to say a brand new indie author should expect that they won't succeed. But there are different levels of success. If you have the existing platform with a built-in demand for your e-book in the five figure range, that's awesome! You can price low and still expect to earn quite a bit through your book. If you have a solid readership from past book sales (with or without a traditional publisher's backing) that's great too. But most first-time authors I meet who are considering e-publishing because of all of the hype around Amazon don't have these things going for them. And there's something I tell my audience of writers on the freelance side regularly that I think needs to be repeated here:

Never expect to be the exception to the rule.

Yes, you can succeed in indie publishing. People have been doing it for decades and that doesn't look like it's going to stop any time soon. But you need to keep your expectations reasonable given what you have to work with on an individual basis, and you need to be prepared to work your ass off. Pricing alone will not carry most books. There's a reason pricing is just one aspect of the larger marketing mix (one of the classic "4 Ps").

When a new tactic is tried, there will usually be successes for the early birds. But eventually you run into the issue of saturation where you need to work even harder to make someone else's previous tactics work for you. It's not impossible, but there's much more to it than "So and so made a bundle this way, so I will too."

My own preference is to look at the long-term market realities given my specific target markets. And yours will likely be different buyers with different expectations and available in different numbers. Writing in a huge niche means you might be able to get away with low pricing indefinitely or as a lead-in tactic because you can sell a large number of copies. If you write for a relatively small niche, you can't assume that you can mimic the success of someone appealing to a much broader audience by doing the same things. This is why "information product" e-books can be extremely profitable and sell well in their niches for several times your typical book price -- niche markets are well-targeted. Just as that high price strategy won't likely work for most novels, the low-ball option won't automatically work for you either.

Do you really want to know if 99 cent e-book pricing could be a good option for you? Then please, please, please do the research first and go beyond the "so-and-so" stories. Look at typical conversion rates of major online retailers like Amazon. Install analytics tools that will let you track conversions of visitors to your site who click links and even bother to visit your e-book's page on Amazon.com. And remember, their more than 20% overall conversion rate -- based on 2009 stats -- is sitewide and includes people who visit already knowing what they want. Yours will depend on how many targeted buyers you can actually get to your page in the first place.

Saying "there are three million people who might have an interest in my book" doesn't cut it. How many of them can you really reach? Now how many of them can you get to your sales page (on Amazon, another bookstore, your own site's sale page, etc.)? Now you can try to estimate conversions. If you have no audience waiting on you and you don't have solid marketing and PR skills, that initial reach can severely limit your success. You can hope against hope that because X, Y, and Z did it that you will too. Or you can be realistic about the things that helped them -- existing audiences, timing, etc. -- and you can figure out the best way to sell your book, understanding it likely won't be the same as theirs.

Yes, E-books Go "Out of Print"

It's also important to remember that e-book sales do not go on forever. E-publishing is not new. Most e-books sold successfuly five years ago seem to have dropped off the face of the earth now with a few exceptions (Aaron Wall's SEOBook being one example, although I believe even that is only available through a subscription service now).

There is an equivalent to being out of print that many newer e-publishers don't seem to understand early on. Word of mouth is great, but it doesn't last forever with no further effort on your part. When you stop marketing, your books eventually will stop selling.

Most e-book authors I know who have been at this for years either cease to update their products (in nonfiction e-books where it's often vital) or they move on to other e-books or projects that can bring in even more money. Product A borders on death as soon as it's no longer a sensible business decision when compared to investing the same time and resources in the profit potential of Product B.

Will there be exceptions? As always, yes. Some people will build a huge name for themselves and appeal to such a large audience that their e-books will continually sell for many years to come (or until the next interesting technology comes along and they don't want to bother to upgrade their past work). But again, it's not smart to expect to be the exception. You should prepare for the long-haul instead of assuming sales will continue to accrue indefinitely.

This argument is very much like one that has taken place for years on the freelance side of the writing profession. In that case it revolves around residual earnings sites. Writers would claim it was okay that they weren't paid up front because they could earn even more by letting their articles sit on these sites for years. Some had more foresight and found more productive uses of their time. A few were the exception and made out really well with them. And others sat by surprised when these residual earnings sites closed down, were sold off, or had payment models changed. Why? The market became saturated. There were too many sites doing the same thing. There weren't enough ad dollars to support them all anymore. There were quality issues associated with them that hurt the larger brands. Things had to change.

And things will also change in indie publishing. They usually do when people start thinking more about the long haul than what might work right now. I think the problem now is that a lot of people talking about indie publishing and e-books specifically haven't figured out the long haul yet. Those who came in with the Amazon e-book boom are still relatively new to e-publishing. And there is absolutely nothing wrong with that. I think the success some have seen is both admirable and inspirational. But those who have been at this a while know that "forever" isn't as long as we might like it to be when it comes to e-book sales. You either release new products or you update your existing product or marketing plan to attract new readers.


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It can be an "update or die" type of work, and sales do thin out over time. That's why people keep releasing more. You can count on continuing sales as long as you continue to write. But counting on an e-book to indefinitely bring in income and using that to convince people to price extremely low? That's when I get really concerned about what new indie authors are are taught before making the leap for themselves.

It's one thing not to be concerned about the money as an indie publisher. If you can say that, then that's wonderful for you. But it should be a pretty big consideration when making the case of low pricing to other indie authors while on the other hand also justifying it with third party stories of financial success. Is more money the reason to do it? Or that you don't care about money right now and are happy with the long-term trickle-in at a lower price point? I don't see how you can make a logical case for something based on those two extremes. I have to imagine the reality for most falls somewhere in between.

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Jennifer Mattern is a professional blogger, freelance business writer, and indie author. She began writing for clients in 1999 and started her first blog in 2004.

She owns 3 Beat Media - a publishing and client services company which operates All Indie Writers as well as several other websites and blogs including The Busy Author's Guide and BizAmmo. Jenn comes from a background in online PR and social media consulting, having owned a small PR firm for several years before choosing to pursue a full-time writing and publishing career.

Jenn also writes fiction under multiple pen names in the areas of children's fiction, mysteries, and horror fiction. Jenn is an active member of the Horror Writers Association (HWA) and currently serves as the organization's Assistant Coordinator of Promotions and Social Media.


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8 Comments

  1. Joanna Penn May 10, 2011 Reply

    Thanks for the post on this important topic that is really being discussed right now, and thanks for mentioning my own post on it. I’d just like to reiterate one of your points:
    “You can count on continuing sales as long as you continue to write”
    Absolutely – I fully intend to keep writing and keep selling. I’m not a pro yet but intend to be. I agree that sales drop off if you also “drop off”.
    I would also add that i am intending to price the next in the ARKANE series at $2.99 and have a tiered pricing as Hocking etc do. All indie authors have the prerogative of deciding their own pricing for their own reasons – we are all different people with different goals.
    Thanks, Joanna

    • Jennifer Mattern May 10, 2011 Reply

      Thanks for stopping by Joanna. I agree completely that indie authors all have to find the best pricing strategies for them, their own books, and their intended markets. My concern is when new authors are given advice that they apply to their first books where intentions might be great, but in the majority of cases things don’t pan out as expected — as in following someone else’s strategies as opposed to finding the right ones for yourself, and more importantly the issue of counting for those sales forever when reality hasn’t backed that up in e-publishing.

      I’m very protective of new writers, both in e-publishing and the freelance side because sadly they’re exposed to misleading information every day (not specifically talking about your post or comment here). And when they follow advice that convinces them to try something once and it fails to meet their expectations (as it usually does for most when they do what others say they should as opposed to doing the research and planning properly for themselves), then there isn’t going to be a round 2. Too many writers of all types quit early in the game because of unrealistic expectations, and that’s why it concerns me so much when I see things like that — from those saying e-books are income forever to those saying residual pay content mills will continue to pay good money indefinitely without accounting for history saying otherwise and the issue of saturation.

      That said, I do sincerely hope that the price point you chose is the best one for your book and that it has the intended affect on future sales. :) Out of curiosity, is the next book nearing release where the 99 cent price point will lead to quick sales of the higher-priced e-book, or is that going to come out much later? I ask because from the marketing perspective I’m curious if you think 99 cents is a good option when there are no other products yet (where people may forget about that first reading experience before the next book is released) or if you suspect a significant portion will stick around in the interim anticipating that next book while they move onto other reading in the meantime. I completely understand it from the perspective of having multiple books already out there for the up-sell, but given the saturation level of low-priced e-books, I’m more skeptical of it for first-time authors these days as opposed to when it was a fresh strategy. That said, I do know you have a name for yourself in the writer community, so you have a built-in blog readership to keep the attention on your work. So I hope that platform and the other work you do really does make you stand out as an exception. :)

  2. Kat J. May 10, 2011 Reply

    I’m very glad that you brought up market saturation. This does seem to apply to Indie books more than most people are willing to admit.

    I’m new, I have 1 book out and the second in the final stages of editing. I discovered the limits to my platform with my first book. This was a wake-up call. I had to choose between endless marketing or finishing the 2nd book.

    The market is changing SO fast it is really difficult to make a plan. What worked 6 months ago (the $.99 price point) didn’t work in March.

    Timely post!

    • Jennifer Mattern May 10, 2011 Reply

      That’s exactly why I find it so frustrating when people chase fads. Having worked for years in marketing and PR (predominantly for independent and creative professionals), I know for a fact that long-term strategy and a solid grasp of the fundamentals win out for the majority every time.

      So don’t go with 99 cent pricing just because it seems like a hot strategy now. Do it for the right reasons, or don’t do it at all. And don’t chase fads just because someone else is doing it. If a handful already are, it’s already too late to rise to the top. Try to find something unique or some spin that you can take advantage of that isn’t hyped up and heading for the maturity curve.

      So don’t worry about a fast-changing market. When you lay a solid groundwork based on marketing and PR fundamentals, changing trends work for you instead of you having to constantly chase them

  3. Cobb September 26, 2011 Reply

    Thank you SO much for this! Thank you, thank you, thank you! I’ve just read the Creative Penn article the comment you’re responding to came from. It’s like the blog author is obsessed with Amanda Hocking. Why?

    In reading the blog I got the impression she’s just using their names as bait to entice new aspring writers to read her blog and perhaps buy her book. I’m just saying that’s how I felt in reading the blog.

    I agree with you that the market is saturated but every indie writer I’ve talked to says it isn’t & won’t be for years. Yet I see with my very eyes that everybody & their mother is pricing at 99 cents.

    Furthermore, I have NEVER heard an indie suggest writing a better book or implementing new or improved writing skills or tactics for a better books as a way to try to push up sales, it’s just : ‘let’s run to 99 cents! That’ll be the ticket!’ And that’s it.

    I also feel that Paranormal Romance
    (in self publishing AND traditional) and probably Erotica are saturated, too. Every female self published author I meet is a Paranormal Romance writer. I think it’s just really popular all over these days.But it’s like everybody is running to the same things like a herd of…Idk.

    But anyway, I’m so glad you took notice and said something about the blog post. I, too, have nothing against the blog’s author because I do not know her. But leading people on with Hocking is disingenuous in my opinion.

    Thanks.

    • Jennifer Mattern September 26, 2011 Reply

      I can understand that indie authors are inspired by the success of Hocking and others. I don’t think there’s anything wrong with pulling inspiration from wherever we can find it. And I won’t go as far as to say her name was being used as “bait” by Penn. Really she just echoed what a lot of others in this niche have said. Hocking, Konrath, etc. have become fall-back examples and the problem is that they’re bad examples. They’re the “if your timing is great,” “if you already have several books written,” and “if you already have a significant following” examples. There’s nothing wrong with talking about those cases. But there is definitely something wrong when the exceptions are treated as the rule when talking to newer indie publishers. My biggest problem is that newer indie publishers are bombarded with these “so and so did it, and so can you” messages when the reality is that many cannot. At least not in the same ways. I think there needs to be more discussion about how those newer writers can build an audience up front to see similar successes as opposed to modeling careers after those who have an uncommon edge.

      You’re absolutely right about us not hearing enough about improving the product to increase sales. Perhaps that’s because authors like to ignore the “product” reality of what they sell. Or maybe it’s just easier to tinker with pricing. Either way, many struggle with marketing. That includes the market research to find out if there’s room for improvement to strategies far beyond pricing. Pricing is just one small part of the marketing mix.

      I don’t have an opinion one way or the other regarding paranormal romances. One of my favorite colleagues writes in this genre (Evelyn Lafont — although I think her quirky style sets her apart in many ways; I’m not a fan of the genre but I enjoy her work). If it’s what people want, I don’t see any harm in giving it to them. At the same time, I’m not much of a fad-chaser. One of the first novels I outlined was a vampire novel (not a romance by any stretch). That was just before all the hype around the Twilight movies started, and by extension further hype around the books. I’d never heard of Stephenie Meyer before that. I shelved the project because I didn’t want my first novel to be seen as “just another vampire book.” I don’t hold it against any author if they do choose to jump on fads. If they think that’s the right business decision for them and if they enjoy their work, I think that’s great. It just wasn’t for me, and I wasn’t going to enjoy the writing as much with that worry on my mind.

      I made a business decision the literary crowd would likely hate. I chose to start a new novel series based around ancillary products I could promote and sell at the same time. Don’t get me wrong. I also chose a genre I love and stories I’ll have a lot of fun with. I had several ideas in mind. All would have been fun. This one had the extra business perk. Easy decision. So while I get what you’re saying about Hocking as an example in a relatively saturated genre, I also don’t think we should discourage people from genres due to saturation (unlike marketing strategies, where they simply don’t work as well when that happens). I say we should write what we want to write. We just need to find more creative ways to get our work in the hands of interested readers, and stop relying on a few successful case studies to serve as road maps.

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