Does Pricing Your Kindle Book at 99 Cents Boost Sales?
Currently, when you price your Kindle eBook at the minimum of $0.99 USD, you will be paid the minimum Kindle Direct Publishing (KDP) royalty rate of 35 percent. However, if you price your book at $2.99 or higher, it is eligible to receive up to a 70 percent royalty (in many Amazon marketplaces).
Do the math. You’ll make five to six times more gross royalties per book at the higher minimum price point. So why would you be willing to accept $0.35 if you could get at least $2.09 in gross royalties for the same book? I’ve found that authors default to the cheapest price for a variety of reasons, none of which are in their best interest.
Reasons Why Authors Try the 99-Cent Pricing Strategy
(And the problems with those reasons.)
1. “A low price will encourage readers to buy and try my book.”
This is one that I hear in author comments.
Amazon allows readers to return Kindle eBooks for a refund within 7 days. So there’s no risk for the reader to buy and try a book at any price point. Granted, if Amazon sees someone returning a high percentage of Kindle eBook purchases, they’re likely to take some action against the scammy reader such as a warning or account suspension. But for normal, non-scammy behavior, we can say that this is a fair trial for both the reader and the author/publisher.
And do you really want to attract readers who are low price buyers? The worst part about this is that readers will mentally peg your books as low cost, and you will lose them when you start charging higher prices for future books. These buyers are fans of discounts and freebies, not fans of your work.
2. “It keeps people from buying pirated copies of my book.”
I’ve received a couple of comments from readers that the $0.99 Kindle book price would keep them from buying cheaper pirated copies of books. I’m sure many self-published authors have a concern that pirating of their work is happening.
But let’s look at this issue like a pirate. Pirates are more likely to try to profit from sales of illegitimate copies of very popular and very expensive books that have high sales volume. Most self-published books are not of that variety. Pirates can see what’s a hot theft target for them with online tools. So they’re not guessing. Though this is not to say it doesn’t happen, your self-published book is probably not on the radar of pirates.
Don’t devalue your work just to keep pirates at bay.
3. “It doesn’t cost me anything to self publish on KDP.”
KDP might allow you to self publish your Kindle book for free. But your writing adventure is NOT free.
Let’s look at just a couple of costs that you’ll incur as part of your author business. For just website hosting, domain name, and internet service, you could be spending up to $350 or more per year. Those are referred to as overhead expenses. You also have costs to produce and market your eBook such as editing and formatting, advertising, software, and more. So your author business’ costs could easily run into the hundreds or thousands of dollars.
If you make $0.35 per Kindle eBook sold, you’d have to sell 1,000 copies per year to cover just $350 of overhead expenses. That sales volume is a stretch for many self-published books. I’ve heard estimates that self-published books may only sell 250 to 500 copies total in all the years they're available for sale!
4. “I’ll make it up in volume.”
No, you won’t. As we just talked about, making large volume sales of your Kindle eBook is quite a feat. Making higher sales volumes usually means higher costs in advertising and promotion, which can add up quickly.
As I’ve discussed in other posts and podcasts, you can realistically expect that only about 1 percent of your author platform—the size of your fan base—will actually buy your book. Do that math. If you don’t have thousands upon thousands of social media followers and fans, a high volume of sales is difficult to achieve.
People buy and read your book because they want your book, not because it’s $0.99.
The Kindle Unlimited Problem
You also have to remember that voracious readers may have Kindle Unlimited subscription memberships that allow them to borrow up to 10 books at a time. This allows them to consume Kindle books at a cost of way, way below $0.99 each. Your $0.99 book price doesn’t encourage them to read; your title being available on Kindle Unlimited does. (Note: KDP Select enrollment and Amazon exclusivity are required for your title to be available on KU.)
In this case, your Kindle book will be dramatically discounted regardless of your price. So why discount?
Is There Ever Any Justification for a 99-Cent eBook?
Some authors price their Kindle books at $0.99 at book launch, usually as a Kindle Countdown Deal (if the title is enrolled in KDP Select), to encourage early sales and reviews. That makes sense since that price is for only a very limited time (up to 5 days maximum).
Also, if your Kindle book is an extremely short book, a $0.99 price might be appropriate. In the Kindle Store, these might be referred to as Kindle Short Reads that take 15 minutes to 2 hours to read and could be completed in one sitting.
However, I’ve published a number of “short read” type Kindle books, each of which focuses on a very narrow topic. Then I bundled the complete set of these related books into a box set at a much higher rate than $0.99, but reasonable enough to make the bundle purchase attractive. Neither the individual titles nor the box set have done extremely well when compared to my other longer, higher priced works.
How to Find the Right Price for Your Kindle eBook
Pricing is a complex skill that even the most talented marketing pros struggle with. Finding the right price requires knowing your competition and your costs. And even then it can be a gamble.
One tool that Kindle authors now have at their disposal is the KDP (Kindle Direct Publishing) Pricing Support (Beta) tool. This tool evaluates your uploaded Kindle book manuscript against other similar books on Amazon. It then tells you the price at which you could optimize your royalties. What I have found in using the tool is that there were cases where I was too high or too low in terms of competitive pricing, which may or may not be at the 99-cent level. I’ve found that it rarely is that low.
While this tool can provide you with a market appropriate price, it does not take your costs into consideration. So, yes, you also need to do a cost analysis to set the right price for your Kindle eBook. But if you find that the KDP Pricing Support tool is consistently suggesting prices that are well below your expectations and profitability goals, that could indicate that the market isn’t capable of delivering for you. You may then need to lower your production costs and overhead expenses to meet your market’s price point.
This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.
© 2020 Heidi Thorne