Why Indie Authors Should Set Higher Prices

Indie authors have been cashing in on low-priced books for a long time. It makes sense; traditional publishers have been slow to come down on their prices, and readers who want to consume more titles naturally turned to the lower-priced options that spark their interest.
Lately, however, this has been changing. Publishers have finally begun selling directly to consumers. For decades they (like other producers) have not sold directly because they needed to support bookstores. Selling direct cut out the middleman, and bookstores would have suffered.
Then came the chain stores and Amazon. For a time, publishers didn’t suffer much because the bigger retailers were able to move more titles than the small shops.
Indie authors cashed in because there was an untapped market: readers who, because they read so much, needed lower prices in order to fuel their desires.
Now, however, ebooks in general and direct-to-reader sales are changing the sales landscape. Without the middleman, publishers can offer discounts more in line with the standard price points indie authors set for their books. And readers find that they can locate quality projects much more quickly using a traditional publisher than by sifting through unknown indie authors’ offerings.
My advice for indies is to keep your books in line with traditional price points. Go with $3.99 as a sale price for smaller sales, and save the $0.99 sale price for big moves or less frequent specials. Have a retail price between $6.99 and $9.99. This signals the quality in your book, and will help direct readers back to your titles.

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14 thoughts on “Why Indie Authors Should Set Higher Prices

  1. Joe Owens

    Kindle definitely reset the playing field. The price points for many Kindle titles assure there is always a bevvy of titles to choose from. Then you have the aggregation of 99 cent titles or free offerings makes it challenging to stretch in the other direction.

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  2. Laine Cunningham Post author

    Agreed. Do remember, though, that Kindle readers are not all readers. When working in the Kindle sphere, set your promotions according to what works there. On other platforms, consider that a 50% discount might be enough for a promotion.

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  3. paulznewpostbox

    I will not set my prices artificially low. Neither will I ‘give away’ or discount.
    I pride myself on high quality writing, stories and narrative, which takes a long time and a lot of effort, let alone copious amounts of coffee, to produce. The end result is a product of premium quality.
    I would rather sell to a few discerning readers than a mass of bargain hunters.
    Unless you are extremely fortunate it takes a long time to build a good, solid reputation in the literary field, I for one will not jeopardise that for a quick buck.

    Thanks for the great post and observation. Re-blogging on Ramblings from a Writers Mind.

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    1. Laine Cunningham Post author

      Paul, thank you for your thoughtful and meaningful response. I’ve watched for a long time as indie authors have reduced their prices…and have really boiled at the fact that when prices drop to $0.99, Amazon only pays 30% because they want to manipulate pricing as much as possible. There should be true freedom for authors of all kinds. Freedom, in our world where we have to eat and pay rent, means financial freedom as much as anything else.
      I am truly grateful to hear from other individuals who are holding the line. And now there is a reason even for those who went with the sales to move their prices back up. Authors deserve more, much more.
      For you and any others reading this blog, know that book reviews are posted here and go out to over 10,000 individuals across six social media channels. If you want to connect with me about a book review, do so anytime. I love to support authors of all types…no matter how your book is published!

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      1. paulznewpostbox

        Hi Laine, I am glad to have met you. I do have a particular book I am promoting at present which I would be grateful of a reviewed promo. Just let me know what you need.
        On the same topic I started Sneak Peek a few weeks back, where authors can advertise their books, with a short excerpt. here is the link http://wp.me/5sgTb if you would like to look. You, or any of your contacts are welcome to submit their books, it is a Free service. Like you I like to help other authors. (My e mail is under contact us on Sneak Peek)
        Thanks for making the contact, Paul

        Liked by 1 person

    2. Khan

      Very well put Paul.

      The problem I see is, assuming you want your product to be profitable, that when you offer a product at a low price you are basically saying that you are confident that a very large amounts of people will buy it.

      While working at commerical loan brokerage, I would see many entrepreneurs set a low price thinking that by making their product cheaper they are increasing their likelihood of a sale. Which is problematic in both the long term and the short term. In the short term, you have to sell a lot more units to cover your costs. Assuming the market can support the number of sales you expected to and you can actually make those sales, then comes the long term problem. It is far easier to get people comfortable to a lower price than a higher price. For example: Just because 1000 people bought your book for $1, doesn’t mean the same number of people will pay $5 for the next one. In short, being the low cost competitor is hell and there is a reason why there are more boutiques then Walmart’s and 99cents stores.

      It is far better to set a price that gives you reasonable profit margins, like the ones mentioned on this post, and build your audience slowly as Paul mentioned.

      Great post, and great advice Laine!

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      1. Laine Cunningham Post author

        Excellent points, Khan. You’ve wrapped up everything I’ve been thinking in a very short yet detailed explanation. Your use of examples from other industries is right on target, too. Generally, when you’re offering a book for free, you’re targeting people who want free books…not necessarily those who are willing to pay for books. So it’s a big problem.
        Now, I’m not saying permafree or temporary free for series doesn’t work, because it does. But as Khan points out, it’s a numbers game. You have to get enough folks in the free promo who are also willing to buy a book at any price if you want to push your second book.
        It’s a particular problem for authors who write on-offs. That is a whole different approach. Free used to work for them too when it wasn’t such an expectation. But it’s been used for so long there are really readers out there who very rarely pay for books. And that’s going to take a different marketing approach to address.

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      2. Khan

        Thank you Laine. Having a finance and marketing background it’s really tough for me to NOT think of things as decimals and dollars.

        I agree free products should be a part of a marketing strategy (within reason anyways). If you’re writing in a genre that isn’t widely known it might be necessary to give away your book to readers in comparable genres, for the sake of having a large enough readership to support yourself. For example: I don’t really read (and therefore pay for) Steampunk stories, but I do read sci fi so if someone gave me a free copy of a steam punk book I’ll give the first chapter a chance. For new and emerging markets/genre this type promotion is essential because there just isn’t a lot of information or familiarity with the product on the consumer side.

        Most of all, by giving away their book for free authors are giving up the chance to understand what kind of material their audience likes or dislikes. Which is essential to selling and product positioning in the market.

        To summarize, I think the moment you decide to self-publish you are signing up to be an author and entrepreneur. You can’t be an author without actively writing, and you absolutely cannot be an entrepreneur without being able to make sales happen at a profitable price.

        Wow, I didn’t realize how much I had to say on this matter. Thank you for kickstarting this discussion. I will be reblogging this post in a few days.

        Like

    1. Laine Cunningham Post author

      Great question, Andrew…and one that has a simple answer.
      Amazon uses royalty rates to foce indie authors to toe the line with their prices. The company feels ebooks should only be certain prices (the magic $9.99 being the top of their line). So they extract a terrible price by lowering royalty rates to 1/3 above that price.
      Now, when you’re setting a price lower than $2.99, Amazon again punishes indies by reducing the royalty rate. The reasoning behind this might stem from two ideas. First, it prevents indies from competing on an equal footing with heritage books that Amazon wants to sell more of by reducing prices below $9.99. Second, it forces indie authors to utilize the website’s Kindle Countdown and other promotional options, where the 2/3 royalty is preserved. And as we all know, to use those promotional tools, the book has to be exclusively available through Amazon.
      All of this equals less competition for Amazon. And in Amazon’s universe, that’s a good thing. It’s far less helpful for indie authors.

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