This week The Author CEO Naomi Blackburn talks about the importance of importance book pricing and how to price your book to sell, rather than stay on the shelves.
Naomi is founder of the Goodreads group Sisterhood of the Traveling Books, as well as the Nordic Noir group, dedicated to discussing Scandinavian mysteries. This year, Goodreads ranked her at # 11 on their top reviewer list, in both the U.S. and in the world (2011 rankings). As a reviewer, Naomi is brilliant, insightful, and, as she puts it, “brutally honest.”
Please feel free to leave questions for Naomi, as well as any suggestions you may have for future posts. I hope you enjoy the column!
The Author CEO: What’s Your Price Point? How to Price Your Indie Book to Sell
by Naomi Blackburn
An author recently approached me regarding disappointing sales of his book, a self-published debut. In my opinion, this author had priced his book too high; that, I felt, was the reason for his difficulty with sales. When I asked how he’d decided on the price for his book, he told me he had researched other books in the genre and found that most were priced within his range.
In an attempt to assist this author, I went onto Amazon and researched the genre. First, this is a genre with very few self-published books, so the author was comparing his release to releases from traditional publishing houses. Second, he was a debut author; the authors he was competing against were very well known, some with frequent television appearances; others had written best sellers or won awards. Third, because this was a debut novel, there were no earlier works to give readers an indication of what to expect. Despite these disadvantages, this author had priced his book HIGHER than competing books.
When I discussed these points with him and encouraged him to reconsider his price point, he expressed disbelief. He couldn’t believe I had suggested lowering his price. With all the blood, sweat and tears (implying emotions) he’d put into this book he could NEVER sell it for a lower price, he replied.
So, what exactly is a price point?
Simplistically, price point is the RETAIL cost of a good, usually determined by how the public is expected to react to that price. When considering how to price a good-i.e. your book and how much to charge for it-there are four simple points to consider. (Please note: I have intentionally switched the language from ‘the book’ to ‘a good.’ Once your book is published, it becomes a GOOD that you have taken to market and the purpose of it is to make a profit.)
As price point affects consumers psychologically, it is important for authors to identify the psychology behind why/how they set their price. Remember to take off your author’s hat and put on your business person’s hat!
- Product-where the product stands in the market and how it compares to similar products.
- Place-consumer price expectations vary depending upon where a book is sold (e.g. consumers expect to pay less at Amazon than they’d pay for the same book at a high-end bookstore).
- Pricing-how your price compares to established prices for similar products.
- Promotion-books may be priced lower for special promotions; you need to allow for this.
I found a quote on WiseGeek.com that I think sums up the interaction of these 4 points perfectly.
Ideally, a retailer wants to hit the point of perfect balance, where consumers view a price as fair and expected, and demand for a product continues to remain consistent. If a price point is too high, demand can slacken, leading to fewer units sold, and eventually pushing the margin enough that the company would have made more money at the lower price point. Low prices can drive demand higher, creating profits on volume, rather than on individual items, a tactic used by bulk and discount retailers.
Why It Makes Sense for Indie Authors to Choose a Competitive Price Point
When Terri and I discussed this post, Terri made a point that I think other authors ought to consider.
‘Most authors who feel this way [reluctant to go below a certain price point] don’t want to sell at 99 cents or, for some, even $2.99 because they feel their hard work (days, weeks, months, or years, in some cases) are worth more than that. My thing is, I’m better off selling 10K books at 99 cents (total royalties $3300) or $2.99 (at $2.00 per book, I’d make $20 K, a lot more than many traditionally pubbed debut or midlist authors would make!!) than selling 500 books at $7.99 ($2800 – AND smaller fan base for next time). Like it or not, that’s what happens.’
I am reminded of a book published several years ago that looked really, really good and that I’d briefly considered purchasing. Problem was, the book, by a debut author, was priced at $10 and had one 4 star review. There was NO WAY I would purchase that book. For $10, it wasn’t worth the risk to me. The book, published in 2010, still has only one review. One has to wonder if the price point is the reason this book is not moving, as its genre is very popular, and if a lower price would have produced better results.
So, you’ve put a lot of time and effort into the storyline, character development, etc. for your novel-it’s understandable that you’re reluctant to give your book away. Still, isn’t it just as important to respect your novel enough to price it REALISTICALLY, to get it into readers’ hands and develop a readership?
Because pricing is so important, we will continue with this topic in the next installment of the series.
The Author CEO: 2012
This was the last post in Naomi’s 2012 series of The Author CEO, but she returns in 2013 with more sound advice and great insights for authors!
About Naomi Blackburn
Naomi Blackburn, owner of The Author CEO, a consultation firm dedicated to helping independent authors navigate the development of strategic business plans and the marketing world, holds an MBA and has worked in the field of business development, sales and consulting for 12 years. A former social worker, she has helped hundreds of clients meet their life goals. An avid reader and top Goodreads reviewer, she comes to the world of books from a reader/reviewer’s perspective. She strives to help authors achieve their goals by teaching them to think of themselves as CEO/entrepreneur of a small business and helping them negotiate the business side of selling books.