When publishing a book on Amazon, one of the first questions you must consider is cost. How much you charge for your eBook matters a great deal. If you price the book too high, it won’t sell many copies. Price it too low you run into the trouble of trying to make back your investment on slim margins.
There are some facts about Amazon pricing you should know. While these are highly subjective, there are basic pricing realities you cannot go into a self-publishing career without a basic understanding of.
Here are four important facts about pricing books you need to know before publishing a book on Amazon.
Publishing A Book On Amazon Royalty Reality
Amazon authors are paid through royalties. Some form of a royalty system has been in place for as long as the publishing industry is around. Boiled down to the simplest explanation, an author is paid a certain amount for every book sold.
On Amazon, it’s very simple. If you price your eBook at less than $3.00, your royalty comes out to per book is 35%. For example, if you run your book at $2, you’ll make seventy cents per sale. If you price your eBook at more than $3.00, however, your royalty is 70%. For a $4 book, you’ll make $2.80.
It is clear that Amazon wants its authors to price books into that $3 to $4 range. The incentive to price there is too much to ignore.
What Makes A $3 Book?
If the goal is to get at or above $3, the next question should be what do Amazon readers value at that price range?
Notice how I said, what do readers value? That’s the key. When pricing your book, you need to consider what the market considers normal for your book-length.
For beginning or new authors, $3 is about the going rate for a novel. That’s right. Your full-length book, ranging from 50,000 words and up, will earn you roughly $2.10 on Amazon. A lot of authors see that as discouraging. Having spent $10 to $20 for new paperbacks most of our lives, seeing less than a cup of coffee per book seems low.
But is it low?
I don’t think so. Take out all of the overhead of traditional publishing, agents and managers, shipping and the like, that seems fair. That is $2.10 directly to you, which is on par with what traditionally published authors earned a long time ago.
Publishing A Book On Amazon Means Flexibility
One of the best pricing features offered by Amazon is its flexibility. An author can change the price of their book whenever they want, moving up and down in price as well as royalty scale.
Why is this so important for authors? You control your product.
If you set your price too high (let’s say $5.00) and sales decrease, you can easily go in and bring it down. With the ability to keep track of daily sales, you can easily see what price point works for your book.
On my first book, I changed the price a lot. I went from $4 (thinking I could beat the $3 sweet spot) down to $2 before eventually settling on $3. What I found was that the increased royalty at $4 didn’t make up for the decrease in sales. On the other side, I discovered that the spike in sales at $2 was not enough to make up for the loss of royalties.
Every book is different. Every author is different.
Don’t Fear Being Free
This discourages authors to no end, but hear me out.
Making your book free (either short term or long term) is good for your writing career.
How is that possible?
For better or worse, we live in a world where artists are expected to give away lot of their products in the interest of building an audience. Musicians play free shows in the interest of making fans. Filmmakers work on low budget/student films to get exposure.
As a writer, one of the best investments you can make in your career is a great book your readers can download and read for free. They get the book, take a chance on your voice. If they like you, they come back for more.
That one free book can lead to a lifetime of sales.
I think of the Amazon pricing strategy in terms of career building. I want my book to be out there for as many readers as possible because, in the long run, those customers and fans will sustain my work.