Choosing how much to charge for your new book, especially a self-published book, involves understanding a combination of practical, legal, and retailer-specified rules every author should be familiar with, not to mention costs, sales psychology, and knowing one’s goals for their book. Perhaps most importantly, it requires some research.
In Part 1 of this series on self-publishing business fundamentals, we studied costs and royalties. Here are the topics covered in this Part 2:
- Three questions every author should ask themselves
- What do similar books, from authors with name recognition like mine, sell for?
- How important are my royalties, at least in the beginning?
- What are my goals and marketing plans?
- Two questions that are irrelevant
- Should I consider how much I have invested?
- Will a low price cheapen the appeal of the book?
- Numbers and psychology
- Amazon FAQs
- Additional resources
Again, this pricing guide and Part 1 were written with the self-publishing author in mind. And this guide assumes readers have a working knowledge of costs and royalties. If not, you can learn about that here in Part 1: The 2020 Guide to Amazon Fees and Royalties for Kindle eBooks and KDP Print.
Summary for those in a hurry
This is a long post, so if you are impatient and want to return to the rest of the post later for details and nuances, I can provide this summarized advice:
- Most self-published books—especially from new authors or those generally unfamiliar to the public—are priced lower than traditionally published books.
- Ebooks: Usually less than $5.99. A lower number for new authors will encourage more sales and therefore more reviews.
- Paperbacks: Usually between $9.99 and $19.99, depending on length and subject matter. Length matters more for print books due to the cost of manufacturing. (Discussed further below.)
- Hardcovers: It is impossible to be price competitive with traditionally published books if you are using print-on-demand (POD). My advice is either to forgo a POD hardcover or to set the price for breaking even.
- Exceptions: Specialized books and books written by well-known or popular writers.
- You can change your eBook price frequently. Indeed, you should experiment with different price points. I like starting low and increasing the price as reviews accumulate.
- You can change your POD print price frequently, too. But be careful if you are printing the price as part of the barcode. (Discussed further below.)
- Retailers—certainly Amazon—have rules about minimum and maximum pricing. It pays to know these. (Discussed further below.)
- The most important action you can take for determining a price is to study comparative books. That is why this is the first question you need to answer.
1. What do similar books from authors with name recognition like mine sell for?
The single best way to determine the retail price for any book is to look at comparable books:
- Visit the category on Amazon where your book will be sold. What are the prices of top-selling books? Do this based on format: Kindle eBook, paperback, hardcover.
- For fiction and certain nonfiction, also check to see if the comparable book is part of a series. It is frequently the case that first-in-a-series fiction books by self-published authors are priced free or 99 cents. This is a proven tactic for top-selling authors—treat book one as a marketing tool for other books in the series, or other books from that author. (Make sure you are comparing your book one to another author’s book one. Note that series-number comparisons are less relevant after book one.)
- Scroll down to the product details section and see if you can tell if the book is self-published. This is the type of book you should be comparing yours to.
How to identify a self-published book
Here are a few things I look for when trying to identify self-published books:
- The Kindle eBook price is relatively low. Self-published books are nearly always going to sell for less—especially eBooks. Self-published eBooks will nearly always be below $9.99 and more likely, depending on the category, below $5.99. That’s because royalties drop significantly at $10 or higher.
- The book is in Kindle Unlimited—Amazon’s Netflix-like eBook subscription program. Many of these are self-published, and inclusion is mandatory if your eBook is enrolled in KDP Select.
- A paperback book’s publisher imprint shows as “CreateSpace Independent Publishing Platform” or “Independently published.” These books are published using Amazon’s free ISBN—more than a million books each year. Other examples include Lulu, Outskirts, Author House, and Balboa Press. (Click here to learn why a free ISBN may not be right for you.)
Fiction vs nonfiction
Comparative analysis is arguably the most important exercise for pricing fiction books. Nonfiction is also subject to competition, but there are additional considerations.
Some fiction categories have more hot sellers than others, but when it comes to creating a single-book breakout, nonfiction books have a greater chance at succeeding. It depends on the uniqueness or value of your content, or how much it can help someone. Combine this with a large and hungry audience and you can see extraordinary results.
There is the often-cited story of Margaret Kent’s books How to Marry the Man of Your Choice and How to Marry a Superior Woman, both of which sold for $95 each in 1986, or about $200 each in 2020 dollars.
It is hard to do because the timing must be right, but it is possible. In these cases, you charge what the market will bear, just as Kent did.
Popularity or reputation of author
How well known you are also plays a significant role in how much you can charge, certainly at the outset. If you have had media appearances in the recent past, or other noteworthy success related to your book, you stand a better chance at selling more books than the first-book author no one has heard of.
Authors with name recognition also usually have established ways to connect with the audience for their book. Email lists are by far the best, followed by social media connections.
Also consider length when comparing your book to similar books (length is shown in the book’s Product Details section). There is nothing hard and fast about this—just make sure you are comparing books with generally similar length. You should never price a short story as high as a full-length novel, for example. (Stephen King’s publisher tried this and his book reviews suffered as a result.)
Length is also one of the factors Amazon uses in its pricing tool—see the Amazon FAQ section later in this post.
Other considerations when comparing your book to similar books
Black and white vs color printing (interior pages)
Are your comparison books in color? If so, you will need to study the manufacturing costs for your book to make sure you can compete.
Anyone using POD quickly discovers that a book printed in color is more expensive than the equivalent-length book in black and white. If you are planning to print your POD book in color, I suggest pricing your book as closely as possible to the competition, even if that means you do not make a profit. If your book sells, you’ll have the confidence to print copies in volume, which will lower the cost of manufacturing.
Packaging and bonuses
A book bundled with an audio CD, a DVD, or maps, for example, has more value than the same book without these enhancements. This is one case where the cost of producing the content must factor into the pricing.
As always, compare your book-with-bonuses with similar books, if you can find them.
2. How important are my royalties?
It is a fair question, since most of us expect to make a profit when selling a product. But how relevant is this for arriving at a price that customers are willing to pay? And what role should royalty or profit play in our early decision-making?
I argue that establishing a retail price for a self-published book based on profit is not a priority. There are more important considerations at the early stage. For example:
- eBook prices can change virtually any time. I talk about the timing for these changes and other considerations a little later, but with virtually no cost of sale, there are many more important considerations than profit.
- If you publish your POD book at a competitive price and the book is a success, this could justify printing in volume, which can significantly improve your profit margin. But as noted earlier, pricing higher to maximize profit at the outset may price your book out of reach of readers, thereby limiting its sales potential. Therefore, you need to be aware of profit margin but consider it in conjunction with other factors.
You need to know your potential royalty to make other decisions. But don’t establish the retail price solely on your desire for profits.
For more about the cost of sales for self-published books using Amazon KDP print, IngramSpark and other online retailers, click here to read Part 1 of this series.
3. What are my goals and marketing plans?
- Most authors I work with want their book to be read. Writers wonder, Can I entertain people? Does my book help people? The higher the price, the harder it is to convince the shopper to buy.
- Some authors have a large network of followers. Or they are writing about a topic that is in high demand. These circumstances give an author more confidence that a higher price will not deter shoppers. And related to this, authors with books in demand may also be able to sell direct to their reader rather than paying Amazon a sales commission.
- Some authors are writing for fun or posterity.
My point is that these circumstances are more important considerations than pricing based on profit margin.
I frequently challenge our clients to consider two pricing scenarios for their eBooks:
- The most likely buyers of your newly released book are people you know. You can charge full price—let us say $4.99 to $9.99—and make a little money. Later, when you decide to temporarily reduce the price for a sales promotion (a proven strategy), how will these people feel?
- Alternatively, you can list your eBook at a “special introductory price” of, say, 99 cents or $2.99. At this price, you are rewarding your friends—“hey, my price is super low, just for my friends. Get it now before the price goes up after the release date.” That is an easy offer to make to friends and family. It also has a better chance of generating more sales, which Amazon’s algorithm notices and rewards. And more books sold means more customer reviews.
Book income is only one way to receive value for your efforts
If you own a business, publishing a book will boost your reputation. The book promotes you as an expert, and people want to hire and work with experts—it is essentially a marketing investment.
So, it stands to reason that pricing a book as low as possible to encourage sales will bring the widest readership. Wide readership means a great chance that a reader will become a client or customer and you will make your money back in that manner.
Fiction writers can do something similar if they create a backlist of books. The formula is to write a series and make the first book cheap or free. Every newly released book provides a sales uplift to the writer’s other books.
If your goal is to have a “best seller”
There are many best seller lists, and what all of them have in common is they are based on selling copies of a book, not profits or gross revenue. Nowhere is this easier for self-publishers to achieve than on Amazon. It’s a simple formula: sell more books in your book’s category than the current top-selling book.
Of course, writing a great book and having a large network of followers is the most obvious—not to mention profitable—way to do this. But what if we are missing one or both of those ingredients? Or what if we have those, and we want to make sure we achieve or retain that top position?
You price your book low to make it a no-brainer purchase.
Taking it a step further, it also helps to place the book in an Amazon category with less competition. Here is a classic personal financial advice book, priced at 49 cents, and placed in Amazon’s casualty insurance category in the Kindle store.
There are three reasons to justify pricing your book aggressively at the outset:
- Low prices usually result in more sales, which means your book will get more reviews and these reviews will accumulate more quickly.
- This book is the first in a series. This is a proven strategy for introducing readers to your other books.
- You are publishing to establish yourself as an expert, or to promote your business.
Two questions not worth considering at launch
1. How do I recoup my costs?
I argue that what you spent to produce the book is irrelevant as it relates to pricing your book. There is a cost associated with self-publishing any book, but using this to determine what to charge your reader is only a factor in certain circumstances.
In addition to the cost of preparing the book for publication, there is the cost of producing individual units for sale to readers. In accounting, this is called cost of sales or cost of goods sold.
This is a variable cost because the price for printing, or sometimes for selling a digital copy, depends on the characteristics of your specific book. You incur this cost for each unit sold.
See Part 1 of this series for details about POD and digital sales when using Amazon and other self-publishing tools.
For those who are doing a print run—hundreds or thousands of copies of a print book at one time—there is more complexity. I’ll come back to this in a future post.
2. Won’t a low price make the book look bad or cheap?
Not at all. But if it bothers you, position the price in your marketing as promotional—it is no different than any other “grand opening sale.” BookBub has become a major book-marketing business based on its success at connecting budget-conscious readers with eBook sales promotions for major authors and publishers.
This is also how new authors are discovered.
The alternative is to price higher, not sell many books, and receive just a few or even no reviews. For me, it would be more embarrassing for my book to have few or no reviews a couple of months after release date.
My analogy is that releasing a new book is like baking a loaf of bread. Once out of the oven, it begins to get old. You can always raise your price. But you can’t get back that period of “freshness.”
The psychology of numbers
Looking at prices online, in stores, and at gas stations, we see that fractional pricing—prices ending in odd numbers—is prevalent. In a 1997 research report titled The Widespread Use of Odd Pricing in the Retail Sector, the authors found:
- Approximately 60% of prices in advertising material ended in the digit 9
- 30% ended in the digit 5
- 7% ended in the digit 0
- The remaining seven digits combined accounted for only slightly over 3%.
If you need more convincing that ending in 9 is a good idea, consider that Apple requires eBook prices to end in 99.
I recommend all eBook prices end in 99. You might argue paperback can be different, but the research shows which price endings customers like to see.
The psychology of pricing applies internationally as well.
Amazon will automatically convert your price in dollars to the local currency, which nearly always results in an unusual ending such as 12, 45, 62 and so on. However, you can override those prices on the pricing page in KDP. Click on Other Marketplaces and adjust the prices to end in 99.
IngramSpark also supports self-publisher-controlled pricing. For that platform, you may need to manually compute the converted price and then round it up or down as you like.
Note that you do not have to round the numbers to come close to your US price. In fact, I intentionally price my books lower in international markets.
Why? For two reasons. One, my books often reference US-specific circumstances or have examples relevant to US readers. Two, readers outside the US may have a lower budget to invest in books.
I figure that with a lower price, I’ll make sales that I would otherwise miss if the book were priced closer to the US price.
Here are seven frequently asked questions about pricing paperback and Kindle eBooks for sale on Amazon. Note that this applies to Amazon.com and that Amazon’s country-specific stores have different policies.
1. Can I prevent Amazon from reducing the price of my book? What happens if they do?
Self-publishers using Amazon KDP cannot stop Amazon from charging customers less than the retail price. But if Amazon does charge less, you receive your royalty based on the full retail price (subject to their policies).
2. How often can I change the price of my books?
You can generally change the eBook price at any time, although there are some limitations and consequences such as if your book is enrolled in pre-order or KDP Select:
- Pre-order. If you lower the price during pre-order, all the existing pre-orders are priced at the new lower price. Raising the price does not impact existing orders—they get the lower price.
- KDP Select. Your Kindle price must be unchanged for 30 days before and 14 days after your Kindle Countdown Deal runs. See all requirements here.
Changing print price
You can update the price of your paperback at any time and as frequently as you like. However, a change of 40% or more will be manually reviewed by Amazon, so this may take longer.
Also see question six.
3. What is price matching?
If Amazon finds your book at a lower price, it reserves the right to match that price. If it does, you will get a lower royalty. In fact, this is a policy that authors can manipulate if they want to give away their Kindle eBook—see the next question. (Learn more at KDP’s pricing page.)
4. Can I offer my eBook for free?
Yes and no. The lowest price you can enter is 99 cents. However, there are two ways to make an eBook free:
- Enroll in KDP Select. You can offer your Kindle eBook free for up to five 24-hour periods within the 90-day enrollment period. Click here to read more about KDP Select.
- Price your eBook as free in other stores such as Apple, B&N, Kobo, and Smashwords. Then contact Amazon to ask them to price match. Amazon is not obligated to price match, but they frequently do.
5. Are there minimum and/or maximum prices I must charge?
Yes, and consider this a summary based on the date of this article.
- Minimum, 35% royalty: 99 cents to $2.99, depending on file size.
- Minimum, 70% royalty: $2.99
- Maximum, 35% royalty: $200
- Maximum, 70% royalty: $9.99
(Source: Kindle eBook List Price Requirements)
- Minimum: the cost to print your book as noted on the pricing page on KDP (also see Part 1 of this series).
- Maximum: $250
(Source: Amazon Print Pricing Page)
Also note that if you have an eBook published with the 70% royalty option, the paperback must be priced 25% higher than the eBook per KDP Terms and Conditions.
6. Can you put the book’s price in the barcode (for paperback books)?
Yes. You must buy or create a barcode with the price encoded and place that on your cover, then upload the file to Amazon as normal and check the box as shown below.
Note that you do not have to put the price in the barcode. Simply upload your cover without a barcode and the barcode Amazon adds for your book will not show a price.
If you print books that have the price in the barcode and you wish to change the price and sell these books, the retailer will require you to place a sticker with the new information over the existing barcode.
7. What is the KDP Pricing Support (Beta) calculator?
Amazon has a tool to help authors determine the optimum price for their Kindle eBook. Visit the Kindle eBook Pricing page for your book on KDP and click View Service in the Royalty and Pricing section to “See the relationship between price and past sales and author earnings for KDP books like yours,” according to the messaging there. The tool evaluates your book’s length and subject matter relative to the sales history of similar eBooks and suggests an optimum price for author earnings.
I hope this guide has given you something to think about. If I could leave you with just four brief reminders, they would be these:
- Study comparable books.
- Know your goals.
- Lower prices matter.
- Your price can change.
And keep this in mind:
- Part 1, The 2020 Guide to Amazon Fees and Royalties for Kindle eBooks and KDP Print
- How to enter pricing information on Amazon KDP (links to Amazon).
- Kindle Direct Publishing Terms and Conditions (links to Amazon).
- How Much Should My Book Cost? Tips for Pricing Your Book (links to IngramSpark).