Day 14

Today, I want to talk about pricing.

Pricing is, after marketing (or rather, before) one of the most complicated aspects of self-publishing as an e-book.

What price do I think is the right price?  What price will perfect strangers and potential readers think is the right price?

Here's how I went about it.  First, it makes sense to me that the price would be less than that of a paperback.  Now, I accept that others may feel differently, but to me a physical copy of the book has a higher customer value than an electronic copy.  So, using that logic, that gives us a ceiling of about $10.

But where's the floor?  There has been a trend of $0.99 e-books.  That's the same price as a song on i-tunes.  A song takes about 3 minutes to listen to.  I estimate my book will take at least 4 hours to read.  Never mind the 9+ months to write.  I just can't bear to price my baby at $0.99.

Now, Amazon's royalty structure comes in to play.  Amazon lets you choose between 35% and 70% royalties.  Seems like a no-brainer, right?  Except to get the 70%, your book has to be priced above $2.99.

Which now gives me a floor.  I have $7 to play with.  One price to pick.  It's like pin the tail on the donkey.

In the US, a grande latte from Starbucks costs $3.29.  So this is the kind of price many people are willing to pay "on a whim", and rather regularly.  Seems like a good as way as any to pick a book price.

So I picked $3.49.  A foamy whisker above the price of a latte.  I like it.  I feel good.

Until I realize that I did that all for nothing.

I think (but I cannot confirm) that In the Past Imperfect costs $3.49 in the US.  But I don't live in the US.  Nor do most of the people I know.  And outside the US, e-books cost basically whatever Amazon feels like making them cost.  Case in point: Switzerland.  Where the book costs a whopping (and random) $6.31.

And not just that, but for all sales outside the US, the applicable royalty rate is.... 35%.

Sigh.

Day 3

Today I succumbed to temptation and bought my own book.  I don't have a Kindle and can't purchase one since I live neither in the US nor in the UK, so I bought it through the Kindle app for iPod.

Which means I am now the proud owner of something that looks like this:

That's the first page of my book right there.  All yours.  For free.  Well, actually it's only about the first twenty words but that counts as a page in iPod-land.

And that brings me to what, so far, has been the most difficult part of promoting my e-baby.  It's not that my friends don't want to do something nice for me (and get a sneak peak into my twisted mind); but most of them have no idea that you don't actually need a Kindle to read a Kindle book.

In fact, until yesterday, neither did I.

Why does Amazon keep this so hush-hush, I wonder?  The only explanation would be that they are trying to encourage people to buy their device rather than use Steve Jobs' version.  But that explanation makes absolutely no business sense.

Surely Amazon makes far more money off sales of the e-books themselves than off sales of the Kindle? 

Let's take your average best-selling e-book at a price of $10.  Amazon makes at least $3 off that price (a bit more, actually, but we'll get into that another time).  At around $140 per Kindle, and a generously estimated margin of 40%, that means Amazon makes more money from the sale of 19 e-books than from the sale of 1 Kindle.

Now let's think how many e-books one Kindle owners is likely to buy.  Probably more than 19, right?  And now let's think of all the e-books non-Kindle owners are likely to buy (especially if they actually knew they could).  The numbers are stacking up now.

The device is not where the money is.  The money is in the content.  So please, people, spread the word.  And buy an e-book!