Have you ever wondered why so many indie-published stories are $2.99? Let me tell you!
This particular mainstay of indie books is largely thanks to Amazon.
As a publisher, Amazon offers two royalty levels: the first is 30% and the second is 70% (this is the amount of the purchasing price of the book that the author receives). As you can tell, the 70% rate is much more attractive.
A tiny bit of math will also show you that for every sale you make at $2.99, it takes six sales at the $0.99, 30% price point to make the same in royalties. There is also speculation among the indie-publishing community that sales at $2.99 or more impact your overall sales rank more than the $0.99 price point.
From an author’s perspective, there’s very little reason to price your book under $2.99. However, there are some reasons to do so:
-You don’t have a very large back catalog (say, less than 5 titles total to your pen name.) The lower price point might get you some more of the important early exposure.
-You have a serial, so you price the first episode of the serial at $0.99 as a “loss leader,” hoping that by enticing readers with the low entry cost they will buy the remaining episodes at the regular price.
-You are running a promotion. This works best if you have some way to get the word out that your book is available for $0.99. There are services for authors that will try to get said word out, but they cost money. It’s all a gamble. Promotions work best if you have a large back catalog to take advantage of: if a reader buys and enjoys your promo title, hopefully they will look for more things you’ve written.
-You don’t know any better. As you can see, from a financial perspective there is very little reason to price your book so low. Many authors put their books out at this price point simply because they’re not confident in themselves or their work, and don’t believe people will think it’s worth the money.
However, that 70% royalty comes with several stipulations. The most important of these to you, the reader, is that $2.99 is the lowest possible price an author can set a book at to still earn a 70% royalty.
If Amazon were to offer that 70% royalty at a lower cover price, I’m sure many authors would take advantage of it as another marketing tactic. However, the only way to get that royalty level under $2.99 on Amazon at the moment is to run a Kindle Countdown Deal. And to run one of those, your book must be enrolled in KDP Select, which prohibits you from publishing the title digitally anywhere but Amazon.
All-in-all, I still think $2.99 is a pretty decent price. it’s less than a fancy coffee at Starbucks, and many traditionally-published ebooks are much more expensive, usually $9.99 or more!
So, I hope you’ll continue to support indie authors. And I hope this post has helped you understand why we price our books the way we do.
All the best!