Randall Wood

Pricing Perspective

There have been a lot of people discussing pricing lately and some of it I just can’t wrap my head around.

The range they are discussing is so small that I feel most have lost the proper perspective when it comes to putting a dollar amount on their book.

Let’s look at the range for a moment. This can be divided into two distinct groups; the trade publishers and the Indies.

For arguments sake we’ll be thinking along the lines of full-length fiction thrillers. E-books from the trade publishers are generally set from $9.99 up. Unless they are being discounted by the distributor as a loss leader you rarely see the prices below the $9.99 mark. So to beat the trade publishers on price the Indies need to sell their books for less than that. That leaves a price ranging from free up to, we’ll say, $8.99.

Most would say that’s a lot of room to play. But is it?

The reasons people use to justify this are many. I have to build an audience. I need to beat my competitors on price. I need to move more volume to climb the charts. I need my first book to be a loss leader so people will then buy the rest of the series.

The whole Free theory seems to finally be running its predicted course. I’m not even going to give it any attention here as I just never bought into the Free theory. $.99 is now the new Free and it seems to be dying even faster. I think this is a good thing as it shows the flaw of that line of pricing. I predict that within the next few years we will see the price of Indie e-books rise and then stabilize as more people develop their business knowledge in relationship to their pricing.

But back to our fiction thriller novel.

If we consider a window of $2.99 to $8.99 that gives us a range of $6.00 to play with. If we start in the middle with our pricing that puts us at $5.99 for our novel. That leaves us with $3.00 on either side.

Now for some perspective.

What do we buy on an average basis that cost us around $3.00? Think of something that you don’t really think twice about when you purchase it.

How about:

A gallon of gas; $3.80. (Criminal)

A Happy Meal; $3.00. ($1 on Thursday!)

A pack of cigarettes; $4.50. (So I’m told.)

A large bottle of water; $2.50. (Outrageous.)

A Latte from Starbucks $4.50. (Guilty.)

A Powerball Lottery ticket $2.00 (Only one.)

A Subway Sub $5.00 (Last night.)

We buy these things without thinking about it. Every day. If we really thought about it we might change our habits (especially the water, $1/16oz translates to $8.00/gallon!) but we don’t. We just pay the price without a lot of thought and go about our day.

So why do we spend hours of time thinking and blogging and worrying about whether we should price our book at $2.99 or $3.99? Do we really believe that the reader is that sensitive to the one dollar difference in price?

Or do we just hope that they are?

A book, especially a full-length thriller as we are describing, offers hours of entertainment, cost nothing to ship or store, and will last forever to be used by anyone you wish to share it with.

Did you notice that nothing on the list above last for more than a few minutes? (Except maybe the lottery ticket, wouldn’t that be nice) Yet the book you buy will last forever.

I consider my own buying habits when I shop for books. I can’t say that a price difference of a dollar or two has ever made my choice for me. If I had to pick the deciding factor it would be a sample of the work. The cover catches my attention and then I might read the blurb to see what I’m looking at, but the deciding factor has always been those few pages that I read. Unless the price is outrageous, it rarely comes into play.

There are always other factors to consider. Your reading time may be limited. You may be on a tighter budget than I am. You may be looking to buy several books at a time. (I do this myself when I take the kids to the bookstore, I set a limit for the group of us and stick to it; otherwise I would happily buy myself into bankruptcy. I’m happy to say that my kids would encourage this. I love seeing them decide what books they will keep and what ones go back on the shelf. They’re like my own little focus group. My seven-year old can even figure in the sales tax now, makes me feel slow.)

So how much does that price difference matter? I see some readers on the blogs proclaim that they stopped buying a certain writer when she changed her prices by one dollar. I don’t get that. Here’s an author who has repeatedly entertained you and given you your money’s worth and you’re ready to drop her over one dollar?

That’s a bottle of water. You’re paying a dollar for 16oz of the most abundant item on the face of the earth!

Then there’s the other end of the spectrum. Kristine Rusch recently blogged about pricing and how Indie authors think small. She threw out the numbers for John Grisham’s latest thriller. He sold well over a million copies of his latest novel in hardback alone. That’s hardback to the tune of $30+ a pop. His readers most likely bought them without even sampling them. He’s proven himself to them and they know they will enjoy the book, so there’s little thought given before pulling the trigger. They buy in hardcover as they know they will want to keep the copy on their shelf next to all the others. And they give it little thought.

From a business standpoint constantly changing the prices of your product does not make too much sense. And that’s not just for books, but for all products. It’s the same in the service industry. Running a sale may work in the short term for some, but in most retail businesses a sale on one item is always balanced by an increase in price somewhere else in the store. There are multiple reasons for this and this post is too long already to get into all of them, so I’ll simply say this;

On the subject of price I agree with Dean and Kris; price your book and then leave it alone. Work on the next one. I do disagree on the set-it-and-forget-it aspect though. I have too many friends that found out their book was reduced to $.99 due to a mistake by one distributor only to be price-matched across the board until they caught the error. Do maintenance checks on your sales to ensure there haven’t been any inadvertent price changes or other shenanigans. But refrain from changing the price every time your sales figures change.

And when setting the price of your book, wear your business hat, not your author hat, and remember to keep things in perspective.