In the first Business Basics for Authors post, I talked about how ebook pricing affects the number of books an author sells.
Higher price=fewer sales, but more profit per unit sold
Lower Price=more sales, but lower profit per unit sold
So what does this mean for me? How do I price my book? Do I set my list price as $1 million under the theory that it just takes one sale to make my career? Or do I price at $.99 under the theory that I’ll attract a 3 million buyers?
Authors can do either, but the smartest option is to find the sweet spot where you get the highest number of sales and earn the highest amount per book sold, thus generating the highest revenue possible. In 2011, Dave Slusher at Evil Genius Chronicles analyzed book sales data posted by JA Konrath in 2010 to find the sweet spot of his pricing vs. revenue numbers. Read his post if you’d like a more in-depth analysis than what I’m going to post here.
Here is a chart of what Slusher found regarding Konrath’s sales numbers. The top of the curve is the sweet spot.
I can hear you: “Jennifer, that’s a lovely little chart, but what does it really mean, and how do I apply it to my situation?”
What it means: If Konrath gives his book away free, he gets no money. If he prices at $1, he earns $1250ish (because lots of people buy at $1, but he only earns $.35 per unit). If he prices at $9, he earns about $500 (because fewer people buy at the price point but he earns $6.30 per unit). But if he prices at $3, he will earn more than $2,000 because he has found the sweet spot where people are willing to buy and where he makes the most possible per book.
How it applies: This data is unique to JA Konrath, and while it might serve as a good starting point for you, the only way to find the unique sweet spot for your book in your genre in a particular market is to experiment with your price and keep records. Figure out how much money you earned at each price point, and you will find your sweet spot.
Sweet spots will change as market forces act, and that is what we’ll be talking about in the next in the Business Basics for Authors series.
6 thoughts on “Business Basics for Authors: The Sweet Spot”
I took a workshop that said the sweet spot for romance, regardless whether it’s paper or electronic, was $5.99-$7.99. Their premise was that women were willing to pay more than the average. It has to do with the content’s perceived value and the guilty pleasure aspect of romances.
Interesting, Susan. I agree that there are other forces at work that can influence a particular book’s sweet spot, and romance may very well have a higher primo price, but the only way to be certain is to test at various price points for your particular book. Even with in the genre, as you said, there’s a range. With a lesser known author, that price may be even less, and with a better known author, it might be even higher. I plan to address outside market forces soon.
Hi, Jennifer 🙂
I wanted to say that I downloaded “Death Benefits” when it was offered for free a few days ago. Because I enjoyed it so much, I immediately bought “Absolute Liability” for the $3.99. I am pretty selective about what I buy. If I discover that I really like that author’s work, I will try to purchase the entire series. So……when is #3 due to arrive in kindle land? 🙂
Thanks,
Trish
Thank you so much, Trish! I am so pleased that you liked Death Benefits enough to order Absolute Liability too!
At Fault is in progress, and I’m hoping to get it out later this year. 🙂
As a new author on Kindle I am interested in finding the right price for my Women of Character romance series. I’ve only had my ebooks out about 2 months. I started out at $3.99 an ebook and I’m currently at $2.99. I did do a 2 day promotion on the first book of the series and there were about 1500 downloads which from what I understand is not that much. That helped boost me for that book for about 2 days following the promotion. What I’ve also found of interest is when I sold 2 books in one week (again, my book is new) my book went from 300,000 something in Kindle down to 78,000 something. To me that’s quite a jump.
I’ve since found many places for promotion and to announce free ebooks, which I didn’t know then. I have a blog on wordpress and blogger and joined goodreads and authorsden. I started a Facebook fan page. I’m on Twitter. So I think there are many, many factors that can play into this.
I believe Joe Konrath said he did little in the way of promoting the books in the beginning but I also think he was a traditionally published writer initially and that would possibly weigh in his favor.
Personally, I don’t generally spend more than $3.99 on a fiction ebook unless I know the person personally or it’s something I really, really think I’ll like. Now I will spend more on a non fiction book about publishing secrets, etc.
One other experiment I conducted is for a non fiction grief and loss book I have on Kindle under a pseudonym. It’s kind of been languishing there for awhile. I decided to do a free promotion for 5 days on KDP select. It was downloaded almost 3000 times for free with no publicity at all. This is in a much smaller category on Amazon then my romance series, and this book throughout the promotion hit #1 in Grief and Loss category a few days, #1 in stress management category and #1 a few times in a family category. In the Free Kindle category it got down to #137, but that was it.
Interestingly, while that free promo was about three weeks ago, the book sales have increased a bit when I put it back up to $3.99 and while it went up to 70,000 or so in Kindle, it did not go back yet to obscurity of 1,000,000 or so. It’s still ranking about #70 in grief and about #85 in stress management.
This is just my limited experience with ebooks but I am tracking the results of my different efforts and the tweaking involved in this market.
Wow! Grace, thank you for all that data. It will certainly help many people in choosing price and deciding how to promote their books. I agree that there are many factors outside of price that influence sales, and promotion outside of sales venues is extremely important. What sites have been the most successful for you?
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