Amazon’s Data Supporting Lower Ebook Prices
Ordinarily, I would link straight to the text, but there is vital information here, and you should read it even if you don’t care about the Amazon v. Hachette nonsense. Look at the numbers.
Let me sum up and quote:
Amazon favors lower ebook prices, which result in higher sales and profits for themselves, authors, and the publisher. Here is their data:
It’s also important to understand that e-books are highly price-elastic. This means that when the price goes up, customers buy much less. We’ve quantified the price elasticity of e-books from repeated measurements across many titles. For every copy an e-book would sell at $14.99, it would sell 1.74 copies if priced at $9.99. So, for example, if customers would buy 100,000 copies of a particular e-book at $14.99, then customers would buy 174,000 copies of that same e-book at $9.99. Total revenue at $14.99 would be $1,499,000. Total revenue at $9.99 is $1,738,000.
The important thing to note here is that at the lower price, total revenue increases 16%. This is good for all the parties involved. (Emphasis added.) Read the full article here.
Amazon doesn’t flaunt its numbers, so when it does, take note. Most indies are not working at these price points, but it is valuable information nonetheless.
Read Barry Eisler’s take on this.