How to price an ebook? I've read many posts on this topic and considered the variety of opinions. After all the research, it finally hit me why I disagree with pricing ebooks at .99. It occurred to me one day while gazing lovingly at my cookies.
Convenience stores buy my cookies for $1 apiece to resell at $1.59 or $1.79. I make 24 dozen each week, using extra ovens for baking and other techniques to speed up the process without sacrificing quality.
Imagine that each of these cookies represents one book selling on the Kindle for .99. Compare production time of cookies to that of creating a book good enough for people to pay even .99. Scary thought, isn't it?
Don't forget that Amazon gets 65% of each cookie--er--book, netting you 35 cents per sale. If you went through a publisher they take their cut. Is the solution to self-publish so you get the entire 35 cents? That's what many are saying, but it's still just a pittance for an awful lot of effort and expense.
I wouldn't sell my cookies for .35. If that's all I got, I wouldn't bother. Remember, I sell to the stores for $1 and they add the extra .59 or .79. I, who created the recipe and made the cookies, get the larger cut of the product. I'd be a fool to give the stores over half my profit.
When an ebook is priced for .99, Amazon gets the largest cut because royalty is only 35%. Priced at 2.99 or higher, royalty rate goes to 70%. A Kindle ebook priced for 3.99 earns $2.76 on royalties. Big difference between getting $2.76 for each book sold compared to 35 cents.
Now if I could write 24 dozen quality books a week hahahahahahahaha, I might consider pricing them for .99. But probably not even then, because that's not really .99 it's .35, which is split 50/50 with my publisher.
* So for each .99 book sale on the Kindle, Amazon gets 65 cents, my publisher gets 17 cents and I get 17 cents.
* For each 3.99 book sale on the Kindle, Amazon gets $1.19, my publisher gets $1.40 and I get $1.40.
* $2.99 is the lowest price available to get 70% royalty rate. At that price, Amazon gets 89 cents, my publisher gets $1.05 and I get $1.05.
* I'd have to sell six .99 books to get the same amount of money I get from one sale at $2.99. I'd have to sell eight .99 books to get the same money I'd get from a $3.99 sale.
A .99 promotional price has merit but as a permanent price on one's books? No. I would not do this for 17 cents, not even for 35 cents. At that price, I'm better off making cookies.
On Friday, I'll post about one publisher's experience with pricing ebooks and how price has affected sales.