Monday, June 20, 2016

Let's Talk Numbers: Why You Shouldn't Price Your Novel at $0.99

Hi Folks,

We're back from Colorado, so that means our more regular posts can resume. Thank you again to Kameron Hurley for filling in for us with her amazing gust post about hybrid authorship! (Seriously, go read it if you haven't! It's good!)

Today I have a short one about pricing. Let's talk about pricing a full length novel at 99c as a standard, not sale, price and the horrible problems that can create.

For this post, please keep in mind that I'm talking about full length novels. Short stories, serials, and novellas definitely have different pricing rules and this discussion may or may not apply to those arenas.

Why You Shouldn't Price Your Novel at $0.99

Every now and then, we see people doing this. They have a a shiny new book, a full length novel no less, and they release it for sale at a $0.99 cover price. Rachel and I cannot help but cringe when we see this happen, because we understand the faulty logic that's happening behind the scenes here.

Why would someone do this? There's basically three kinds of authors who put up full novels at what is a discount price.
  1. Those who are part of the book mill brands who write a book a month, don't edit or copy edit it, and just go for quantity over quality as a publishing strategy.
  2. People who are trying to build readership, often desperately so.
  3. Folks who don't think their books are worth full price.
It should come as no surprise that Rachel and I disapprove of the book mill approach. We don't think that it's good for the industry in general. Worse, the people we've see who pursue this kind of business model often talk about how soul killing it is, so y'all can see why we dislike this practice on many levels.

Now, people who are pricing their books at 99c as a means of building readership faster, those people I want to talk to the most today. For insecure authors, I'll be hitting on that topic near the end of this post.

Most everything I have to say about pricing low to build readership can be summed up simply as,

Using $0.99 as your regular price point is trading long-term gains for short-term ones.

Starting out, new authors need to build readership. It's the first and last item on their agenda besides writing the next book. Additionally, most people understand that lower price = greater volume so pricing to move is the logical tactic.
"Tactics without strategy are the noise before defeat"
-Sun Tzu, The Art of War
Persistent bargain-basement pricing is engaging in grievously short term tactics without really considering their impact on the future (ie the strategy for a healthy long-term career). There's three major issues with using $0.99 as a regular price point for full length novels.

Problem #1 - You can't put it on sale later
Being able to generate a spike in sales is a pretty powerful and crucial tool in an author's arsenal. I've written an extensive blog post about the different types of spikes, their affect on sales, and their splash effects as well. Go check it out.

Here's the crucial info in a single graph,

Nice Dragons Finish Last - Lifetime Sales Rank Chart

If you've read that post, you'll see that there's only a handful of ways an author can intentionally create a spike. Those ways being launching a book and doing a big sale. Most other massive spikes are, quiet frankly, luck. (though a great book has more 'luck' than a good or mediocre one!)

So being able to go on sale is a majorly important tactic. Ah, but how do you do that if the book is already $0.99? That's usually the sale price!
Let's go free!
Free is the obvious answer to this, but Rachel and I have a major dislike of free. This has nothing to do with greed and everything to do with what kind of readership you want to build for the long term. Which brings me to,

Problem #2 - You are building the wrong kind of readership
I've heard over and over again that free readers are terrible customers. This isn't to say free readers are bad people. They're not! It's just that free readers as a group tend to download books they aren't really interested in just because they're free. Then, when they actually do get around to reading the thing, they'll often end up unsatisfied (and thus leaving you bad reviews) since, again, this is a book they downloaded just because they could, not because they were actually interested in the story.

5,000,000 free books on my Kindle, nothing I want to read.

(For a really in depth look at the issues of courting the free reader, check out this amazing Self-Publishing Podcast about "Is Free Still a Viable Strategy?")

Again, this phenomenon isn't the fault of people who like free books. It's the author's fault for selling the wrong product to the wrong customer. Free just doesn't qualify customers well enough and so everyone winds up unhappy with the results. Check out my post on Designing Your Author Brand if you want to learn more about how to court the customers who are right for you.
You have to consider what kind of readership you are building. This is the key to long term success as an author. 
The problems with free readers also spill over to the $0.99 crowd. Both are bargain buyers who classically hate paying a lot for books. There's many reasons for this. Some are book hoarders, but most just have limited reading funds which cannot match their reading voracity. I think we can all sympathize with this. ^_^ I'm not saying that these folks don't deserve books, but you the author must carefully consider what it means to court this bargain crowd as your main readership, mostly because if you start at $0.99, you can't raise prices later in your career without causing a readership riot. Bring in everyone at $0.99 and you might lose them all at $2.99.

This is the crux of the bargain readership issue. Everyone expects prices to go down the longer a good is on the market. If you start at $0.99, it is very very difficult to go up, which means you're trapped. But if you begin at a higher price point, you can always go down to boost sales and make your readers happy at the same time. Plus, by framing the price drop as a "sale" you buy yourself room to go back up later as readership increases since everyone understands sales are temporary, even if your book has been on $0.99 "sale" for months.

So, clearly, the $0.99 price point is a very poor move strategically, but even this is hardly the biggest cost, which brings us to problem #3

Problem #3 - Money
We never shy away from the $$ side of things around here. Authors have to make a living after all! Selling books at $0.99 is inherently problematic for any author who wants to live on their writing.

theoretical earnings on 1000 books sold at various price points
For most ebook sellers, going below $2.99 means dropping into a special 33% royalty bracket as opposed to the usual 70% or so. The per book earning power of a book at $2.99 is 6x greater than that of a book priced at $0.99 while not being 6x more expensive.

Let me put this in another perspective. Going self-pub and selling for $0.99 means earning $0.33 per book. If you went with a standard NY contract, you'd get a lot more fame, build readership as fast or faster, and be paid a lot more per book. (25% net receipts on a $9.99 book is usually around $2 on average)

Think about that! If you are pricing at $0.99 to build readership, you'd earn more money by going traditional instead. How often can we make that claim anymore? If anything, I think that this is perhaps my most important point in the entire article. 

But wait, there's one last major flaw with the permanent $0.99 strategy!

Problem #4 - Undermining Your Brand
$0.99 is a sale price, a discount brand, or even a book mill. Do you want this to be your author brand? If the answer is yes, I'm going to cock my head at you in puzzlement.

Of course, if your goal is to be a discount brand, that's totally cool. Different strokes for different folks. I can respect creating a discount brand if it's being done deliberately and strategically. If you don't want to be a discount brand though, don't price at $0.99 for works you should be asking $2.99 to $5.99 for. It's as simple as that.

Fake it till you make it
Brand is a tricky beast. You have to act like what you want to be until you become it. If you want to be known for writing great books, then you have to act like your books are great. This means good production quality, a dedication to quality writing, and asking people to pay what great books are worth.

I'm sure that many starting authors worry that their books just aren't worth $4,99. First, you aren't alone. All authors are insecure about their books in some way, even really accomplished ones.

Rachel whenever I'm reading her latest book
Second, this insecurity might be true, but you can't act like it is. Yup, there's going to be some impostor syndrome here to start with. You know what though?
You'll only be a new author for a couple of books. After that first series is done and the next one started, you'll be an experienced author.
How many books will you write in your career? 20? 30? 50? It's not inconceivable! Dream big! Do you want to undermine years of later writing by creating a shaky foundation? This is what I'm talking about with all this short term vs long term stuff.

Imagine building a discount brand because you don't feel your writing is worth full price. Now imagine you've gotten better and want to charge more. It's hard to do. You'll lose a bunch of readers, get some nasty reviews, and generally be facing an uphill battle while your readership sorts itself out. The rocks won't be under your butt forever, but they might last for a couple of books at least.

To illustrate this, I'd like to trot out a bit of seldom discussed intel on Rachel's sales. So, with The Legend of Eli Monpress series, there's a pretty hefty drop in readers between the omnibus and book 4. Only about 40% of people who read the omnibus will go on to read The Spirit War. This is in stark contrast to her usual 85%+ read-through rate on all other books.

Is it quality? I'd say no, because Eli books 1,2,3 and the omnibus are all wonderfully rated at 4 to 4.6 stars.

However, the omnibus is $9.99 for 3 books while The Spirit War is $9.99 for just itself. I do believe the price cliff is the reason why more people don't finish the series. People come in for the well rated, discounted omnibus and they bail when it's time to pay $9.99 for the next part of the story.

Further to prove the point - 90% of people who read the individual Eli books, specially those who bought book 3, The Spirit Eater at $6.99, go on to read book 4, The Spirit War

So, as you can see, the price readers come into your book matrix at really matters and is a vital part of your long term strategy. Don't give up the short term for the long-term... it's um... longer!

There's essentially no advantage to pricing full length works at $0.99 except for as a sale.

And that's my point for this article. Please don't let short term pressure, impatience, or insecurity drive you to using a flawed pricing tactic. Ask a good price for you books! Price where you want to be and build your readership for the long term. 

If you don't know how to price, look at well rated books that are similar to yours (in genre but also in length). Ask on kboards or another author group as well. Do you research and keep the reals before the feels.

Thanks for reading today. If there's any topics you'd like me or Rachel to talk about here on the blog, please feel free to leave them below. We're always working hard to find information that is useful to you. You can also just hit me up on Twitter, that works too! (@TravBach) Rachel's social media links are here as well if you want to get live updates! (Twitter/Facebook/Tumblr/Google+)

Thanks again for reading, and I'll see you all next week!



Baronger said...

What about pricing the first book in a series at .99. Basically doing the Baen theme of "the first taste is free"

Facebones said...

I endorse this post 100%. While I am as guilty as anyone of scouring the free download section of the Kindle store, it is often a case of getting what you pay for. Free lowers expectations.

The only exceptions I can think of would be having the first volume in a series as free as a way to hook new readers, and even then that might not be effective.

Writers as a whole need to stop devaluing what they do. I spent a year writing and editing my book and finding a publisher. (Plug: That should be worth $5.99 on your end.

Rachel Aaron said...

@baronger Annie Bellet (@anniebellet) brought up this exact point on Twitter. Loss leading is slightly different that what we're talking about here, and is (as Annie points out) a very valid strategy. We don't do it b/c my books are too huge and too far apart (one year, in my case), but if you're a series writer publishing at a good clip and you're looking to hook people into your series, having a loss leader to get readers on board can definitely pay off long term.

@Facebones thank you!

Graeme Ing said...

What about a launch tactic of pricing at 99c for the first 3 days as a reward for your loyal readers and newsletter folks, and to frontload the Amazon algos and try to get a bunch of early reviews. Then increase it to full price after a few days?

Travis Bach said...

I perhaps didn't give the right context here on this post. There's times when 99c is a good idea. What I'm cautioning against is permanently pricing multiple books at 99c. Or pricing your very first (and only) novel at 99c.

For example, I saw someone-who-shall-remain-nameless put up book 3 in a series at 99c. That's the kind of thing that I feel is problematic.

Loss-leading, sales, temporary 99c price points and so on, these are ok and totally valid tactics.

Graeme Ing said...

Thanks for clarifying. I love reading all your data analysis posts, Travis, and Rachel's posts about writing. My fave books of yours are the Paradox series. :)

Marion Harmon said...

Speaking as a self-published author who now lives on his writing, I can say that while I mostly agree with you (all of my ebooks now sell at $7.99), I did start my career with $.99 as the price of my first book. I kept it at that price-point for three months and then started raising it until it reached its $7.99 price. Of course this was a few years ago, and I don't think the ebook market was flooded with so many self-published books then.

Catherine Vignolini said...

My agent has my first novel (sci-fi) out on submission. I'm learning a lot from you both, Rachel and Travis! This is a part of the business I've ignored in favor of writing. Thanks for sharing!!