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Summary:

Evidence from Kobo’s self-publishing platform, Writing Life, suggests that $1.99 is a bad price for ebooks. That’s corroborated by recent data from self-publishing site Smashwords.

What’s the right price for your self-published ebook? You’ll probably want to stay in the $2.99 to $5.99 range, new data from Kobo’s Writing Life platform suggests — and stay away from $1.99 if you want to maximize sales.

Publishers Weekly reports on Kobo’s self-publishing platform, Writing Life, which launched in June 2012. Mark Lefebvre, Kobo’s director of self-publishing and author relations, tells PW that the $1.99 price point “is dead”:

“Authors most often start at $2.99 ‘and walk the prices up,’ he said, noting, ‘A low price point may be a hook, but it’s the quality of a work that attracts readers, not the price.’ Lefebvre added that $1.99 is dead ‘not just for us, but also, it seems, on other platforms,’ pointing out that $0.99 KWL titles sell twice as many copies as those at $1.99, and that ‘$2.99 sells more than four times more.’ About 80 percent of the KWL titles that sell consistently are priced in the $2.99–$5.99 range, and he also pointed to ‘a bit of a lift in the $7.99–$9.99 price range.'”

This is corroborated by a recent report from self-publishing platform Smashwords, in which Smashwords CEO Mark Coker called the $1.99 price point “a black hole” and said to avoid it. He found that “on average, $3.99 books sold more units than $2.99 books, and more units than any other price except FREE.”

So what is the problem with $1.99? It may be that readers have come to associate it with bargain-basement quality; they may see $0.99 or free as a promotional or limited-time price and $2.99 and above as a marker of quality. I’d love to hear thoughts from self-published authors in the comments.

Photo courtesy of Shutterstock / photo.ua

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  1. That’s interesting. I’ve played around with pricing some and my YA novel seems to go better at $2.99. I wonder how closely people pay attention to things like story length when it comes to price.

    1. I usually pay attention to length in relation to the price. I’m willing to pay more for a novel length story (or even a novella), but I’ve seen too many authors charge over $4 for a short story to just buy without checking.

      I don’t associate $1.99 with bad quality, but I’m more likely to try something from an unknown author at 0.99.

  2. AvianKingdom published its books at above the $1.99, it is a quality product and we want readers that actually want literature with intent behind the stories.

  3. Interesting data. I wonder how perceptions differ for e-singles and shorter works, and if $0.99 is universally seen as the pricepoint for basement quality.

  4. Valentine North Monday, September 23, 2013

    Very confusing statements. Smashwords and KWL both talk about pricing and sales, but they forget that different books are not different kinds of fruit or vegetables.
    They might sell more copies of a book at a certain price, but that’s because of the book itself, not the price.

  5. Cendrine Marrouat Monday, September 23, 2013

    That’s an interesting article, thank you!

    I think it all boils down to how you see yourself as an author. Do you want to be labelled as a “bargainer” or “quality-oriented” creator? It’s not about selling millions of copies but rather about setting your eyes on the long-term goal and being taken seriously.

  6. It’s all about perceived value. We sold more DVDs at $15 than we did at $10, because people expected them to be higher quality at that price.

  7. Michelle Louring Tuesday, September 24, 2013

    It’s always interesting to take a look at pricing behavior.
    I know from myself that I have a hard time taking free or $0.99(unless they are short stories) books seriously, and $1.99 just seems like an odd price to me. Then again, I had planned to bundle 3 short stories, each selling seperately at $0.99, together and discount them, but if not at $1.99, then what?
    Wouldn’t want them to be swallowed by the black hole :)

    1. I agree with your thought process here, Michelle. I’ve got a short story series that I list at $0.99, which seems fair for a short story. Later, I hope to combine them all into one and offer for maybe $5.99. Still pondering.

  8. Stephen Barry Einbinder Tuesday, September 24, 2013

    Why must it be X.99? Why can’t the price be round, like $3.00, $4.00 or $5.00?

    1. The Psychology of Games blog attempts to explain this:

      http://www.psychologyofgames.com/2013/06/the-left-digit-effect-why-game-prices-end-in-99/

      Granted, that talks about video games and not ebooks, but the principle is the same.

      1. Right, but it could be virtually any product. Just look around and you’ll see the. In fact, depending on where you live, at least in the United States, you may still even see gas stations with prices listed in tenths of a cent as in $3.49 9/10. The funny thing is that I don’t believe the the United States has ever issued coinage smaller than one cent, at least not during the automobile age.

        Another phenomenon I’ve seen with newsletter publishers over the past few years is the use of “7” instead of “9” as the ending digit. For example, instead of their letter being $99 a year it’s $97, or $47 versus $49. Does anyone know if there’s some other magic to “7”.

        Lastly, as I’m typing this I randomly looked over to my other screen that’s currently displaying my email inbox. There’s a message from Amazon.com with my first name followed by “Kindle Books Starting at $1.99″. Go figure.

    2. It’s also why gas is always priced at something like 2.99 with another 99 in superscript which means you are actually pay $3.00 per gallon but the mind thinks of it as 2.99 instead. It why when you walk through the checkout line you have all those items such as candy, gum, magazines and even the toys for the kiddies for those impulse buys. It all plays on our minds to what attracts us to buy that items.

  9. No one is asking the right question. To know whether this assertion is true or not, we should be asking whether the median sales of titles priced at $1.99 are significantly different from the median sales of other titles. Average (mean) sales are significantly affected by the outliers, i.e. the best sellers. If, as I strongly suspect, the median sales are essentially the same at all the major price points, the entire basis for this article is moot.

    It worries me that so few people in the publishing business understand the danger of using simple averages for statistical analysis of sales data. Didn’t anyone in this industry take an introductory statistics course in college?

    1. I’m not sure how to get a median sales figure from one outlet, for one price point. I would be interested, could be useful.

      However, as to needing a maths qual. for a publishing career, I doubt that many entrants would concentrate on that; A specialty that gets bought in?

  10. Michael W. Perry Tuesday, September 24, 2013

    As with everything in publishing, don’t forget the powerful Amazon factor. Price a book $0.99 or $1.99 and Amazon only pays 35% royalty. Price it $2.99 and it pays 70%. Pricing an ebook at $1.99 may mean that the author is clueless about business and perhaps not that good a writer.

    I must like even numbers. For some reason $2.99 strikes me as more appealing that $3.99. My two latest books are both $2.99. If $2.99 seems too low, I’d almost rather the price be $4.99 than $3.99. Weird.

    This is a big change from how I priced print books. For them, I took the print cost and multiplied by four, making my share of the retail price about 25%. By that principle, I’m underpricing a $14.95 print book ($3.70 profit) by selling it for $2.99 ($2.09 profit). I need to almost double the sales for that smaller markup to be made back.

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