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What’s the best price for a self-published ebook? $3.99, Smashwords research suggests

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One of the biggest decisions that self-published authors have to make is how to price their ebook. What’s the sweet spot? Self-publishing platform and digital bookstore Smashwords analyzed 11 months’ worth of sales — $12 million, 120,000 ebooks sold — to discern some best practices for self-published authors. The full report is here. Among the findings:

Most authors price at $2.99…

Smashwords founder and CEO Mark Coker found that authors chose to price at $2.99 “more frequently than any other price point. In last year’s survey, $.99 was a more common price point than $2.99. In this year’s survey, $2.99 was [chosen] about 60 percent more often.”

…but $3.99 sells the most copies.

Smashwords’ findings suggest that those $2.99 authors should price up by a dollar: “One surprising finding is that, on average, $3.99 books sold more units than $2.99 books, and more units than any other price except FREE. I didn’t expect this. Although the general pattern holds that lower priced books tend to sell more units than higher priced books, $3.99 was the rule-breaker. According to our Yield Graph, $3.99 earned authors total income that was 55% above the average compared to all price points.”

smashwords price points

Coker also noted that “Books priced between $.99 and $1.99 continue to underperform when we look at the book’s total earnings. $1.99 performs especially poorly. It’s a black hole. I’d avoid that price point if you can.”

Coker acknowledged that if everyone starts pricing their ebooks at $3.99, the enhanced sales effect may be lost: “Today, [the] $3.99 price point appears to be an underutilized opportunity because there are fewer titles than $2.99 and readers respond favorably to $3.99. However, if thousands of authors shift their pricing to $3.99 tomorrow, would the edge diminish? I don’t know the answer to that.”

The full survey, which also includes findings on book length and title length, is here.

Photo courtesy of Shutterstock / Borys Shevchk

6 Responses to “What’s the best price for a self-published ebook? $3.99, Smashwords research suggests”

  1. Very interesting.. I had a feeling that 2.99 and .99 were becoming a price point ghetto (& anyway, always get nervous when too many people are doing the same thing) and started playing around with various price points, with varying results. I had settled on a range of around 3.50-4.99, but 3.99 fits snugly in there.

  2. The analysis shows the relationship between price and quantity and ties that into total revenue. To understand, it’s 1 book at $10 or 10 books at $1 except the data show it’s 4.2 books at $1 and 1.2 at $10 (roughly speaking). The total revenue isn’t the same at each price point because the quantity doesn’t responded linearly.

    To understand why this is, consider this. You probably know that price and demand are inversely related. A lower price means more sales and vice-versa for a higher price. But that assumes everyone sees your book at different price points. They don’t. For the most part, there are X number people viewing your book. Most won’t be interested in it regardless of the price. Those who are interested, because of the content, are buying if it’s priced at $1 or 2 or 3. That means 0.99 doesn’t have the result you want–maximum revenues–price x quantity. The chart is showing that.

    If your book isn’t selling the price isn’t the issue. It’s because first few people get the chance to see it and those who do take a pass regardless of price. Dropping the price doesn’t magically bring in more hits because readers don’t know it’s there.

  3. Definitely interesting. I wonder why that is? $3.99 seems a bit steep to me if you’re taking a chance on an unknown self-published author. Was this meant to imply that $3.99 sells best if you have an established audience?

  4. Reblogged this on Informed Ideas and commented:
    Pricing is a huge issue for most freelance writers. This is some truly useful information to have if you’re considering publishing an ebook. Of course, it begs the question: how do these statistics compare to those from other ebook platforms like Scribd or Kindle (Amazon)? Anyone know?