How much should your book cost?
Your answer is critical to your book’s success and your author career.
Most authors simply price their books like the authors around them. But I want you to make informed pricing decisions to understand the why behind book pricing.
In this article, we’ll discuss the second P of the five Ps of marketing.
The Five Ps of Marketing
Your book’s price is prominently displayed wherever your book can be found, whether on a physical bookshelf or Amazon. Price says a lot about your book, but it’s easy to overlook this important marketing tool.
Some authors ask, “Shouldn’t I just price my book so it’s the cheapest option?”
Not necessarily. As Seth Godin says, “The problem with a race to the bottom is that you just might win.” But there are times when lowering your price can be a good idea. In fact, some authors make fortunes by offering free books. On the other end of the spectrum, Brandon Sanderson made millions by selling a $200 book.
With such a wide range of pricing options, you may ask, “What is the best price for my book?” but that is the wrong question.
Instead, ask, “What are the best prices for my book?” Your book doesn’t just have one price. Your book’s format and placement affect the price and the price changes over time.
Once you understand pricing strategy, you can maximize the reach of your book and the money you make from it.
In this article, you’ll learn how to think about price as a marketer. We’ll cover 14 pricing strategies authors can use to supercharge sales and profits. Knowing which one is best for you is key to your success.
Traditional and Indie Differences
Typically, the publisher controls the price of a book. Indie authors have direct control over price, while traditional authors must ask their publishers to implement a pricing strategy.
If you are traditionally published and want to make a good case for your pricing strategy, email your publisher with your plan and include a link to this episode. If you make a good case for your strategy, they will be more likely to listen and implement your plan.
There is an optimum price for your book.
According to basic economic theory, there is an optimum price for your book. As you raise the price of your book, you make more money per copy and sell fewer copies. As you lower the price of your book, you sell more copies but make less money per copy.
If you chart this relationship on a graph, it looks like a curve. It’s such a common business concept that there are cheesy stock photos that illustrate the demand curve.
In my experience, indie authors often underprice their books by $2.00 to $3.00 per copy. The optimum price is often much higher than you think, especially if you already have an established readership.
James Patterson’s ebooks sell for $14.99. Compared to that, your $9.99 ebook is a bargain. Yet, many authors think they will make more money selling at $4.99 or $2.99. But a lower price means you have to sell many more books.
The Mysterious Forces Setting Book Prices
So, who controls the price of a book? Well, it’s complicated.
Amazon Sets the Bounds for Pricing Expectations & Profitability
Amazon KDP offers a 70% royalty for ebooks priced between $2.99 and $9.99 and a 35% royalty for books priced outside that range. From a royalty perspective, your ebook’s optimum price will almost always land between $2.99 and $9.99.
The Publisher Sets the Suggested Price
While publishers can suggest prices, they can’t always mandate prices. Their pricing strategy depends on whether the book is sold under the “wholesale model,” where they have less control, or the “agency model, where they have more control.
Under the traditional wholesale model, publishers sell books to retailers at a discount, and then retailers set the price for consumers. In this model, the publisher does not control the final retail price, only the wholesale price.
Expanded distribution paper books often seem to be sold via the wholesale model. The wholesale model explains why you might see Barnes and Noble selling your paperback at a massive discount. Under the wholesale model, if they want to lose money selling your book, they can. If they want to sell your book at a premium, they can. You get paid the wholesale price regardless of how Barnes and Noble prices your book for the reader.
Under the agency model, publishers set the retail price, and retailers act as “agents” who sell the book to consumers at that price. Retailers get a commission for each sale, but the publisher controls the price.
If you are indie published, you have full control over the price of your ebook but only partial control over the price of your paper book. KDP functions more like the agency model, while expanded distribution is closer to the wholesale model.
The Reader Determines Whether the Price Fits
Amazon sets the bounds and expectations, the publisher makes pricing suggestions, and the readers determine whether the price fits the product. If a book looks too cheap or too expensive, a reader will pass on that book. The reader’s buying decision is like a vote influencing the demand curve we discussed earlier. So, knowing your Timothy is key to setting your optimum price.
Brandon Sanderson’s million-dollar idea was realizing that some of his Timothys wanted a premium option, and they were not being well-served by the options available from his publisher.
Another factor to consider is inflation because it also affects pricing. Inflation compounds exponentially. If you have 5% inflation one year and 5% the next year, the total inflation for the two years is not 10%. It’s 11% because the math compounds. The math behind inflation is the same math behind compound interest.
The inflation rate from 2019 to 2023 is 19.57%.
If you sold an ebook for $4.99 in 2019, you should be selling that same ebook for $5.97 in 2023. If you raised your price by $1.00 in the last four years, you’re not earning an extra dollar per sale. Because of inflation, you’re only earning two more pennies per sale. And if you didn’t raise your price by $1.00, you’ve taken a $0.98 pay cut on each copy you sell.
Authors who don’t understand inflation often struggle to pay the bills, especially if they follow old advice. If you started writing in 2019, you probably heard that $3.99 was the price you needed to stick with. However, because of inflation, you need to increase your price by a dollar or two just to keep pace with what you were earning back then. It’s important to make your price work for you.
Most authors follow the crowd like chickens follow each other in the coop. I don’t want you to be a chicken copying the other chickens. I want you to make informed decisions about your price.
You also need to understand why your price is different and why having a different price is okay. Make an informed pricing decision, be confident it’s the best price, and your readers, who want you to succeed, will follow you.
What’s more, if you offer your book at multiple price points, giving readers a choice in how much they pay, you’ll find readers even more eager to buy and share your books with others.
Your book is valuable, and you deserve to get paid for your hard work.
14 Pricing Strategies Authors Can Use to Supercharge Sales
A list of 14 pricing strategies sounds like a lot, but you won’t be able to use them all. Many of these strategies will be used at different stages of your book’s life cycle. This list will serve as an overview of the pricing possibilities to help you break out of the thinking that “My only option is to lower the price.” That thinking will ruin your book’s chance of reaching its widest audience.
These suggestions will help you make informed decisions and have a better conversation with your publisher. If your publisher realizes you understand what you’re talking about and are fluent in the language of business and marketing, they’ll be much more likely to listen to you.
Strategy #1: Price Anchoring
Price anchoring is a classic, fundamental price strategy.
Since all numbers are relative, consumers anchor to a price, and they compare other prices to that anchor price.
Is 500 a big number or a small number? It depends. Numbers are relative.
For example, I was having a conversation with my daughter, who just turned five years old. I’d told her, “In five minutes, it’s time for a nap.”
My daughter said, “Five isn’t very much.”
I said, “Well, I know somebody who turned five years old, and she’s a big girl.”
She replied, “Well, but it’s not a big number for minutes.”
Whether you’re measuring in minutes, years, or dollars, numbers are relative and need an anchor.
Amazon anchors its prices by default. It almost always sells books at a discount from the MSRP. When you set a price for your book, realize that Amazon will discount your suggested price, and that’s another reason to raise your MSRP. The publisher, whether that’s you or a traditional house, will want a price they can discount to make that book look like a bargain and still make money.
Strategy #2: Reverse Coupons
When you offer a reverse coupon, you announce a future price increase to create a sense of urgency so that customers will want to buy now.
A reverse coupon is like the golden rule of pricing strategies. Wouldn’t it be great if companies would alert you of upcoming price increases? If you knew gas would be more expensive tomorrow, you would fill up today.
I talk more about reverse coupons in my episode titled Why Many People Are Afraid to Buy Books (Marketing Psychology)
Through our Kickstarter campaign, I offered a reverse coupon for the Novel Marketing Conference. People who backed our Kickstarter got an exclusive discount on their ticket, which is no longer available.
However, I’m currently offering an early-bird price. It’s higher than the Kickstarter price but lower than what a ticket will cost in December. In January, you’ll be able to buy a more expensive ticket at the door, and that price acts as a high anchor.
The door price is also high because I want to motivate people to register early so I can plan. I need to know how many people will be at the conference, so I don’t want a lot of people showing up at the last minute. However, if somebody does show up at the last minute and is willing to pay a premium, we will sell them a ticket if we have any left.
Strategy #3: Discounts/Price Pulsing
Price pulsing is when you temporarily discount your book’s price to generate a spike in sales and then return it to the original price. This strategy can result in increased visibility on sales charts.
You see this strategy in action when your grocery store puts products on sale or offers coupons.
In the publishing world, we call this price pulsing. For a limited time, you reduce the price of your book and team up with companies like BookBub or Ereader News Today to help spread the word about your special discount.
You’ll typically see a spike in sales due to the discount, and that’s why we call it a pulse. Your sales will go through the roof for a short time, and then they’ll come back down. To learn more about price pulsing, listen to our episode on How to Use Price Pulsing to Supercharge Your Backlist Sales.
Strategy #4: Bundling
If you have multiple books, you can offer them at a discount when purchased together. Bundling increases sales volume as well as the value proposition for the reader. You can offer books online with an ebook bundle and in person with a special “conference bundle.”
Kickstarter campaigns often bundle the ebook, paper book, and audiobook into a $40 or $50 bundle. Check out my recent interview with Joanna Penn about bundling ebooks and creating beautiful hardback books to sell directly from your website.
Bundling plays well with anchoring. A customer will see your bundle of five books, each of which normally costs $9.99, and know that the value of the bundle is $50. Bundling allows you to offer that five-book bundle for $25, which is a 50% discount for the reader! And yet, $25 is a much larger sale for you than the $9.99 they would have paid for one ebook. Bundling shifts the anchoring.
It’s important to note that for ebook bundles on Amazon, most authors price between $2.99 and $9.99 to get the 70% royalty.
Strategy #5: Loss Leader/Permafree
Sometimes, retailers will sell a product at a loss just to get customers in the door, hoping they will buy other higher-margin items before they leave.
For example, at the grocery store, milk, bread, and eggs are often sold at a loss and placed in separate corners of the store. Customers who want milk, bread, and eggs will have to walk through most of the store to get all three, which makes it very likely that they will buy other items besides milk, bread, and eggs.
Authors can take advantage of the loss leader strategy by permanently offering the first book in their series for free (permafree). If the free book is well-written and ends on a cliffhanger, readers will happily purchase the sequel.
To learn more about permafree books, listen to our episode on The Upside and Downside of Free Books.
The permafree strategy has gone in and out of fashion, but the psychology behind it is still solid. However, it only works for books that make readers fall in love with the characters. If you haven’t crafted good characters, this strategy won’t work for you.
Permafree doesn’t work well for a standalone book. Additionally, if it takes you a long time to write books, giving one away on a permanent basis is probably not a good strategy.
Authors who can write two or three books per year benefit from the permafree strategy. They’re not risking much by making one free.
When I was a marketing director at a publishing company, we experimented with the permafree strategy and found it resulted in a net overall sales increase in certain series. By sacrificing the sales of book one, we sold more copies of books two and three than we were previously selling of all three books.
Strategy #6: Countdown Deals
Amazon’s KDP Select program offers countdown deals where the book’s price gradually increases over several days. A countdown creates a sense of urgency for potential buyers. It also leverages anchoring by anchoring the countdown price to the list price.
Additionally, when you do a countdown deal, Amazon will feature your book on a page of their website.
In my opinion, countdown deals are something to experiment with after your book has been out for at least six months. A year is better. This strategy works best for your older books.
Strategy #7 Price Skimming
With price skimming, you price your book higher when it is new, exciting, and has maximum visibility. Over time, as sales slow, you can reduce the price to attract a broader audience.
Hollywood studios use price skimming with theatrical releases. If you want to watch a new movie, you have to go to the theater, where tickets are sometimes $20.00 per person. If you want to go with a friend, that movie will cost you $40.00.
After the movie is out of theatres, you can purchase a copy for $20.00 and watch it at home with your whole family. That’s half the price. Soon after that, you can rent the movie for $5.00, and a short time later, the movie is offered for free on a streaming service like Netflix.
Price skimming works well for authors who want to charge a premium for their book. The best way to do it is to sell your book at a super-premium on Kickstarter before you offer it on Amazon.
Offering your book for a premium exclusively on Kickstarter allows your most passionate fans to support you by paying more and getting exclusive access to your book.
Authors who’ve used this strategy on Kickstarter have had great results. You’ll commonly see an average of $30 paid per customer on Kickstarter. Sometimes it’s even higher. And $30 is much more than the $5.00 or $10.00 you would get selling on Amazon.
Later, you can offer the book on Amazon for $10.00. You could start doing some price pulses or countdown deals a year after your launch.
Whatever you do, don’t discount your book right away. You need to make a statement about your book’s quality right away. If you’re not willing to put a price on your book that signals quality, no one will believe your book is quality.
Strategy #8: Price Penetration
Price penetration is the opposite of price skimming. You charge a little upfront to penetrate a new market.
Disney employed this strategy with Disney+. They started by offering a cheap monthly subscription of just $6.99 with easy password sharing and no ads. As people got hooked on the service, Disney+ raised the price to $13.99 and curtailed password sharing. In the future, the price will continue to increase. In the long term, subscription services like Disney+ and Netflix won’t be cheaper than cable.
So, how do you use penetration pricing as an author? By making the first book in a series cheaper. You don’t have to offer it for free. Just offer it for less.
You might price your series as follows:
- Book 1: $2.99
- Book 2: $3.99
- Book 3: $4.99 and so on.
Penetration pricing allows readers who don’t know you to sample your writing without risking much money. The downside of penetration pricing is that anchoring works against you. The $3.99 book seems expensive compared to the $2.99 book they just bought.
Strategy #9: Pay-What-You-Want
Platforms like Gumroad allow authors to let readers choose their prices. This strategy can be effective, especially if you have a dedicated and supportive readership. Pay-what-you-want can work particularly well for religious and nonfiction books. However, if your audience isn’t very big, you need that audience to be really fired up.
Strategy #10: Bulk Discounts
Bulk pricing allows customers to buy more copies but pay less per copy. To offer a bulk discount, you need to sell books directly from your website.
If you are traditionally published, your publisher may also offer bulk discounts. Find out what bulk discounts your publisher offers and pass that information to your big buyers.
You can offer bulk discounts to book clubs, Bible studies, or conference directors who want to purchase a copy for all their attendees.
Strategy #11: Third-Party Memberships
Kindle Unlimited, 24SYMBOLS, and Scribd offer memberships that make your book “free” to their paying members. Think of these services as Netflix for books.
For example, as an author, you can sign up for KDP Select, which will enroll your book in the Kindle Unlimited Lending Library (KU). However, enrollment in Kindle Select means your ebooks are exclusively sold on Amazon until you unenroll from the program.
Readers who pay for KU can check out your book for “free” while you get paid on a per-page-read basis. Some authors make thousands of dollars every month from page reads. Others only make pennies.
The Kindle Unlimited Fund currently divides half a billion dollars annually between their authors based on how many pages are read.
Since authors get paid per page read, KU tends to favor longer works, books in series, and genre fiction. Your short, one-off nonfiction book won’t perform well in KU, but your 12-tome series on dragon hunting may make bank.
Strategy #12: First-Party Membership or Subscription Model
Platforms like Patreon and Substack allow authors to offer their own content and get paid by their readers. Some authors give away one chapter at a time for patrons. It is like having your own membership program like Kindle Unlimited, but readers only pay for your content.
The subscription model is particularly popular in genres like LitRPG.
Nonfiction bloggers can publish blog posts on Substack that readers pay for. They can also release essays for their patrons on Patreon. I interviewed a nonfiction author who was making around $2,000 per month publishing essays related to her nonfiction books, and that was on top of what she made selling her books.
Strategy #13: Membership Discounts
If you have a membership program, you can offer member-exclusive discounts. For example, I offer patrons exclusive discounts on many courses.
Costco has built an entire company around this pricing strategy. People pay Costco for the privilege of shopping at Costco. Before you say, “That’s crazy,” ask yourself if you have a Prime membership.
Strategy #14: Luxury Pricing
With luxury pricing, you make something expensive to make it unobtainable for most people. That unattainability makes it very desirable for those who can afford it. Luxury pricing works well for certain product categories. For example, no one wants to buy a $5.00 bottle of perfume or $10.00 opera tickets.
The store Bath and Body Works decoded this strategy for the perfume industry. They realized people didn’t want to buy a $5.00 bottle of perfume, but they would buy a $5.00 bottle of lotion that’s so highly scented it might as well be perfume. They discovered they could sell perfume cheaply by calling it lotion.
How you present your product affects how customers see it.
Some authors have had incredible success with luxury pricing. Brandon Sanderson famously made this pricing strategy work by selling premium copies of his books for between $200 and $500 per copy.
Many other authors utilize luxury pricing by offering signed and numbered copies. You don’t have to price your books as high as Sanderson did to be successful with luxury pricing. Simply signing your beautiful hardback book and numbering it 1/100 makes it a unique and potentially valuable investment for readers. To learn more, check out our episode on How to Use Scarcity & Ubiquity to Make Your Book Irresistible.
Bookstagram and BookTok have greatly influenced the increased desire for beautiful hardbacks. Gen X may have been happy to buy disposable mass-market paperbacks, but Millennials and Gen Z prefer spending more on higher quality hardbacks. Even some Baby Boomers are starting to prefer hardbacks.
In a world where everything is disposable or electronic, and nothing is real, people long for substance, something more than a glossy paperback. Don’t be afraid to make a luxury version of your book.
Pricing is a Tool
Price is a valuable tool. It signals quality, rekindles interest, and sets expectations. Be flexible with your pricing and experiment with different price points to find the optimum price for your book. Realize that today’s optimum price may differ from next year’s.
Lefty Bruder, a one-armed detective, has only one mission: rescue a young girl destined to become a slave to a Mexican cartel boss. But an unseen stalker is intent on killing him before he can accomplish his mission. Assembling a team of misfits, Lefty and his crew prepare to brave the unknown and face their greatest challenge yet.