One of the biggest questions many authors and small press publishers seem to have about ebooks is how much they should sell them for. And, of course, if you’re someone who reads ebooks, this is obviously of interest, as well!

While there are a lot of theories and arguments, I think the bottom line – for me – is that the best price is where the book provides the best overall return. In other words, there’s a price sweet spot where the number of sales times the price (or, specifically if you’re the author, the royalty) nets the highest return. Price the book too high and you’ll make a fat royalty for each sale, but you’ll hardly sell any; price it too low, and you may sell quite a few, but you won’t make much (and, ironically, if you price too low your sales may drop off – go figure!). So somewhere in between is where you want to aim, and sometimes it takes some experimentation.

In the case of my first novel, In Her Name, I originally priced the Kindle and Mobipocket versions high (for an ebook by an unknown author) at $8.97. I got some sales, but not all that many. I experimented for a while, and determined that for this book the sweet spot seems to be $6.99, which Amazon discounts to $5.59 (and I discount it on Mobipocket to follow suit). The royalty is quite reasonable, and the sales are the best compared to the other prices I tried.

The other day, though, Kat Meyer tweeted a link to a discussion on Harper Studio that was extremely interesting. After a brief introduction, “Bob” kicked things off with the following observations:

There seems to be a common refrain in many discussions of e-books, the idea that publishers should charge next to nothing for e-books because it doesn’t cost publishers much to produce them.  This reflects a lack of understanding of a publisher’s costs.  The cost of manufacturing a book is only the final cost in an extensive process.  Whether a book is printed on paper and bound or formatted for download as an e-book, publishers still have all the costs leading up to that stage.  We still pay for the author advance, the editing, the copyediting, the proofreading, the cover and interior design, the illustrations, the sales kit, the marketing efforts, the publicity, and the staff that needs to coordinate all of the details that make books possible in these stages.  The costs are primarily in these previous stages; the difference between physical and electronic production is minimal.  In fact, the paper/printing/binding of most books costs about $2.00…so if we were to follow the actual costs in establishing pricing, a $26.00 “physical” book would translate to a $24.00 e-book…and while I agree that e-books should be priced at a greater discount to hardcovers than $2.00, we need to move the conversation beyond the idea that e-books “don’t cost publishers anything to make.” — Bob

I’m not going to parrot here everything I wrote in my own response on this thread; instead, I highly recommend that you check out the discussion – there are lots of interesting insights and commentary for both authors/publishers and readers, alike.

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