It will come as no surprise to any author who pays attention to Amazon and their pricing that they have a strong preference for ebooks priced between $2.99 and $9.99, inclusive. For books using their KDP program and priced in that range, they pay 70% royalties to authors. They pay only 35% for books priced $10.00 or more and those under $2.99.
An independent observer of the digital marketplace might well suggest that Amazon (or any electronic retailer) should earn the same amount on any ebook sold regardless of its price. They have the same infrastructure costs for all ebooks, regardless of whether they are priced at $0.99, $5.00, or $12.99. Retailers traditionally make money as a percentage markup over cost. Yet Amazon has decided to take a whopping 65% for books priced “too high” or “too low.” They do it because with their huge market share of ebooks, they can. They also do it to vex publishers and attempt to sway them to their beliefs about the book market.
Amazon not only sells books; it is a publisher with a plethora of imprints. My Ant Farm is published by one of the imprints, Kindle Press. Kindle Press is an ebook-only publisher, choosing books through the Kindle Scout nomination process. (This blog explains Kindle Scout.) Kindle Press authors range from debut to mid-list. How would Amazon choose to price these books given their contracts provide authors with 50% royalties?
Kindle Press books have been listed at $2.99, $3.49, and $3.99. The chart below demonstrates the somewhat loose relationship between price and page count. Note that sometimes Kindle Press discounts selected books to $1.99 as part of a promotion.
Kindle Press authors generally have low name recognition. I wondered how Amazon imprints price books for the bigger names. (All prices are from early September when I collected research for this blog.) I checked out three titles. Robert Dugoni had Her Final Breath in preorder. His previous book was an Amazon #1 seller. The Kindle book was priced at $5.99 (paperback was listed at $15.95, discounted to $11.90). The Good Neighbor by AJ Banner was the current Kindle #1 seller. Its ebook was priced at $4.99 and the paperback listed for $14.95, discounted to $8.26. PJ Parrish had She’s Not There in pre-release. The ebook was $4.99 and paperback was listed at $15.95, discounted to $11.99.
Given how long the books are, if these folks were Kindle Press authors, Dugoni’s and Parrish’s ebooks would sell for $3.99 and Banner for $2.99. The premium Amazon attaches for their better known authors based on this sample is $1.00-$2.00 over Kindle Press pricing.
Not so for big 5 publishers. On Amazon, Sue Grafton’s X was available in hardcover for $17.63 and $14.99 for the ebook. Sara Paretsky’s Brush Back was $14.64 for the hardcover and $13.99 for the ebook. Louise Penny’s The Nature of the Beast was $16.76 hardcover and $14.99 for the ebook. Their “premium price” over my estimated Kindle Press ebook prices was $10-$11.
What’s Happening with the Supply/Demand curve?
How did the various groups of books sell?
When it comes to the very top name authors, the high ebook prices do not seem to adversely affect sales ranking too much. Grafton’s X was ranked #12 when I wrote this sentence. [Nearly three months after the book’s release it is still #508.] Lee Child’s Make Me was #13. [Two and a half months after release it is still #179.] Louise Penny’s The Nature of the Beast was #79. [Three months after release it is #1,457.] But Paretsky’s Brush Back was “only” #1,626. [Four months after release finds it at 10,936.]
In comparison, Dugoni’s preorder for Her Final Breath was 1,388. [Two months after release it is #179.] But P.J. Parrish’s preorder of She’s Not There was 17,259. [Two and a half months after release it sits at #1,533.]
The Kindle Press authors do not sell as well. About a third have had rankings under 2,000 sometime during their book’s life. Another 20% or so have had rankings under 10,000, leaving well over half who have never cracked the 10,000 level.
The supply and demand curve for ebooks is not a single curve. Readers are willing to pay a substantial premium—$10-$11—for top best sellers. Their brands apparently justify the extra cost for readers. And clearly, the Kindle Press authors do not sell as well as at least some of their other Amazon Imprint brethren, which makes pricing differences between Amazon imprints logical.
Where do relatively unknown self-published authors fit? Based on Amazon’s apparent pricing model, I speculate that $2.99 might be a reasonable price. It’s the lowest price that still provides the author with a 70% take, yet it is still probably low enough for readers who have somehow found the book to make an impulse purchase.
Indie authors, I’m curious: at what price do you list your books, and what is your reasoning?
|How @KindlePress Chooses Kindle Book Prices by @JMJAuthor|