Putting a price tag on your priceless work of art
One of the key decisions to take when you come out with a book or for the matter any product is pricing. If you are selling in different mediums and in different formats, you have to come up with pricing for each of them. How do you go about it? Today I am going to share my thought process behind pricing of my book.
Let me start with the Kindle book. KDP Select gives opportunity to take 70% royalty if your price your book above $2.99 and only 35% if your price it below the said amount. So that is an obvious price point. One needs to think what is one’s objective when you are considering the price to set – whether to earn more royalty or be more widely read. Every marketer faces this problem – high margins versus more sales. Here added incentive of a bigger jump in margin if you go for $2.99. But my book was smaller than the standard book and I felt $2.99 was just too much for it. Next price point was $0.99 the minimum price for the 35%. That seemed a bit too low and other than losing margins, pricing too low devalues the book. Readers may think book is priced low because it is not worth it. So I decided to keep it a bit above the 99 cents. At the same time I did not want to go too close to $2.99 for I will feel bad that I am taking a 35% cut in my margins for giving the readers the book just a few cents cheaper. So, I priced it at $1.5.
For the e-book in India, I felt somehow 100 is a psychological barrier. So, decided to go with 99. And it is not too expensive – even a Star Bucks coffee costs that much. So, I did not want to go down to 49 price point. That seemed like devaluing the book. Also much smaller works like single stories were selling at 49. So, 99 seemed ok for 7 stories. For other market, I did not think much and just set it at a currency unit below the equivalent of $2.99.
Coming to print book, there was a cost angle – printing cost, selling platform margin and maneuverability for selling platform to offer its own discount. That set the floor price. Another factor setting the floor price was the e-book cost. For readers who are not particular about paperbacks, I would prefer them to go for e-book. Paperbacks were only for those readers, especially reviewers who would read only paperback books. So, I could not price paper back close enough to e-book for readers who would otherwise pick up the e-book to opt for the paperback instead. That also was a factor in determining the floor price. The ceiling was based on how much readers can afford and the margin I wanted to make. I definitely could not go above 200 – that would put readers off for such a small book. With that ceiling coming up, there was hardly any room for much play between the floor and the ceiling. A price of 175 was arrived at which seemed the ideal the price for me to make a bit of margin (note - I am calling it margin and not royalty. Will explain later) and not cannibalize by Kindle book sales.
When I went for KDP Print option for international markets, very similar considerations came into questions. But floor price itself was coming too high. And I did not expect much sales there. I only wanted it available there in case friends abroad asked for paperbacks. Anyways I did not expect too many of them to sell. So, margins did not matter. Therefore, I went with a wafer thin margin which would be next to nothing post taxes.
Now coming to margins versus royalty, the margins were not real my royalty as such because there is also the cost of cover design, editing and marketing and promotional initiatives. That way there was a logical way to arrive at how much margin I wanted to make to cover these costs. While I was not expecting to make big money with my first book – only to reach more readers and be more well known in reader circles, I did not want to cut margin so low that I make such huge losses that I can’t do more books post this one. I decided I was here for the long race and I cannot afford to burn out my money. So, I decided to set such a margin so as to break even if a 1000 copies sell. Beyond 1000, my real profits would start rolling in. Even those are not really profits, because the cost does not count my effort in writing the book nor my effort in getting the books printed and promotional activities. But for the first book, I let it pass. The sales figure that would cover these as well would probably be closer to 10,000. Which is when one can start seriously considering writing as an alternate career option. That is if one can churn out 3-4 such books every year.
If reading the story of how this book came to be interests you to buy the book, you can find the e-book and paperback on international markets out here. myBook.to/Unfairy_Tales (This is not a link to a shady site. This will take you to Amazon page based of your country). Paperbacks in India can be bought out here. http://www.pustakmandi.com/Carthicks-Unfairy-Tales-T-F-Carthick