by Stephen Blake Mettee, IBPA Board Chair, founder of Quill Driver Books and The Write Thought, Inc.
At Quill Driver Books we put a lot of thought into the pricing of each title we published.
Here is an abbreviated list of things we considered:
• How big we anticipated the market for the title would be. A small, concentrated market may support a higher price because there are fewer books for those who are in this market to choose from. Large general markets may require a competitive price.
• The buyer demographics: Is this book for poor, starving writers or successful business people?
• How are competing titles priced? The last thing we wanted to do was to compete on price, but we knew the retailers were sensitive to pricing and might not stock a book they felt was overpriced.
• What the demand for the book would be. We felt we could get a couple of extra bucks for a book written by an author with a huge platform. Duh.
• What it cost us to print the book.
With all these factors—and more—to consider, we likely missed the optimum price, that is, the price that would return the largest profit to us. This price is often called the “sweet spot.”
For instance, if we priced a book so we netted $3 on each copy and sold 10,000 copies, we would make $30,000. But, if we priced it with $6 in it for us and sold 40 percent less, or 6,000 copies, we would make $36,000, a 20 percent increase in profit. Of course if the price that returned $6 each cut our sales to 3,000 copies we would make only $18,000.
Until a title sold down and we went back to press on it, we were stuck with the price we set since it was printed on the back cover.
I say, we “likely” missed the optimum price because, how could we ever know unless we published the identical book at different prices in identical parallel universes?
You can see why we gave it so much thought.
One grand thing about e-books is, since there is no printing involved, once edited, designed, typeset, and formatted, the cost of an e-book is zero. Another is that the retail price a publisher sets can vary day to day.
But, with these two advantages, what does a publisher need to be concerned about when pricing an e-book? Vook, the innovative company that melds books with video, has issued a splendid white paper that goes a long way toward answering this question. I’ll let you in on what it has to say in an upcoming blog.
Crown Publishing is rushing out a $.99 e-book on Rick Perry, the latest candidate for the Republican Presidential nomination. The book is actually one chapter from The Victory Lab a fall 2011 release by Sasha Issenberg. According to Crown, Victory will present a broad coverage of electoral strategies and the motivations behind the voting decisions people make and isn’t solely about Perry. This is doubly clever, because the $.99 book will sell on its own and act as an ad for the whole book.
Just a write thought.