Monday, 7 November 2016

Indie eBook Pricing

By Narelle Atkins

The pricing of eBooks is a popular conversation topic among indie authors. A big advantage of independent publishing is the author has control of the price of their print and ebooks. Indie authors set the price for their eBooks, and can adjust the price at any time.

Print Book vs. eBook Pricing

The prices of print books tend to be similar, irrespective of whether the book is traditionally published or independently published. There are costs of production for print books that must be factored into the selling price. Retailers will mark up the price of the print books they sell.

In contrast, there are fewer costs to factor in when determining the price of eBooks. There are fixed costs in terms of book formatting, cover design, editing, etc. The per unit cost of selling an eBook is smaller than the per unit cost of selling a print book.

Amazon Kindle Direct Publishing (KDP) Pricing Model

Indie authors who sell their eBooks on Amazon via KDP can select the price they charge for their eBooks. KDP currently offer a 70% royalty for eBooks priced $2.99-$9.99 and a 35% royalty on eBooks priced below $2.99.

A Kindle eBook priced at $2.99 will earn six times the royalty of a Kindle eBook priced at $0.99.

Supply and Demand

The housing market is a good example of how the economic principles of supply and demand influence price.

Demand is greater than Supply

The current Sydney housing market is an example of demand exceeding supply. The price of houses in Sydney has risen in recent years due to demand from buyers being significantly larger than the supply of houses for sale.

Supply is greater than Demand

The US housing market after the Global Financial Crisis is an example of supply exceeding demand. The supply of houses for sale was larger than the demand for houses by buyers, leading to falling house prices.

The are many factors at play in the housing market that influence the supply and demand for housing. These factors influence the price that buyers are willing to pay.

Supply and Demand factors for eBooks

The supply and demand of eBooks will influence the price of eBooks.

We now have an almost unlimited supply of eBooks available for sale. There are no barriers to entry to the eBook publishing market. Anyone can publish an eBook direct with KDP (Amazon Kindle), iBooks, Nook, Kobo, and the other eBook retailers, or they can use a distributor to sell to the various sales channels eg. Draft2Digital and Smashwords.

The book selling statistics, for both print and eBooks, consistently show that the demand for books isn’t falling. The growth in the demand for eBooks isn’t keeping pace with the massive increase in the supply of eBooks that we’ve seen in recent years.


Discoverability is a buzz word in publishing circles. How can readers find your eBook among the millions of titles available for sale?

One way to improve visibility is to discount the price of the eBook and purchase paid advertising eg. Bookbub ads that will reach your target audience of readers. Placing an eBook in a competitively priced multi-author indie boxed set may also help increase visibility. I discussed marketing indie boxed sets in my post last month.

According to the law of supply and demand, the demand for a product should rise when the price is lowered. This means that the more competitively priced eBooks at $0.99 will sell more copies than eBooks priced at $9.99.

Certain genres eg. romance have a larger target audience and a higher demand for ebooks by readers. These popular genres will attract authors who follow market trends, which increases the overall supply of eBooks in the popular genres to meet the perceived demand.

Willingness to pay

Willingness to pay is a big factor in the demand for eBooks. How much are readers willing to pay for their eBooks?

Readers are willing to pay more for print books than eBooks

This is a logical and rational decision made by readers. A reader owns the print book, can on-sell the print book and can share the print book with their friends and family. An eBook is purchased under a licensing arrangement. This usually means the eBook can’t be shared or on-sold.

Print books have an intrinsic value because they’re a physical product. It’s harder for a reader to ‘steal’ a print book from a physical store than it is for a reader to ‘steal/pirate’ an eBook online. The value our society, in general, places on books, music, film, photography and art that is sold and distributed online is an area of concern for artists and creators.

Connecting with your target audience of readers

If readers love your writing, and trust your brand, they will be more willing to pay a competitive price for your eBooks. If you’re an unknown indie author in a market where your target audience have Kindle, iBooks, Kobo and Nook accounts full of unread titles, why would they take a chance on your debut eBook priced at $4.99? 

That’s why marketing is important. Word of mouth marketing (where readers tell their friends about the books they love) sells books.

Loss leader eBooks

A loss leader is a product that’s sold at a loss (below cost price) to attract customers to sample and buy from a specific product range. If an indie author has several eBooks for sale, they can select a title as their loss leader eg. Book 1 in a series. A loss leader can be permanently or temporarily priced at $0.99 or available for free to entice readers to sample the author’s writing. Low priced multi-author boxed sets can also work well as loss leaders.

Indie authors teach their readers how to buy their books

If an indie author releases 3 ebooks within a year, and chooses to make every ebook free during the first 90 days after the release date, what is the author communicating to the reader?

This pattern of pricing will teach the reader to wait and not purchase book 4 on pre-order or when it releases. The reader will assume that they’ll probably have an opportunity to download book 4 for free within 90 days of the release date.

Indie eBook pricing strategy

Indie authors can experiment with different pricing strategies until they find a strategy that works for their books. Each book is unique and there’s no ‘one size fits all’ solution to how indie authors determine the price of their eBooks.

A Question for indie authors: How do you select the price of your eBooks? Are there any pricing strategies that have worked well for your eBooks?

A Question for everyone: How much are you prepared to pay for eBooks? Are there reasons that explain why you’re willing to pay more for certain eBooks?

I’d love to hear your thoughts and experiences.

This post is being shared on the Australasian Christian Writers blog and the Christian Writers Downunder blog.

If you’re looking to connect with writing groups online, you can join the Australasian Christian Writers Facebook Group and the Christian Writers Downunder Facebook Group.

Omega Writers Inc. provides helpful resources and membership benefits for writers who live in the Australasian region.

A fun loving Aussie girl at heart, Narelle Atkins was born and raised on the beautiful northern beaches in Sydney, Australia. She has settled in Canberra with her husband and children. A lifelong romance reader, she found the perfect genre to write when she discovered inspirational romance. Narelle's contemporary stories of faith and romance are set in Australia. 

Her latest novella release, Seaside Christmas, is available in An Aussie Summer Christmas boxed set from Amazon for 99 cents. 

Twitter: @NarelleAtkins


  1. Great post Narelle and very helpful. I can see we have a major problem in that the supply is way more than the demand for eBooks. I find it encouraging though that print books haven't gone out of fashion as was predicted some years ago. Yay! :) However, it is a problem for Indie authors isn't it? Thank you for a well presented post which will be very helpful to all Indie authors.

    1. Hi Anusha, Yes, the massive oversupply is distorting the market price for eBooks. The eBook oversupply means that indie authors and publishers can't manipulate price by deep discounting to make big gains in market share. It's the reason why marketing is very important.

      In other industries when there's a massive oversupply of product and profit margins are squeezed, many of the producers are forced to leave the industry and find an alternative product to sell that's profitable.

      We haven't seen a mass exodus of authors who have quit writing, which is a consequence of profit not being the overriding goal for most authors. The traditional publishing model for print books created barriers to entry that moderated the supply of books in the market (stores).

      I think print books are here to stay, and readers understand the value in owning print books.

  2. Great post, Narelle. Thanks for the break-down of different points to consider. You make some really valid points about supply and demand, perceptions of value, and how marketing strategies can condition our readers to get things for free (or bargain basement prices).

    I agree that e-books cost less to produce than print books - though as you say "There are fixed costs in terms of book formatting, cover design, editing, etc." There is one 'cost' that often seems to be left out of the equation - and that is the time, skill, research etc that the writer (creator) brings to produce the book. And while costs are less - it's takes a huge number of sales at 30 cents (or even $1-2) per book to recoup all the outlays (for cover design, editing, formatting), let alone the author's time. It's a bit of a catch-22 - the need to discount to attract readers, the practice of discounting conditioning readers to expect to pay less than a cup of coffee to get a book (which they can still go back and re-read & can lend to friends and family).

    I don't have any answers and can see the value of lead-losers & a well thought out strategy - I'm wondering if having 'sale periods' when the book is reduced or free (and not in a predictable pattern) may keep the balance between valuing our work and attracting the attention of readers?

    1. Hi Jeanette, It's hard to know the answers when you consider there are millions of indie authors and publishers playing in the publishing pond.

      One thing we need to remember is there are also authors willing to pay thousands of dollars to vanity presses to publish their book (which is irrational behaviour by authors, imho) and taking big financial losses for the chance to hold a book with their name on it in their hand and maybe sell a handful of copies to family and friends.

      Since profit often isn't the main driver behind an author's decision to publish their book, the oversupply of ebooks is unlikely to change.

      How do we convince society, in general, to value the arts? If artists (authors) don't value the time and effort they invest in their writing (by choosing to vanity publishing, for example), how can they expect anyone else to value their art enough to choose to pay to read it?

    2. Hi Narelle - yes, great point that profit is usually not the main driver for author's decision to publish (and I think that's a good thing) - though the reality is that authors still need to eat & pay the rent or mortgage - so unless they are being subsidised in some other way (the day job, a pension, a grant) their capacity to write is significantly curtailed. As Paul says 'a worker is worthy of his/her wages' 1 Tim 5:18

      Also good point about vanity publishing - though I'm not sure that the glut of e-books is just about vanity publishing (after all, often the author prepared to pay big money to have a book in their hands is more interested in a print book than an ebook). I can't help but think that past marketing strategies of dropping prices for ebooks and perma-free have conditioned readers to expect to get ebook for free or less than a dollar. After all, putting 99c on a novel that may have taken years to write - and certainly several months - is devaluing art just as much as the vanity author (who is probably locked in to selling their books at inflated prices).

    3. I take your point about supply and demand - though On reflection - I wonder if one of the issues is that, because most new and emerging authors - and even established authors - don't depend on their book earnings as their primary income, they can and consistently do sell books below cost (once the author's time and skill & the typical number of books sold is factored in ) - and than in turn conditions the readers to expect e-books to be dirt cheap (basically below the real cost). In most other industries, if you consistently sell below actual costs you go out of business. I'm just wondering, if as an Indie author it's good to have reasonable prices which one can discount for specific campaigns - though I can see the value of having the first book in the series at discount or permafree to lead readers to the others & there is always the huge issue of discoverability. No easy answers.

    4. I agree, the glut of ebooks is independent of vanity publishing. The vanity presses tend to target authors who want print books. Indie publishing has been helpful in providing authors with an alternative and viable route to publication that can earn them a decent return on investment.

      What vanity publishing does do is devalue the creation of literature. The author is intentionally choosing a publication path that is unlikely to reward the author with royalties for the time and effort they've invested in their book.

      Have we conditioned readers to expect cheap and/or free eBooks? Print books have traditionally been borrowed in large quantities by library users. Secondhand print books are on-sold, and the author/publisher doesn't earn money from the sale of used books. I think some of the library market of readers have relocated to the eBook market. Borrowings of print books in my local library have fallen and the stock of physical books on the shelves is smaller.

      There have always been readers who, for various reasons, have not purchased brand new print books. The big question is how much are the print buyers who now buy eBooks prepared to pay?

      If an author can make volume sales on a 99c book, they may earn more than if the book was priced at $2.99 or higher. 99c boxed sets in popular genres can be lucrative due to the volume sales and KU page reads.

      An author/publisher will set a price to maximise their profit. Permafree can work well if you have at least half a dozen other books for sale. Each genre tends to have pricing 'sweet spots' and the top 100 paid lists will give you an idea of the price point.

      Yes, I agree, pricing so you have room to discount is important. It's important to remember with KDP that the earnings from 1 sale at $2.99 is the equivalent of 6 sales at $0.99. I price my novellas at $0.99 because they're 1) shorter reads and 2) have been available for sale in a 99c boxed set. When I indie publish my Heartsong backlist (hopefully before the end of November) you'll see my pricing strategy for the six books and how that fits in with the novellas I currently have for sale.

    5. Jeanette wrote:
      "On reflection - I wonder if one of the issues is that, because most new and emerging authors - and even established authors - don't depend on their book earnings as their primary income, they can and consistently do sell books below cost (once the author's time and skill & the typical number of books sold is factored in ) - and than in turn conditions the readers to expect e-books to be dirt cheap (basically below the real cost)."

      Jeanette, I sometimes wonder if authors think about the time they actually spend on their writing in the same way they count the hours they work in another type of job? I don't depend on book earnings as my primary income, but I strongly believe in the principle of workers being rewarded financially for their work, including work in the arts. If we want the best writers producing books (and not just writers who can support themselves via other means) then they need to earn a reasonable return on their investment in writing their books.

      Indie authors are effectively running a small business. They will struggle at the start to make a good profit because they have to pay upfront costs to publish. Traditionally published authors who are paid an advance have more certainty over their income. A problem in recent years is that advances have been falling in value while the cost of living continues to rise each year.

    6. All good points :) I've priced my novella & short stories lower - that makes a lot of sense. Could be that many avid readers have moved to low-cost ebooks rather than using libraries. (In Australia at least, libraries still pay authors for books lent & you can now borrow e-books). And totally agree that being an Indie author is running a small business though for many it can be more a hobby. Perhaps too there is a feeling among Christian authors that approaching writing as a business (instead of a calling) is somehow wrong. I tend to think that business and calling can co-exist - and, while God gives the increase and we do need to trust him, that being professional about our writing hopefully helps its reach. Paul after all used Roman roads and transport systems, synagogues and Godfearers to spread to the gospel - in other words he didn't just sit and wait, he had a strategy which God blessed.

    7. Appreciate your post, Narelle - lots of things to think about :)

  3. Hi Narelle,
    Thanks for this. It's interesting to read about the economic principles behind the pricing. Some good discussion topics in the comments too.

    1. Thanks, Paula. I'm glad you've found my post helpful.