Ebook Pricing | Periscope Depth

From the Blog

May

no two days are alike, except the first and fifteenth pretty much

Posted by Perich at 7:00 am

I fight the temptation to turn this into one of those writer blogs that’s about nothing but the numbers. But this is an interesting enough development that it bears recording.

So: on April 30th, I made Too Close to Miss available on Amazon for free. It had been moving fewer than a dozen copies per month over the last couple months (B&N, still killing it), so I wouldn’t be losing much money by giving up sales. The shift from $2.99 to $0.00 wouldn’t take effect for a few days^*, since I was taking advantage of Amazon’s price-match guarantee rather than their KDP Select program. So I lowered the price, checked in a few days later to see if it had taken effect (it hadn’t), and promptly forgot about it.

On May 7th, I saw that Too Close to Miss was finally at $0.00 on Amazon – the price-matching algorithms had caught up. I also saw that, through no work on my part, it had moved ten thousand free copies.

Fast forward a week. As of last night, Too Close to Miss has moved 60,000 free copies. It’s the #1 free ebook in the “Women Sleuths” category and, as of Sunday, was the #2 free ebook on Amazon overall.

When you get 60,000 of anything, you need to address it somehow. So let’s talk about the meaning of “free.”

I’ve been blogging for over ten years and I’ve never written something that 60,000 people have read. Even the occasional Overthinking It article of mine that found its way to the IMDb front page (and was fraught with errors) couldn’t match those numbers. And that’s free content too! So it takes more than just a $0.00 price tag – it takes a presence in front of an interested audience.

If I showed up in Times Square with 60,000 paperbacks, I couldn’t give them away in a week. And even if I did, almost all of them would end up in the garbage. The 60K copies of TCTM that have been downloaded in the last week all went to people who wanted something to read. A significant portion of them may have deleted it after the first page. But I guarantee I had a better success rate at connecting to readers with Amazon than I would have via any other means.

This is with practically no publicity effort on my part. I let my friends and the Overthinking It twitter feed know. But I do not have 60,000 friends, and OTI does not have 60,000 regular readers.

Then how did 60,000 people know this book was free all of a sudden? Amazon has created an audience expectation that plenty of Kindle books will be available for free at any one time. Sites and subcultures, like Kindle Nation Daily and Pixel of Ink, have sprung up around this notion: automatically and frequently updating subscribers on which ebooks are available for free that day. So there are people who will scoop every free ebook onto their Kindle like the lightning round of Supermarket Sweep. Given that, I’m not opening any champagne bottles yet.

And yet, presuming 1% of those 60,000 read the book and like it enough that they want to read more, that’s 600 new fans. All at a cost of the $20 to $30 that I lost in Amazon sales for May.

Final note: I would have been happy to end the experiment at 25K free copies. But, since this is a roundabout process (change the price at Smashwords, wait for it to get pushed to retailers, wait for the retailers to notice, wait for Amazon to notice the other retailers), it’s not fully under my control. Thankfully I’m not relying on this for significant income. And it’s not costing me or anyone else anything, so I’m left with this odd, inexplicable embarrassment as free copies keep pouring out the door.

Of course, the real test will be how many copies it moves once I start charging money for it again – or how many copies the next book in the series sells. Which should be any day now …

_________________
* Briefly: Amazon will not be undersold on an ebook if they can help it. If Amazon finds the same ebook at a lower price via another retailer, they will lower their price to match – all the way to zero if need be.

Feb

working too hard can give you a heart attack

Posted by Perich at 9:47 am

Speaking of sales numbers, here’s an update on what I’ve moved for Too Close to Miss in January.

Amazon: 37^*
B&N: 148
iTunes: Unknown at this point

I expected sales to drop when I raised the price. My hypothesis (or rather my hope) was that raising the price 4X would result in less than a 4X drop in sales. In the case of B&N, I saw almost exactly a 4X drop; with Amazon, I saw more than that. So demand for ebooks by debut authors is predictably elastic! Useful data.

As to why sales dropped so much, I have a few theories:

(1) A natural drop-off from the initial surge. The day I posted the announcement, I saw an immense number of purchases. More than twenty friends of mine shared the post on Facebook. That sort of momentum couldn’t be sustained forever.

(2) I’ve also eased up on the self-promotion this month, not out of any consideration for your feelings but due to being busy. I also want to make sure I’m finding effective means of promotion, which has taken some research and planning.

(3) Pricing myself out of the market. Okay, that’s a slight exaggeration: $3.99 is not too much to pay for an ebook (and at such quality!). But the data I referenced on Tuesday suggests that the plurality of ebooks on Amazon are priced between $2 and $0. That’s where all the action is. B&N books average higher, so I’m not costing myself as many sales there.

The plan for now is to keep the price at $3.99. I didn’t hit the 1000 copies total this month (I rather ambitiously called that shot two weeks ago; oops), but at this rate I’ll easy make that in February. The plan for now is to use social media to promote word of mouth and to focus on the next Mara Cunningham novel, which is roaring around the curve as you read this.

If you haven’t checked out Too Close to Miss, my neo-noir Boston crime thriller, you can find it on Amazon, Barnes & Noble or iTunes for only $3.99.

If you’ve already read it, please let people know what you thought – either with a review on your site of choice or by sharing the good tidings on Twitter or Facebook.

_______________
* Technically 38, less one refund. And Kindle credits the refund at $0.99, meaning this was before I jacked the price. So somebody bought my book, read enough of it to decide it wasn’t for them, and said, “I want my ninety-nine cents back.” I have flown too close to the sun.

Jan

I ran contraband that they sponsored; before this rhyming stuff I was in concert

Posted by Perich at 10:25 am

With the surge in e-readers and tablets, as well as new programs like KDP Select, there’s been a huge churn of stories on ebook pricing. Here are a couple of recent links:

First, via The Kill Zone, a link to a Booklr survey of the top 100 Kindle Books vs. the top 100 Nook titles between January 12th-19th. 35% of the top Kindle titles were less than $2 or free; none of the Nook titles were. At the other end, 40% of Nook’s top 100 were $10 or more; only 27% of the Kindle’s were.

Second, via Forbes, an EbookFriendly report based on Amazon data shows that the average price for a self-published ebook in 2011 was $1.40. The average price for Amazon’s top 100 eBooks was $8.26.

(This was for all of 2011. The Booklr data above, for one week in 2012, gives an average price for the top Kindle 100 of $6.48. So already the KDP Select strategy has worked at lowering ebook prices)

Finally, my man Ben Snitkoff linked me to a blog post by David Kazzie on how KDP Select shot his debut novel, The Jackpot, to the #1 spot for Kindle legal thrillers. He has a few theories as to why the free promotion helped:

Also, I had so many free downloads, the book began to appear in other books’ “Customer Also Bought” pages. Amazon doesn’t seem to care if these books mix together on the Also-Bought lists, so many more people were seeing the book once it switched back to Paid status, even though all its prior traffic was due to free downloads.

I like this theory, partly because it jives with my own successes on the Nook platform. The more people download your book, the more your book gets paired up with other titles by recommendation algorithms. If it hits some lucky sector, sales can suddenly take off.

So what’s Amazon up to?

I love every chance I get to chat with my CEO for a few minutes, because he has amazing insight when it comes to online marketing and media^*. Many months ago, I was sitting with him at a company lunch while he was holding court to our Directors of Business Development and of Revenue about Google’s apparent product strategy. “Make a good enough product,” he said, “and give it away for free. Sure, Google Docs isn’t as feature-rich as MS Office, but it doesn’t need to be in order to exert price pressure.”

It appears that Amazon is following a similar strategy. They’re a big enough player that they can throw a lot of weight behind a particular price point. If their goal is to make life harder for legacy publishers, this makes sense as a tactic. Yes, Amazon would be collecting more margin if the average ebook price were still $8.26, not $6.48. But Amazon can afford to lose a little margin because they’re getting money elsewhere (people buying TVs or groceries or sweaters online). Random House isn’t.

This is purely speculation, of course. But it’s a story that makes sense to me.

_______________
* And I’m not just saying that because he’s my boss. If you know me in real life, you’ll know that I never compliment someone’s intelligence unless I really mean it. This has less to do with my integrity and more to do with my overweening conceit.

Jan

saving his pennies for Sunday

Posted by Perich at 7:00 am

It’s been a hell of a first month, hasn’t it?¹

I don’t want this to turn into an indie writing blog focused solely on the numbers. I see a lot of those. While big sales are good, there are more important considerations, like growing the craft, developing a network of supportive readers and fellow authors, establishing benchmarks for quality, and so forth.

But: I’m new to the indie publishing process. I’m learning. And I invited all of you to learn with me. This means ripping open the numbers and letting strangers peck at them.

In the first month, I have 755 sales attributed to Too Close to Miss. This is across Amazon, Barnes & Noble and the various Smashwords platforms. It doesn’t include iTunes sales figures, which I only get to see quarterly, so for all I know I’ve sold more. But 755 is what I know I’ve done.

Some observations:

To the best of my knowledge, 755 units is a phenomenal month for an independent, debut, no-name author. I’m very proud of it. I’d be more proud if it felt real; this is still some sort of crazy dream.
Of those, 148 came in the first full week (Dec 2nd through 10th), 126 in the second week (Dec 11th through 17th), 333 in the third week (Dec 18th through 24th) (more on that odd surge tomorrow) and 169 in the final week (Dec 25th through 31st). So it seems like 100 / week is a good minimum to hope for.
This was at a price of $0.99 across all platforms. Yesterday, as threatened, I raised the price to $3.99². My seat-of-the-pants guess is that multiplying the price by 4X will reduce sales volume by 4X. Of course, the royalty structure on Amazon and B&N means I’ll still be making more money, even if this is the case. And maybe demand is more inelastic than I suspect: maybe I’ll only lose half my sales. Or maybe they’ll shrink to 10 books a week. A spectrum of possibilities awaits!

________________
1. Life tip: the trick to making time last longer is to fill your days with new and exciting things. Since December had a book launch, a cycle of marketing and promotion, Christmas and New Year’s Eve in it, it feels like I’ve packed ten weeks into the last four. At this rate, I will live forever, or at least feel that way.

2. However, since iTunes takes longer to update its prices and since Amazon guarantees a price match on its ebooks, it’s still available (as of this writing) for $0.99 on both those platforms. Object lesson: plan your price changes carefully and stagger the execution.

Dec

you’ve been so kind and generous; I don’t know how you keep on giving

Posted by Perich at 7:00 am

Three bullets:

First, the number of people who downloaded Too Close to Miss as their first purchase for their Kindle or Nook is overwhelming. Thank you all. The near-total market penetration amongst my friends tells me I need to get my marketing game together, because I’m running out of friends with e-readers.
More on this later, but a quick observation: as of today, my sales on Barnes & Noble have tripled my sales on Amazon. This is so far outside my expectations of how the various ebook platforms would work that I’m treating it as I would a hundred-dollar bill found on the bottom of my closet. I’ll have a lengthier post examining how and why this might have happened come the new year, but for now: thank you Nook users!
The people who bother to read this blog every day (and thank you!) are the closest thing to a mailing list I have right now, so you get to hear it first: I’m jacking up the price of Too Close to Miss on January 1st. I don’t know to what yet, but at least to the magical $2.99 price point, if not higher. I think I’ve plumbed the network of supportive friends and curious strangers about as deep as I can, which is what the $0.99 come-on was meant to do. But to achieve my dream of being a self-supporting writer, I need to (someday) earn a decent amount of revenue per sale. I don’t expect to start earning that total next month, or even next year. But I need to see how much sales will drop – if at all – as the price goes up. I need data more than I need units moving off the virtual shelf.

So if you’ve bought Too Close to Miss already and enjoyed it, please let your friends know that they can only get it this cheap for 4 more days. Send them to Amazon or Barnes & Noble or iTunes. You’ll position yourself as a distinguished connoisseur, that savvy critic who can point out ebook gems in the crowded turf. “I bought his first one at just under a dollar,” you’ll say, gesturing for the waiter to refill your Chateau d’Yquem, “and it’s held its value remarkably well.”

Consume it? Don't be absurd. It's an investment!