Tuesday, March 8, 2011

Pricing experiment update: after seven days

On March 1, I began a double-edged pricing experiment. I raised the price of one book and lowered the price of another.

Dead Dwarves Don’t Dance
I lowered the full-length cyberpunk novel, Dead Dwarves Don’t Dance, from $2.99 to $0.99.
In order to earn as much at a cover price of 99 cents as I did at a cover price of $2.99, I have to sell six times as many books. That’s not happening yet. But, it’s only been one week.
Here’s the daily charts (click to enlarge):


February average daily sales = 6.6
March average daily sales so far = 13
February average daily royalties = $13.21
March average daily royalties so far = $4.55
So, alas, I’m only earning 34% of last month. If that holds true for all of March, this experiment will result in lost revenue of at about $240. To say the least, I’m hoping this improves.
On the other hand, I am selling nearly twice as many copies of the book. That means many more readers and hopefully more fans, who will hopefully be interested in buying my other books.

Format Your EBook for Kindle in One Hour
I raised the DIY book, Format Your Ebook for Kindle in One Hour, from $0.99 to $2.99.
Now, we’ve got a totally different story for this DIY book. I was expecting a decline in sales with the price increase, but I’ve actually seen an increase in sales!


February average daily sales = 6.7
March average daily sales so far = 7.5
February average daily royalties = $2.34
March average daily royalties so far = $15.08
Woot! I’m earning 644% more per day with the price increase. That is very nice. If this trend continues, I’ll earn $421 on this book alone this month.

What does this mean for me?
If things continue at the same rate for the rest of the month, I’ll earn a total of about $650 this month at the new prices. That’ll be about a 36% increase from last month.
I’m looking forward to seeing if these new trends persist for the rest of the month. I’ll give you another update in about a week.

What does this mean for you?
Format Your Ebook for Kindle in One Hour is a Do It Yourself instruction book. It can conceivably save a self-publishing author hundreds of dollars in formatting fees. So, $2.99 isn’t much of a risk. And, people are willing to pay more for something that can help them earn money.
It is not a genre fiction book that someone buys on impulse. So, I don’t think you can generalize the success of this price increase to novels.
But, if you have an instructional book I think you can experiment with higher prices.

20 comments:

  1. Very interesting post, Derek. What I'm doing right now as a price experiment is that I've raised the prices of most of my books on B&N to 2.99 and kept the prices at Amazon at .99 for the same books. I'll probably make a lot more money at B&N but sell more copies at Amazon--we shall see!!
    Congrats on the numbers for your formatting kindle book. I doubt that you'll sell 6 times as much for your other book to make up for the price reduction. It happened with JA Konrath because he was able to push his book into the top 100, mainly due to the blog marketing tool he used in his experiment (imo).

    Anyway...it's always a tough call and I'm doing much the same as you with my books, so I guess this is a little bit of a pot/kettle situation when I criticize your price reduction...

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  2. @Gniz: Careful, B&N's fine print says they price match ;)

    J. E. Medrick
    Shackled

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  3. Hey Derek,

    Another thing that may be in play here is the perception of value. In other words, a book at $2.99 is perceived to be "worth" more than a book at $0.99, and are therefore more likely to get it.

    However the simpler explanation may be that your sales for that book have been trending upwards anyway. Perhaps this is simply saying you've left some money on the table before, and now you're getting closer to the book's perceived value.

    Interesting experiments, in any case Derek. I'm following closely...

    ~Graham

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  4. B&N will price match. Worth noting though that if you go to B&N via Smashwords, you get 60%, not 35% on 99 cent books. The Smashwords royalty rate is flat for any price.

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  5. Hey Derek, interesting post again.

    I used your formatting book for my stuff - actually I used your posts before you put out the book, then purchased it after the fact because it was so useful to me - but I'm wondering if you have any ideas for pubit? I used Sigil to create my B&N files, but there is a glitch in the software. the new version doesn't work for me either. I can no longer get it to work and would like to reload my pubit files. Any decent alternatives that you know of?

    Also, I'm just starting an everyday feature on my blog that could be fun for authors looking for an easy way to promote their books. A "Bookstore Challenge."

    Check it out...

    ­ Click Me

    or here if that link doesn't work.

    http://stephentharper.blogspot.com/

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  6. Derek,

    Imagine what your sales would be if you made a book on how to format for B&N!! (Can you tell I REALLY want you to do one?) ;)

    I know B&N is a more complicated process. I don't mind, just charge me more for the book!

    Chu-ching! I can hear your cash rolling in now!

    Angeline Kace

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  7. Cool, Derek! You're the first to get the ball rolling. And a very compelling paragraph that is, too.

    What do you think? I'll do it every day for at least a month. I'm tweeting and posting about it and such. If it catches on it could be fun.

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  8. Stephen, I think it's a great idea to help promote! I'll post about it later this week and see if we can get you some more participants.

    Only thing is, I think daily might be two frequently. Maybe once or twice a week?

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  9. This comment has been removed by the author.

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  10. Hmm. Do you think that daily discourages participation? I was thinking the opposite, that the more posts I can promote via twitter, goodreads, etc... the more people it can attract to post and reads. I'd love to be able to attract book-bloggers who aren't necessarily authors to it. Also, I like how easy it is to participate. No emailing files - just cut and paste. Or type it in, I guess, if you it's not an original file.

    Well, anyway, I just started doing it yesterday as a Twitter campaign. The plan is to tweet a paragraph a day for 30 days. And I post them on the blog, so I'm committed to follow through with that idea. Maybe after that, if it's still working, I'll slow it down.

    What do you think? And while I'm asking... what do you think of all that black on my blog? Cool or distracting?

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  11. Angeline, I have a Format Your Ebook for Nook in Seventeen Hours ;) planned. Unfortunately, the process is sooo complicated and annoying, that I'm not looking forward to writing a book on it. However, I have 3 books that I need to publish for Nook, so I probably will put out the DIY book. Most likely in April. I will charge more for it, probably $4.99 because of how annoying it is.
    Would you like to a beta tester on the book?

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  12. Well, I know that I don't have time to participate every day. I just think that once or twice a week would give people time to add their paragraphs and read the others. If there is a new one every day, I wouldn't have time to read everyone's submissions.
    Caveat: I am not a Tweetophile, so if the main purpose is Tweeting, then please disregard my comment.
    The black does not bother me.

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  13. Derek, Heck yes, I want to be a beta tester for it! I will even buy it when you publish it too! Is your book going to tell us how to add chapter links & add pictures?

    Dude, $4.99 a book is sooo cheap for the info you are providing. I found a guy that will format to ePub, but it will be $150 to START. Then,I found a lady that has an eBook out on formatting for ePub and she is charging $20 for the eBook. I really think you could get away with $9.99 or more. Just sayin' people WILL buy the book. What other choices do they have? Don't sell yourself short.

    Angeline Kace

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  14. Angeline, okay, you convinced me. $9.99 it is. ;)

    I will put you down as a beta tester. Thanks!

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  15. Yes, the book will include instructions for chapter links and pictures.

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  16. I am so glad that you are writing this book!!

    I hate buying indie books from B&N because I can't switch between devices and easily find my spot. Kindle sinks, so I can go from computer, to phone, to another computer and start from the last spot I read. B&N doesn't have this feature, so when I switch devices, I have to scroll from the very beginning because indies NEVER put the darn Table of Contents in. With that, I could at least start from the beginning of the chapter that I know I was on.

    Glad my cries of "Raise your prices, Raise your prices" has finally gotten through ;)

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  17. Opps! not "sinks" but "syncs" lol

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  18. Interesting data.

    Maybe the $.99 is a good price point for someone that's brand-spanking new. A reader is more likely to take a risk on a newbie for a mere 99-cents.

    But as word spreads, more reviews come in, marketing, etc., the $2.99 price point makes more sense.

    Don't want to leave money on the table.

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  19. Interesting again seeing the comments about Nook. I uploaded the exact same Word doc to Kindle and to PubIt and it looks fine. I have no illustrations, and it's a novel so no complex navigation files are needed, and that may be part of it. But I know people with similar books who seem to have problems. I just don't know why. I've been telling everyone to use OpenOffice instead of Word for final formatting, because most of the ppl who have described problems seem to be using Word.

    At this point it takes me 1-2 hours to format and upload to Smashwords, Kindle and PubIt.

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