Sunday, May 15, 2011

Pricing experiment update: raised the price back up to $2.99

Last Monday I raised the price of Dead Dwarves Don’t Dance back up to $2.99.
I had lowered it from $2.99 to 99 cents back on March 1st, and it inched its way from about 9 sales a day to a record 125 units sold on April 25th.
Before I lowered the price, I was making up to about $18 per day in royalties. After lowering the price to 99 cents, royalties plummeted to $2.45/day. But my per day royalty eventually reached $43.75 on April 25th.
Then, on May 9th I raised the price of Dead Dwarves Don’t Dance back up to $2.99. My royalties went through the roof. Since May 9th, I’ve been averaging $100/day in royalties on this one book alone!
Here are the charts so you can see for yourself:

Did I make more money than if I had kept the price at $2.99? Let’s figure that out.
In January and February my royalties increased by about 50% more than the previous months. If we assume that trend had continued in March and April, I would have made about $550 in March and $825 in April and $620 in the first two weeks of May. That means I would have made a total of about $1995 in that time period if I had never lowered my price.
$1994 = Estimated March 1st through May 15th royalties if I had never raised my price.
$1966 = Actual royalties earned, March 1st through May 15th, after lowering price between Mar 1 and May 8.
Wow! That’s pretty darn close. I’ll be real interested to see if I can beat the estimated amount by the end of May. I’ll create a nifty hypothetical versus actual chart at the end of the month to compare.
What these estimates don’t include is the increased sales for my other book: Dead Dwarves, Dirty Deeds. That book rode the coattails of the other book, seeing a bump in sales even though the price stayed the same.  It’s a bit harder to estimate the difference on this one because of its greater sales fluctuations month over month. But, I think I probably made an additional $150 on Dead Dwarves, Dirty Deeds because I lowered the price of Dead Dwarves Don’t Dance.
Was the price decrease a good idea?
If we only look at total royalties earned, it looks like it’s about a wash. I would have earned about the same if I had never lowered my price. However, if my sales continue to top $100/day, then I’ll definitely be earning a lot more. So I’m crossing my fingers.
What’s obvious is that price decreases become an even more powerful tool for every other book you are selling. If I had a few more Dead Dwarves available during the time when I dropped my price on one, I could have sold a lot more books.
What this means for you
Lowering your price seems to be a great way to eventually increase royalties. Yes, you’ll lose money for the short term, but if my numbers hold up, it looks like you’ll be able to recoup those loses within a couple weeks once you raise your price again.

Other reports on the pricing experiment:

12 comments:

  1. Good to know. Thanks again for scouting ahead.

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  2. 125/day... I am speechless! That's so incredible!

    My single highest day of sales on a single title has been 3... and my highest across all titles again 3!

    You're becoming a paragon, Derek! I hear your name mentioned in some of the most unlikely places anymore :) Keep up the great work and congratulations! You're headed for full time authorship ;)

    YA: Cheat, Liar
    Adult: Shackled

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  3. Derek: I've been watching your experiment and cheering you on. Great job! Let me add my perspective as well, as I've had a very weird ride. My book The Summoner did very well out of the gate at 2.99, and for months it stayed in the Top 100 of my categories. It did well at BN, also. Then, inexplicably, when everyone else reports that sales build over time, my book started to drop, and then peter to almost nothing. I lowered the price to .99 cents and sales shot back up and surpassed the earlier sales. The moral? I have no idea, except that .99 can help you get back in the game.

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  4. Great post Derek! As always ;)

    This has been really interesting for me to watch. I have had a hard time trying to figure out where I am going to price my book, but I think you explained it perfectly for me, "Yes, you’ll lose money for the short term, but if my numbers hold up, it looks like you’ll be able to recoup those loses within a couple weeks once you raise your price again."

    Thanks!
    Angeline Kace

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  5. I included your Kindle format book to a free DIY Guide I'm passing around. You look like you've got a plan here, now write more books! :)

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  6. I'm sorry, I mean I put in the link to your guide! hehe

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  7. Derek, I'm wondering what, if any, marketing you're doing to support sales?

    Facebook, Twitter, blogging and commenting in forums and other blogs have had just about zero impact on my sales. The only copies I've "sold" recently are ones that I gave away via a Smashwords coupon.

    I know that short stories don't sell as well as novels, but at 99 cents, I thought I would at least get a trickle instead of a flatline.

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  8. Derek,
    Thanks for sharing this info. It helps us to make pricing strategy. And I'm enjoying the blog in general. I appreciate your time.
    S Alini.
    alinibooks.blogspot.com

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  9. As a consumer, two things I really look for are:

    1. Good cover art.
    2. An entertaining and well written back cover copy.

    Shallow? Maybe - probably - but we all do it.

    Consumers have so much choice right now that you really only have a moment to capture their imagination and make a sale.

    A good cover image grabs the attention. It makes the first impression. The more professional the cover is, the more professional buyers will assume you are.

    If your description is weak or hard to parse, buyers are going to assume that the book isn't going to be much better.

    Short Story writers have it even worse. The perception in buyer land is that if you're not getting 80-100k words for your .99 cents, you're getting ripped off. It's a crap perception and *wrong* - but there you go. The folks I know that are selling short stories are doing so on the strength and popularity of longer works they've already published.

    Good luck to all of you and keep up the good work, Derek.

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  10. Thanks, Derek, for keeping up with your experiments and sharing the info. It shows what can be achieved. I'll just keep trying to edge towards it.

    I am also finding that the same genre help each other but not different genres, so I guess writing another would be helpful(!)

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  11. All, thanks!

    JE, aww shucks. I’m just glad that a bunch of people like my stories enough to buy the books and not return them for a refund. ;)

    Layton, I’m just as many people are seeing your sales behavior as mine. Have you thought about changing your cover and/or book description? I was quite surprised my sales on the novel trended upward for a good long time before losing momentum a week before I raised my price. I think that was caused by a lengthy 2-star review, but I’ll do a post on that later.

    Angeline, I’m still experimenting, so nothing is set in stone yet. However, my Dead Dwarves, Dirty Deeds book did ride the coattails of my novel’s sales upswing. Alas, I only make 35 cents on the short story collection. But, when I have two full-length novels in a series I’m going to price the first one at 99 cents for a good amount of the year to sell the other. When I have 3 in a series, I’ll probably keep the first a 99 cents all the time. I think it will be a great way to increase sells of subsequent books. Unfortunately, as other people have noted, it doesn’t look like coattails reach across genre lines (my YA book has only sold about 30 book so far – it’s still looking for an audience).

    Coral, thanks! I know I’m still supposed to get that thing up on Smashwords but I just haven’t had time.:(

    PJ, I’ll do another marketing post sometime soon. Short story: I only do FB, Twitter, and this blog. From what I can tell, all my sales are coming from people just finding my book on Amazon. I think the single best marketing that I’ve done so far was having Igor do the great cover. After that, it probably has to be getting DDDD up into the top 20 of the High Tech, Adventure, and Science Fiction best-selling lists.

    Linda, I agree. There appears to be no cross-genre pollination whatsoever. At least across cyberpunk to YA adventure. From what I’ve learned, I’d advise writers to stick to one genre for at least your first three books. I might change this advice if my YA book takes off soon. But, so far, it seems like two genres is the same as two different authors – I’m getting no help whatsoever from my existing books. Next plan: Add a sample of The Elemental Odyssey to Dead Dwarves Don’t Dance! Gosh! I just thought of that right this instant. Why didn’t I do this a long time ago? Drat! Derek is a goofball!

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  12. Great thoughts you got there, believe I may possibly try just some of it throughout my daily life.

    E-Publishing

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