Tuesday, February 7, 2012
Is 99 cents the best price for your ebook?
Over the past year I’ve been doing some experiments with pricing for my ebooks. I’ve collected about 15 months of data on it and I thought I’d share it with you.
I have priced my cyberpunk novel, Dead Dwarves Don’t Dance at 99 cents, $2.99, and $3.99 (that's about 35 cents, $2.00, and $2.70 in royalties, respectively). The chart below shows the daily royalties at each price since the 11/23/2010 publish date.
As you can see there is some significant fluctuation.
I priced the book out of the gate at $2.99 (about a $2.00 royalty), and it slowly built up sales to 9 copies a day, or $18.
After a few weeks of that peak, I decided to experiment with dropping the price and see if I could improve my Amazon sales rank. I dropped the price to 99 cents in late February 2011. You can see the significant drop off in royalties.
However, the lower price did result in a stead and steep increase in number of units sold. On April 25, I hit a record daily sales of 126 units, earning $44. At this point, Dead Dwarves Don’t Dance hit #333 in the Amazon Best Sellers rankings, and I was in the top #10 of a couple genre lists.
I decided it was time to raise the price and see if I could benefit from that good rank. I raised the price back to $2.99 and you can see the stratospheric increase in royalties on May 27 to $140! Excellent! My plan was working.
The increased sales continued through May (I earned $2,289 for Dead Dwarves Don’t Dance in May).
However, the Amazon Sales genre rankings worsened, and the book dropped out of the top 20 lists. I decided to lower my price again to try to stay in the genre top 20 lists.
I dropped the price back down to 99 cents on June 9. You can see the deep decrease in royalties.
Unfortunately, my plan did not work. The novel continued to decline in sales. I was at a loss to explain this. Was it a Summer slump, altered Amazon ranking algorithms, the Amazon $2.99 sales? Whatever the cause, my sales never recovered.
I kept the 99 cent price for the rest of 2011, hoping to see a resurgence. But that was to no avail. Even Christmas sales didn’t help much.
So, I decided to raise the price up to $3.99 in January 2012. As you can see in the chart, royalties jumped up quite a bit. For the 33 days before the price increase, I made an average of $2.12 per day. For the 33 days after the price increase, I've made an average of $6.07 per day.
So, what’s the best price?
I think 99 cents might sometimes be a good price to help you improve your sales rank so that when you subsequently increase your price you can sell more units.
But I don’t think 99 cents is always the best price. You have to play around with it. If it’s helping your rankings, it might be a good idea. But if not, raise that price!
You should also go over to Lindsay Buroker's blog and read her recent post on this exact same issue: Ebook pricing: Why 99 cents might be a mistake for you.