Our goal as writers is to craft a story so interesting that strangers will pay money to hear it.
In the first edition of this posting, I tried to show a model for working out the math for modern writers. That brought up a lot of questions from my readers. So I put together a model for figuring out Return On Investment. On paper, it looks like a mildly good writer could beat the DOW this year. But the model depends on price.
In my 25 year career in sales and marketing, nothing about sales has changed: people make an emotional decision to buy. I don’t care how many times you read Consumer Reports, you will buy the one you like most. Price plays a role. Value plays a bigger role.
Free is bad. We have an odd reaction to “free”. We don’t like it as much as something we paid for. Think about it. A stranger sees you waiting for a train and hands you a free cup of coffee. The first thing you think is, “Do I want it? Is something wrong with it? What’s the catch? Is it really free?” You decide, yes, it’s free, no strings, all good, you take it. Before your first sip slides down your gullet, you had to override your cynicism. You started on a negative. But it only took a few seconds to drink. Not a big investment in time or cash. How do we equate that to an hour’s read? Ask any photographer or lawyer, or any professional who offers free services, ‘do the recipients of free services complain more than those who paid?’ Yes. Why? Because to pay for a service, you had to make an emotional decision to invest your time and money in it. You convinced yourself it was a good value before you paid. You have no emotional investment in something that’s free.
But free books are good, right? Libraries have been handing out books to tax payers for eons. There is more perception of free literature than any other form of education or entertainment. My city has several libraries – but no movie theaters. No communal televisions. We are a little less reticent about a free book. Since the library actually paid for the book, and to a certain extent, so did the tax-paying reader, it is not exactly free. We are entitled to it, just like public education.
How do I gain readers? Use the Proctor & Gamble method: Free samples. I walk into Whole Foods, get one cracker with a thumbnail-size cheese on it, and my emotional investment is small. If I don’t like it, toss it. No harm. If they tried giving me a pound of cheese, I would hesitate. Same holds for writing. So how should readers sample? We should ask the reader for a minimal amount of invested time so that he/she decides there might be value in giving you a try. Short stories come to mind. Chapters are usually too short to resolve a conflict and therefore leave the reader thinking he/she was given something incomplete. A full novel represents several hours of the reader’s time, pretty big investment. My advice: Free short stories, with fan-mail contests for free books. Make ’em work for the book.
MONEY. PRICE. What should I charge? When we ask people for money, we have a moral obligation to provide a value. What we charge for our services must be competitive and valuable. Where does your writing stack up in terms of known brands? Are you as good as James Patterson? EL James? Margaret Atwood? Dare to price yourself at the same price point and find out? Your reviews will tell you if you were right or not. Oh boy, will they tell you. But there is no need to be shy if you’ve written something valuable.
Unit Sales? Hey, price my book! Remember the equation to hit $100K of personal net income in my first money-oriented blog? To get there, we had to make some investments, pay some blood sucking distributors, and gross $360,000 in sales at $2.99. That meant hitting the top 100 overall. Yeah. No problem. But what if we dug our way out of the $2.99 basement? Would we lose volume? In my opinion, yes. How much volume depends on the competition. Twilight knockoffs are spilling out like grain from an elevator. Lower prices. Hunger Games has few competitors. Higher prices. Where do you fit? How many readers will pay for your book at any price?
Look at your competitors and read their reviews. Are you better? Charge more and put it on introductory sale. Are you not sure? Start low and raise it until you see volume dropping.
My opinion, writers like Joanna Penn and R.E. McDermott should be sitting at $4.95. They’re established, writing exciting books, have an established fan base, and write at the level of traditionally published authors. If they were starting tomorrow, I’d advise them to price at $4.95 and put it on sale for $2.99 for a week or two. You can always put it on sale for a week to drive unit sales. If you’ve not engaged a professional editor, take a couple dollars off both price points.
Wait. Erotica is higher priced? Yes, smaller audience, more specialization. Writers of foot-fetish novels are going to have a smaller readership willing to pay more. I suppose. Gauge your audience and how hard it is to reach them. Set your price accordingly.
Here is a breakdown of unit sales required to meet that $100K net at different price points:
|
Unit price |
2.99 | 3.99 |
4.99 |
7.99 |
|
Royalty Rate |
70% |
70% |
70% |
70% |
|
Royalty per Book |
2.09 |
2.79 |
3.49 |
5.59 |
|
Unit Sales Required |
120,401 |
90,226 |
72,144 |
45,056 |
|
Daily Sales |
334 |
251 |
200 |
125 |
Provide value. Price accordingly. If you’ve done the work, don’t be ashamed of it.
There is a growing perception among readers that anything below $2.99 is of little value. I believe that number will rise over the next year by at least another dollar. Good works will settle somewhere between $5 and 10 eventually. Why? Because that is what we’ve paid for hardcovers for decades. Of the ~ $17 we laid out, about $5-10 of it went to shipping and production.
No. I have no earthly idea why the Big 6 publishers price ebooks at $12.99. It’s an outrage that even Alberto Vitale, former CEO of Random House, doesn’t understand.
Where are you pricing your book and why?
Peace, Seeley James
