Continuing our series of posts on the steps of the independent publishing process.
It is very vulgar to talk about one’s business. Only people like stock-brokers do that, and then merely at dinner parties.Oscar Wilde, The Importance of Being Earnest
You may wish to give away your work, for promotional, political, personal, or artistic reasons, but most independent authors want or need to sell their work. This means making arrangements with eBook and print distributors, including setting prices, however vulgar a topic that may seem. Let’s look at some of the considerations.
eBook pricing is simple, compared to print book pricing, so we’ll start there.
Whether you are dealing with a retailer like Amazon, or a distributor like IngramSpark, there are rules for eBook pricing. For example, you might be required to have a minimum price of $0.99, a maximum of $249.99, and end the price with 99. Within those rules, you can set any price you want.
When you set a price, you usually have a choice to set it for all markets, or for individual markets. For example, if you set the price at $0.99 USD in all markets, the price of the book in Canada will vary depending on the exchange rate. If you set the price by market, you might select $0.99 CDN as the price in Canada—reducing your earnings, but avoiding disappointing Canadian readers when you advertise your book is 99 cents.
Your share of the price depends on several factors, including the length of the book or size of the book file, and the selling price, but is typically between 30 and 70%.
Regardless of the royalty rate, your earnings depend on two factors: price and quantity sold. The relationship between price and quantity sold is uneven. Price your book too high, and you are likely to not sell any copies. However, you may not sell copies if it is priced too low, either. Readers may assume it is poor quality writing.
At the time of preparing this post, the sweet spot for pricing genre novels, for new writers, seems to be $2.99 or $3.99 (depending on length, reviews, and so on). That’s enough to make a couple of dollars per book. Established authors often charge more. If you are unsure how much to charge, see what books similar to yours are selling for.
Pricing lower than $2.99 should be reserved for short-term sales, shorter works like prequel novellas, or promotional works like the first in a series.
You can change your pricing as often as once a week, so you are not locked into a specific price. However, changing your price too often may annoy customers who almost bought the book last week at a lower price, or did buy the book last week at a higher price.
Print Book Pricing
Print book pricing needs to account for three significant costs: printing the book, shipping (from the printer to you), and retail markup. The first two depend on the size, page count, and weight of the book. As a general rule, a larger book with a smaller number of pages is cheaper, and thinner paper is cheaper, but you should select a size and paper quality that is consistent with books like yours. IngramSpark offers a print and shipping cost calculator that lets you experiment with different options.
If you print a quantity of books in advance, you know the exact cost per book. For example, if you print 500 copies of your book for $2000, and pick them up from your local printer, your cost per book is $4. This is an option if you can afford the upfront printing cost, and will manage the distribution yourself.
For an independent author or small publisher, a more likely scenario is using print-on-demand. You can order a small quantity for yourself, and bookstores can order copies as required. With print-on-demand, the costs of printing may vary depending how many copies you order, and change over time, especially if you are a Canadian using a print-on-demand service in the United States and have to allow for exchange rates. As your costs may change, including a price on the cover may be risky—you’ll need to redesign your cover to incorporate the new price if your costs change significantly, which can cause delays and cost money.
The shipping cost only applies to books that you order to sell yourself. Any bookstores that order copies bear their own shipping cost (which comes out of the markup). If you order books to supply a bookstore, the shipping cost is yours, but you can arrange to have the books shipped directly from the printer to the bookstore, avoiding double shipping charges.
Let’s suppose your cost to print per book, before shipping, is currently about $5. Allowing for a markup of 55% (i.e. the retailer and distributor take 55% of the sale price), you’d need to sell the book for about $11 (list price) just to break even. If you set the list price at $14.99 (as with eBooks, there are rules on prices), you can earn about $4 per book (when you are not covering the shipping costs), and have a margin for fluctuations in printing costs.
If you are selling in multiple markets, you also need to consider the different production costs in each market. The good news is that distributors like IngramSpark show you the cost and your earnings for each list price you select for each market, making it easier to set your prices.
If you buy the books yourself, getting them shipped to you might increase your per book cost to about $7. If you sell them directly, for the list price of $14.99, you’d make about $8 per sale. You could sell them cheaper, but then you’d be undercutting local stores that carry your book.
If you supply the books you bought for $7 to a local bookstore at 50% of the list price of $14.99, you’d make only 50 cents per book. But that low profit may be worthwhile for the promotion and sales you get from having your book on a store shelf.
Increasing the quantity you buy or choosing a cheaper shipping method may reduce your cost. Setting the list price higher is the best way to ensure you can make money regardless of how the book is sold, but the list price must seem reasonable to purchasers.
To set a fair price for your independently published book, you need to know the list prices of similar books. The best way to learn this is to visit your local bookstore. An independent store that sells local books (like Dartmouth Book Exchange or Carrefour Atlantic—both carry Somewhat Grumpy Press books) is likely to have a good selection of similar books, and the bookseller can let you know the range of prices. Buying a book or two is the best way to start a conversation about pricing and support a store that might sell your book.
Booksellers may choose to sell your book lower than list price you set, and you have no control over this. This does not affect your earnings. Instead, the seller is choosing to accept a lower payment. For example, Chapters-Indigo is currently advertising Recycled Virgin at almost half the list price. Since Somewhat Grumpy Press is not running this promotion, we have no information on how long the sale will last.
Some booksellers use Amazon to sell books online below the list price, presumably hoping to make money by undercutting other retailers (including Amazon). While this may be a questionable practice, once you have made a book available for order and set the list price, there’s little you can do to control who orders it or what they do with it, including what they sell it for.
One last consideration about the retail markup. While you must offer this for bookstores (online or physical) to carry your book, so they can cover their costs of selling the book, physical bookstores are unlikely to stock your book on their shelves unless you also offer returns. This means they can order your book and return it if it does not sell within a month or two.
For a small or independent publisher, offering returns is extremely risky. If ten copies are ordered, three sell, and the bookstore returns seven, you will have paid for ten copies to be printed and only sold three. You can have the seven unsold copies returned to you, incurring shipping costs, but those copies may not be in saleable condition. You might be able to afford that loss, but if a bookstore chain orders 1000 copies, and 700 are returned, that’s a huge loss.
Big publishers rely on large print runs (reducing per book costs), and gamble that sales will exceed returns. They also have the resources to sell returned books. If you’ve seen a discount books pop-up store, or a chain store offering a selection of deeply discounted books, you’ve probably seen returned books being sold. Some publishers destroy unsold books to save the costs of return and resale. You may have noticed a warning in books that if the cover is missing, the book was reported destroyed and sale of it is not permitted.
You can still get your book into bookstores without offering returns. One option is independent bookstores. Some will purchase books outright, while others sell books on consignment. Stores might offer to purchase the book for a lower percentage of the list price, or sell on consignment for a higher percentage. Chain bookstores may offer consignment sales for local authors on a location-by-location basis.
For print pricing, you need to ensure the price covers the costs of making and selling the book, as well as earnings for your hard work. There are many factors to consider, from the quality of paper you choose to your reliance on bookstores. eBook pricing is simpler. Given that eBooks are also cheaper and easier to produce, it may be tempting to produce your book as an eBook only.
The best approach for you depends on your goals, your book, and your marketing strategy. For example, you might plan to sell mostly eBooks, but offer print copies at little or no profit as a promotional tool. On the other hand, as eBooks have minimal production and distribution costs, it is much cheaper to offer them free or deeply discounted.
Being informed about the options helps you choose your approaches to both pricing and broader marketing decisions. The information presented here is based on our experiences, but see what other have to say—there are many online articles on this topic. Ask any questions you have about pricing, or any other self-publishing issue, in the comments.