# When too low is going to run authors out of the job.



## KRCox (Feb 18, 2011)

I read on someone's site that the Kindle book prices has become a race to the bottom, especially for Indie Authors and Publishers.

Some rough numbers here: 
Writing the Book: 500-1000 hours (including brainstorming, planning, rewrites, etc..)
@ 2.99 per book

Let's say that you've done well, and you sell 50/month * 12 months * 2.99 * 70% (what you keep) - 30% taxes.

SO that's a nice : $879 a year. 879/500  or 879/1000 = $1.75/hour or $0.88/hour

And this isn't including the time or cost you've used to market your book.

Yes, Kindles cost $200 or so. And yes, I agree that digital books should be less than paper. But authors need to compete in better ways than dropping prices so far. 

Am I out to lunch thinking like this? And what value is actually being places on authors today if they're willing to sell themselves so low? 

What're your thoughts?


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## Joseph Robert Lewis (Oct 31, 2010)

I think there are many philosophical angles to approach this subject. 

For example, an ebook is on sale forever, not just one year. So shouldn't you try to calculate lifetime profit?

Also, most traditionally published books earn only an advance of a few thousand dollars, which may not work out to much over a long period of time.

Also, one person make take five years to write a novel while another takes three months, which would skew your calculations.

Also, one novel might be 200,000 words while another is only 60,000. 

There are too many variables to compare or evaluate objectively. If you are making money, great. If you make enough money to live on, even better. I'm just grateful to be living in this era when I can publish a book today and get fan mail from distant countries tomorrow. 

Exciting times!


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## BruceJones (Mar 1, 2011)

"Low pricing" is a relative term, as is "high pricing." Right now 99 cents is about as low an author can go and expect even the most modest profits. But some authors even give books away in Kindle and other e-platforms, the theory being that a free book "pays" for itself by virtue of the word-of-mouth advertising it gets through the larger numbers of readers it reaches...which, hopefully, translates to more future buyers. The beauty of the ebook system is the author's ability to control the price to more or less fit his needs. The same can be said of the book's content, however. and I can see where this might lead to an endless "director's cut" of drafts whereby the concept of the original loses all meaning. But hey, maybe that's a new art form in itself?


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## MrPLD (Sep 23, 2010)

Of course, the whole 99c thing, while I am indeed subscribing to it, is a lot like the lotto. _Some_ people are going to get the right numbers and line everything up and rocket to the top, however even with the rapidly exploding market of readers there is still a huge glut of available books.

Consider it this way, it's probably from the top 5000 people on Amazon that make a reasonable income, the rest of the ~3,000,000 books don't make it.

You can increase your chances by having multiple books but in the end it's still a slim chance. Irrespective of if you're earning $2.99 or $0.99, if you're not in that top-5000 it's just not going to matter.

(That was a nicely generalised, broad-strokes, faux facts response  )

Paul.


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## Bob Mayer (Feb 20, 2011)

Authors have been getting run out of the job long before Kindle.  A $5.99 mass market paperback at 8% royalty netted an author what?  .47?  Who got the rest of the money?  Bookstores got half.  I always love seeing those articles and weeping and wailing when a bookstore goes out of business, even Borders.  Ever see one about an indie author going out of business?  Hey, I love bookstores, have spent thousands of dollars there, but over 50% of indie bookstores I've approached have blown me off as a genre writer.  Not their type even when I live a few blocks away.  And then they go out of business, begging for community support.  They made more on my books than I did.  What am I missing.  I would have liked their community support.  I'm not bitter.  I understand their point of view.  I'm REALISTIC which most people in publishing aren't right now.
Who got the rest of the money? Publishers.  And how did they treat their midlist?  Replaceable parts.  Random House doesn't even respond to me even though they've now sold 1.3 million books under my name.  They're too busy looking for Charlie Sheen's book.  Hope it does as well as Snooki's.
The reality is the people in between writers and readers are hurting.  Their slice of the pie is diminishing.  And they don't like that.
How low is too low?  When an author can't make a living.  Which has been happening forever.  Let's face facts.  Even though you can cut the middle guy out, very, very few writers are going to be able to make a living writing.  Because the base fundamental is that the numbers will be the same.  Succeeding by publishing yourself will have the same odds of success as submitting to agents, getting one, the agent finding editors to read you, make an offer, the publisher throwing the book out there, people buying enough so that your sell-through is high enough that they'll do another book while doing nothing to promote you, etc etc etc.  
The game has changed, but the odds haven't.
The big, big difference is this.  After 20 years since my first book came out, writers have more control than ever before.  I don't have to hope an agent likes it, an editor likes it, they decide to market it, promote it, ship it, etc.  I do all of that.  All I need is for READERS to like it.
I feel very happy with that.

Write It Forward.


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## MrPLD (Sep 23, 2010)

Bob_Mayer said:


> All I need is for READERS to like it. I feel very happy with that.


And that about sums it all up really. Of course, editors, proofers, illustrators and graphics artists are still going to have a job, it'll just be more contract work direct from Indies ( we already hire our editor, proofer and illustrator ) .

Paul.


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## Leigh Reynolds (Mar 2, 2011)

MrPLD said:


> Of course, the whole 99c thing, while I am indeed subscribing to it, is a lot like the lotto. _Some_ people are going to get the right numbers and line everything up and rocket to the top, however even with the rapidly exploding market of readers there is still a huge glut of available books.
> 
> Consider it this way, it's probably from the top 5000 people on Amazon that make a reasonable income, the rest of the ~3,000,000 books don't make it.
> 
> ...


Same thing in any entertainment field - just this expands the possibilities and market so that more entertainers can make money so to speak. For example, if the American National Football League was watched regularly everywhere in the world, there'd be more money in it.


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## SashaSavage (Feb 17, 2011)

With the change in the economy lots of authors have lost their contract due to low sales. It was hard enough earning anything with 8% royalties but when the bottom fell out on book sales everyone felt the bite. However, now authors who lost hope in ever earning any decent money from writing finally have a chance to earn SOMETHING. It might not be alot to some but for others something is better than nothing at all. The big difference now is authors are in control of their own destination. Whether we win or lose is now totally  up to us. The only people we have to impress is the readers. I think having several books and one priced at .99 is a great way for new authors to introduce themselves. Books priced that low are considered impulse buys. Readers will take a chance at something that cost no more than a burger on a value menu. I've found several new authors this way and was willing to download the higher priced book on the second round. I think it's a smart marketing strategies.


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## Harry Shannon (Jul 30, 2010)

I'm with Mr. Cox, the math doesn't work. I love the Wild West freedom of all this, but as a mid-list author adjusting to the new reality, can see seriously deflationary pressures mounting. Business should be as unemotional as possible. At $2.99 we can clear about what we made from a hardcover sale, and that makes sense as a self-published "sweet spot." Lower than that, except for short fiction, novellas and special promotions, makes our desperation to be read appear borderline senseless. It is a bit like walking away from a union wage to stand on the street corner singing for quarters and dimes. 

Advertising? Promotion? I honestly suspect many people are loading up their Kindles with things they will never finish, just because of fire sale prices. At minimum, just not get around to for a long, long time. If that is true, then the promotional aspect for most authors is rendered moot. Writing has never been an easy profession, and has always required hard work over many years. Amanda Hocking recently posted that her hits have happened after an "overnight" lasting several years, which is generally the case. 

History shows that people who work for peanuts shall recieve peanuts for their work. Just my two cents, anyway.


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## Paul Clayton (Sep 12, 2009)

Harry Shannon said:


> I'm with Mr. Cox, the math doesn't work. I love the Wild West freedom of all this, but as a mid-list author adjusting to the new reality, can see seriously deflationary pressures mounting. Business should be as unemotional as possible. At $2.99 we can clear about what we made from a hardcover sale, and that makes sense as a self-published "sweet spot." Lower than that, except for short fiction, novellas and special promotions, makes our desperation to be read appear borderline senseless. It is a bit like walking away from a union wage to stand on the street corner singing for quarters and dimes.
> 
> Advertising? Promotion? I honestly suspect many people are loading up their Kindles with things they will never finish, just because of fire sale prices. At minimum, just not get around to for a long, long time. If that is true, then the promotional aspect for most authors is rendered moot. Writing has never been an easy profession, and has always required hard work over many years. Amanda Hocking recently posted that her hits have happened after an "overnight" lasting several years, which is generally the case.
> 
> History shows that people who work for peanuts shall recieve peanuts for their work. Just my two cents, anyway.


I agree with much of this. I think 99 cents is a good promotional tactic, for a short term. But I don't think it's a good long term policy. Yes, some have done very well with it. But it's like everything, the early adopters can have great success with certain marketing efforts, but when everyone attempts to do the same thing, there is a great falling off. Now, in the historical top 100, I see commercial publishers discounting certain books to 99 cents. Sure is good to see your numbers run up when you reduce your price, but I think it should be only a short term strategy. I'm using that to promote a series, but at some point all my books will be $2.99 (or higher). They're worth it. Best!


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## Guy Dragon (Feb 6, 2011)

What was the average writer's wage before we could self publish? Don't forget to include all the writers who were never successful in getting published. They still put in the work, they just managed to receive zero in return.


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## Bob Mayer (Feb 20, 2011)

There's never been an average writers wage in print, unlike screenwriters.  To say one can earn the same amount on a $2.99 eBook as a hardcover is off by 50%, unless my contracts have been unique.
I think this is completely backwards.  Authors have been getting run out of the job incessantly.  I would say the number of authors published in 1991 when my first hardcover came out who are still making a living writing is 1 out of a 1,000.  Today it might too low on price, but then it was too low on print run, which we had no control over.  We have control over price now.  So if an author is getting run out of the job for being too low, change it.


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## Anne Victory (Jul 29, 2010)

KRCox said:


> Am I out to lunch thinking like this? And what value is actually being places on authors today if they're willing to sell themselves so low?


I think that the value of a book (to the author) is not the price per unit, but the total revenue.


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## BrianKittrell (Jan 8, 2011)

But what if you sell more than 50 copies a month? I have two books out, one at $0.99 and one at $2.99. I make over $1,000 a month so far, but it'd be fine if I made $200 a month. I use it as an extra income source to help with bill overflow and hard times.

Everyone's sales may vary. If you make enough sales at $0.99 and $2.99 to make the kind of money you want, sounds like a good thing to me.


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## JRTomlin (Jan 18, 2011)

KRCox said:


> Am I out to lunch thinking like this? And what value is actually being places on authors today if they're willing to sell themselves so low?
> 
> What're your thoughts?


So you are saying that if some Big 6 publisher pays you .45 per copy of each paperback sold (which is about average) that is the value being placed on the author.

Why are authors willing to sell themselves THAT low?

Maybe you have some thoughts on _that_?


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## BrianKittrell (Jan 8, 2011)

JRTomlin said:


> So you are saying that if some Big 6 publisher pays you .45 per copy of each paperback sold (which is about average) that is the value being placed on the author.
> 
> Why are authors willing to sell themselves THAT low?
> 
> Maybe you have some thoughts on _that_?


Quoted for truth, and someone else said .47 along the same lines. If you sell at $0.99, you make less per copy than that (by about 10 cents or so), but you make about 5 times that amount at $2.99. I think whatever makes good business sense for you is what you should do.


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## daringnovelist (Apr 3, 2010)

Writing is passive income - your time is "equity."  Or "capital."

While I'm not for underpricing your product, price/effort is irrelevant in a situation like ebooks, because you don't have a fixed cost per unit.  The question is just how soon do you think you will recover your costs?

I took some time to write SEO articles for a while two years ago.  I did it for six months or so in my spare time.  The money trickles in, and I have just now reached the point where I probably made $10-$12 an hour for my effort.... but that effort is now completely done, and the income from those articles is now accelerating.  I'm using it to fun some advertising experiments for my books.

One of the things I learned doing that, though, was that going after immediate rewards tends to bite you in the behind later.  Google changed its algorithms, and many of the 'smart' people who took shortcuts aren't doing as well now as before.  The lesson I learned from that is that you should do a good job for your audience, don't undervalue your efforts, and all will come to you in the end.

Camille


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## Aaron Withers (Mar 4, 2011)

Many authors have no choice but to price their books competitively. People will pay whatever they think something is worth, high or low. Being unknowns makes it difficult for some of us to price as high as we would like unless we have a hell of a hook to draw people in.

I am not so much worried about pricing myself out of writing, I am more concerned with filling a void that no one else has. That is why I am charging $2.99 for my fiction as opposed to .99 cents. Only time will tell if I have made the right move.


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## Gordon Ryan (Aug 20, 2010)

Bob_Mayer said:


> The big, big difference is this. After 20 years since my first book came out, writers have more control than ever before. I don't have to hope an agent likes it, an editor likes it, they decide to market it, promote it, ship it, etc. I do all of that. All I need is for READERS to like it.
> I feel very happy with that.
> 
> Write It Forward.


Bob, I'm solidly in your camp here. Not to mention the new life breathed into back list books that were dead, despite having rights returned many years ago. They now sell again, modestly, and that gives me pleasure if not a Mercedes. The new books, totally under my control, are just gravy.

Cheers,

Gordon Ryan


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## A.R. Williams (Jan 9, 2011)

I understand your concerns and have felt the same myself.  Some writers have actual strategies they are using when pricing at .99, while others have no strategy at all and are basing their decision on emotion. 

But here's the thing. You can drive yourself crazy worrying about how other writers are pricing their books. Make your objective to write the best book you can possibly write. Find a strategy that works for you to promote it. Use that strategy and then write more books. Life is too short to worry about whether the sky is going to fall tomorrow (it might). By making the best product you can and marketing it wisely should help you find the audience you need given enough time.


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## Guy Dragon (Feb 6, 2011)

Bob_Mayer said:


> There's never been an average writers wage in print, unlike screenwriters. To say one can earn the same amount on a $2.99 eBook as a hardcover is off by 50%, unless my contracts have been unique.
> I think this is completely backwards. Authors have been getting run out of the job incessantly. I would say the number of authors published in 1991 when my first hardcover came out who are still making a living writing is 1 out of a 1,000. Today it might too low on price, but then it was too low on print run, which we had no control over. We have control over price now. So if an author is getting run out of the job for being too low, change it.


There is always an average when dealing with numbers. I'm talking about the mean. 

My point was that people always compare _published_ writers' incomes. Before self-publishing became popular, many writers would put in hundreds to thousands of hours writing a book and never see a cent because it was never published. Now, everyone who writes a book can be published. It would be misleading to compare the income gained from writing when you only include _successfully published_ writers on the traditional side and _everyone who has ever written a book_ on the self-published side.


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## Ali Cooper (May 1, 2010)

I think authors trying to compete with one another is stupid. People read more than one book, we don't need to compete. In my experience you can benefit as much by pricing higher and recommending each others books. If this downward trend continues then only mass market books will get noticed and the indie e book market will become just like the trad market authors were trying to get away from.

Somewhere I have a whole thread for authors pricing above $2.99. I've started some promotion threads on amazon for quality books priced $3 - $7.99.

I think many authors are forgetting the pay isn't the same as a mainstream royalty because they are not only author but publisher. Many authors spend a lot of time on the publishing/marketing jobs and also money on editing and production.

If you feel you want to charge more for your book, go ahead. It's a personal choice and at the end of the day you should do what you're happy with.


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## DanaG (Feb 13, 2011)

But you're naming a fairly low amount of monthly book sales. I don't care what business model you're looking at - 50 books a month isn't enough to support a person, unless you're selling them for $100 bucks a book and getting to keep all of that. However much you charge per book - you're going to have to sell thousands of books a month, at least, before you approach a living wage.

I would love for all of us, as authors, to be able to charge, say, $9.99 per book, but for me as a businessperson - what I really need to do is set the price at a level that I think will encourage the most people to buy my books, while still putting money in my pocket.



KRCox said:


> I read on someone's site that the Kindle book prices has become a race to the bottom, especially for Indie Authors and Publishers.
> 
> Some rough numbers here:
> Writing the Book: 500-1000 hours (including brainstorming, planning, rewrites, etc..)
> ...


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## Nathan Lowell (Dec 11, 2010)

Aaron Withers said:


> Many authors have no choice but to price their books competitively. People will pay whatever they think something is worth, high or low. *Being unknowns makes it difficult for some of us to price as high as we would like unless we have a hell of a hook to draw people in.*
> 
> I am not so much worried about pricing myself out of writing, I am more concerned with filling a void that no one else has. That is why I am charging $2.99 for my fiction as opposed to .99 cents. Only time will tell if I have made the right move.


This is where platform is the key element. You're not an unknown to the members of your platform.

Growing the platform is the main mission of effective social media marketing and you do that one person at a time.

I realize I sound like Johnny One-Note here, but what we're really doing in this space is trading the long queues of traditional publishing (with small payoffs) for the long queues of developing our own markets (with bigger ones). The significant advantage is that we control the destiny -- at least in the short term.


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## FictionalWriter (Aug 4, 2010)

I see .99 as strategy pricing. I've seen well known traditionally authors use it when changing genres as a "fire sale" kind of thing, but they only left it at .99 for a week or so. I think .99 is already an indication to readers that a) this is a very short book or b)I am a new writer and I'd like you to try me out. It's working for some and not so much for others, but to each his own. We live in a capitalistic society so as long as you're not committing a of crime, anything goes when it comes to selling your goods. 

I think what I'm beginning to see though, is some writers using the pricing as the ONLY selling point for their book. There is no real promoting going on except to say it's .99. I see an impatience  to get immediate results. To me, any book, indy, e-published or traditionally published, requires the same effort in terms of marketing and promotion. I see no short cutting when it comes to this. Which means it may takes months, perhaps a year (and lots of books) to find that fan base you need to support your writing.


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## Nathan Lowell (Dec 11, 2010)

historicalromauthor said:


> I see .99 as strategy pricing. I've seen well known traditionally authors use it when changing genres as a "fire sale" kind of thing, but they only left it at .99 for a week or so. I think .99 is already an indication to readers that a) this is a very short book or b)I am a new writer and I'd like you to try me out. It's working for some and not so much for others, but to each his own. We live in a capitalistic society so as long as you're not committing a of crime, anything goes when it comes to selling your goods.
> 
> I think what I'm beginning to see though, is some writers using the pricing as the ONLY selling point for their book. There is no real promoting going on except to say it's .99. I see an impatience to get immediate results. To me, any book, indy, e-published or traditionally published, requires the same effort in terms of marketing and promotion. I see no short cutting when it comes to this. _*Which means it may takes months, perhaps a year (and lots of books) to find that fan base you need to support your writing. *_


This!


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## _Sheila_ (Jan 4, 2011)

I'm unclear about how we got from 'A' to 'D' here.

If we are going to compare making money selling ebooks to non-ebooks we need to do that honestly.

I don't know the traditional publishing industry intimately, but I would assume that if you write a book, and it is selling 50 copies a month, you won't be asked for a second book.  

If you have an ebook selling the number of copies that would be required to maintain a traditional contract, then you are selling enough ebooks for it to make sense, even priced at .99.

Chances are good that you are making more on your ebook than you would be making in traditional printing.  I know of a writer that made it to the NYT best seller list, the book only made her $20,000.  I know that sounds like a lot of money, but think about how may authors actually get on that list.  How long before the book falls off the shelf?  Will they reprint for her just because 12 people want to read it?  Perhaps one of those 12 would be the one to start a new sales frenzy.  With an ebook, none of those situations are a problem. 

When I switched my price from $2.99 to .99 - I prayed (literally) that I could sell six times as many books, so that I wouldn't lose money.  The first month I sold many more than that, and the numbers have gone up steadily.

Am I getting rich?  Nope.

Am I making enough money that it makes sense to continue?  Yes.

The issue for me is not about pricing, it is about opportunity.  I've been asked several times why I am willing to sell my books at such a low price.  I am of the opinion that to do anything differently is simply ego at this point.  I've proven that in my specific situation, I make more money selling books at .99.  If I were to raise that price to $2.99, it would be because I want to think that the product I create is worth more than .99 per unit.  My business model is to sell big numbers and make my money in volume.  

There are others that would prefer to charge more and sell fewer.  Then there are those that can charge more and sell more.  I'm not there -- yet!  =)

Sheila


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## destill (Oct 5, 2010)

Arkali said:


> I think that the value of a book (to the author) is not the price per unit, but the total revenue.


Amen!

Publishing (self- or otherwise) is a business. Any good business person will find a way to cut costs and provide value to their customers. Nobody wants to work for free, in any industry. It's a matter of finding the balance in variables: effort, quality, quantity, and profit. Ultimately, you must be profitable to continue. (Unless you have an alternative source of income and are looking for tax breaks--which likely excludes most of us.)


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## MariaESchneider (Aug 1, 2009)

KRCox said:


> I read on someone's site that the Kindle book prices has become a race to the bottom, especially for Indie Authors and Publishers.
> 
> Some rough numbers here:
> Writing the Book: 500-1000 hours (including brainstorming, planning, rewrites, etc..)
> ...


It's a nice thought, but it's never been about what it costs to produce goods. It's always been about what the market will bear. And right now, the market happens to be bearing 99 cents well and $2.99 for some and anything above that, not as much.

I think it will change when Amazon decides (if they do) that THEY can't make money at 99 cents. That inflation will probably up the cost to a new basis point of $1.99.


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## daringnovelist (Apr 3, 2010)

Just two points on reading the comments:

The OP (or the blog the OP read) was not criticizing the 99 cent price point.  He was talking about 2.99.

The other thing was that he wasn't entirely wrong.  His numbers were off by a long shot, but people do significantly underestimate the effort it took to write a book (or anything that is the base work of setting up a business) and create for themselves a model which is not sustainable.

However, this is natural.  The key is to evolve your practices and plans so you see your walls coming before you run into them.  You may change course many times.

Camille


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## Jan Hurst-Nicholson (Aug 25, 2010)

I am also in the Bob camp. Having been trad published and gone through the frustration of having no control over the marketing -
Friend: "I went to the bookshop to buy your book, but there were none in stock." 
Me to bookshop: "Why haven't you got my book in stock?"
Bookshop: 'Waiting for the distributor." *
Repeat several times, including after a good review and interview in the newspaper = lost sales.
* the distributor got 60% of selling price, while I got 10%.  

You can market up a storm, but it will lead to nothing if the books are not in the shops.

I am now making more money selling my books at 99c than I ever made in trad publishing, and I know that all the marketing I am doing by sending off e-books for reviews, appearing as a guest author on blogs, taking part in forums etc will benefit me (and Amazon) instead of sharing with an agent, publisher, distributor and bookseller. I also have a worldwide readership, instead of the small readership in SA


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## daveconifer (Oct 20, 2009)

A.R. Williams said:


> I understand your concerns and have felt the same myself. Some writers have actual strategies they are using when pricing at .99, while others have no strategy at all and are basing their decision on emotion.
> 
> But here's the thing. You can drive yourself crazy worrying about how other writers are pricing their books. Make your objective to write the best book you can possibly write. Find a strategy that works for you to promote it. Use that strategy and then write more books. Life is too short to worry about whether the sky is going to fall tomorrow (it might). By making the best product you can and marketing it wisely should help you find the audience you need given enough time.


I so agree, as I often do with A.R.

Sometimes these price debates (and they all turn into the same debate about four posts in) remind me of one I often have with a friend who is a plumber. He insists that I'm stealing money out of his pocket when I unclog my own drain or fix a leak in a pipe in my house. He's been brainwashed into thinking he or his colleagues (meaning 'real plumbers') "own" any plumbing work in my house. Many writers seem to have this mentality about other people's marketing...


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## David &#039;Half-Orc&#039; Dalglish (Feb 1, 2010)

Your math assumes the book will sell for only a single year. Um, no? That, and it's hardly fair to count AFTER taxes. It's not like any other job will advertise their hourly wages or total salary after taxes. And even by your math, Dance of Cloaks has paid me $24 an hour. By the end of this year, it'll be close to $48 an hour. Next year? Year after that? Who knows. But it's silly trying to compare and justify after the fact. Price your book to be successful, and drop any emotional attachment or sense of entitlement of what your book "should" earn and focus on how much it "can" earn.


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## John Hamilton (May 6, 2010)

Half-Orc said:


> Your math assumes the book will sell for only a single year. Um, no? That, and it's hardly fair to count AFTER taxes. It's not like any other job will advertise their hourly wages or total salary after taxes. And even by your math, Dance of Cloaks has paid me $24 an hour. By the end of this year, it'll be close to $48 an hour. Next year? Year after that? Who knows. But it's silly trying to compare and justify after the fact. Price your book to be successful, and drop any emotional attachment or sense of entitlement of what your book "should" earn and focus on how much it "can" earn.


Gotta agree with you there, David.


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## Terrence OBrien (Oct 21, 2010)

_ "Yes, Kindles cost $200 or so. And yes, I agree that digital books should be less than paper. But authors need to compete in better ways than dropping prices so far. 
Am I out to lunch thinking like this? And what value is actually being places on authors today if they're willing to sell themselves so low? 
What're your thoughts?"_

OK. For discussion, let's accept your scenario, and let's accept that authors will sell themselves low, thus setting a low market clearing price. (Doesn't mean I agree, but we can still deal with the model.)

Thousands of authors will leave the market if they decide the return is not worth the cost. Thousands of others will not enter the market. They will not be able to make a living and will devote their time to more productive efforts.

Additional thousands will remain because their personal values warrant staying. Many of these folks will decide that the financial and personal benefits of the effort justify it. We might disagree with their evaluation, but they don't care what we think. They are thinking for themselves.

What does this mean for the market? Nothing. The supply of good books will continue. Readers will be happy. Retailers will be happy. Authors will wish they made more money, but their continued production will attest to their happiness.

There will only be an effect on quality if one contends quality books demand authors who make good money from those books, and authors who do not cannot produce good books.


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## A K Smith (Feb 15, 2011)

In a previous profession, I heard this conversation over and over again, as the people with higher prices told the people with lower prices that they were selling themselves short.  In some cases that was true, in others it wasn't.

I think it's a bit patronizing to come on here and post numbers like no one has done the math.  I think everyone is aware that they have to sell 6x as many books at .99 as they do at 2.99 to break even.  Please give the authors here credit.  Assume they're experimenting with price and will choose the price that suits them best, without having to be taught math.  Some people would prefer to sell 600 books at .99 and get a higher sales rank than they would selling 100 at 2.99.  Others are content to price their books at 5.99, and whatever sells, sells.

We're all businesspeople who have to choose the business model that works for us.


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## Guest (Mar 4, 2011)

While I have said this a million times (well, we HAVE discussed this a million times by now, haven't we?   ).

1.ALL AUTHORS are unknown to a portion of the buying public! *Every single author is unknown to someone*. I love Margaret Weis, and there are people who have no clue who she is. I'm a huge fan of the religious scholarship of Jonathan Kirsch, and there are plenty of people who have never heard of him. Most people here only know me from this forum, but when I go to a gaming convention people come up to me and ask me to sign their books because I AM known in that community. One of my authors, Dr. Lynn Veach Sadler, is a full time author, poet, and playwright. Most of you have never heard of her. But she's won the dozens of literary awards and fellowships.

Authors have this mentality that "successful" authors are all household names. That isn't true. Forget the Kings and Meyers and Rowlings of the publishing world. A lot of authors make their living writing for a specific target market, and people outside of that market will never know who they are.

But people are looking for shortcuts to success, so instead of doing the slow and steady process of building name recognition with their target demographic, they go with the 99 cent price. There are better ways to build name recognition, but they take longer. And people are impatient.

2. People don't know the difference between a royalty and gross profit. And this issue I place at the foot of POD services and Amazon, because they call what they pay out royalties, because technically they are serving as the publisher. But in reality, they are not royalties, but your gross profits. So this screws up the comparison between self publishing and traditional publishing.

Let's say you have a traditionally published book. The publisher gives you 10% royalties on the book. The book royalties may be only 20 cents a sale, and you sell 5,000 books. You make $1,000. The same book at 99 cents earns .35 cents a sale. You make $1,750. On the surface, you make more money self publishing cheap (assuming you actually get the same sales volume). But this overlooks several factors. In the case of the traditional book deal, that $1,000 is free and clear. Unless you have an agent, that money is all yours. In the second issue, out of that $1,750 you have to deduct all of the expenses associated with the book. Did you pay for someone to design your cover? Did you hire an editor or proofreader? These are expenses traditionally covered by the publisher. Now you are absorbing them. You are also performing all of the administrative functions that would have been handled by the publisher, such as distribution and accounting. These time costs, actions related to selling your book that _you would not have done otherwise_, are rarely factored into self publishers cost. But they can be enormous.

3. Books are not commodities. I don't read romances, and there is no price point at which I would buy a romance. Even if they are free downloads, it would not matter. I do read a lot of speculative fiction, and if a book grabs my attention I buy it whether it is 99 cents or $5.99. I publish roleplaying games. If you don't play RPGs, there is no price I can plot my games at that will make you buy it. Pricing it at $9.99 or 99 cents won't matter to you. Meanwhile, gamers routinely pay $3, $4, and $5 for ten page PDFs that have the type of information they want for their games.

The point being, books are not interchangeable. Nobody says, "Gee, I was really in the mood to read a good horror novel, but this chick lit book that I would never read otherwise is only 99 cents so I'll buy that instead."

Philip Kotler of Strategic Marketing for Education Institutions noted that "the art of marketing is the art of BRAND BUILDING. If you are not a brand, you are a commodity. Then price is everything and the low-cost producer is the only winner."

What does this mean? Yes, there is a large part of the marketplace that shops by price only, and they will buy almost anything that is 99 cents. But they aren't loyal to your brand. They are loyal to low prices. If someone comes along able to sell even lower than you, you will lose these customers.

Whereas if you build your brand and go after your target market through long-term branding and value building, you can have consistent sales numbers with higher prices. Why do so many people spend hundreds of dollars on an iPhone when most cell phone contracts give you a free phone? Because the iPhone has strong branding and is seen as a value added device. Apple could sell iScissors for $50 and people would buy them by the truckloads, even though they are just a pair of scissors.


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## tbrookside (Nov 4, 2009)

> My point was that people always compare published writers' incomes. Before self-publishing became popular, many writers would put in hundreds to thousands of hours writing a book and never see a cent because it was never published. Now, everyone who writes a book can be published. It would be misleading to compare the income gained from writing when you only include successfully published writers on the traditional side and everyone who has ever written a book on the self-published side.


Quoted for truth.

The OP is comparing $879 to the nebulous concept of "making a living", and finding the $879 wanting.

That is not a valid comparison to draw.

If slush pile figures are to be believed, 999 books out of every 1000 written for the trad market [or more] will earn exactly $0 in that market.

The $879 has to be compared to the $0. Not to a theoretical living wage.

Woo hoo! What was once worth $0 is now worth $879! What a country!


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## Terrence OBrien (Oct 21, 2010)

_"The point being, books are not interchangeable. Nobody says, "Gee, I was really in the mood to read a good horror novel, but this chick lit book that I would never read otherwise is only 99 cents so I'll buy that instead." _

True. However, they may do that within the horror genre. There are many sales venues where the horror offerings may not include a known author. In that case the horror offerings are fungible goods.


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## TheSFReader (Jan 20, 2011)

Hi Guys ! (Warning : non native writer ahead)
As a reader, I have a finite (but fluctuating) budget for books, let's say 40 $ a month. Supposing I spend it completely, with pbooks, I could afford one hardcover and a few paperbacks. From those 40 $, more or less 12% would go to the authors --> 5 $.

With self published ebooks (70% royalty), I could get 13 ebooks at 3$ each, thus 27 $ for the author.
Of course, while I may read 13 books a month, it takes quite a lot of time, hence my buying more or less half that, which still make 13 $ for the authors --> way more than a pbook !
But at that price, and since it won't take place on any physical shelf space, I can in addition afford to take some risk and buy other books that I wouldn't otherwise. Be it for reading later, for discovery, because I like the author's posts on the web... Whatever ! 
Also note that it leaves margin for me personally to buy some other books, to pay more for those books by donating (when possible) to the authors, to buy higher priced books from the same authors...

The low prices can also attract potential buyers : some young adults who have only 10 $ can buy 1 book and still have change for his lunch, while with a paperback he would have to pass the opportunity, and used the money for something else ... In the first case, that's 2$ in the authors pocket, in the other one that's 0.

Of course, giving readers more for less as you do with cheap priced ebooks can be seen as devaluing your work, but on the contrary, it allows a greater number of people to benefit from reading from what it's worth and give you proper compensation.
Hey, if more people are attracted by the low price and buy/read it hence giving you back the same compensation, shouldn't you be happy for them ? Those readers are "for free" and will become your salesmen (be it from word of mouth, reviews, better ranking) for that book, and maybe the other ones you've written...


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## JRTomlin (Jan 18, 2011)

TheSFReader said:


> Hi Guys ! (Warning : non native writer ahead)
> As a reader, I have a finite (but fluctuating) budget for books, let's say 40 $ a month. Supposing I spend it completely, with pbooks, I could afford one hardcover and a few paperbacks. From those 40 $, more or less 12% would go to the authors --> 5 $.
> 
> With self published ebooks (70% royalty), I could get 13 ebooks at 3$ each, thus 27 $ for the author.
> ...


Thanks! I appreciate reading that from a "non native writer".


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## Paul Clayton (Sep 12, 2009)

historicalromauthor said:


> I see .99 as strategy pricing. I've seen well known traditionally authors use it when changing genres as a "fire sale" kind of thing, but they only left it at .99 for a week or so. I think .99 is already an indication to readers that a) this is a very short book or b)I am a new writer and I'd like you to try me out. It's working for some and not so much for others, but to each his own. We live in a capitalistic society so as long as you're not committing a of crime, anything goes when it comes to selling your goods.
> 
> I think what I'm beginning to see though, is some writers using the pricing as the ONLY selling point for their book. There is no real promoting going on except to say it's .99. I see an impatience to get immediate results. To me, any book, indy, e-published or traditionally published, requires the same effort in terms of marketing and promotion. I see no short cutting when it comes to this. Which means it may takes months, perhaps a year (and lots of books) to find that fan base you need to support your writing.


"I see an impatience to get immediate results" Even though I have the first book in my Southeast Series priced at 99 cents, I'm uncomfortable with that. I think it's worth much more than that and I don't want to contribute to a perception that Indies are worth less than Trad books. But when my numbers slow I know I'm tempted to raise the price. I won't do it however. You say, "I see an impatience to get immediate results" I see where this can turn into a panic and stampede, a race to the bottom. Anyway, just my two, er, 99 cents.


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## KRCox (Feb 18, 2011)

JRTomlin said:


> Thanks! I appreciate reading that from a "non native writer".


I did also.


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## Amanda Brice (Feb 16, 2011)

historicalromauthor said:


> To me, any book, indy, e-published or traditionally published, requires the same effort in terms of marketing and promotion. I see no short cutting when it comes to this. Which means it may takes months, perhaps a year (and lots of books) to find that fan base you need to support your writing.


^^ This.

I don't love the 99 cent price point as a regular price, although I admit I plan to use it at release time as a limited time sale. I think 99 cents can be a valid strategy, but it has to be a stategy. If your whole marketing plan is based around 99 cents with nothing else to sell it, don't expect to succeed.


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## A K Smith (Feb 15, 2011)

Bards and Sages (Julie) said:


> But this overlooks several factors. In the case of the traditional book deal, that $1,000 is free and clear. Unless you have an agent, that money is all yours. In the second issue, out of that $1,750 you have to deduct all of the expenses associated with the book. Did you pay for someone to design your cover? Did you hire an editor or proofreader? These are expenses traditionally covered by the publisher. Now you are absorbing them. You are also performing all of the administrative functions that would have been handled by the publisher, such as distribution and accounting. These time costs, actions related to selling your book that _you would not have done otherwise_, are rarely factored into self publishers cost. But they can be enormous.


Publishers sell a service that is losing value, that has already lost a great deal of value since the 70's-80's. They once provided a great package of services: reading slush, major editing, publicity, printing, sales to many independent booksellers across the country. Now they provide none of those things. Agents read slush. Nobody buys a book that needs major work. Nobody gets coop unless they're already a bestseller. Printing is outsourced. Markets have been consolidated into a few megacorps, and those markets tell publishers what to print, rather than the publishers' sales staff telling the bookstores what they should buy.

Editing a book is a contract job with a fixed cost. Designing a cover is a contract job with a fixed cost. There is absolutely no reason to pay someone a percentage *forever*, on a job they did once. When the majority of the work is yours, you should get the majority of the pay. Why should I pay for someone else's lunch in an expensive Manhattan restaurant? Why should I be contributing to the health insurance and 401k plan of editors and cover artists? Why should I be contributing to some CEO's golden parachute?


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## MariaESchneider (Aug 1, 2009)

Just a funny story in the FWIW category.  I have a friend who is an avid reader (and reviewer for a fairly large site--no, they won't review indies).  She reads around 200 books a year.  Almost all are review copies or library.  I asked her for advice several times on pricing and we had quite the discussions.  She said, "Go for $4.99 with Under Witch Moon.  It's good and really if someone will pay $2.99, they won't think much of $4.99.  It's still a great bargain. They're used to paying more."  

Fast forward a few months.  She won a kindle.  She asked for some recommendations for good indies.  "These things are priced at 99 cents! I can buy 20 of them for the price of two books!  Who is good out there?"

So...what sounded nice on paper when it was other people's money did not hold true for the big book lover staring at all the candy in the window.  She bought several--all were 99 cents to try out!!!


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## KRCox (Feb 18, 2011)

I've very much enjoyed the replies in this debate. Thanks for taking the time to respond. =)


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## Jack Wallen (Feb 9, 2011)

It has taken me a while (and the act of pulling all of my books at once for polishing) to come up with an actual plan for pricing. It looks like this:

When a book series is introduced (most of my books are are members of a series) the price will be .99 cents. When the second in that series comes out, that book will be priced at $2.99. The reason is that the initial book has given readers time to read and get "hooked" on the series. Once they have read the first at .99 cents, theoretically they will be more willing to pay $2.99 for the next (and subsequent) books. 

I haven't tested this yet, but starting next month I will have the opportunity to do so. If it works, everyone here will be the third to know (the first being me, the second being my wife). ;-)


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## waker (Feb 24, 2011)

regarding the OP's math, here's dean wesley smith's math:

"- Goal: Make $80,000 per year indie-publishing.

- Sales Assumption: Book sells 3 copies per day total across all sites at $4.99 earning the author $3.33 per sale or about $10.00 per day or $3,650.00 per year per book. (If you use $2.99 price, double the numbers of sales. If you use 99 cents per novel sales price, just go read something else because it will never work long term for you.)

So, with my assumption, the magic number is 21 books needed to make close to $80,000 per year on that level of per-book sales.

One Book Per Year: 21 years of writing one book per year until author is making $80,000 per year. (Again, all kinds of assumptions of similar sales and who knows what's going to be happening in publishing in 21 years. Not a plan I would start on in these turbulent times.)

(Author would need to sell 65 copies per day on the one book to make $80,000 in one year off of one book. Very possible, but not likely. That's more of a produce-type sales level.)

Two Books Per Year: 10.5 years of writing two books per year until author is making close to $80,000 per year.

(Author would need to sell 33 copies per day on each book to make close to $80,000 in one year off of just two books. Very possible, but again not likely.)

Four Books Per Year: 5.25 years of writing four books per year until author is making close to $80,000 per year.

(Author would need to sell 17 copies per day on each book of four books (across all sites combined, remember) to make $80,000 in one year off of four books. Very possible, and coming a little closer to us normal folks.)"

-- Dean Wesley Smith: Speed

http://www.deanwesleysmith.com/?p=3204



Arkali said:


> I think that the value of a book (to the author) is not the price per unit, but the total revenue.


This.



Half-Orc said:


> Your math assumes the book will sell for only a single year. Um, no? That, and it's hardly fair to count AFTER taxes. It's not like any other job will advertise their hourly wages or total salary after taxes. And even by your math, Dance of Cloaks has paid me $24 an hour. By the end of this year, it'll be close to $48 an hour. Next year? Year after that? Who knows. But it's silly trying to compare and justify after the fact. Price your book to be successful, and drop any emotional attachment or sense of entitlement of what your book "should" earn and focus on how much it "can" earn.


Exactly. Your books can stay in "print" forever, which is why traditional publishers are trying to grab rights that keep them earning 75% of your e-royalties .. forever.

In addition, the OP's math assumes you will only sell that material in one way. You can sell some pieces of writing over and over again -- as short stories, to anthologies, bundled into complete books, as options, as foreign rights.


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## JRTomlin (Jan 18, 2011)

MariaESchneider said:


> Just a funny story in the FWIW category. I have a friend who is an avid reader (and reviewer for a fairly large site--no, they won't review indies). She reads around 200 books a year. Almost all are review copies or library. I asked her for advice several times on pricing and we had quite the discussions. She said, "Go for $4.99 with Under Witch Moon. It's good and really if someone will pay $2.99, they won't think much of $4.99. It's still a great bargain. They're used to paying more."
> 
> Fast forward a few months. She won a kindle. She asked for some recommendations for good indies. "These things are priced at 99 cents! I can buy 20 of them for the price of two books! Who is good out there?"
> 
> So...what sounded nice on paper when it was other people's money did not hold true for the big book lover staring at all the candy in the window. She bought several--all were 99 cents to try out!!!


Great story, Maria!


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## Eric C (Aug 3, 2009)

Jack Wallen said:


> It has taken me a while (and the act of pulling all of my books at once for polishing) to come up with an actual plan for pricing. It looks like this:
> 
> When a book series is introduced (most of my books are are members of a series) the price will be .99 cents. When the second in that series comes out, that book will be priced at $2.99. The reason is that the initial book has given readers time to read and get "hooked" on the series. Once they have read the first at .99 cents, theoretically they will be more willing to pay $2.99 for the next (and subsequent) books.
> 
> I haven't tested this yet, but starting next month I will have the opportunity to do so. If it works, everyone here will be the third to know (the first being me, the second being my wife). ;-)


I've tested this out, am still testing this out, although with two stand-alone novels instead of two series novels. I had to sell about 12,000 copies of my 99 cent book before it started to show any effect on sales of my $2.99 book, and it took six months to show an effect. (I advertised the $2.99 book only once or twice so that any increase in sales could logically be attributed to my 99 cent novel. The $2.99 book is still very hard to find in the "customers who bought, also bought" area, and it has only a single reader review, so it's a stretch to attribute a sudden increase, a tripling, almost quadrupling, of revenue, over the last month in sales to anything but the other book.)

The 99 cent book has been well-received, based on reader reviews, and the reason I think it took so many copies sold and so long to suggest a sales effect on the other book is that many 99 cent book buyers took months to get to it in their TBR pile.


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## FictionalWriter (Aug 4, 2010)

Yes, a book simply has to have more. It's got to be good. It's got to appeal to a certain % of readers. You have to market and promo it because of these qualities and not just because it's cheap. The price may be one of the motivating forces in buying you initially but in order to keep selling books and making decent money doing so, it can't be the reason they will buy you again. When it comes to entertainment, mediocre and less is not going to cut it. Most readers won't read a book they think is just 'okay' and say, "But I'll definitely buy their next book."



Amanda Brice said:


> ^^ This.
> 
> I don't love the 99 cent price point as a regular price, although I admit I plan to use it at release time as a limited time sale. I think 99 cents can be a valid strategy, but it has to be a stategy. If your whole marketing plan is based around 99 cents with nothing else to sell it, don't expect to succeed.


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## AnneKAlbert (Dec 7, 2010)

I've purchased e-books from .99 - 5.99, and admit it's not the low end that bothers me, but the higher cost of some books.  

Also, thanks for the info on Dean Wesley Smith. VERY much appreciated!


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## Patrick Skelton (Jan 7, 2011)

I've been selling mine for 99 cents during the week, then 2.99 on the weekend when people seem to be open to spending more on entertainment. I like the results so far.  I will say that I'm not selling 6x the amount at .99, however. Maybe 3x, but not 6x.  


Losing money at 99 cents, but gaining exposure.  Publishing is full of trade-offs, I suppose.


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## David Derrico (Nov 18, 2009)

I've heard the $0.99 vs. $2.99 argument many times &#8230; and certainly struggled with it myself. So I decided to have a little fun with it, and see what else out there you could get for less than $2.99. I mean, how low is too low? Are e-books really cheaper than _actual dirt_? I think my fellow authors might appreciate it. 

http://www.davidderrico.com/cheaper-than-dirt/


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## Emma Midnight (Feb 19, 2011)

There's one assumption being tossed around in this thread that may not hold true: that a given ebook will be on sale forever at Amazon et al. We don't know that. It could be that Amazon will purge titles eventually to improve the customer experience. It may be that to keep a book on sale Amazon will charge you a yearly service fee or put your book in a lower royalty rate structure because it doesn't sell in high enough volume. 

The entire business model for selling books may change too. With movies and music we're seeing more services that charge a monthly fee and stream content. Why would books be immune to that?

The publishing world is being turned upside down and inside out. No one really knows what the business model will be like in a few years. But if you look at other media, such as movies, music, and even games, the $0.99 price has a lot traction and the Netflix model is encroaching onto that turf as well.


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## mathewferguson (Oct 24, 2010)

KRCox said:


> I read on someone's site that the Kindle book prices has become a race to the bottom, especially for Indie Authors and Publishers.
> 
> Some rough numbers here:
> Writing the Book: 500-1000 hours (including brainstorming, planning, rewrites, etc..)
> ...


Welcome to the free market.

I'll happily gut you on price any day of the week if I think it will be to my benefit. I'll happily underbid anyone if I want whatever it is badly enough.

Of course, there are plenty of writers out there who'll happily gut me on price and in fact have (especially on some freelance writing projects where I bid $2000 and they bid ... zero).

But it doesn't matter. All these endless conversations about the race to the bottom, alas alas what shall we do? Writing is going to be fine no matter what happens. Market conditions change all the time and suddenly something that used to make a lot of money makes nothing. Sometimes a protected profession has its barriers smashed down and wages drop. Big deal.

In eBook publishing the truth is that almost everyone who is making a dollar in it is making more money than they ever made through traditional publishing or other writing. There are writers here making $10 a month and that's $10 more than they made before.

Look at the entire pool of Kindle writers. We have those who are professional book authors. They don't work on the side as freelance writers or waiters or whatever else. They're treating it as a full-time business and working out the sums.

Then there are those (like me) who work as freelance writers and editors and also put work up on Kindle. I'm making money elsewhere so I can race to the bottom and maybe I'm happy with only $x per year.

Then there are others who have part-time and full-time jobs and if they make $500 they'll be happy. They might not care about the dollar per hour rate.

You need to think about life-time earnings. I wrote one of my books in 2006 and only put it up last year. In the first four years of its life I only earned the advance that was paid way back then before the publishing company closed up. Now it's up and earning a trickle of money for ... how long? The rest of my life? It's a children's reader which took about five days of work. Probably less than 30 hours I'm guessing. If it earns $600 then I'll have been paid $20 an hour for writing it. If it gets up to $6000 in life-time earnings then I'll have been paid $200 an hour for writing it.

Add in possible compilations, adaptations to other formats, advertising revenue generated by my website ...

As I've said before, the market wants what it wants. Collusion, price-fixing, unspoken agreement to set prices, etc, is going to fail in the face of the market. Go too high and people simply pirate or don't buy and some other writer will happily take that sale out from under you.

You're also forgetting that people have different motivations ... I put all my work up for free on torrents. If Kindle publishing shut down tomorrow I'd still put my work up for free. I write for money, sure, but ultimately the money doesn't mean much to me. In this race you're competing with people who simply don't care about the same things you might.


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## Jack Wallen (Feb 9, 2011)

I'll be totally honest. I started writing seriously when I was an actor. As a professional actor for 20 years I knew there was no retirement for me, so my plan was to start writing books hoping that some day, some how, they would serve as a sort of retirement for me. So I look at this as a long-term venture that will allow me to actually survive into my twilight years. 

Oh I didn't like typing those last two words for so many reasons.


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## waker (Feb 24, 2011)

Emma Midnight said:


> There's one assumption being tossed around in this thread that may not hold true: that a given ebook will be on sale forever at Amazon et al. We don't know that. It could be that Amazon will purge titles eventually to improve the customer experience. It may be that to keep a book on sale Amazon will charge you a yearly service fee or put your book in a lower royalty rate structure because it doesn't sell in high enough volume.


The point isn't that the market won't change. The point is that electronic works will never go out of print.

Publishers are attempting to grab e-rights for works that will never go out of print .. so rights will never revert to the author. If an author retains rights to his works, he can sell them forever -- on whatever new media or platform emerges.


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## A K Smith (Feb 15, 2011)

Emma Midnight said:


> There's one assumption being tossed around in this thread that may not hold true: that a given ebook will be on sale forever at Amazon et al. We don't know that. It could be that Amazon will purge titles eventually to improve the customer experience. It may be that to keep a book on sale Amazon will charge you a yearly service fee or put your book in a lower royalty rate structure because it doesn't sell in high enough volume.


This is a good point. I realize this is a board primarily about Amazon and the Kindle, but I think it's important for authors to make sure they're also available on, and promoting for, other sites. We benefit from Amazon having healthy competitors. It helps prevent them from becoming a monopoly. When I visit author websites, I'm surprised at how many people don't promote Smashwords. Yes, the % is lower there, but readers can get the same book on all platforms, which is a huge selling point.

I do think there's a logical fallacy in your suggestion that Amazon might charge more, or pay less, to authors who don't sell as much. It's an argument I see a lot on these boards, that Amazon will get rid of the $0.99 price point when it's unprofitable for them.

That price point is not a problem for them. Low volume per author is not a problem for them. Their $0.65 (on a $0.99 transaction) is almost pure profit. The bandwidth taken up by hosting your work is a drop in the bucket. The cost of transmitting large files is passed along to the author. Amazon specializes in the "long tail" - meaning while traditional bookstores only want to stock a few books that will be bought by many, Amazon also wants to stock many books that will only be bought by few. Profit on the long tail is something unique to the internet, where shelf space is virtually endless.



> The entire business model for selling books may change too. With movies and music we're seeing more services that charge a monthly fee and stream content. Why would books be immune to that?


I don't want to nitpick, but the monthly subscription is not new to fiction publishing. Serialized fiction used to be the norm (think Dickens). I believe that if publishing were to revert to something like that, in an electronic form, authors would still make money.


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## rsullivan9597 (Nov 18, 2009)

A K Smith said:


> That price point is not a problem for them. Low volume per author is not a problem for them. Their $0.65 (on a $0.99 transaction) is almost pure profit.


I don't think you...or I...or anyone here can really say what the profit is on a $0.99 book. But bandwidth and storage are not the high cost issues. Off the top of my head here are some others:

- Credit card processing fees - usually some flat rate + a %. Flat rate is usually dependent on volume - which Amazon has a lot of but it's not going to be zero and will be a higher % of cost then a higher priced item.

- Connectivity fees - Unless you bought the cheap version of Kindle - you have connectivity built into the device and you pay NO monthly fee for the ability to download anytime/anywhere. Essentially they are paying some provider with a very expensive infrastructure to provide this service. They aren't doing it for free and its not cheap. Now each book purchased is responsible for a % of that cost and again the cheap book has less room to contribute than the more expensive oen.

- Employees - programmers, customer support reps, technical people, they all have salaris and benefits. Again this is spraed over many books but a cheap book has to contrbute to this just like an expensive one does.

Again I don't think either of us know enough to say whether $0.65 on $0.99 is a profit center or not for them - but as a business person...I'm skeptical that they are rolling in the dough at this price point.


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## A K Smith (Feb 15, 2011)

rsullivan9597 said:


> I don't think you...or I...or anyone here can really say what the profit is on a $0.99 book. But bandwidth and storage are not the high cost issues. Off the top of my head here are some others:
> 
> - Credit card processing fees - usually some flat rate + a %. Flat rate is usually dependent on volume - which Amazon has a lot of but it's not going to be zero and will be a higher % of cost then a higher priced item.
> 
> ...


I understand what you're saying, but I think you underestimate the volume discount, and how willing Amazon is to let the small prices be paid for by the higher prices. Many used booksellers have been using the $0.99 price point on Amazon for some time now. Amazon's motivation is to be the place everyone goes because they can find the rare, the out-of-print, and the highly specialized, along with the mass-market.

To give another example of how willing they are to settle for less money, or even *take a loss*, in order to dominate the market, look at what they were doing before publishing houses agreed to the "agency model." They were marking e-books down to $9.99 and taking a loss in order to set their preferred price point.

Amazon CEO Jeff Bezos created the company with a plan to operate at a loss for the first 4-5 years in order to undercut the competition and achieve a dominant marketshare. That strategy worked quite well. You'll find a lot of people predicting that the "basic" Kindle will soon be free, and given Bezos's history, I wouldn't be surprised.


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## Debra Burroughs (Feb 17, 2011)

Since my quasi-publisher uploaded my stuff to Amazon, I don't know as much as those of you who handle it yourselves. It sounds to me, from posts I've read, that 1.00 to 9.99 is at 70% and less than 1.00 is at 35%?  What is the cut-off for the 70%?  

I'm very new to this, so if you could bare with me, I'd like just a little enlightenment. (I am trying to learn this stuff myself so I don't have to have anyone else managing my book on the different sites.)


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## Christine Kersey (Feb 13, 2011)

I dropped the price on one of my standalone suspense novels to .99 earlier this week. Interestingly, I've found that sales of my 2.99 book have kept pace with the .99 book. We'll see if that continues.


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## NotActive (Jan 24, 2011)

content


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## BrianKittrell (Jan 8, 2011)

Debra Burroughs said:


> Since my quasi-publisher uploaded my stuff to Amazon, I don't know as much as those of you who handle it yourselves. It sounds to me, from posts I've read, that 1.00 to 9.99 is at 70% and less than 1.00 is at 35%? What is the cut-off for the 70%?
> 
> I'm very new to this, so if you could bare with me, I'd like just a little enlightenment. (I am trying to learn this stuff myself so I don't have to have anyone else managing my book on the different sites.)


The cut off on the low end for 70% is $2.99. $2.98 and lower is at 35%. Anything above $9.99 goes to the 35% scheme, and I think the max price of a Kindle book is $199.99.

http://www.zdnet.com/blog/btl/amazon-earnings-strong-q4-on-holiday-season-sales/30188 - "Revenue was $9.52 billion, a 42 percent increase over the year-ago quarter."

It is true that we don't know exactly how much Amazon pays per credit card transaction, but I would be willing to bet that they are able to negotiate with a third-party processor due to volume if they don't handle it internally. I doubt that the fee is so great as to dissuade them, though.

I don't believe that Amazon has allowed the $0.99 price point if they could not sustain themselves on their current setup. They get $0.65 on $0.99 ebook sales, and they get $0.90 on $2.99 sales. It's $0.25 difference at this point, so perhaps .65 is the low-end of their "magic number" range.

As for being able to pay their employees, I think the $9 billion last quarter should cover the tab okay.

A K Smith makes some good points about Amazon's history, and I think they're more interested in keeping dominance than maximizing their profits because dominance yields even greater profits when those not fit to survive (other booksellers) fall to the wayside.



Matthew W. Grant said:


> Patrick, how have you been able to switch the prices constantly on Amazon to hit at the right times for the changeover? It's one thing on SW (for their own site, not their distribution channels) because SW updates prices instantly, but the erratic lag time for changes on Amazon seems like it would throw a wrench into price change plans pegged to certain days.
> 
> Have you figured out a way to get them to change the prices more quickly?


Prices can change quickly, usually within a few hours. Even if it says, "Publishing......", the price might already be changed. He probably sets the new price Thursday night and changes it back Sunday morning (or something like that) to allow for the 24 hour stated price change.


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## rsullivan9597 (Nov 18, 2009)

A K Smith said:


> I understand what you're saying, but I think you underestimate the volume discount, and how willing Amazon is to let the small prices be paid for by the higher prices. Many used booksellers have been using the $0.99 price point on Amazon for some time now. Amazon's motivation is to be the place everyone goes because they can find the rare, the out-of-print, and the highly specialized, along with the mass-market.
> 
> To give another example of how willing they are to settle for less money, or even *take a loss*, in order to dominate the market, look at what they were doing before publishing houses agreed to the "agency model." They were marking e-books down to $9.99 and taking a loss in order to set their preferred price point.
> 
> Amazon CEO Jeff Bezos created the company with a plan to operate at a loss for the first 4-5 years in order to undercut the competition and achieve a dominant marketshare. That strategy worked quite well. You'll find a lot of people predicting that the "basic" Kindle will soon be free, and given Bezos's history, I wouldn't be surprised.


The $0.99 used book sellers are making their money on shipping. Amazon is not taking a loss on them. They buy their prodcut from remandered sold by the pound.

If you agree that Bezos is willing to sell at a loss to undercut the competition - then what makes you think he's not doing this on the $0.99 priced books? Seems to me the more likely scenario is that there is a loss here not "all profit" as you originally contended. But again. I don't think either of us have enough facts to be able to state anything but opinion on the profitablility of the $0.99 priced books.


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## Jan Hurst-Nicholson (Aug 25, 2010)

Don't forget the 60 day's interest they earn on all those 99c purchases.


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## Philip Chen (Aug 8, 2010)

I have tried both pricing at $2.99 and at 99 cents. 

Of course I would like my book to be a success, since the reason I wrote it ws to get the maximum number of people to read this story. 

After a lot of soul searching I decided that I could not consider myself successful unless the book started selling really well. 
As I am still on the climb up the hill, I decided to keep my price at 99 cents for the time being. 

If the book starts getting traction, i.e., becoming so situated that it is essentially selling itself, then I would consider raising it to $2.99.


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## Emma Midnight (Feb 19, 2011)

rsullivan9597 said:


> The $0.99 used book sellers are making their money on shipping. Amazon is not taking a loss on them. They buy their prodcut from remandered sold by the pound.
> 
> If you agree that Bezos is willing to sell at a loss to undercut the competition - then what makes you think he's not doing this on the $0.99 priced books? Seems to me the more likely scenario is that there is a loss here not "all profit" as you originally contended. But again. I don't think either of us have enough facts to be able to state anything but opinion on the profitablility of the $0.99 priced books.


I read a couple of years ago speculation that Apple's profit on each $0.99 iTunes song sold was very, very slim. It wouldn't surprise me at all if Amazon is not making very much on the $0.99 books. They have a lot of servers, a lot of IT professionals, and a lot of bandwidth to pay for.


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## Terrence OBrien (Oct 21, 2010)

_"- Employees - programmers, customer support reps, technical people, they all have salaris and benefits. Again this is spraed over many books but a cheap book has to contrbute to this just like an expensive one does."_

Financial accounting and cost accounting can lead in different directions when dealing with overhead. OH is often "spread" over units of production. Often the overhead is a fixed cost that does not change with production volume. The actual charge per unit is not known until the end of the accounting cycle when total unit production is known. This is a financial accounting approach.

In this case, the programmers, reps, and techies do not increase because Amazon added 1,000 books to the Kindle store. They don't hire new programmers or tech reps. they keep the same number. So its a fixed cost. For cost accounting purposes, we only look at the incremental cost of the unit. [Bogus Number Alert] If it costs 1 cent visa charge, 1 cent transmission, and 1 cent additional disk space, the incremental costs are 3 cents. Amazons gross margin is 65 cents. Their profit is 65 - 3 = 62. This is the cost accounting approach.

When we look at the total profitability of Amazon's venture, all costs have to be considered. But when we look at decisions on individual actions, cost accounting leads to the most profitable answer.


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## rsullivan9597 (Nov 18, 2009)

Emma Midnight said:


> I read a couple of years ago speculation that Apple's profit on each $0.99 iTunes song sold was very, very slim. It wouldn't surprise me at all if Amazon is not making very much on the $0.99 books. They have a lot of servers, a lot of IT professionals, and a lot of bandwidth to pay for.


Actuallly the way I heard it was the songs weren't the money maker - it was the ipods (the hardware themselves) that they were actually making their money on. It sounded suspicious to me at the time but it is what I remember about that marketplace.


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## Sebastian Kirby (Jan 3, 2011)

KR

An essential discussion.

Charles Dickens wrote for a penny a line and made ends meet by taking on lecture tours. 

Has that much changed?

Seb


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## Jan Hurst-Nicholson (Aug 25, 2010)

Beatrix Potter self-published her first book


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## D.R. Erickson (Mar 3, 2011)

I see writers with large backlists doing well at .99 but I haven't seen them produce much in the way of new work. With these otherwise wasted backlists, they've got a good idea, sort of volume strategy - buy one for a buck and then 10 more for 3. 

What I'm most curious to see is the shape of new work. Will all indie books now be 50k words long to accommodate these low prices? It's one thing to put an already squeezed-dried backlist on sale, but what will your next new novel look like?

Honestly, nothing but 50k word "novels" for a buck or two would drive me right back to the mainstream, even at $10-$13 a pop.


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## aaronpolson (Apr 4, 2010)

I used to work for a bookstore--years before anyone heard of Kindle.

I'm very late in this conversation, but I wanted to clarify:  bookstores do not make 50% on a mass market paperback.

That's ludicrous.  Our margin was about 50 cents.  Maybe that was our chain, but 50%?  Sorry.


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## daringnovelist (Apr 3, 2010)

A note on margins: Amazon may have a history of selling things at a loss, but Apple never has.  Apple's financial strategy has always been to maintain deep pockets, and even discounted items tend to be barely discounted.  

The other thing to remember about Bezos is that his strategies tend to be very "big picture."  When he takes a loss, it's not just to make money down the line.  Usually he's making money now.  Remember that Amazon collects phenomenal amounts of data -- they know the behavior of both the buyers and the sellers.

Personally, my guess is that Amazon is making money at 99 cents, probably good money in volume.  If not, then, as with amazon associates and market place sellers who sell things for one penny, they have found that they make good money in related purchases.

Camille


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## Sharlow (Dec 20, 2009)

I don't know. I think everyones worried about nothing. Unless Amazon does away with the 0.99 price range, 0.99 is here to stay. As to if you can make a profit at it? I've been out of work for the last 5 years due to health issues and some severe tragedy's, but I can say that when I was working for KOBI as a master controller, I made more money last month with my 0.99 and one 2.99 the I made in any month of working at the station.

If sales continue, and they are actually accelerating, I will double last months income from my books this month. I don't need much to live on, but I'm happy.


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## nicholaslasalla (Mar 5, 2011)

I don't see writers ever losing their jobs over this sort of thing.  If your product is interesting enough, people will pay whatever amount you put up there.  There's a big chunk of luck involved as well -- some people's stuff will take off for whatever reason while someone else's will sit and stagnate. 

The key is to keep writing.

The secret is to want to.

If what we're all after is money, then honestly there are easier sales jobs out there.  Work on the weekends.  You'll probably outsell your books, or at least earn more cash from said job.

If what we're after here is connection and recognition, then stick around and write as much as you can.  Write not because it's going to earn a buck, but because you want someone else to enjoy your head for a while.  That's what my goal is.  I'm 28, becoming more acutely aware of the passage of time with each passing year, and frankly I'm just happy to be here, happy to be at the top of my game and happy to be able to write and have someone else read it.  When I check my Kindle bookshelf reports and see I've sold one or two copies today, I'm not disappointed.  It's a thrill to me, particularly when that number goes up, as it has in the past few days.

Oh my God!  People are actually READING my words and getting something out of it!

That's what drives me on.

I may make a lot of money off E-Books, I may not.  I'll probably still have a day job for quite some time, but as long as I can do what I love -- write -- and people can still read what I write and enjoy it, I'll be happy.


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## Bob Mayer (Feb 20, 2011)

A bookstore that only cleared .50 cents on  mass market had something wrong.  I'm not saying profit, but publishers consign books at usually 50% off cover price.
We dropped the price on Atlantis and Chasing to .99 two weeks ago and we're averaging, overall, not just those two books, 5 times the sales we had before.  There are other factors involved, but as a lead, it helps.  
Very few authors in traditional publishing didn't have a 'job' in that they weren't making a living.  When the average advance is $5,000, how many people can make a living?  I lived in a one room, unheated apartment above a garage when my writing career started.  I took every gunslinging job the reserves would offer me as a trained Green Beret (and they sent me some weird places).  But I love writing, so nothing is going to run me out of the job.


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## Terrence OBrien (Oct 21, 2010)

_"What I'm most curious to see is the shape of new work. Will all indie books now be 50k words long to accommodate these low prices? It's one thing to put an already squeezed-dried backlist on sale, but what will your next new novel look like?"_

They will be the normal length. Those who find price too low for the normal length will simply drop out. Others will take their place. The biggest mistake anyone can make is to limit market development to scenarios that ensure their own success.


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## aaronpolson (Apr 4, 2010)

Normal length? Who decides? Haven't publishers been dictating "normal length" for years? If a novel is 50K and damn good, so be it. If it's 100K and amazing, wonderful. I don't want any more puffed up 100K garbage just because "the market" expects a certain word count. The content and quality of those 50-100K is more important (to me) than the number of words.

As a high school teacher, I share plenty of amazing books which wouldn't have cleared the word count bar for today's publishers: _The Great Gatsby_, _Fahrenheit 451_, _The Bell Jar_, _Of Mice & Men_...to name just a few.


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## Beatriz (Feb 22, 2011)

A.R. Williams said:


> I understand your concerns and have felt the same myself. Some writers have actual strategies they are using when pricing at .99, while others have no strategy at all and are basing their decision on emotion.
> 
> But here's the thing. You can drive yourself crazy worrying about how other writers are pricing their books. Make your objective to write the best book you can possibly write. Find a strategy that works for you to promote it. Use that strategy and then write more books. Life is too short to worry about whether the sky is going to fall tomorrow (it might). By making the best product you can and marketing it wisely should help you find the audience you need given enough time.


Very well said and I couldn't agree with you more.


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## Terrence OBrien (Oct 21, 2010)

_"Normal length? Who decides? "_

Nobody decides. Count all the pages and divide my the number of books. That allows for various lengths. There is no reason to think the average will change.


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## Leigh Reynolds (Mar 2, 2011)

Bob Mayer said:


> e is $5,000, how many people can make a living? I lived in a one room, unheated apartment above a garage when my writing career started. I took every gunslinging job the reserves would offer me as a trained Green Beret (and they sent me some weird places). But I love writing, so nothing is going to run me out of the job.


Green Beret Gunslinger, now there's a book title.


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## MosesSiregarIII (Jul 15, 2010)

nicholaslasalla said:


> I don't see writers ever losing their jobs over this sort of thing. If your product is interesting enough, people will pay whatever amount you put up there. There's a big chunk of luck involved as well -- some people's stuff will take off for whatever reason while someone else's will sit and stagnate.
> 
> The key is to keep writing.
> 
> ...


I like.


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## kcmay (Jul 14, 2010)

Bob Mayer said:


> Authors have been getting run out of the job long before Kindle. A $5.99 mass market paperback at 8% royalty netted an author what? .47?


I'm with Bob. Midlist authors have been struggling for ages to earn a living writing full time. But don't forget, they have to pay their agent 10-15% out of that $0.47, netting them only about 40 cents per book. That's what BN currently pays on a 99c book, and 5c more than what Amazon pays. On a book that's in print forever and available in more countries than just one's own, it's not a bad deal.


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## Guest (Mar 7, 2011)

It's a gamble... Really, it has become a gamble...


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## Beatriz (Feb 22, 2011)

TheoVonCezar said:


> It's a gamble... Really, it has become a gamble...


Wasn't it always a gamble? When it comes to the arts, it is always a gamble but most of us have to do it or die.


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## Edward C. Patterson (Mar 28, 2009)

We're authors, which requires writing among other things), not lawyers. We don;t have billable hours with fiction. Quantifying a non-commodity can only drive you to cut off an ear and paint yourself silly.

Edward C. Patterson
No one could afford my hourly rate, so why charge it. Unless, of course you're talking about my street corner.


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## Carolyn J. Rose Mystery Writer (Aug 10, 2010)

I write in my spare time (after my day job is over for the day), and money isn't the motivating factor - I want readers to experience my settings and characters. So I always ask myself, "What else would you be doing with the time you spend writing?"
The answers are pretty mundane things like cleaning the house, shopping, etc. Getting out of doing those things by writing is . . . well, priceless.


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## Joseph Robert Lewis (Oct 31, 2010)

Part of the issue is that Amazon ranks bestselling books by the number of units sold and not the revenue generated. 

So you sell five $2.99 books and make $10 and I sell twenty $0.99 books and make $6. I get ranked as a bestseller because I sold four times the volume even though your sales were far more profitable (for you and Amazon both).

If Amazon publicized books by profitability, the ranks might look very different.


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## Alan Ryker (Feb 18, 2011)

aaronpolson said:


> Haven't publishers been dictating "normal length" for years? If a novel is 50K and d*mn good, so be it.


Yes they have, and it shows. The novel is bloated and meandering. And somehow, people have grown to enjoy that. Look at the popularity of hysterical realism.

I love lean, mean fiction and am ecstatic to now be able to read it from others and find readers for mine.


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## rsullivan9597 (Nov 18, 2009)

Joseph Robert Lewis said:


> Part of the issue is that Amazon ranks bestselling books by the number of units sold and not the revenue generated.
> 
> So you sell five $2.99 books and make $10 and I sell twenty $0.99 books and make $6. I get ranked as a bestseller because I sold four times the volume even though your sales were far more profitable (for you and Amazon both).
> 
> If Amazon publicized books by profitability, the ranks might look very different.


Too true


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## FictionalWriter (Aug 4, 2010)

Stephanie Laurens (bestselling romance author) recently suggested that they also include a Top Grossing list. I think it's a good idea.



Joseph Robert Lewis said:


> Part of the issue is that Amazon ranks bestselling books by the number of units sold and not the revenue generated.
> 
> So you sell five $2.99 books and make $10 and I sell twenty $0.99 books and make $6. I get ranked as a bestseller because I sold four times the volume even though your sales were far more profitable (for you and Amazon both).
> 
> If Amazon publicized books by profitability, the ranks might look very different.


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## NickSpalding (Apr 21, 2010)

Joseph Robert Lewis said:


> Part of the issue is that Amazon ranks bestselling books by the number of units sold and not the revenue generated.
> 
> So you sell five $2.99 books and make $10 and I sell twenty $0.99 books and make $6. I get ranked as a bestseller because I sold four times the volume even though your sales were far more profitable (for you and Amazon both).
> 
> If Amazon publicized books by profitability, the ranks might look very different.


This surrounded by twinkly fairy lights.


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## Edward C. Patterson (Mar 28, 2009)

NickSpalding said:


> This surrounded by twinkly fairy lights.


Leave us fairies out of it. 

Render unto Caesar what is Caesar's.
Render unto Amazon what is Amazon's.

Amazon knows that circulation is better than cash for readers (not for Amazon, but hey). Volume means circulation and circulation means exposure and, if the work is good, love and adoration, and ego is the oxygen to an author. I mean, look at the Smashwords promotional. I've put over 200 books into circulation in a week without promoting it. It didn't improve my Amazon rankings, but who needs any of it when you have fairy dust.  I do believe in fairies, I do, I do. I do.

Edward C. Patterson


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## Will Write for Gruel (Oct 16, 2010)

historicalromauthor said:


> Stephanie Laurens (bestselling romance author) recently suggested that they also include a Top Grossing list. I think it's a good idea.


If people are so concerned about how price affects sales, then just have three tiers of bestsellers. Tier 1 is $12 and up, tier 2 is $5.00 - $11.99, and tier 3 would be $0.99 - $4.99. Forget about hardback and paperback distinctions. Let it all be done by price.


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## Bob Mayer (Feb 20, 2011)

I'm just wondering how many writers actually have it is their primary job?  I remember back when I started over 20 years ago, Michael Crichton said there were 200 fiction writers making a living writing novels.  I think that was a little bit low, but still.  I think we see the handful that are selling enough on Kindle to make a living, but for each one, there are probably 999 who aren't.  It was the same with traditional publishing.
Every author I know wants to make money writing for one reason:  to keep writing.


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## rsullivan9597 (Nov 18, 2009)

historicalromauthor said:


> Stephanie Laurens (bestselling romance author) recently suggested that they also include a Top Grossing list. I think it's a good idea.


I love this idea


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## Sharlow (Dec 20, 2009)

rsullivan9597 said:


> I love this idea


Would most authors want that information shared?


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## Terrence OBrien (Oct 21, 2010)

The fact is 99 cent books are selling more units than many higher priced books. Why would consumers care how much revenue a producer is getting from a book?


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## David &#039;Half-Orc&#039; Dalglish (Feb 1, 2010)

Terrence OBrien said:


> The fact is 99 cent books are selling more units than many higher priced books. Why would consumers care how much revenue a producer is getting from a book?


I really, really doubt many readers would care. This sounds like something authors would care about, and as much as Amazon caters to authors, I doubt this will be something they do. I wouldn't be surprised to see more filtering options to drop out cheap books, though, when organizing various lists and rankings.


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## edwardgtalbot (Apr 28, 2010)

Alan Ryker said:


> Yes they have, and it shows. The novel is bloated and meandering. And somehow, people have grown to enjoy that. Look at the popularity of hysterical realism.
> 
> I love lean, mean fiction and am ecstatic to now be able to read it from others and find readers for mine.


I could not agree more. I just released a 37K word thriller I am calling a "half-novel". The initial outline for the thing didn't look all that different than that of a novel, though I knew it would be on the short side of my normal 100K. As I started writing, I realized I could tell the story more effectively with half the words, so by the time I was 10% done, I knew I had something other than a novel.

If e-pubbing wasn't an option, I would have added to the outline. I have an idea for the sequel and I probably would have combined that into a single book. It would have had more moving parts and more characters. I'm not going to definitively say that would have been worse, but it would not have been the same story I came up with. And people seem to be digging this one a lot more on Smashwords this week than they do my full-length thriller.

I know some people will simply not read fiction this short. But I very strongly suspect that over just the next few years, the vast majority of readers will wind up embracing the variation in length and it will be a net positive.


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## Aaron Pogue (Feb 18, 2011)

For anyone agonizing over the effect we're having, the impression we're giving of the "value" of a writer, or anything else by pricing our books low...check out the book Free by Chris Anderson. It's incredibly easy to read, and astonishingly informative.

The fact of the matter is, in a competitive marketplace the price of goods will fall toward the marginal costs of distribution (that is, the cost of each additional product shipped after the first one), and with digital goods the marginal costs are near-zero.

We don't need to wring our hands in frustration at all the sell-out writers devaluing our profession (or worry that we're doing that ourselves). Fundamental laws of economics would see to that happening whether we voluntarily participated or not.

And that's not a bad thing. That's why I recommend reading the book. There is a huge amount of money to be made from selling things very cheaply (or giving them away free). You just have to understand the new market.

And from what I've seen, there are a lot more indie- and self-published authors out there, pricing their books at $0.99 or $2.99, who understand the new market than there are traditional presses.


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## edwardgtalbot (Apr 28, 2010)

Aaron Pogue said:


> The fact of the matter is, in a competitive marketplace the price of goods will fall toward the marginal costs of distribution (that is, the cost of each additional product shipped after the first one), and with digital goods the marginal costs are near-zero.


That has not proven at all true with some other digital goods, like many types of software. There are other fundamental economic factors that impact this. A simple Econ 101 list of all the ways the invisible hand tends to fail is a good starting point.

That said, I tend to agree with you that ebooks will probably wind up fairly close to zero. But only if the problems of differentiation/perception of value that currently exist get addressed. Economic theory does not suggest that in every case they will.


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## Terrence OBrien (Oct 21, 2010)

Price does indeed plummet to marginal cost for fungible goods. But we also need an unconstrained supply. The classic case is the fishery. However, where we have product differentiation, we lack the fungible goods characteristic. A supplier of a differentiated good with zero marginal cost presents a horizontal supply curve that intersects the demand curve at some non-zero point. The supplier essentially picks some price point on the demand curve.

That's why software isn't zero, and it explains why people buy MS Office when Open Office is free. Companies place a value on the Office product due to support and the networking effect. So Microsoft prices accordingly.

An author is faced with differentiating his book from all others. The third book of a trilogy is certainly worth more than zero for someone who liked the first two. So the author can capture that value in a non-zero price.

However, zero may very well be where authors start the differentiation process. Before anyone buys the first copy, all those thrillers or romances are fungible goods. They are all unknowns. Differentiation of a book starts with the first reader.

To further confuse the matter, the author of a trilogy is a monopolist. That is a different pricing theory. He's the only one who sells the third book. You can't get it from anyone else.


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## Aaron Pogue (Feb 18, 2011)

Terrence OBrien said:


> Price does indeed plummet to marginal cost for fungible goods. But we also need an unconstrained supply. The classic case is the fishery. However, where we have product differentiation, we lack the fungible goods characteristic. A supplier of a differentiated good with zero marginal cost presents a horizontal supply curve that intersects the demand curve at some non-zero point. The supplier essentially picks some price point on the demand curve.
> 
> That's why software isn't zero, and it explains why people buy MS Office when Open Office is free. Companies place a value on the Office product due to support and the networking effect. So Microsoft prices accordingly.
> 
> ...


I had to read some of those paragraphs two or three times before I fully understood them...but (eventually) that makes a lot of sense.

And I don't think it's a bad place to be. I _like_ the idea that authors get to determine the value of their books based on the quality of their stories. If that happens by everyone eventually pricing Book One at $0.00, that's a small price to pay to get control of our economic futures.


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## Alan Ryker (Feb 18, 2011)

edwardgtalbot said:


> I know some people will simply not read fiction this short. But I very strongly suspect that over just the next few years, the vast majority of readers will wind up embracing the variation in length and it will be a net positive.


Good on you, man. Which one of your books is it? I'd like to add it to my tbr pile.

And readers will get used to the difference. As more of us release shorter works, perceptions will change. People are just accustomed to the current length. Before long there will be just as many people embracing half-novels, as you called it, as there are epic fantasy fans who love huge tomes. The list of works we call classics (containing both Ulysses and The Great Gatsby) shows that what people like in contemporary fiction is imposed by outside, artificial constraints.


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## Terrence OBrien (Oct 21, 2010)

We might remember _Guiding Light _ and A_s the World Turns_ ran for over 50 years on TV. So we know an audience both endures and renews. A micro-novel episode every month for the next fifty years?

_"I had to read some of those paragraphs two or three times before I fully understood them...but (eventually) that makes a lot of sense."_

When I started writing novels, I promised myself to never let economics sully a single page. That would be an eternity of zero price.


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## edwardgtalbot (Apr 28, 2010)

Alan Ryker said:


> Good on you, man. Which one of your books is it? I'd like to add it to my tbr pile.
> 
> And readers will get used to the difference. As more of us release shorter works, perceptions will change. People are just accustomed to the current length. Before long there will be just as many people embracing half-novels, as you called it, as there are epic fantasy fans who love huge tomes. The list of works we call classics (containing both Ulysses and The Great Gatsby) shows that what people like in contemporary fiction is imposed by outside, artificial constraints.


It's "Alive From New York"

Yes, I think and hope perceptions will change. I'm happy to read a 200,000 word book or a 30,000 word book as long as those specific books feel right at that length. Certainly there may be a point where a work is so short that readers are not likely to pay for it, but there's zero reason to think it will wind up being near current standard "novel length"


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## Jamie Case (Feb 15, 2011)

I think a Top Grossing List would be a bad idea for indie authors. Awesome for nosy people like me though.


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## daringnovelist (Apr 3, 2010)

Terrence OBrien said:


> The fact is 99 cent books are selling more units than many higher priced books. Why would consumers care how much revenue a producer is getting from a book?


Consumers love that sort of information. Odds are they wouldn't associate it with the price -- unless the price were outrageous -- but they love to hear about both the struggling underdogs (especially if they make good) and the Lifestyles of the Rich and Famous. I mean, come on, how many stories do we need about the top incomes of stars, and politicians, and businessmen? Apparently an endless number.

So itis _newsworthy_, and good for writers to tout.

The problem is that it's not good for Amazon to tout. They don't want to give out numbers. Note that even though we can see the rankings, Amazon doesn't reveal how many sales led to those rankings. The attraction of earnings numbers is the actual number itself. It's a story about someone getting rich. Amazon doesn't want to give out precious data, and even if they did, the writers may not be happy with it.... so I doubt Amazon will ever create such a list.

That doesn't stop writers from using it.

Camille


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## Eric C (Aug 3, 2009)

Jamie Case said:


> I think a Top Grossing List would be a bad idea for indie authors. Awesome for nosy people like me though.


A top grossing list is what Mike Shatzkin (a consultant to big publishing) is pushing for, and he points to the movie biz as an example.


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## Eric C (Aug 3, 2009)

daringnovelist said:


> The problem is that it's not good for Amazon to tout. They don't want to give out numbers. Note that even though we can see the rankings, Amazon doesn't reveal how many sales led to those rankings. The attraction of earnings numbers is the actual number itself. It's a story about someone getting rich. Amazon doesn't want to give out precious data, and even if they did, the writers may not be happy with it.... so I doubt Amazon will ever create such a list.


My guess is the NY Times will adopt a revenue based best seller list within the year. I'm sure you're right that Amazon won't.


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## A K Smith (Feb 15, 2011)

Eric C said:


> A top grossing list is what Mike Shatzkin (a consultant to big publishing) is pushing for, and he points to the movie biz as an example.


Yes, but gross really reflects the number of tickets sold, since tickets are all the same price on average. The reason the movie biz likes to see the numbers is because they *spend* variable amounts to make them. If a movie grosses 200 million it could still net a loss. But two different movies which gross 200 million have sold about the same number of tickets each.


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## Terrence OBrien (Oct 21, 2010)

_"A top grossing list is what Mike Shatzkin (a consultant to big publishing) is pushing for, and he points to the movie biz as an example."_

Shatzkin would have a good analogy if some new first-run movies had 99 cent tickets and some had $10 tickets. As it is, total sales is closely correlated to total tickets. A list of movies by ticket dollar revenue and a list by number of tickets sold would be very similar. This isn't the case for books, and I speculate he wants to change it in order to change the composition of the list to favor published books. That's what I would be doing if I was being paid by the publishers.


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## daringnovelist (Apr 3, 2010)

Terrence OBrien said:


> _"A top grossing list is what Mike Shatzkin (a consultant to big publishing) is pushing for, and he points to the movie biz as an example."_
> 
> Shatzkin would have a good analogy if some new first-run movies had 99 cent tickets and some had $10 tickets. As it is, total sales is closely correlated to total tickets. A list of movies by ticket dollar revenue and a list by number of tickets sold would be very similar. This isn't the case for books, and I speculate he wants to change it in order to change the composition of the list to favor published books. That's what I would be doing if I was being paid by the publishers.


Actually, first run movies DO have varying price ranges. Different theaters, different times of day. There are student and senior citizen prices. There's also the issue of how many screens a flick is showing on.

And because of that Hollywood trade news outlets always report multiple numbers -- usually gross, weekday/weekend, and "per screen," plus how many weeks out, percentages up or down. They also usually drill down to comparisons to same weekend on previous years, and inflation adjusted dollars.

The reason the Hollywood model is like that is because it's an investment. It's business news. But I do think one element may end up working like the indies; I think the "gross" vs. "per screen" -- which is the way they measure indie films in particular -- could be equivalent to looking at gross vs. sales for books.

Camille


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## Terrence OBrien (Oct 21, 2010)

_"Actually, first run movies DO have varying price ranges. Different theaters, different times of day. There are student and senior citizen prices. There's also the issue of how many screens a flick is showing on."_

Ticket prices do vary, but they are all subject to similar variance. I agree lists are not normalized for screens. Not so with eBooks selling for 99 cents and $10.

We might stand back and ask why there is suddenly an effort to change best seller lists from counting copies to counting dollars. Who benefits from the copies model? Who benefits from the dollars model?


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## daringnovelist (Apr 3, 2010)

Terrence OBrien said:


> _"Actually, first run movies DO have varying price ranges. Different theaters, different times of day. There are student and senior citizen prices. There's also the issue of how many screens a flick is showing on."_
> 
> Ticket prices do vary, but they are all subject to similar variance. I agree lists are not normalized for screens. Not so with eBooks selling for 99 cents and $10.
> 
> We might stand back and ask why there is suddenly an effort to change best seller lists from counting copies to counting dollars. Who benefits from the copies model? Who benefits from the dollars model?


But what I'm saying is that the lists ARE the equivalent of normalized, in that ALL of that info is provided -- including the dollar variances. (And yes, there are definite variances. Some movies have no discount showings, some appeal largely to the discount audiences -- all that info is tracked in available within the lists.)

In Hollywood, they don't choose either/or - they do it all. The only reason we don't do it all is because it's not in Amazon's interests to disclose its analytics. (And before Amazon, the distributors considered it to be internal data.) In Hollywood, the whole town LIVES by analytics, and everybody knows the difference between the seats and the gross and the per screen.

Why would we change? I don't think we will. For one thing the best seller lists were never accurate analytics before. They were based on surveys, with all the built in biases that surveys have to have. (Weighting of data to attempt to represent what those who created the list felt were the most important elements, etc.) And one reason there would be pressure to change is because past best seller lists often didn't include discount publishing, and publishers would certainly exert pressure to keep the discounters out of the pool now.

The other issue is simply the access to accurate and verifiable numbers. Amazon does not like to provide them as a whole - and they aren't the only ebook publishers out there. Irregular reporting brings us back to weighting and sampling -- or publisher self-reporting.

IMHO, providing Hollywood style (multiple list) numbers would not advantage anyone in particular -- though not providing it does disadvantage those who are under represented on whatever list is chosen as "the" list. However, it isn't in Amazon's best interests, so even if we do see it in some small token way, I don't expect it really.

Camille


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## Terrence OBrien (Oct 21, 2010)

1. My comments are limited to the referenced Top Grossing list, not all of Hollywood analytics. 

2. One reason we know so much about individual Hollywood movies is they are often financed and organized as securities offerings subject to SEC reporting regulations. We probably know a lot more about the results of the last Harry Potter movie than we know about the book.

2. I'd suggest the current impetus to change is due to the appearance of 99 cent books at the top of the list.

3. Amazon does not give out much in the way of sales figures. This is very similar to the publishers' behavior. It seems to be an industry characteristic.


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## Guest (Mar 13, 2011)

I haven't read the whole thread, so apologies if others have already made similar responses.



KRCox said:


> Some rough numbers here:
> Writing the Book: 500-1000 hours (including brainstorming, planning, rewrites, etc..)
> @ 2.99 per book
> 
> ...


Your math assumes a book is only on sale for a year. In truth, you're creating an asset that can continue to pay you indefinitely. Ebooks need not ever go out of print. Run this out over the next 10 or 20 years and your hourly wage changes a lot.

Also, as I've found with blogging (I make a living from content I write and put out for free), there's a compounding effect. As you produce more content and become more well known, your earlier work gets more recognition and becomes more popular. (This assumes you're a good writer and you're entertaining/informing folks, of course; there's always a question of that... are your readers going on to buy your other books?) 50 ebooks a month isn't very many, so I question that part of the equation too. I'm a n00b writing in unpopular genres, and even I'm doing better than that. Lots of people on this board sell waaaay more than that per month.



> And what value is actually being places on authors today if they're willing to sell themselves so low?
> 
> What're your thoughts?


The problem is most of us think like artists or wage slaves and not entrepreneurs, which is what we have to be if we want to sell our art. Many of us aren't comfortable "selling" though and that shows. A lot of us fail because, when we *do* try to market, we sit there and try what all the other unsuccessful folks are doing instead of studying the successful people and figuring out what they're doing. And by "doing" I mean doing today, not a year or two ago. Just because some of the pioneers made their first sales by posting in the Amazon forums doesn't mean you can get far doing that today. They got rewarded for being early adopters. We have to figure out new strategies to get recognized going forward.

Good luck!


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## Raven Mardirosian (Mar 9, 2011)

It's not so much about the price but volume. It's only going to be a year or two before everything is .99.


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## rsullivan9597 (Nov 18, 2009)

Raven Mardirosian said:


> It's not so much about the price but volume. It's only going to be a year or two before everything is .99.


I certainly hope your wrong as I think that will make it MORE difficult for indie writers to make a living wage. I was getting a bit frightened when the big-six was doing some serious discounting a while back ($5.00 the most common but a few at $0.99) but I think that was mainly to get on the NYT bestseller list for ebooks and they have now revereted to a more standard pricing strategy. Currently the top 100 breaks down as follows:


60% $5 or more
40% $2.99 or less


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## Jamie Case (Feb 15, 2011)

I think indie authors have more to fear from boutique publishers than they do from the Big 6. Even though as a group boutique publishers are responsible for a large percentage of books published, they often get left out of the conversation. Of course their reaction to the new marketplace will be much slower because they are so fragmented, but I think once they really enter the game, they'll be the ones who compete with indies on price. I think I read somewhere that Mills & Boons (or one of the other boutique publishers) is already in the process of creating an e-book only line. 10 bucks says their offerings fall squarely in the .99 - 2.99 range.


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## KRCox (Feb 18, 2011)

Sebastian Kirby said:


> KR
> 
> An essential discussion.
> 
> ...


Out of curiosity I looked it up and 1 pence in 1870 a line would be about 50c US today. So he's doing pretty well I think.

But I get your point. No, from the looks of things, it hasn't changed a lot. However, that was the reason I started this thread to begin with. I was hoping to encourage all authors to stop undercutting each other as all that will happen is destroy the industry for all of us. $3.99 is really the lowest any should charge for a novella, 5.99 for a novel, and the rest is at discretion. Still much cheaper than paper, people will get used to the pricing models, and authors will, even the crappiest of us, pull in that extra few bucks a month to help with rent.

I'm charging 99c for a short story I wrote, it's 28 pages, but my book is $4.99 because it's less than a movie ticket, and even though it's a novella, at 257 pages, or about 55,000 words, assuming an average of 250 words per minute is 3.6 hours of enjoyment. The average novella on paper is from 6.99-10.99, eh?

$12-15 for 2 hours of movie, $4.99 for 3-4 hours of reading and you can do it again and again if you choose. The movie in the theatre is over and to go again, it's another $12-15.

Oh, and my book, based on talking to as many who read it as I can, is worth the 5 bucks.

There is such a thing as competing to death. That's not a good solution for anyone.

Good Luck.


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## Will Write for Gruel (Oct 16, 2010)

Half-Orc said:


> I really, really doubt many readers would care. This sounds like something authors would care about, and as much as Amazon caters to authors, I doubt this will be something they do. I wouldn't be surprised to see more filtering options to drop out cheap books, though, when organizing various lists and rankings.


And the opposite -- options to only see books in a certain price range. I'd like to only see $0.99 - $2.99, for example. I will exhaust those options before I move on to higher priced books.


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## Terrence OBrien (Oct 21, 2010)

_"I was hoping to encourage all authors to stop undercutting each other as all that will happen is destroy the industry for all of us."_

Authors don't control price. Amazon does. The fact that they let us set price now shouldn't be taken to mean they always will. Nor should we ever think they will let author price setting ruin their business.

In terms of getting authors to quit undercutting each other? That has been tried over and over again in various industries. It is rarely successful, and success has always depended on having a low number of players in the cartel, or controlling government muscle.

Each author will price where her individual self-interest indicates she will make the most money. That is exactly what we see now.


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## Edward C. Patterson (Mar 28, 2009)

This girl agrees.


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## edwardgtalbot (Apr 28, 2010)

Terrence OBrien said:


> Each author will price where her individual self-interest indicates she will make the most money. That is exactly what we see now.


I agree with your take on all this, including the economics stuff, but I suspect the above is not literally true. It would be true if profit motive was the only motive. What remains to be seen is whether the fact that so few authors will make a living writing changes this equation in a meaningful way. Maybe for practical purposes, maximizing profit WILL be the driving factor. Or maybe enough authors will care more about getting their work read that it will have a material impact on the economics. I don't think anyone knows at this point.


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## Will Write for Gruel (Oct 16, 2010)

edwardgtalbot said:


> I agree with your take on all this, including the economics stuff, but I suspect the above is not literally true. It would be true if profit motive was the only motive. What remains to be seen is whether the fact that so few authors will make a living writing changes this equation in a meaningful way. Maybe for practical purposes, maximizing profit WILL be the driving factor. Or maybe enough authors will care more about getting their work read that it will have a material impact on the economics. I don't think anyone knows at this point.


I suspect a lot of it will be similar to how blogs operate. Blogs get started with an enthusiastic burst, but most are abandoned because at some point they seem more work than fun. I can see this happening with indie writers too. Write, publish, and the profits don't come, and the enthusiasm vanishes.


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## Terrence OBrien (Oct 21, 2010)

_"Or maybe enough authors will care more about getting their work read that it will have a material impact on the economics."_

Anything is possible. But it's instructive to look at how people behave in other pricing situations, and then ask if there is some fundamental difference in the make up of authors. Maybe there is, but I don't see it. This is why I see any effort to urge authors to price higher for the greater good to be futile. It never works. And greater good usually pivots around some individual's self interest.

We might look at free software like Linux or Open Office, but we have to acknowledge property rights are absent. Nobody owns Linux like MicroSoft owns Windows. Sun was instrumental in getting Open Office off the ground, but that was a commercial attack on MicroSoft in a struggle for server dominance.

There is an interesting model with some commercial software. They give away basic versions for free, and charge for more expensive versions. AVG virus protection is a good example. Adobe Reader is free, but that drives demand for purchase of Adobe Writer. MS gives away Word reader which builds the network effect for purchase of MS Word. MS gives away C++ run module which builds demand for C++ compilers.

I can certainly see an author pricing as low as possible in an effort to gain a following, but that price would be the profit maximizing point that is part of a program of maximizing revenue over a period rather than a point.


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## Guest (Mar 13, 2011)

Aaron Pogue

Guess Microsoft hasn't read the book where your cited concept appears:

"The fact of the matter is, in a competitive marketplace the price of goods will fall toward the marginal costs of distribution (that is, the cost of each additional product shipped after the first one), and with digital goods the marginal costs are near-zero."

I remember years ago buy Microsoft Windows (3.1) I believe. The package came with about 18 floppy disks, and a hefty printed manual.

Today the new Windows comes on one disk (material cost less than $1) and the manual is on the disk (eliminating a bunch of paper and ink).

If Microsoft had read that book about marginal costs of distribution, then Windows should sell for a lot lot less than $100

A movie ticket cost me $8 (senior special), small bag of popcorn $5 and a small soda $5 a couple of weeks ago. All I'm left with is the memory of that night out. Some friends have tried to tell me that they pay much more than 99-cents when they walk into Starbucks.

A few weeks ago I read that someone had calculated the numbers and found that computer printer ink would retail at about $1,000 a gallon.

For years the publishing industry has paid writers peanuts because we would write for free just to see our work in print.

Even in this age of PayPal and computerized inventories, we still mostly wait hat in hand while the book stores and publishers take 90 days or so before they render us our money.

Now we should be able to control most of the process. Let's be careful about pricing our work which should certainly be worth at least a movie ticket or a cup of coffee.

Who is John Galt?


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## taufour (Dec 14, 2010)

KR you've raised an interesting question and I don't think anyone has a real answer to this one. I write sci fi and am now finishing my first fantasy/horror novel. I sense in my gut that if readers like a cover or a premise or a story logline, they will be happy to fork over an additional dollar or so to have the book. I also sense that if writers price their own work too low, readers sense that the work is 'cheap' somehow -- either not done well or that we are selling to just make profit rather than expose a good audience to a great story?
But I'd like to see what others think as well on this one; I am new to the Kindled book experience and my second in the series HAMMERSPACE, will be Kindled soon, so I have to make that choice again.
Of more concern is the Loan policy -- that might really put us out of business! I don't think we intend to just loan our books to the masses like that -- I donate to libraries as well but when I put a book on Kindle I'd like to make some spare change on it
VJ WAKS
TAU4
HAMMERSPACE
vjwaks.com


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## astonwest (Dec 29, 2010)

Just my opinion, but e-book pricing will have to remain on the low-end. Most content on the internet (aside from books) has been provided for free so long that users tend to expect it; some even demand it. Most readers understand they'll have to pay *something* for most books, but if it exceeds their personal comfort limit, they'll pass on the purchase. With self-publishing becoming so prevalent in the e-book world, that comfort level is going to be skewed toward the low-end of $2.99 and below.

I saw a comment earlier up-thread about authors competing with each other. What's interesting, in my mind anyway, is that with lower prices on books, readers can purchase more books of a variety than they used to when print was their only option. How many new authors could a reader try out when they're spending $10 on e-books versus when they were spending $25 on print books?

Of course, my opinion's likely skewed, since I write to tell stories and make a little side income, versus trying to have writing be my sole source.


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## Aaron Pogue (Feb 18, 2011)

Okey Dokey said:


> Aaron Pogue
> 
> Guess Microsoft hasn't read the book where your cited concept appears:


Actually, the book has a whole chapter on Microsoft. It's his direct answer to the music industry's absurd claim that they "can't compete with free" (and so need government intervention).

Bear in mind, I was trying to express a whole book's worth economics in a little bitty comment on a forum. What Microsoft does is sell the service, not the product (just like Terrence OBrien was talking about above). If it were _just_ MS Office (or MS Windows), they'd have a hard time competing with free competitors like OpenOffice and Linux, but instead they price their products based on the value of the customer support and installed userbase (since everyone is using Word, it's worth using Word).

Chris Anderson's recommendation throughout his book is the "freemium" model -- something else Terrence mentioned above -- giving away a portion of your product for free and selling a more advanced version.

I think the direct parallel in e-Books would be the $0.99/$2.99 split (or whatever the second half ends up being), where a first book in a series is given away, and the rest of the series is priced higher. You wouldn't expect to see total conversion, but you wouldn't have to. The market is so large that you can afford to "give away" that first book to 95% of your audience if 5% will become long-term paying customers.


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## Joseph Robert Lewis (Oct 31, 2010)

I think in a few years, the novelty of self-publishing will wear off, especially as more people realize that it's not a guaranteed get-rich-quick scheme. Eventually, the herd will thin out a bit to just those people who want to make a real effort because they love writing.


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## Terrence OBrien (Oct 21, 2010)

I'm not sure about that thinning herd. For years people have been writing books and querying agents. The herd seems to be a tough bunch to thin.


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## Edward C. Patterson (Mar 28, 2009)

Terrence OBrien said:


> I'm not sure about that thinning herd. For years people have been writing books and querying agents. The herd seems to be a tough bunch to thin.


And I thought we were all on a diet.  Tougher than the herd is one old gal who overlooks the fast running river and just can;t wait to Moose on it.

Edward C. Patterson


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## Carol (was Dara) (Feb 19, 2011)

I've just unearthed this old thread to share a meandering and possibly pointless anecdote. Hey, it's past my bedtime. I'm allowed to make no sense, right?

A few years ago I was a young writer eager to see my work published and to make money from it. So I joined a site where people posted writing projects they needed done and the rest of us bid on the jobs.

There were a ton of writers on this site but a limited number of projects available. We writers were all so eager to undercut each other we'd promise anything no matter how outrageous. We'd bid $1 on a project (only because we weren't allowed to bid $0.01) and promise to have it turned in by an insane deadline, even though we'd be up half the night typing frantically to make it in time. For $1. The labor itself was worth far and above $1 and we all knew it.

The competition was just so fierce and we were all so desperate to make ourselves stand out from the next guy that we'd scramble to let ourselves be taken advantage of. The whole experience felt so demeaning I eventually dropped out. The only ones who were gaining anything worthwhile from any of this were the project posters who were making a comfortable living off the writers' backs. And none of us could really complain about that because we allowed them to do it. Heck, we _invited_ them to do it and vied for the honor of being chosen.

You might think I'm saying all this to make some kind of point against the $0.99 pricing of ebooks. I'm not. My feelings on the subject or too divided for me to take a particular stance one way or another. All I know is, when I see the words "$0.99 novel" or "race to the bottom" these are the memories that surface.


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## mathewferguson (Oct 24, 2010)

Dara England said:


> I've just unearthed this old thread to share a meandering and possibly pointless anecdote. Hey, it's past my bedtime. I'm allowed to make no sense, right?
> 
> A few years ago I was a young writer eager to see my work published and to make money from it. So I joined a site where people posted writing projects they needed done and the rest of us bid on the jobs.
> 
> ...


You're absolutely right!

That fierce competition drives crazy things.

Although I must admit that I've done it too and would do it again if I thought it worthwhile. I started at free and underbid other writers. I've been in meetings where they've said "this guy will do it for $2000" and I say "I'll do it for free". I have no ethical problem undercutting another writer just like those that have undercut me have no problem with it.

The high price, high sale book will always make the most money for Amazon but the 99 cent book with Amazon taking $0.65 cents will make them more in aggregate.

Look at Joe Konrath's recent experiment with The List. At the 99 cent level it was selling an average of 1082 per day, earning Joe $375 and Amazon $696. At $2.99 it is selling an average of 823 per day, earning Joe $1723 per day and Amazon $738.43.

If sales drop below 796 per day due to the price going back to $2.99 then after that Amazon loses money relative to earnings at the 99 cent level.

The 99 cent level represents maximum earnings for Amazon as a proportion of every dollar spent.

If I spend $1000 a year on only 99 cent books, the author will take $350 and Amazon will take $650.

If I spend $1000 a year on only $2.99 books, the author will take $700 and Amazon will take $300.

It is clearly to their benefit to have high volume 99 cent sales dominating their eBook range.

And if people start thinking 99 cents is the right price point then this flows back into sales data and rankings which reinforces it until you see the top half of the top 100 are all 99 cent books and people decrease purchases of $2.99 books.


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## Rex Jameson (Mar 8, 2011)

This is a tough thread to re-read. Excellent points all around, but no clear answer. For those that think the "herd will thin", I think you're very wrong. This is only the beginning, and there will always be a new generation of writers that are willing to undercut in order to get a share and an opportunity, and self publishing will always have this issue. The market appears to handle quite a bit of .99 - 2.99 books right now. We can only hope that the market itself gets bigger as technology becomes more widespread and books become so much easier to pick up.


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## rsullivan9597 (Nov 18, 2009)

Joseph Robert Lewis said:


> I think in a few years, the novelty of self-publishing will wear off, especially as more people realize that it's not a guaranteed get-rich-quick scheme. Eventually, the herd will thin out a bit to just those people who want to make a real effort because they love writing.


If anything the number of self-pubbers will increase, especially those who used to publish traditionally that are going to get fed up with the 17.5% / 52.5% split between author and publisher.


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## JJayKamp (Mar 11, 2011)

Mathew, that's interesting about Konrath making more money at the higher price point, since he's the champion of the .99 cent book.  The figures you quoted are making me rethink my pricing strategy.

I also want to thank the person (sorry, this thread is so long, I've forgotten your name) who explained how changing your book price works.  I was under the impression that changing my price (or my product description) would put my book back into the limbo of "publishing" for days, just as if I were starting over from scratch and publishing for the first time.  Good to know that it only takes hours for the new price/changes to be reflected.


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## Edward C. Patterson (Mar 28, 2009)

I'm glad I've seen the day when readers dictate the pricing. Power to the reader. They need to get some benefit from the bibliorevolution.  

Edward C. Patterson


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## Terrence OBrien (Oct 21, 2010)

_"I think in a few years, the novelty of self-publishing will wear off, especially as more people realize that it's not a guaranteed get-rich-quick scheme. Eventually, the herd will thin out a bit to just those people who want to make a real effort because they love writing"_

Nothing remains new forever, so the novelty will wear off. But that hardly means the number of people involved will diminish. I look at traditional publishing and the reports of thousands of query letters arriving year after year at agents' and publishers' offices.

i think we can safely say the novelty factor of traditional publishing faded long ago, but that didn't seem to matter. I can't say why these authors kept at it, but I see no reason for them to stop simply because books are displayed in digital ink rather than printers ink. All these folks knew writing wasn't a guaranteed get-rich-quick scheme. But they kept at it anyway.

If they thought their book was good enough for a traditional publisher, is it reasonable to think they would consider it good enough for an eBook?


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## Edward C. Patterson (Mar 28, 2009)

But some things get old.


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