How to set the price of your eBook?

Opinions about what is the ideal price for an eBook abound and are often contradictory. Unsurprisingly, traditional publishers advocate keeping prices in the highest possible range in order to maximize their profit. Among self-publishers, however, the debate between proponents of high prices vs. low prices (below $5.00) is more a question of perceived self-value of the book than about profit per se.

High price proponents’ argument is that by offering bargain price outside of specific, time limited promotional campaigns, the author devaluates his own work.

Low price proponent argument is that by keeping the price low they will reach a larger audience and get more exposure for their book.

Without data, this debate can go on forever, and it is sure to be a winner topic in writers’ favorite coffee houses.

Luckily, thanks to Smashwords’ study , some data are now available.

A comparison between ebooks unit sales and ebooks unit prices clearly shows that, though there is a correlation between price and sales figures, it is not linear as shown in the graph below.

A you can see, any eBook priced between $1 and $1.99 underperforms compared to those priced at $0.99 or above $5.00. Consumer psychologists might earn a fortune analyzing why the $1.00 mark is so unpopular, but as writer, it is just good to know that it is best staying away from it, even without fully understanding the underlying logic.

Also, whether the author’s aim is to reach as wide an audience as possible of maximize revenue, it is good to know that selling an eBook at $2.00 -$2.99 will sell more units than those priced at $0.99. In addition, it will provide higher revenue, which is nice in any case 🙂

Yet, as far as maximum exposure is concerned, nothing beats the free eBooks that get about 100 times more downloads than sold eBooks.

This study does not differentiate between fiction, non-fiction and trade publication, which is a pity as non-fiction books have a history of being priced higher than fiction books. This being said, it certainly gives food for thought.

Happy eBook selling at the right price !