Monday 7 November 2016

Indie eBook Pricing

By Narelle Atkins

The pricing of eBooks is a popular conversation topic among indie authors. A big advantage of independent publishing is the author has control of the price of their print and ebooks. Indie authors set the price for their eBooks, and can adjust the price at any time.

Print Book vs. eBook Pricing

The prices of print books tend to be similar, irrespective of whether the book is traditionally published or independently published. There are costs of production for print books that must be factored into the selling price. Retailers will mark up the price of the print books they sell.

In contrast, there are fewer costs to factor in when determining the price of eBooks. There are fixed costs in terms of book formatting, cover design, editing, etc. The per unit cost of selling an eBook is smaller than the per unit cost of selling a print book.

Amazon Kindle Direct Publishing (KDP) Pricing Model

Indie authors who sell their eBooks on Amazon via KDP can select the price they charge for their eBooks. KDP currently offer a 70% royalty for eBooks priced $2.99-$9.99 and a 35% royalty on eBooks priced below $2.99.

A Kindle eBook priced at $2.99 will earn six times the royalty of a Kindle eBook priced at $0.99.

Supply and Demand

The housing market is a good example of how the economic principles of supply and demand influence price.

Demand is greater than Supply

The current Sydney housing market is an example of demand exceeding supply. The price of houses in Sydney has risen in recent years due to demand from buyers being significantly larger than the supply of houses for sale.

Supply is greater than Demand

The US housing market after the Global Financial Crisis is an example of supply exceeding demand. The supply of houses for sale was larger than the demand for houses by buyers, leading to falling house prices.

The are many factors at play in the housing market that influence the supply and demand for housing. These factors influence the price that buyers are willing to pay.

Supply and Demand factors for eBooks

The supply and demand of eBooks will influence the price of eBooks.

We now have an almost unlimited supply of eBooks available for sale. There are no barriers to entry to the eBook publishing market. Anyone can publish an eBook direct with KDP (Amazon Kindle), iBooks, Nook, Kobo, and the other eBook retailers, or they can use a distributor to sell to the various sales channels eg. Draft2Digital and Smashwords.

The book selling statistics, for both print and eBooks, consistently show that the demand for books isn’t falling. The growth in the demand for eBooks isn’t keeping pace with the massive increase in the supply of eBooks that we’ve seen in recent years.


Discoverability is a buzz word in publishing circles. How can readers find your eBook among the millions of titles available for sale?

One way to improve visibility is to discount the price of the eBook and purchase paid advertising eg. Bookbub ads that will reach your target audience of readers. Placing an eBook in a competitively priced multi-author indie boxed set may also help increase visibility. I discussed marketing indie boxed sets in my post last month.

According to the law of supply and demand, the demand for a product should rise when the price is lowered. This means that the more competitively priced eBooks at $0.99 will sell more copies than eBooks priced at $9.99.

Certain genres eg. romance have a larger target audience and a higher demand for ebooks by readers. These popular genres will attract authors who follow market trends, which increases the overall supply of eBooks in the popular genres to meet the perceived demand.

Willingness to pay

Willingness to pay is a big factor in the demand for eBooks. How much are readers willing to pay for their eBooks?

Readers are willing to pay more for print books than eBooks

This is a logical and rational decision made by readers. A reader owns the print book, can on-sell the print book and can share the print book with their friends and family. An eBook is purchased under a licensing arrangement. This usually means the eBook can’t be shared or on-sold.

Print books have an intrinsic value because they’re a physical product. It’s harder for a reader to ‘steal’ a print book from a physical store than it is for a reader to ‘steal/pirate’ an eBook online. The value our society, in general, places on books, music, film, photography and art that is sold and distributed online is an area of concern for artists and creators.

Connecting with your target audience of readers

If readers love your writing, and trust your brand, they will be more willing to pay a competitive price for your eBooks. If you’re an unknown indie author in a market where your target audience have Kindle, iBooks, Kobo and Nook accounts full of unread titles, why would they take a chance on your debut eBook priced at $4.99? 

That’s why marketing is important. Word of mouth marketing (where readers tell their friends about the books they love) sells books.

Loss leader eBooks

A loss leader is a product that’s sold at a loss (below cost price) to attract customers to sample and buy from a specific product range. If an indie author has several eBooks for sale, they can select a title as their loss leader eg. Book 1 in a series. A loss leader can be permanently or temporarily priced at $0.99 or available for free to entice readers to sample the author’s writing. Low priced multi-author boxed sets can also work well as loss leaders.

Indie authors teach their readers how to buy their books

If an indie author releases 3 ebooks within a year, and chooses to make every ebook free during the first 90 days after the release date, what is the author communicating to the reader?

This pattern of pricing will teach the reader to wait and not purchase book 4 on pre-order or when it releases. The reader will assume that they’ll probably have an opportunity to download book 4 for free within 90 days of the release date.

Indie eBook pricing strategy

Indie authors can experiment with different pricing strategies until they find a strategy that works for their books. Each book is unique and there’s no ‘one size fits all’ solution to how indie authors determine the price of their eBooks.

A Question for indie authors: How do you select the price of your eBooks? Are there any pricing strategies that have worked well for your eBooks?

A Question for everyone: How much are you prepared to pay for eBooks? Are there reasons that explain why you’re willing to pay more for certain eBooks?

I’d love to hear your thoughts and experiences.

This post is being shared on the Australasian Christian Writers blog and the Christian Writers Downunder blog.

If you’re looking to connect with writing groups online, you can join the Australasian Christian Writers Facebook Group and the Christian Writers Downunder Facebook Group.

Omega Writers Inc. provides helpful resources and membership benefits for writers who live in the Australasian region.

A fun loving Aussie girl at heart, Narelle Atkins was born and raised on the beautiful northern beaches in Sydney, Australia. She has settled in Canberra with her husband and children. A lifelong romance reader, she found the perfect genre to write when she discovered inspirational romance. Narelle's contemporary stories of faith and romance are set in Australia. 

Her latest novella release, Seaside Christmas, is available in An Aussie Summer Christmas boxed set from Amazon for 99 cents. 

Twitter: @NarelleAtkins


  1. Fascinating article as usual, Narelle. Thanks for this - I've learned a lot!
    I subscribe to Bookbub, & do find it a helpful way to get to know different authors (esp. when their books are free!) $0.99 is a fairly small price to pay for trying an unknown author on e-book, and the multi-book sets a great way to get to know different writing styles - and usually excellent value also. (I still like my physical books, though!)

    1. Hi Carolyn, I agree, $0.99 is a small price to pay for trying a new author. Readers can read the free sample first to see if they like the story.

      I do a lot of driving around Canberra for my day job, and I don't think twice about paying, on average, $4.00 for a latte. I could pay 90c for a cup of coffee from the petrol station, but my $4.00 latte is so much nicer and worth paying the extra money.

      This is the price comparison I use for my ebook purchases: $0.99 is nice as a special ebook price, but I'm prepared to pay $3.99 for a 75k plus trade length novel, and I'll pay $4.99 or more for 90k ebooks and traditionally published ebooks by favourite authors who write excellent books. If the ebook price is hitting $10 Aussie (over $6.99 USD) I'm starting to think about buying the print book instead of the ebook (especially if the difference between the print and ebook price is small eg. around $5).

    2. Hi Narelle

      Love your comparisons here. As a reader, I think along the same lines (though I'm not sure if I'm conditioned by the market to see e-books over $5.00 USD as expensive).

    3. Hi Jeanette, My willingness to pay is very dependent on the author and how much I love their writing. If I'm hooked into a series, I'll press 'buy now' without paying much attention to the price. I used to borrow library books to see if I liked an author's writing before I'd buy a $20 print book. I see the loss leader deals as a similar process for eBook buying. The author now earns eBook income from me instead of Public Lending Rights income from library borrowings.

  2. Excellent post, Narelle and good how you provide basic economic theory to the logic of setting ebook prices. As Carolyn mentions cheap ebooks are a great way to "sample" new authors. There are a lot of non-fiction books that are simply too expensive (especially when you add shipping costs and conversion costs) and so I'll buy the ebook even when it's $9.99.

    I expect one of the benefits of being an indie is being able to vary your price and watch the impact. I think that could be fun and potentially could be a little addictive.

    1. Hi Ian, I chose to cover the economic theory to debunk some of the myths regarding indie authors and ebook pricing. There are rational economic reasons to explain why indie authors use price as a marketing tool. Publishers do the same thing with price eg. They may temporarily reduce the price of book 1 in a series to $1.99 or less just before book 2 is released.

      Yes, if you have an economics background then the ability to set your own book prices is fun, lol. Indie authors have access to real time data and I will analyse how certain marketing activities impact my book sales and KU page reads.

  3. Hi Narelle - I like to try new authors when their books are 99c or free. If I love that story, I have been known to buy the rest if they're in a series, as long as each one is under $6. My limit used to be $5 but that changed when I found a few authors with books just over that mark. I will also buy a more expensive ebook if I'm supporting someone I know. Great post - thanks!

    1. Hi Andrea, It's interesting how we each set our budget limits. I'll also occasionally splurge on a more expensive book by an author friend or favourite author. :)


Note: only a member of this blog may post a comment.