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Determining the optimal price for your book is one of the most important decisions you’ll make as an author. The price point you land on impacts everything from your royalty earnings to your book’s positioning and sales. Price too high, and you risk limiting your audience and ability to get the visibility needed to boost sales. The price is too low, and you leave money on the table that reduces your royalty checks.
To maximize your book royalties over the long term, you need a pricing strategy that balances ideal revenue generation with achieving wider readership at different stages of your book’s lifecycle. Here are some tips to help you optimize pricing and royalties:
Understand royalty rates
First, be clear on the royalty rate you receive from your publisher or retailer. Traditional publishers generally pay between 10-15% list royalty for print books and 25% net royalty for eBooks. Retailers like Amazon offer self-published authors between 40-70% royalty on eBook sales, and Createspace pays between 20-60% royalties on print books, depending on the format. Know your royalty rate so you can accurately estimate earnings.
Related: Your One-Stop Guide to Royalty Rates
Price for maximum net receipt
Next, experiment with pricing to determine the “sweet spot” that maximizes your net royalty receipt per sale. This is your royalty percentage x your book price. Test prices between $2.99 to $9.99 for eBooks and $10 to $25 for print books to see where your net royalty per unit sold peaks. This optimal net receipt price is usually below the highest price you’d reasonably charge. Pricing above this point doesn’t necessarily increase your royalty check.
Consider production costs
Your pricing must also comfortably exceed your print production costs for physical books. Calculate your per-unit expenses for printing, fulfillment and distribution. Then, ensure your sales price allows a healthy profit margin above these hard costs. Digital editions avoid this constraint, though you must still account for marketing costs.
Related: Want Clients to Know You Before a Pitch? Write a Book.
Evaluate competitive titles
Research competitive book prices within your genre and category. Where does your book fit price-wise against bestsellers and leading books in your niche? Matching the standard or average pricing for your category signals appropriate value to readers familiar with the market. Deviating too far outside norms can deter buyers unless you have an established brand.
Factor in book length
For printed books, your page count should be considered. Industry standards roughly equate every 50 pages to $1 of the book price. So, a 100-page novella may be priced at $10-15 print, while a 400-page novel could command $25 or higher. With eBooks, length matters less since delivery costs are minimal. Focus more on maximizing net royalty receipt.
Strategically vary pricing over time
One of the biggest opportunities for boosting overall royalty earnings is to strategically vary your pricing over the book’s lifespan to address shifting objectives. Here are three price change strategies to consider:
- Launch at Reduced Promotional Price – Consider discounting your book at launch to $0.99 or $2.99 for the first few weeks. This sparks initial buzz and readership, even if it means lower per-unit royalties. You earn-out through higher volume.
- Increase to Standard Price – After launch, move your book price up to its “standard” pricing level based on competitive rates, length and optimal net royalty receipt. Stay here while the book is being actively marketed and sold.
- Discount Occasionally – Periodically drop your eBook price for short promotions, such as holiday sales, when you want to boost visibility and unit sales numbers. Time price drops around marketing campaigns.
- Higher Price for Loyal Readers – Once sales taper off, you can increase your price again closer to the maximum your loyal readership will tolerate. This takes advantage of fans still discovering the book later and willing to pay more.
Additional Pricing Considerations
Here are some other pricing factors savvy authors take into account:
Market trends — Study overall pricing trends in the publishing industry. Are average prices increasing or decreasing over time? For example, the average eBook price decreased from $8-$10 to $3-$5 over the last decade as more titles flooded the market. But print books have seen some price inflation recently.
Backlist prices — For authors with a backlist of earlier titles, consider pricing your backlist books lower than new frontlist titles. Readers who discover you from your latest book may purchase your backlist at lower prices, earning you additional royalties.
Independent bookstores — If selling through independent bookstores, you may need to price your book at par with Amazon’s price or offer an increased wholesale discount. This allows indie retailers to compete profitably with Amazon’s pricing power.
Foreign market pricing — When selling book rights in international markets, be aware of local pricing norms and living standards. Price competitively within each market. Don’t directly convert your US price. Let your foreign publisher or distributor suggest appropriate pricing.
Track royalty statements — Analyze your royalty statements every period to see if your pricing strategy is paying off. Look at your per-unit and total royalties earned based on sales volumes. Tweak prices or test new promotional price points to optimize your results continually. Consider price elasticity — sometimes lower prices can expand readership enough to increase total royalties.
Pricing is about balancing margin and momentum. Set prices to maximize royalty revenue while maintaining the visibility, readership and strong ratings needed to drive ongoing sales. Test options to find the optimal per-book and total royalties your book can earn over time.
With strategic thinking and ongoing refinement, you can determine pricing that generates high royalty income by aligning with your book’s market positioning and sales aspirations.
Related: 10 Pricing Strategies That Can Drastically Improve Sales
This article is from Entrepreneur.com
