What Should eBooks Cost?

In this article is the following quote:

“The cardinal rule for digital ebooks is that you want to sell them for as much as you can,” says Allen Weiner, an analyst at Gartner.

Now, think about that for a sec.

Done?

Is that not fundamentally wrong? What you really want in an eBook, is to find the price point where you’re making the most money in aggregate for that book. In other words, the maximum price customers will pay may not yield the highest income. Suppose both the price points produce a profit when you do your P&L. Now suppose you get 100 sales at $9.99 (call it $1000 bucks). That’s nice. You have $1000 bucks in the door. But what if 4.99 gets you 1000 sales? (Call it $5000) You make A LOT more if the lower price sells a lot more books.

In eBooks, mind you, you manufacture once and sell multiple times with no per unit manufacturing cost. More units sold do not result in more expenses. There are some server costs, as the files must be stored and backed up. But it’s not like paper, where each book contains paper and ink that you have to pay for. With an eBook, the vendor assumes the cost of delivery. You get your file to Amazon (for ease, pretend that’s all) and you’re done.

It seems to me that the goal should be finding the sweet spot for the trifecta of price, units sold, and income realized.

I’d shrug and say I don’t understand traditional publishing’s P&L except there’s just overwhelming evidence that a lower price sells significantly more books. Ask any self-publisher.

What do you think?

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3 Responses to “What Should eBooks Cost?”

  1. Timothea says:

    LOL I think that this analyst is hoping to convince self-publishers to increase price so that traditional publishing has a chance! Just saying…

  2. llaph says:

    I admit I am cheap and will wait for my library to get an over-priced book I had been waiting for. I am limited to e-books or audio books (which I don’t purchase much) and paying $12.99 or more is just stupid.
    It looks like you are just paying for a brand name and the omg factor of getting a new release right then and there. Then after a few months or whatever the price goes down to something more resonable.
    People can be really dumb.

  3. LenoreJ says:

    I’m an avid reader of historical romance. If an e-book costs more than the 5.99 I’d pay at the discount store for a paperback, I pass on it. There is too much good stuff available. Backlist titles compete with the Salvation Army thrift stores. I’ll pay for convenience, but only so much.