We all know the basic theory for finding the right price: figure out how many your readers will buy at each price, and how much it will cost you to produce each copy at each volume, and then look for the price/volume combination that yields the greatest total margin.
We all also know that this is easier said than done for print books, even with the advent of databases like Nielsen Bookscan, but it’s practically impossible for ebooks. So far. Bookscan doesn’t measure sales for ebooks. You can’t call Ingram and get sales numbers for them, either.
And no one knows what the Amazon ranks for ebooks mean — not to mention, that those volumes for a given rank would change wildly in the future, as ebooks become more popular. So, we can’t really predict the volume for a given price.
What can we do? We can say that for certain types of books, certain price expectations are becoming common. For example, Amazon has made $9.99 the norm for a trade book currently in hardback. And the ebooks of titles currently available in mass market paperbacks tends to range between $3.99 and $6.39, with the upper end representing current and high-volume books, and the lower end representing backlist.
And yes, Virginia, there is a backlist for mmp in ebooks. Who knew that this was possible?? Of course, it wasn’t for print books, because of the economics of producing, storing, shipping and selling the physical object, but ebooks make it work.
In short, we’re going to have to fall back upon the old standard: find your books’ competitive titles, and price your book to meet that competition.
Will that offer you enough revenue to cover your costs? Or even, wonder of wonders, make a profit?? That is, indeed, the question. And what costs should you consider?
1. Royalties. Authors deserve to get an amount similar to the amount they get for the sale of a print copy, in my opinion. Not a similar rate, but a similar total. That may well mean that the rate is double or triple the royalty rate for print, given the smaller list prices. And publishers should consider setting the breakpoints so that we’re splitting the proceeds evenly with authors after our investments have been recovered.
2. Marketing: getting the message out to your readers is pretty much the same thing, whether you’re selling a print book or an ebook. Same types of people, same reasons to want the book, same selling points in the book. (Currently a smaller total pool of potential buyers, but that will change, I suspect.)
3. Plant costs (that’s publishing jargon for the fixed costs of preparing the manuscript for publication): the only one you don’t have, for the Kindle and some other types, and for now!, is compostion/text design. All of the editing still needs to be done (structural/ developmental, line, and copy-editing are all important to the quality of the final book). Cover images are still necessary. Etc, etc.
If the ebook is just an extra dab of icing on top of the cake of a book you’d do anyway, then the plant costs are almost irrelevant, but that’s obviously not going to be the case for very long.
4. Distribution: yes, you don’t need to ship the physical object, but you DO still need to pay those who own the channels through which you reach your reader. That may be Amazon or Fictionwise, or whoever, but it’s still a very large chunk of the revenue, if not most of it.
5. Cannibalization of Print Sales: whether through piracy, or because you believe that your readers would buy print if and only if they didn’t buy an ebook, it is possible that ebook sales will cut into your pbook sales. It doesn’t seem as if this happens yet for most types of titles, but it’s something that every publisher should consider.
In the end, only you can tell if the projected sales revenue will exceed the costs for a given title. And the only way to do that is to run your numbers, just as you did for a print book.
Some things never change.