Over the past few days, I’ve noticed a lot of hand-wringing over the 99-cent book. Yesterday, both the Huffington Post and Nathan Bransford waxed eloquent on the problems with the 99 cent price point. Bransford was, in my opinon, considerably closer to the mark than the HuffPo’s writer when it comes to explicating the long-term implications of the 99-cent price trend.
So, here’s the thing. If you put your book up a year ago (or even 6 months ago) and priced it 99 cents, the chances that you would move a LOT of units at that price were very high. It made sense to price in the bargain basement, even if you only made 34 cents per copy, if you could sell ten books at that price point to every one you could sell at $2.99. ($2.99 x 70% = $2.09, while $0.99 x 35% x 10 copies = $3.40).
But, as Bransford rightly notes, there’s now a glut of 99-cent ebooks. There are so many, in fact, that the price point is no longer much of an enticement to readers. Yes, it’s easier to get the casual browser to buy book at 99 cents than at $2.99, but it’s not as much easier as it used to be. When there are so many 99-cent options to choose from, readers become pickier about what they’re willing to pay even 99 cents for.
It used to be that the 99-cent price point helped browsers find you. Now, there are so many books at 99 cents, pricing at that point no longer makes your book stand out. Instead, it just leaves your book swimming in an ever-expanding pool of other books at that same price. So, unless you have something ELSE to distinguish your book from all the others (great cover art, title, concept, and most especially IMO, lots of reviews/ratings), the chances that you are going to make 10x as many sales at 99 cents as at $2.99 are simply not that great. And for the 99-cent price point to make sense financially, at least as a price for a novel-length book, you really have to to sell a lot more copies.
The fact that 99 cents is not a huge incentive for readers anymore was brought home to me by watching sales of my short story, THE REIVER. When I initially released it, I priced it at 99 cents (it’s a very short story, so more than that seemed like price-gouging). Sales were in the neighborhood of 5-6 per day on Barnes & Noble but no more than 1 per day on Amazon. On Amazon, the book was quite simply LOST in the sea of 99 cent slush and people just weren’t finding it. After a couple of months, I decided to raise the price to $1.29 on the theory that the 99 cent point wasn’t bringing me any eyes I wasn’t finding otherwise. Sales dropped precipitously, but then a funny thing happened. Because the Smashwords version hadn’t sold but two copies, I didn’t bother raising its price and Kobo (one of the retailers that gets books from Smashwords) discounted the 99-cent version to 89 cents. Amazon, being all about keeping up with the Joneses, discounted the story on their site from $1.29 to $0.89 and, lo and behold, I very quickly started selling almost 10 copies a day on Amazon.
So, are people really that price sensitive? We’re talking a 10-cent difference between the original price and the discounted price that attracted so many more sales. What are people buying with the 10 cents they’re saving? The answer, of course, is that it wasn’t the prospect of saving an extra 10 cents that boosted sales–it was the fact that the 89-cent price is so unusual that by itself, it made the book stand out in a way it hadn’t before. More eyes FINDING my book led to more sales.
I think the fear of a lot of authors and publishers is that 99 cents is becoming “the price” of a book, the way 99 cents has become the “price” of a song on iTunes (although, in fact, most new/popular songs are now priced at $1.29). I can understand that concern, and I’ve shared it to some degree, but I think in the long run, it’s not going to happen because of the convergence of these three things:
1. 99 cents is no longer a point of differentiation, and…
2. The total number of books you must “differentiate” yourself from to attract readers/buyers is growing exponentially, so…
3. You will have to differentiate your book by something other than price.
It’s #3 that’s the sticky wicket. When 99 cents was a “marketing” point in and of itself, it made a certain amount of sense to price your book there, especially when you initially released it. But now, it’s not enough (if it ever really was, which I doubt). Smart writers and publishers know they have a following and that the market can and will support prices of $2.99 (and more) for ebooks. The key is that, whatever the price point, your book has to be able to find its readers and vice versa. And that is going to cost authors and publishers too much for them to afford to sell their book for 99 cents indefinitely.