Why do Indie Authors Price the way they do?

I posted recently on a Facebook motorcycle group that I had a couple of books, recently released, that younger members might be interested in. The books tell the tale of what it was like to ride solo and across closed borders in the days before GPS and Google Maps.

I admit, being an author who wants to sell a book or two, I selfishly posted a link to my website.

Well, one young hee-haw took great exception that my link took the interested reader to my web page, where each book was available for purchase for the princely sum of $2.99.

He berated me for the temerity of suggesting that $2.99 was a price too far. It was interesting that quite a few members of the Facebook page not only leapt to my defense, but also bought the books and subsequently left kind five star reviews.

I do have all of my books on Kindle Unlimited, so technically it is “free” to those who subscribe to that service.

Which brings me to pricing. For the sake of comparison I have chosen my latest book, “We’re On Our Way USA!” for all editions.

Let’s look at eBook pricing first.

For the Indie author, Amazon offers two royalty rates, 35% and 70%. If I want to use the 70% royalty rate, the minimum that can be charged for an eBook is $2.99. At that rate it will cost me $0.10 cents for delivery, making me a profit of $2.02.

If I want to charge less, which can be a very solid strategy, I need to move my long and painfully written, and torturously edited book, with handcrafted cover and hours of research into titles, categories and keywords into the 35% rate bracket. Now I can lower the book as low as $0.99 but at that rate, my profit has dropped to $0.35 cents.

Now, for the same book, same file size etc. let’s take a look at print editions.

For print editions sold through Amazon, the author gets 60%, which isn’t far from industry average. But now of course I have to eat the cost to produce the book. The little travel adventure book we are looking at has 134 pages. That costs me $2.48 to print, so even at a price of $5.79 I make only $0.99 cents. Be careful if you are selling in Australia, cost to print in that territory is $5.09 so I am forced to edit the list price and increase that to $9.99 and still only make $0.90 cents on a book.

I have no control over Kindle Unlimited rates. As an author we track page reads, or as Amazon calls it, Kindle Edition Normalized Pages (KENP). It is currently $0.0045 cents per page read. So for the book we are comparing, for a full book read I can expect to make a whopping $0.80 cents. In case you are wondering, authors don’t get paid for “Look Inside” reads, only for reads made from a book downloaded to a kindle unlimited account.

All cool so far. Now let’s add in advertising costs. If I don’t advertise, I don’t sell. There are roughly 32.8 million published titles on Amazon, so the author needs to find a way for the reader to find his/her books.

On Amazon there are a ton of metrics I can look at to measure cost, profit and sales effectiveness but the main four are “cost per click,” “impressions,” “clicks,” and “sales.”

For an effective sales campaign, I am looking to create one that gets somebody to click on an ad once for every 800-1000 times its is shown, which equates directly to the impressions. For the eBook priced at $2.99 I need a cost per click priced at 0.39 cents to generate a sale for every four clicks to remain slightly profitable.

That’s one person actually choosing to buy a book for every four people who clicked the ad after having seen it on their Amazon page..

For a print book, that drops to one sale for every two clicks. What can help is the KENP reads. For any given sales campaign, in addition to sales, I know it will also generate Kindle Unlimited downloads which I call gravy. These can help bump me back towards a decent margin.

A lot of friends and family who kindly buy a book choose the paperbacks, which is fine. I think the assumption, other than wanting a physical book written by somebody they know sat on the shelf, is that the higher retail price is helping the writer out. As you can see, this is not always the case. I will take any sale of any kind, any day of the week but the eBooks are always my favorite.

Oh, and that delicious KENP gravy of course!

2 thoughts on “Why do Indie Authors Price the way they do?

  1. Thanks for explaining that in such detail. Some people online will be pro and some negative/harsh – that goes with the territory of being public, it seems. The numbers are truly small aren’t they? Amazon wins whatever – which is fair in one way as they have convinced so many people to use their platform. It does remind me of a painting I once bought from a painter. The framer charged me more than the art piece – it is a great frame, but it’s not created painstakingly from an imagination over layers and layers of ink. And, if I had bought that from an art gallery, I would have had to pay 2x what I did. So I would not have….As they have to sell and get me in their gallery too. There is definitely something wrong though, I feel, with us all being hooked on “free” or low price things. There has to be some sense of fairness and reasonableness in any bartering. A tough life for the author – but books last for an eternity 🙂 Keep going!


    1. Even though the margins are small, the potential addressable market is enormous. The trick is balancing ad spending against revenue generated (obvs), but it takes time to learn, and there are hidden pitfalls along the way, such as the Oz market, where it becomes easy for ad spend to get quickly out of control and generate almost $0 for print editions. This year I can proudly claim to be a paid writer. I have proved that an income is there, small at first admittedly. The trick now is how to scale that success. Thanks for the comments and continued support.


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