More Thoughts on the Economics of Authorspace – Book Prices

G’afternoon, folks. So, given that royalties and prices are a trending topic with a couple of author groups on FB I am a part of, I figured I’d do a bit of research and post results.

I went to Amazon’s Kindle Books section for fiction and spreadsheet’ed the top 60 books on the chart. I removed any “short story” from the list, since I’m trying to sort out pricing for novella’s and wordier. I then ran averages for the blocks to determine the pricing normals. Here is what I got:

          Average ..  Low  ..  High
 Top 10: .. $7.07 .. $2.99 .. $17.54
 Top 20: .. $5.50 .. $2.99 .. $17.54
 Top 30: .. $5.14 .. $2.99 .. $17.54
 Top 40: .. $5.51 .. $1.99 .. $17.54
 Top 50: .. $5.36 .. $1.99 .. $17.54
 Top 60: .. $5.34 .. $1.99 .. $17.54
Top 20–60: .. $4.95 .. $1.99 .. $16.85
Top 20–60: .. $4.67 .. $1.99 .. $12.99 (normalized, see below)

A few interesting observations…

… The highest priced book is in the top 10, but the next highest in the rest of the range is less than a dollar different. However, -that- book is a 3-books-in-1 trilogy of 3 books in the top ten; it is selling for less than the total price of those three books addded. When you “normalize” it to reflect that you’re getting 3 books at that price, there is almost a $4 difference.
… The low price for the top half of the range is $1 more than the low price for the bottom.
… All parts of the range have low price books, but the average is almost 1.5 times their price.
… In the Top 10, the most expensive books are near the top.
… Once you are out of the Top 10, there is almost no relationship to price vs position, which implies that pricing has little to do with postitioning.
… Being in the top 10 allows a premium of about $2 to be charged by the publisher over everyone else.

So, the next thing that figures in is “what should we be charging?” According to Wikipeida’s article (http://en.wikipedia.org/wiki/Word_count), here are the break downs by word count:

Classification   Word count
 Novel ......... over 40,000 words
 Novella ....... 17,500 to 40,000 words
 Novelette ..... 7,500 to 17,500 words
 Short Story ... under 7,500 words

According to some reading on the Science-Fiction/ Fantasy World (http://www.sffworld.com) lit site, the usual range for that type of novel, which is the stuff I write, is 80,000 – 120,000 words.

The min-max monster might well say that “The Answer” is in releaseing a series of 50k novels for $4.65. That is, as an author, your most efficient route if you’re trying to maximize your revenue.

That seems a bit tacky to me. I’d rather be known for value, not spine-count.

If we operate with the idea that the standard “five-buck-book” ($4.95-ish) is actually a good center ground, then we can do some wide-window price-per-word math. We are also not verified top-ten producing authors, so that extra $2 is not in our domain yet.

The average of 80k to 120k is 100k. Thus, the price by word count for SF/F is 5 CENTS per THOUSAND words. To meter myself, “The Sauder Diaries – By Any Other Name” is 97.5k words, thus should hit in at around $4.88 on the virtual shelves.

The problem is that this logic breaks when you price vs word count, instead of doing some go-look-at-the-charts research to see what people are charging:

 Classification  SRP(1)         AAP(2)
 Novel ......... $2.00 to $6.00 $4.99
 Novella ....... $0.88 to $2.00 $2.99
 Novelette ..... $0.38 to $0.88 $1.99
 Short Story ... $0.38 $0.99
 (1)SRP ... Suggested Retail Price
 (2)AAP ... Actual Amazon Prices

The AAP is based on eye-ball scans of Amazon charts, looking for reoccuring numbers. Keep in mind the royalty shelf on Amazon at $2.99+

What I draw from all of this is that value-to-price decision is in the eye and heart of the reader, not the author. Mentally, there are established “price brackets” based on market loading & demand that seem to be “no think zones” for a buyer.

Any one who has done sales for a living will tell you that a buyer makes an emotional decision to buy and then gives it an intellectual second thought. Part of what you, as a sales person of your own book want to do, is price in a fashion that doesn’t make them think too hard about if you represent a risky purchase (IE: $5 for a lousy book). Pricing either too high or too low will cause that decision to be reviewed.

At the same time, we as authors should know where we stand for our works and how best to monetize them in this making-it-up-as-we-go business space. I’ve gotten reviews for my first book that either implied or flat our stated that I could ask for that $2 preminum on book two and expect to get it. I don’t know if I will or not… I’ll have to do some thinking.

 

One thought on “More Thoughts on the Economics of Authorspace – Book Prices

  1. Pingback: Coffee Vs Book or Trust vs Risk | Split Horizons

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