Tuesday, June 9, 2015

Pricing Your Indie Book Correctly

Pricing Your Indie Book Correctly
By Wild About Bones Editing
 For Indie Romance Convention

Pricing Your Indie Book Correctly

Before you can set a price on your book, you need to know several things:

1.  What did it cost you to produce and publish it?

2.  What are the distributors’ and/or retailers’ fees for each book sold?

3.  What is your “valued” competition charging for like titles?

Let’s think outside the box for a minute. Let's say you are grilling out steaks tonight. Are you buying your steaks at the "dollar" store, or are you going to the grocery store or wholesale club to get them? Why? The steak at the "dollar" store is only $1. At the grocery store, steak is probably a minimum of $5 or $6 for the lesser quality steaks. The same thing you are thinking about that "dollar" store steak (yes, there is steak at a lot of "dollar" stores) is what people think about books sold at $0.99 on a regular basis.

How do you determine what you should be selling your book for and how many do you have to sell to break even?

Formula:  Word count ÷ 250 = eReader pages

Pages                    Price

001-100                $2.99

101-200                $3.99

201-300                $4.99

301-400                $5.99

401-500                $6.99

501-600                $7.99

Now let’s say after the retailer takes their cut, you may get approximately 50% of the purchase price from the retailer for each book sold. (Careful of the retailer/distributor fine print like Amazon taking a much larger percentage if your book sells for $0.99 instead of $2.99 or more.)

Formula: Total Costs ÷ Net from retailer = Base # of books

Formula: Base # of books + 10% returns = # books required to break even

Example: 60,000 word paranormal romance with total costs of $700

To find purchase price: 60,000 ÷ 250 = 240 ebook pgs = $4.99 retail price

Find net from retailer (assume 50%): $4.99 * .5 = $2.49

To find books to sell: $700 ÷ $2.49 = 281

Add in 10% average return rate: 281 + 10% = 310

It will take 310 books to break even on this title. Not too bad.

But, what if you sold the same book for $0.99?

Find net from retailer (assume 30%): $0.99 * .3 = $0.29

To find books to sell: $700 ÷ $0.29 = 2414

Add in 10% average return rate: 2414 + 10% = 2656

It will take 2656 books to break even. This is going to take a very long time for most.

Why is breaking even important? Tax implications and ability to write full time

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