I recently finished an extensive review of pricing and profit generation for my novels, and was somewhat surprised by the results.
Over the last two years, I have had my offered my various novels for sale at three price points -- $9.90, $4,99 and $2.99.
By measuring the profits per day generated by each title, I've been able to draw the following conclusions:
- During the initial introduction of a new title, it is best to skim price. This is because those most devoted to my work are willing to pay a higher price to get the novel sooner rather than later. For the first 4-6 months the title should be priced at $9.90.
- During all other times, pricing at $2.99 a copy produces the highest per day profit. After the initial introductory period, the price should immediately be moved back to $2.99 per copy.
- Since Amazon "price matches," I am experimenting with setting the price on Smashwords, and letting Amazon present it as a "List of $9.90, and a discounted price of $2.99." I'm hoping this will communicate a higher value to the novel than simply setting the price at $2.99 on Amazon. Not sure how I will evaluate this, however.
- I still need to explore prices under $2.99. Since these lower prices will all come at a lower commission (30% versus 70%), I would need to see a very substantial increase in sales to offset the lower price. Nevertheless, I plan to experiment with $1.99 and $0.99 over the coming months.
With four novels in the market, and hopefully a fifth coming later this year, I'm hoping to use some creative pricing to improve discoverability. Will update later with any new insights.