How Much Should You Charge for Your eBook?
What is an ebook worth? On the one hand, isn't it just an intangible collection of bits of data that can be duplicated for no cost? Perhaps the price should be very low? On the other hand, is it really the data you are selling or the information that you worked extremely hard to create? Perhaps the price should be high. Or perhaps you are like most authors and just have no flippin' idea.
First, you need to make sure you are asking yourself the right question. If you ask, "what is my ebook worth?", well, if you did your job your work should be worth a fortune. Unfortunately, that is not what people are willing to pay for your book. The right question to ask is, "What will the market pay for ebook?" Now we are on the right track.
If your book is in print, the general rule of thumb is to make your ebook price 50-75% of your print price. As many of you know, the cost to produce a book, publish it, distribute it, and sell it is very high -- with little profit left over. Ebooks are very different. Most authors can sell their eBook for 50% of their print book price and still make over 500% more profit than their print book. Readers know this, so they get angry if you charge too much (see http://www.nytimes.com/2010/02/11/technology/11reader.html ).
Now if your book is not in print, or you want to ensure that your book is competitive, you need to look at books similar to yours and see what they are selling for. Look at the retail price, not the discounted price. You set your retail price and the retailers will choose how much they want to discount it. If your book has little competition, you can get away with a higher price. However, if your book is one of many in the same category, you might want to keep it as close to $9.99 as possible. This appears to be the magic number for now. But this may get higher as people abandon the printed word and move exclusively to ebooks.
Don't go too crazy thinking that your book is not selling because of a price above the magic $9.99 number. If you book is not selling well, chances are overwhelmingly that it is your lack of marketing the book -- not the price of the book.
You may be tempted to change the price with Amazon, but leave it as is with Apple. But consider this -- Amazon sells far more books than the other stores (as of this post) so unless you have a good idea of these retailer's market share, it will be difficult to get any useful information on the ideal price of your book. Also, readers might be quite upset if they buy your book for the higher price on one site, then see it for significantly less on another. They will return your ebook and perhaps even rate it poorly. My advice (and our policy at eBookIt.com), keep the price the same and let the retailers adjust the exact price. This is standard industry practice and no reader will get upset with you, the author, over a slight price variance.
One more important consideration. Retailers such as Amazon and B&N give far more generous commissions on books priced from $2.99-$9.99. This means, if your books is priced between around $10-$20, you will receive less in royalty than you would if you stuck with the $9.99 price.
When you choose a price for your ebook, think mostly of the competition. If you do, you should be just fine.
If you are an eBookIt.com client and you want to change your price of your book, please see this FAQ first.