Bargain Bin?

Posted on 26 June, 2012

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One of the most interesting things about putting something out there with a price tag on it is hearing people’s opinions on that price.

I went for $2.99 explicitly because that’s the lowest price point at which an author gets Amazon’s best cut of each sale. At the time my pricing research consisted only of periodic checks of Kindle’s best-seller list. Most of those samples showed that books by established authors, especially ebook versions of the same things I see prominently offered at The Regulator or Barnes & Noble, were selling for something on the high end of the <$9.99 market with occasional $12.99 books listed. The books from authors of whom I’d never heard were going for $2.99 or $1.99. My reasoning for this went like this: a new author has no brand identity so has to go for the bargain price point but white collar bondage porn (Fifty Shades of Gray) can get away with charging $12.99 because buyers will pay a premium not to have to be seen buying it in  store and they’ll tell themselves they’re getting it at a discount compared to the cost of the physical book. Ultimately, pricing is a psych experiment but I’m the new guy in the lab and I had no idea how to go about it.

I tried to research it sort of halfheartedly before listing Perishables on Kindle but I had zero luck finding anyone who would openly address the motivations and rationales behind their own pricing choices. The Kindle discussion boards are rife with extreme opinions and flamebait, like anything else on the Internet, and they just weren’t helpful except that everyone there agrees erotica can charge more because, as noted above, people are willing to pay extra to buy it in private. Eventually someone who is a stranger and who has read Perishables sent me a message saying they could have paid $5 or even $6 and felt that it was a fair price. They would have had no regrets. Their point was that they felt I’m lowballing the price and suggesting, by doing so, that it’s of commensurately lower quality. They then sent me a couple of links to blog posts by other authors who essentially say the same thing. In short, they argue that anything less than $4.99 is putting one’s self in the discount bin at the front of the store with a big sign that says, “Just take it away, it’s worthless.” One of the comparisons I saw made was that $2.99 is like setting the fresh fruit next to the rotten in the produce section. They further argued that the $4.99 – $9.99 range is where readers expect “normal” books to be and that anything over $9.99 had better be special in some fashion (or erotica). One of these arguments was explicitly based on the person’s perception that lots of people are willing to pay $5 for a drink from Starbucks which they then drink in 15 minutes and forget without complaint. These authors all also felt that early adopters of ebooks had made a grave and terrible error by going for free and 99c price points because they had – it was being argued – artificially depressed market prices and created an expectation on the part of a purchaser that a book isn’t worth more than 99c or $2.99 when really ebooks should cost as much or very nearly as much as physical paperbacks.

Several things jumped out at me about these arguments and their advocates and in reaction to them:

1) An ebook is not a paperback. It just isn’t. I can take a paperback out on the beach and not worry about it if I drop it in the sand. I can lend it to a friend, forget it in a coffee shop, read it when the power’s out, tuck it in my back pocket, tote it down to Nice Price and swap it for $2 in store credit I can then immediately turn around and spend on someone else’s ex-paperback. I can drop it on the kitchen floor, run it over, splash mud all over it, decorate with it and on and on. There are lots of experiences I can have with a physical book that I can’t with an ebook. I think ebooks are great and I love the ways technology enhances the reading experience – highlights! it always remembers what page I was on! – but the real world has highlighter pens and bookmarks and random conversations. It’s a lot harder to have the experience of saying to someone on the bus, “You’re reading Dracula? That’s my favorite novel,” when what you see them holding is a black plastic rectangle into which SONY has been stamped. There are lots of things I can do with an ebook that I can’t do with a book but they mostly involve losing/destroying/moving the physical book and physical books are sufficiently cheap to replace that their loss can often be considered negligible.

2) The people making these arguments in favor of higher price points have a vested interest in seeing average ebook prices rise. They are people actively trying to make money on ebooks. They aren’t being objective; they’re advocating for their own good fortunes. There ain’t nothin’ wrong with that and I want them to be able to make money and keep writing just as much as I want it for myself; perhaps more than for myself, to be honest, since I have a day job and have spent decades writing for my own entertainment so clearly I do not need to sell anything to satisfy myself yet I appreciate that they do. Still, it’s worth being conscious of the fact that they are not impartial observers. There is no Kelley Blue Book of ebooks. There are no informed, objective experts.

3) People like me who arrive at $2.99 as a price point that says, “This is worth something to me but I’m an unknown quantity so here, have it at a bargain and we’ll go from there,” are not getting that idea from nowhere. We’re all newbs on the writer/seller side of the till, yes, but we’ve been on the reader/buyer side of it since we were kids. To some degree I absolutely drew $2.99 out of a hat, yes; to some degree I picked it based on the price points I see in the Kindle best seller list; but to a much larger degree I picked it because Reader Michael tells Author Michael that he might be willing to take the dive at $2.99 but not at $4.99 and definitely not at $7.99. There’s a kind of chicken-and-egg question at the heart of any argument constructed from both the positions that ebook prices are artificially low because of authors and that ebook prices are artificially low because of buyers in the existing marketplace. Bookstores and books are not new territory to me. Selling there is new territory to me. I consider myself to have a deep understanding of the attitudes and expectations of an exceptionally narrow slice of the market – myself – and that’s the best/only reliable data I’ve got for making pricing decisions. Amazon has recently changed how they calculate rankings in a way that favors higher-priced books, but they also have an ongoing interest in seeing the market always support higher prices than it could sustain yesterday.

Now, that said, it’s flattering as all hell to be told that I’m charging too little for my work. I disagree, but it’s deeply flattering and I do dearly love to be flattered! It’s also interesting to me because I already sort of had in mind a third or fourth stage to the experiment that is The Perishables Project: price tinkering. If I hit 25 or 50 sales – I haven’t decided which – I will almost certainly increase the price to $3.99. If I hit 100 and there are good reviews, I will probably price it to $4.99 to see what happens, especially if it’s easy to offer a discount or coupon. At that stage of the experiment I’ll be looking to find out how easy or difficult it is to affect interest by tweaking the terms of the transaction between the buyer and myself, something I find interesting in part because I suspect that many ebook purchases – and perhaps most or even nearly all indie/self-published/etc. ebook purchases – are impulse buys that occur in a sort of motivational wormhole impervious to all intrusion by encouragements such as reviews and advertising and heavily influenced by “others who bought this also bought”-style automated recommendations and word of mouth.

When discussing this with Richard last night he encouraged me to frame it as a question of how many books I’d have to sell to have earned minimum wage on Perishables, counting the time I spent writing and the time I spent thinking about it, discussing it, all that. The answer to that is 350 copies. If I hit 100 sales that will almost certainly be my eventual target, then: to have earned minimum wage on this story. If I do that then I’ll be kind of shocked.