This is pricing for novels. I'm pretty firm at $2.99 for novellas and collections, and $.99 for short stories. I've seen no reason to alter those prices. Also, these are Epic Fantasy novels, other genres may have different results. In addition, bookstores like Amazon change their algorithms more often than Jeff Bezos changes his underwear, so this information may be wrong before I even write it.
Big publishers have people to figure out how much to charge for books. They have tons of statistics and expense ledgers that tell them how much to charge. The author usually gets paid the least out of that, of course. ;)
As an Indie Author, I have to figure all that out myself using the information given by other Indie Authors, companies that share any information, my own sales data, and sheer guesswork. Out of those, sheer guesswork has been my primary strategy.
My Pricing Schemes So Far
When I first published Rojuun 3 years ago, I priced it at $4.99. I thought it was a good price. Half of what Traditionally published books went for, but a fair price for the work I put into it. At the time, I hadn't researched what others were doing and were astonished to discover that $2.99 was the preferred pricing. I lowered the price to $2.99 for a while, then went to $3.99. Once I had a couple more books, I made Rojuun permafree to drum up interest for the sequels. That's been my most effective sales strategy overall.
However, I've always struggle with whether to charge $3.99 or $4.99 for the sequels. (My readers prefer $3.99, I'm sure. lol) I've gone back and forth, testing. I'd finally decided on $4.99. Recently though, I came across a Smashwords post about $3.99 being the sweet spot for books. In it, Mark Coker states:
"One surprising finding is that, on average, $3.99 books sold more units than $2.99 books, and more units than any other price except FREE. I didn't expect this. Although the general pattern holds that lower priced books tend to sell more units than higher priced books, $3.99 was the rule-breaker. According to our Yield Graph, $3.99 earned authors total income that was 55% above the average compared to all price points."
You can find the blog post here: http://blog.smashwords.com/2013/05/new-smashwords-survey-helps-authors.html
So I changed my pricing to $3.99 for the second time in the last couple of years.
Both times I lowered the price, my sales remained level. There simply hasn't been a quantifiable increase. Keep in mind that when I lower the price, I make 50-80 cents less per sale. So instead of making more money, I'm making less money.
At this point, I'd like to point out that I'm not trying to become rich (though I wouldn't turn it down), I'm trying to make a living off my writing and support my family. If I can do that, then I can write every day and produce more stories for you to enjoy!
There was one other thing I was testing when I did this: the effect on a new release. You see, when I released Wyvern, the book hit Amazon's hot new releases list and the sales did extremely well. That was at $4.99. It hit the list a couple of weeks after release, about when I reached 30 sales. Books can only be on that list for 2 months. The sales took a dive after that.
When I released the next novel, Liselle, the price was $3.99. It reached 30 sales in the first week, however, it didn't hit the new release list. About 6 weeks after release, I changed the prices back to $4.99. One week after that, Liselle went on the hot new releases list and sales spiked . . . for the 3 days it had before the 2 month time limit ran out. *sigh* Oh, and I still had the sales dive after it went of the list. *doublesigh*
Now keep in mind I don't have any inside information as to how Amazon does things. I'm basing all of these results on my own interpretation of my sales.
I've decided to keep my novels priced at $4.99. I believe this is a fair price for both me as the writer and for my readers. I believe it maximizes quantity of sales along with profit. The first books of the series are free, so readers can see whether or not they like my writing. If they do, then they have an idea of what they're getting when they pay the $4.99.
I'm sharing this information primarily for other writers in the hopes that it will help them with their decisions, but I like to let my readers know my reasoning for the decisions I make too.
All my best,
John H. Carroll