Setting the retail price for your book shouldn’t be an arbitrary decision; it’s one that requires a bit of research and planning. There is no single formula for calculating the price of a book because there are many considerations.
Following are factors to consider when setting the retail price for your book.
Value Perception
Unlike fiction readers who tend to consume large quantities of books and are therefore influenced by lower prices, most nonfiction readers buy books based on the subject matter instead of price. So the question to ask yourself is this:
Do you want to charge a premium, a lower price, or come in somewhere in the middle?
Part of this will depend on your target audience and what they are willing to pay, but there can also be a perception of value.
For example, if you’ve written an authoritative book on stock investing and priced it on the low end of the spectrum, say $9.99, this could actually lead readers to perceive the book as less valuable than similar books priced at $24.99 or even $29.99.
Conversely, if you’ve authored a book of jokes or a short children’s book, charging a premium price of $24.99 could repel buyers.
Bottom line: For most authoritative nonfiction, you can aim toward the higher end of the pricing spectrum. Topics that are lighter in nature may be best served in the lower to mid-range. Also, most memoir writers should also stay on the mid- to lower-end of the spectrum, unless you are a celebrity, have a large following or your book is centered around a popular or niche topic (like addiction recovery).
Market Price
It’s important to research what your competitors are charging. The goal here is to avoid pricing your book out of the ballpark for your target readers—unless this is part of your strategy. I know a technology author who wrote a one-of-a-kind tech manual and priced the 400-page volume at $300, but this not a typical strategy and only works for people with tight niches and a loyal following of readers.
Start by checking the price of five to ten similar books in your genre, and more if you can find them (a quick search on Amazon should do the trick). Make sure you are comparing paperback pricing with paperback and hardcover with hardcover, because hardcover will always be more expensive. While doing your research, also note the prices for the Kindle editions. Write these prices down to refer back to as you work through the decision making process.
Bottom line: Know what your competitors are charging.
Page Count
When you look at competitors’ book pricing, note the page count. Are the books longer or shorter than yours? Generally speaking, a shorter book of 150 finished pages or 40k words or less typically commands a lower price. And conversely, a longer book of over 60k words or 200 pages can command a higher price.
Bottom line: The length of your book can impact price.
Profit Margin
The retail price you set for your book impacts your profit margin. Retailers like Amazon take 40% to 55% off the cover price of the book, and then you have to deduct your print cost in order to determine your profit.
Example:
Retail price of $19.99
Less retailer’s 40% discount: $8.00
Net earned from retailer: $11.99
Then, subtract your print cost of $4.75 and you are left with a net profit of $7.24 for each book sold through retailers.
But if you take this same example and set the retail price lower, here’s what happens:
Retail price of $14.99
Less retailer’s 40% discount: $6.00
Net earned from retailer: $8.99
Then subtract you print cost of $4.75 and you are left with a net profit of $4.24.
(And good news: Either way, these are much higher royalty rates than you would earn through a traditional publisher. Most big publishing firms pay authors an average of $1 per book sold.)
This also means that you need to be able to acquire your books at a reasonable price (you should not be paying $9 for your own paperback books so beware of vanity presses that over-charge).
And also do the math above with a retailer discount of 55%, Amazon’s standard discount rate:
Retail price of $14.99
Less retailer’s 55% discount: $8.24
Net earned from retailer: $6.75
Then subtract you print cost of $4.75 and you are left with a net profit of $2.00.
Tip: You don’t have to give Amazon a 55% discount, though that’s what they ask for. I suggest setting your discount to 40%; Amazon will still carry your book.
Bottom line: Know your numbers. Make sure that whatever price you set allows you to be profitable.
Paperback vs. Hardcover
As noted previously, hardcover books are always priced higher than trade paperbacks because the cost of printing a hardcover is often at least twice as much as paperback. And if you print both versions for your book, your paperback might be priced around $15.99 while your hardcover might be priced around $24.99.
Bottom line: Set your price based on the format of the book.
Price Structure
The vast majority of books have a price ending with a 99 cents or 97 cents, such as $14.99 or $14.97. Studies have been done over the years that report two main reasons why retailers price items this way:
- The left-to-right effect. We read from left to right so when we see an item priced at $39.99 next to an item priced at $42.00, we quickly decide there is a big gap in price because item #1 has a 3 in front of the number instead of a 4 and our brains register the difference as significant.
- We consumers think the price is lower when it’s rounded down (more brain trickery).
Most books typically end with 95, 97 or 99 cents, but that doesn’t mean you can’t round up. Since nonfiction readers aren’t a price sensitive, rounding up may not make much of a difference.
Bottom line: Choose whatever ending feels right to you.
Easiest Price
My personal favorite price for my own nonfiction trade paperback books, which average over 200 pages, is $19.99. It rounds up nicely to $20 at live events, where I offer to pay the sales tax and collect lots of $20 bills.
If you’ve authored multiple books and you want to sell them in bundles (which can be a great way to boost revenue at live events), you may want to factor in your bundle pricing. Perhaps you price your paperback at $19.99 and a companion workbook priced at $24.99. You could offer a “deal” and sell them together for an even $40.
Bottom line: Choose a price that fits with your overall goals.
Ebook Pricing
Amazon has worked very hard to drive down the pricing on Kindle books, which has wreaked havoc for all ebook publishers. When you publish your Kindle book with Amazon, you are rewarded for pricing at $9.99 or less because Amazon pays you a royalty rate of 70%. If you price above $10, Amazon penalizes you by only paying a 35% royalty.
Because of this, ebook pricing has become a contentious topic. Fiction authors have been hit the hardest due to all the free and low cost promotions Amazon encourages its authors to do. Fiction authors are finding that price points between $.99 to $2.99 work best. Yikes!
But us nonfiction authors don’t have to play by those low-price rules because our readers care about content over price. With this in mind, you should still do all the work listed above and know what your competitors are charging, but with authoritative nonfiction you can likely do well with an ebook price in the range of $7.99 to $9.99. And one advantage with ebook publishing is that you can adjust your pricing at any time. So if your book isn’t selling well at $9.99, you could drop it down to $7.99 and see if it makes a difference.
Bottom line: Nonfiction authors don’t always benefit from pricing lower.
Setting the Retail Price for Your Book
Once you’ve taken all of the factors listed here into consideration, you should be able to make a confident decision on where your price should be. Keep in mind that you can’t change retail pricing on a whim like you can with ebook pricing. In order to change the price of a print book, you will need to assign a new ISBN number and generate a new barcode on the cover that reflects the new price. However, this shouldn’t be a concern if you get your pricing right the first time around!
Lastly, pricing won’t matter a bit if you aren’t doing the work to market your book. In the world of book publishing, it all comes back to marketing!
Get Our Book Pricing Calculator
We’ve put together a simple spreadsheet that allows you to plug in your retail price and print cost for your book and quickly see the royalty earned.
Download the Book Pricing Calculator here.
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