There seems to be a common misconception out there that e-books are cheaper to produce than paperbacks or hardcovers, therefore they should be should be priced lower. The people who hold this view are also incorrectly assuming that readers make digital buying decisions based on different rules/criteria than they use when buying physical products. They mistakenly assume that the only reason a customer might buy an e-book is to save money. This is just plain false. People have all kinds of different reasons for buying e-books, and here are just a few of them: They prefer to download all their books onto either an e-reader, laptop, or tablet because it is much more convenient to have them altogether in one light-weight and compact unit than it is to lug around a heavy bag full of books. They see real value in the content of that e-book (e.g. it contains information that can save them time or money, or it has helpful advice that can improve their health in some way). It is more important to them to save trees by going paperless than it is to save money. They love being the first person to have the latest technology in their hands, so they prefer to have an e-reader and e-books for that reason alone. The list could go on. But you get the point. Value-Based Marketing versus Price-Based Marketing I teach authors about the merits of both value-based marketing and price-based marketing. There is definitely a time and a place for both types of marketing no matter what it is you're selling, so it's important to learn about them both. You may be someone who values a low price above all else, but never assume everyone else is the same as you. It is really important to understand your customers' values and preferences before you set the price for your e-book, otherwise you might lose the sale. If You Price it Too Low, You've Got Nowhere to Go! Most people are pretty comfortable with price-based marketing (e.g. offering sales/discounts to try to undercut their competitors’ prices); but value-based marketing is another important skill to master. At the end of the day, anyone can sell on price. And here’s the biggest issue with that: if price is the only thing you’ve got, and then someone with a similar e-book written about a similar topic comes in at a lower price than you can match, then it's all over for you. You’re done. The sale is lost. Learn how to sell based on value, and you'll potentially save that sale. You’ll always be able to justify your price when you've proven the book's value ahead of time. Better yet, you can even increase that price down the road by adding even more value down the road. That's some food for thought for you. I hope you find it useful.
That's something that always cracks me up: "Buying an e-book to save trees". The question I have, how do you calculate the cost of an e-book? Is there a formula that everybody uses? Let's say, a paperback goes for $15.99 what would be a reasonable price to sell it as an e-book?
That's a loaded question. Without knowing specifics about the book we're discussing, I can only give you a generic answer here. So, keep that in mind as you read this. I'm going to answer your question by including an excerpt from one of my recent books titled How to Publish a Bestselling Book ... and Sell It WORLDWIDE Based on Value, Not Price! How To Price An eBook As a preface to the next part about how to price an ebook properly, I will say that pricing a digital book is a wee bit different from pricing a physically printed paperback book. A little later on, we’re going to discuss the logistics behind determining the best retail price for a paperback book, depending on where it will be printed and where it will be sold. We can’t even discuss it at this stage because it’s impossible to guesstimate one’s printing costs without knowing the final page count of the finished book; likewise, it’s impossible to set a profitable retail price for that book without knowing one’s printing costs. All that said, many authors incorrectly assume that consumers make ebook buying decisions according to different criteria than their paperback buying decisions—that it’s based solely on price ahead of value because of the format of the book. They mistakenly suppose that the ebook version of a book should be priced cheaper than the paperback version because of its reduced production costs (i.e., no printing involved). This is a flawed premise because, again, all kinds of different people in this world have all kinds of different motives and reasons for buying ebooks. In here, I list various reasons why people buy e-books which is similar to my original post (including the "save trees" reason that makes you laugh) so I won't repeat them here. It would be redundant to do so. I'll just continue on with the next point... These are just a few of the reasons why people might buy ebooks. There are probably many more. It all comes back to what I stated earlier about the importance of consistency in one’s overall marketing message. If consistency is the key, shouldn’t the ebook version and paperback version of a book be priced the same? If it’s the content of the book that the client is buying and if that content could potentially help them to improve their finances or health or some other aspect of their lives in a measurable way, isn’t that worth the same to them no matter what format they’re buying it in? The answer is yes. Absolutely! That's the generic answer to a generic question. Which brings us back to this: How do you price the paperback version of your book? You first have to figure out your production costs which may or may not include editing, design, proofreading, indexing, printing, whatever else. You also have to factor in the percentage of your retail price that you're going to pay out to the various wholesalers/retailers who carry and sell your book for you. And you must also to consider your audience in that calculation: are they influenced more by a value-sell or a price-sell? (Trying to reach a value-sell client with a low price will cost you a sale. Trying to reach a price-sell client with a high price will cost you a sale.) I take all these things into account and give authors a formula they can use to figure out their retail price. They can simply plug their own numbers into that formula to make it a bit easier. No, I'm not going to share that formula with you here. If I do so, then there will be no reason for anyone to pick up a copy of my book. But I hope you find this bit of information helpful.