* the following article was contributed by Ginny Grimsley, National Print Campaign Manager @ News and Experts in Wesley Chapel, FL

How To Price An Ebook
Amazon Vs. Kobo: Which Is Better For Price And Value?

By Kim Staflund

Last year, a major milestone was reached in the ebook industry: self-published authors began taking home the bulk of all author earnings generated on Amazon.com, eclipsing those represented by major traditional publishers.

There has never been more opportunity in human history to publish a book. However, many questions linger for how to maximize a book project. What’s an appropriate price point for an ebook?

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 buyers have various motives and reasons for buying ebooks.

Some customers buy ebooks based on price:

•  They prefer downloading ebooks to their laptop, desktop computer, or ebook reader that they received as a gift, because ebooks are cheaper to buy than paperbacks or hardcover books.

Some customers buy ebooks based on value:

•  They bought an ebook reader for all their ebooks for the convenience of having them all in one place (i.e., so they don’t have to cart around lots of heavy books with them).

•  They see significant value in the content of the book (i.e., it contains priceless information and instructions that can help them to earn more money or to better themselves and their lives in some measurable way).

•  Going paperless to help save trees is more important to them than saving money.

•  They want to have the latest technology in their hands before anyone else has it. (These people will almost always pay more to stay one step ahead of other people.)

Additional factors for judging an ebook’s optimal price are content and consistency. Readers buy books for content, not paper. An ebook’s content could change a reader’s life, but if no one knows about the content, then it won’t do anyone any good. That’s why authors need to be proactive with a marketing campaign. A key to a successful campaign is consistency of messaging, which is just another reason why authors should consider pricing their ebook the same as a paperback copy.  

Kindle is Best for Price-Based Ebook Marketing

Amazon’s Kindle Direct Publishing (KDP) platform allows publishers and “indie” or self-published authors to upload interior book files specially formatted for their e-readers; and it has a generic, front-cover-generator option available in cases where the client hasn’t already had one designed. This is a prime example of the vanity book publishing model in that vanity publishers promote themselves as the fast, cheap and easy self-serve way to “publish” (or, more accurately … format) a book without any mandatory professional editing, design, proofreading, et cetera, involved whatsoever.

Like many other vanity publishers, Amazon’s Kindle does its best to maintain control and ownership over the files uploaded to its site by enticing authors into an exclusivity contract via its KDP Select program. In addition, Amazon strongly encourages authors to price their Kindle ebooks at $9.99 or lower by providing greater incentives (higher royalties) on the lower-priced books; and they will only allow authors to connect their POD paperback books with their Kindle ebooks online via their “Kindle MatchBook” option so long as that ebook is reduced to as low as $2.99 per copy.

Recently, French publisher Hachette was victorious in negotiating a deal. Now, Amazon cannot forceauthors to price their books on their ecommerce site at $9.99 or less. Amazon, however, continues to strongly advocate for such pricing, arguing that low costs are good for all parties and citing the pre-World War II invention of the paperback, which made books accessible to more people. Opponents to the price ceiling say Amazon’s stance is arbitrary.

It will likely take an author forever to make back the money it cost to properly publish a book if the retail price is set at $2.99 per copy. Additionally, such a low price truly devalues content.

Kindle’s KDP platform not only prices ebooks very low, but it also allows authors the choice of offering their books free of charge for two to five days out of every 90-day period to try to bolster new readership. In other words, interested readers can simply wait it out and get a book for free. For many, a rhetorical adage may come to mind: Why bother buying the cow when you can have the milk for free? A much more effective way to entice new readers into buying a book is with a “Sneak a Peak” option that allows them to look inside a book to read only a small portion of the content for free, instead.

Kobo is Best for Value-Based Ebook Marketing

Luckily, many other ebook retailers out there will happily sell various ebook formats for their clients worldwide without exclusivity contracts, while also letting those publishers (self-publishers) determine their own recommended retail prices. Kobo is one of these retailers. When authors upload files to Kobo Books, they can set their own prices from the start. However, Kobo can put the book on sale if they choose to as it is with all retailers across the board.

This is the traditional relationship of all manufacturers and their retailers. The manufacturer (self-publisher) knows its own production costs and, therefore, sets its own recommended retail price based on those costs. The retailer, in turn, lists the item at that suggested price and may or may not provide discounts based on their own projected profit margins. Obviously, a book that is professionally published by including professional editing, graphic design, and proofreading into the process has a higher production cost (and higher quality) which commands a higher price.

Many Kindle authors mistakenly believe that their books need to be priced low or given away for free in order to become a bestseller, but that’s inaccurate.

The digital POD paperback version of my book, How to Publish a Book in Canada . . . and Sell Enough Copies to Make a Profit!, became an Amazon.ca bestseller only a short month and a half after it was first published, as did my next book titled How to Publish a Bestselling Book … and Sell It Worldwide Based on Value, Not Price!. The recommended retail price for both of these books is $19.99 USD. They reached bestseller status because of their quality content combined with using various online and traditional marketing techniques—not because of low pricing.

Amazon or Kobo?

Authors need to determine whether they offer the best value or the best price. They need to decide who they are early on—what the core intention of their book truly is—and then be true to that vision through and through. Authors should understand their target market—their customers’ preference—beforedesigning a sales and marketing strategy, and then make sure that the strategy is consistent with their preference in every single way, including the retail price they’ve set for every format of their book. By taking these steps, authors will sell far more books over the long run.

About Kim Staflund

As the founder and publisher at Polished Publishing Group (PPG), www.polishedpublishinggroup.com, Kim Staflund works with businesses and individuals around the world to produce professional quality audiobooks, ebooks, paperbacks and hardcovers using a supported self-publishing business model. As a bestselling author and sales coach, she shows authors how to sell their books using all the effective traditional and online tricks of the trade. Staflund has a substantial sales and sales management history combined with over 20 years of book publishing experience within the traditional and new publishing markets.