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eBook Price Strategy on Amazon

Now your book is ready and about to be put on Amazon shelves. Yet, one question remains. What is the ideal price? Luckily, Fingers Murphy has kindly authorized the republication of his post about his own strategy and observations.

eBook Price Clustering: Does the Price of Your Book Define Who Will Buy It?
First published by Fingers Murphy

Does the price you set your book at dictate which “Customers Also Bought” lists it ends up on? I think it does. This may be an obvious function of buyers having certain traits. Those looking for bargain books buy bargain books, those willing to pay full price are more likely to pay full price. But I think the ramifications are something indie authors need to consider.  I offer my own two books as anecdotal examples.


I published FOLLOW THE MONEY in May and, after a slow start, I reduced it from $2.99 down to $.99 in the hope that sales would jump.  As I’ve remarked before, sales grew, but not spectacularly.  Rather, it has been a slow, steady buildup, and I suspect that buildup would have occurred at the higher price point.  But I had no ability to test that theory.

So, when I put THE FLAMING MOTEL out at the end of August, I decided I would put it at $2.99 and leave it there.  I also moved FOLLOW THE MONEY back to $2.99.  It’s early yet, but I’ve noticed something interesting about the books showing up in the Customer Also Bought lists for the two books.

First of all, it’s important to understand what Customer Also Bought lists are and why they matter. Next to Amazon affirmatively promoting a title, I think these lists are the single biggest driver of sales. I don’t fully understand how they work, but they seem to define a universe of books that are commonly bought by the same readers.  The more commonly they are bought by the same readers, the earlier they show up in the Customers Also Bought list.

For example, Steven J. Harper’s THE PARTNERSHIP is the first book on the Also Bought list for FOLLOW THE MONEY. I don’t know this for a fact, but I suspect that more readers of FOLLOW THE MONEY have also bought THE PARTNERSHIP than any other book. If you click on THE PARTNERSHIP and scroll through its Also Bought list, FOLLOW THE MONEY is the eleventh recommendation.  Which makes sense because THE PARTNERSHIP has been a very successful book, so lots of people have bought it (and bought ten other books more often than mine).  Obviously, the higher up your book is on another book’s Also Bought list, the more likely readers are to see it and click on it.  And these are very valuable clicks because they are typically readers who are already interested in books very similar to yours (or at least often bought by people with a certain collection of tastes).  The more popular the book is, the more referrals your book will get. These are very valuable referrals.

However, once your book gets clustered together with a certain group of books, it gets harder and harder to break out of that universe. Does this matter? In think it might matter a lot.  Let’s look at my books.

FOLLOW THE MONEY spent the entire summer at $.99. Of its 100 Customer Also Bought recommendations, 48 are other $.99 books.  Basically, half of the other books that show up as recommendations (and in whose Also Bought lists FOLLOW THE MONEY shows up) are $.99 books.  Meaning at least half of the people who come across FOLLOW THE MONEY because of Amazon’s suggestion will be people who are looking at $.99 books.  The high concentration of $.99 recommendations suggests to me that there are a lot of bargain shoppers out there who are buying only, or mostly, $.99 books.  This causes a problem if, like me, you want to raise your price. Will all those people who are looking for $.99 bargains who come across my book be willing to buy it at a higher price? Or will they dismiss it out of hand because of the price? Time will tell.

THE FLAMING MOTEL, which is just two weeks into its release, has only 17 Also Bought recommendations so far.  But interestingly, only one of those books is a $.99 title (Ken Isaacson’s SILENT COUNSEL). The rest are all $2.99 and up, and half of them are over $5. This suggests that THE FLAMING MOTEL is being bought by a completely different group of readers and is not being snapped up by the $.99 bargain hunters. It also suggests that if I raised the price to $3.99 or $4.99, the people who are buying it wouldn’t necessarily have a problem with it because they’re used to paying that much and more.

This is important for an indie writer’s long term strategy because there appears to be real stratification between bargain hunters and the rest of the book buyers out there.  Those willing to pay more generally do pay more, and those who want to pay $.99 tend to mostly pay only $.99.

At first, a new indie writer wants readers, and will take them at any price.  The $.99 price point makes sense in that circumstance. But the reader you may be attracting, and who may end up defining where you book gets “recommended” by Amazon’s Also Bought lists, may trap you in the $.99 ghetto. This could make it very difficult to raise the price once the book gains some traction because the $.99 crowd may resist paying  anything above that.

This is a basic branding question. What kind of product are you selling? A bargain product, a mid-range one, or a high-end premium product? Once something gets defined one way, it’s hard to change its perception.  The Amazon Customers Also Bought list ensures that your book has an established perception, which is a great thing. But you should at least have a plan for managing that perception over time.

Even at $2.99 a book is still on the low, self-published end of the spectrum. It’s just not a lot of money for something that should provide hours of highly engaged entertainment. Over the long haul, it might be better to build your audience more slowly at a higher price than to get defined (perhaps permanently) at the $.99 price point where customers may be very resistant to any price increases.

More Data on eBook Price Clusters and Amazon’s Customers Also Bought Lists
First published by Fingers Murphy

I wrote a couple of weeks ago about the effect that ebook pricing has on Amazon’s Customers Also Bought lists.  I had listed my new book, THE FLAMING MOTEL (UK), at $2.99 after having my first book, FOLLOW THE MONEY , at $.99 through the whole summer.  What I’d noticed was that Amazon’s Customers Also Bought list for my new book was populating with higher priced books than the Also Bought list for my book that had been listed at $.99.

In fact, at that time, THE FLAMING MOTEL only had a single $.99 book in its Also Bought List, out of 17 suggestions.  But FOLLOW THE MONEY had 48 out of 100 suggestions at $.99.  A significant difference.  Because THE FLAMING MOTEL was so new, I wanted to be careful to not draw too much of a conclusion from the data.  So I’ve given it a couple more weeks.  Now THE FLAMING MOTEL has 50 suggestions in its Also Bought list.  Let’s look at the data.

FOLLOW THE MONEY  has held pretty steady, despite the fact that it has now been back at $2.99 for about a month.  It currently has 46 of its 100 suggestions at the $.99 level.  Virtually no change from the 48/100 it had two weeks ago.

THE FLAMING MOTEL now has 11 out of its 50 suggestions priced at $.99.  Although this is a significant increase from where it was in the last post, it is still substantially below the level of FOLLOW THE MONEY: 22% versus 48%.  The difference seems meaningful to me.

What does all of this mean as a practical matter?  I think it means that, to the extent Amazon’s system makes associations between your book and other books based on who bought your book and other books, the price has a large effect on the company you keep.  Once associated with $.99 books, the association is hard to break.  That could have longer term effects.

Most importantly, it might make it much more difficult to raise prices.  I raised FOLLOW THE MONEY to $2.99 and the book continues to sell about as well as it did as a $.99 book, but $2.99 is still a bargain book.  Query whether it would continue to sell if I raised it to $3.99 or $4.99.  Would all of those people looking at $.99 books who saw mine in the Also Bought lists be willing to pay such a “premium?”

If you look at THE FLAMING MOTEL, the books in its Also Bought list are much more expensive, with many mainstream books.  It seems that those buyers would tolerate such a price increase pretty easily.  I’m going to let a few months of data accumulate and see if the trend holds.  Then I may try some pricing experiments.

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5 Responses to "eBook Price Strategy on Amazon"

  1. Anton Gully says:

    I’ve never read John Locke but dismissing his success as nothing more than a pricing exercise is nonsense. You don’t sell a million e-books unless you’re providing a quality read. Suggesting otherwise is tantamount to calling his readers price-led idiots.

    Regardless, I enjoy articles like this which analyse the numbers behind the art. I am so easy for statistics. Very interesting read.

    Isn’t the $2.99 price the lowest price point at which you get the 70% cut from Amazon? I imagine that alone will help skew the numbers in the favour of a low volume seller. If you’re unknown are you likely to sell significantly more at 99 cents, than at three bucks? I suspect not. If you sell twice as many at 99c but your cut is a fifth of what it would be at $2.99 then it makes no sense to lower the price. (I’m not sure what the 99c share is to be honest. I think it’s 30% – whatever, it’s a fifth or similar, I think. You get the idea anyway…)

  2. This is exactly WHY John Locke sold a million books. The next time I hear the myth of his brilliant marketing, I am going to jab a pencil in my eye. It was Amazon algorithms, doing what you have so clearly explained, that solda million 99 cent books–he was in EVERY recommendation window of anyone who ever bought a 99 cent book. In fact, it would have been truly notable if he HADN’T sold a million, not that he did. And that is 99 percent of his success. All the “ten times better” stuff is just a cute little sound bite.

    But as you say, it’s the company you keep. And how will that sustain over the course of time, when you use up the bulk of your initial audience, as Locke did? I vary pricing all over the chart, and there’s something to be said for keeping your price up (generally, lower-priced books get worse reviews, too, because people buy them who don’t want them). Good analysis–I think this is the single most critical factor in building book sales, yet few even think about it. And it’s also why Amazon is selling tons and tons of ebooks.

  3. Gill Wyatt says:

    This is a great article for writers. I’m in the UK. I have a kindle and I scan the 99p books. I recently found that a book that I liked by Marino Fiorato. I had never heard of her but once I knew I liked her style I was happy to pay a lot more for the next ones. I’m not sure I would have paid more for the first one though.

  4. John Chapman says:

    John Locke priced his Creed novels at $0.99 and managed to sell a million of them. His idea seems to have been ‘Now it’s up to the well known authors to prove they give 10 times as much value’.

    I have to admit a low cost book is far more appealing to me.

  5. Paul D. Dail says:

    Personally I believe that the art of writing shouldn’t be compromised just because of the convenience of obtaining it. It doesn’t rule out the hundreds of hours we authors (or at least some of us) have put into our craft.

    And you have given me even more reason with this great article. I also struggled with price point and had a similar experience as you with briefly lowering my price for a trial sale. I hadn’t considered the Customers Also Bought list, but it makes complete sense.

    Paul D. Dail
    http://www.pauldail.com- A horror writer’s not necessarily horrific blog

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