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Two Killer Kindle Self Publishing Price Tests

I’ve been thinking a lot of Amazon’s Kindle self publishing pricing lately.  Why is it $2.99 seems to be the recommended best price for an eBook on Amazon?  In my conversations with a few colleagues, they’ve asked why I always “race to the bottom” when pricing quality ebooks and tutorials.

A lot of the blogs (including Steve Scott’s) point to the $2.99 price from Amazon eBooks yet there are other books in the Best Seller categories selling well at price points above the $2.99 price point.  When I first published my book – Project Management Interview Questions Made Easy – I benefited from the new book exposure phenomenon that Amazon provide.  I sold the book at $2.99 and then gradually increased the price.  The book has been selling consistently on Amazon for the past 2 years and by no means am I retiring on this one book, but I’ll take the couple of hundred bucks it generates each month.  After all, it is a portfolio approach to “build a catalog business”.

To test my colleague’s theories about “racing to the bottom”, I wanted to run a few different price tests to see if pricing really does matter for a book that solves a specific need or want.  I wanted the tests to help answer the following questions:

  1. What is the optimal price for one of my books which addresses a direct market need?
  2. Why always race to the bottom for $2.99 for the 70% royalty?
  3. Would a .99 cent test skyrocket my book?
  4. How many more books would I sell at $0.99 and what would the 30% royalties earned?
  5. Do I need to rethink the pricing approach?

The following are the results of my price testing over the past few months.

Establishing the Baseline

From January to June 2014, I kept the price set a $3.99 and the sales and monthly 70% royalty for the US Market were as follows:

kindle self publishing price test

January – June 2014 Royalties and Units

 Jan 2014Feb 2014Mar 2014Apr 2014May 2014Jun 2014
Units605456524038
Sales167.58150.82156.41145.24111.72106.13

For future price test comparisons, the average sales for the six months is:
Average Sales Jan – June @ $3.99 Price with 70% Royalty: 50
Average Monthly Income Jan – Jun: $140

With the baseline in place, I ran a $0.99 price test in July and a $4.99 price test in August.

The $0.99 Kindle Price Test

I wondered if reducing the price would generate a significant boost in sales even though the 35% royalty would mean a dip in revenue. The July results were:

July $.99 Price Test with 35% Royalty

Sales: 74
Income: $26

Overall I improved sales by reaching 48% new readers however I lost 82% of the average royalty. In my book, I include an email opt-in opportunity to download additional templates so I also increased the number of subscribers to my email list. I picked up a few more reviews so that’s always helpful.

In my portfolio of project management books, I sell 2 other books priced at $4.99 and in July, I saw a 35% and 140% increase in sales however, the total amount earned for the 3 books didn’t beat the overall portfolio monthly average.

$0.99 Conclusion: Great price point for exposure, not great for revenue

The $4.99 Kindle Price Test

In August, I wanted to see if I increased the price point by 25% if there would be a positive or a negative impact on sales and overall profitability. The August results were:

August $4.99 Price Test with 70% Royalty

Sales: 36
Income: $126

Compared to the monthly average of 50 units and $140 in royalties, I have 38% fewer sales and lost 10% of monthly royalties. I am comparing it to the monthly average whose earlier months performed better. In May and June, the royalties were lower than August’s $4.99 price point.

$4.99 Conclusion : $3.99 performed better by 10%

Kindle Self Publishing Price Test Summary

Below is the summary of all monthly sales and price tests.

kindle self publishing price test

January – August Royalties and Units

 

 Jan 2014Feb 2014Mar 2014Apr 2014May 2014Jun 2014Jul 2014Aug 2014
Units6054565240387436
Sales167.58150.82156.41145.24111.72106.1325.24125.75

The table below summarizes the tests

Price Test SummaryUnitsSales
Average @ $3.99 (Control)50$140
$0.99 Price Test74$26
$4.99 Price Test36$126

Based on the data, I’m doing a disservice by offering the book at $0.99 and underperforming at a price point that’s 25% higher. after reviewing the results, I’m going to take the following actions in October.

  1. Test the $2.99 price point again in October.
  2. Assuming $2.99 underperforms (as it had in past months), I’ll raise the price back to $3.99

Additional Considerations

All three of my Kindle eBooks provide tutorials or step by step solutions to solve project management problems using software tools or project management processes. It is definitely a niche that sells but doesn’t sell a ton on the Kindle market. Depending on the October test, I’ll actually leave the KDP Select program and sell these same tutorials at a $24.99 price point on my own website. I’ll add additional templates and supporting material that isn’t included as easily on the Kindle platform.

Future titles that are not tutorial based will remain on the Kindle platform at the $3.99 price point and serve as lead generation to my http://www.tacticalprojectmanagement.com site

What has been your experience?

I hope you found these Kindle self publishing price tests useful. I’d be interested in hearing your own results.  Please comment below in the blog and help answer the following questions:

  • Has a $0.99 price test led to an overall improvement in your Kindle royalty portfolio?
  • What has been your optimal Kindle Price point for your market?

I’ll let you know how the October $2.99 price test goes!

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4 Responses to Two Killer Kindle Self Publishing Price Tests

  1. Yael September 22, 2014 at 12:16 pm #

    There is a follow-up question: KDP has a 90-day “free look” feature. Is that helpful to overall sales? Have you tested NOT placing on the KDP free-look?

  2. Andrew Makar September 22, 2014 at 3:05 pm #

    Hi Yael – I have not tried the 90-day free look feature. My books are enrolled in KDP Select which allows them to be viewed under Kindle’s Unlimited option. However, I’m looking to improve the conversion as one of the text solves a significant problem for project management job seekers.

    Considering a PM’s salary is a a high one, even a $9.99 price point seems reasonable given the approach and strategies that can lead to a higher paying job.

  3. Rachel September 22, 2014 at 3:24 pm #

    Hi Andrew-

    I’m wondering if you’ve tried using a funnel approach to improve sales for your books? I would bet that if you priced one book at 99 cents, and then had a lead in from that book to the second book (with a sales page), you could sell the second book at a higher price – possibly even higher than $4.99.

    The key thing to implement would be that the 99 cents book would have to be just a small(er) bit of really actionable info (not those ones that just rehash old blog posts) for one problem that they can fix using your book. And then the more expensive book would fix a wider range of problems.

    In fact, upon thinking some more, if you had it so that people went to your site to get a “coupon” for the second book, you could collect their email addresses and then send them off to buy the book at Amazon at the same time.

    • Andrew Makar September 24, 2014 at 1:16 am #

      Thanks for the comment Rachel. At this point, I haven’t published more than 3 books in my portfolio. I’ve been building a list as each book provides templates and an opt in opportunity. Since these are project management techniques, the lower price $2.99 – $3.99 option plays well. October will be another good test to see how well these books would sell.

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