$2.99. That’s the magical price point for Kindle books. When your ebook is priced at $2.99 or higher, Amazon pays you a 70 percent royalty for selling your book. That means you make about $2.10 on each copy of your book you sell.
The game changes when you price your eBook below $2.99. Amazon will then take 65 percent (remember, they were only taking 30 percent on books $2.99 and up), which leaves you the author with only a 35 percent cut. Although you may think that $2.99 is the lowest price to charge for your ebook, there can be a benefit to selling at a lower price.
- Price your book at $2.99. The higher price will mean less in sales. If you sell 50 copies every month at a 70% royalty rate, that means you’ll get about $110 in profit.
- If you try pricing your book at $.99, you’ll end up seeing more sales but the question is whether or not you can make it up in volume. If you’re able to sell 500 books a month, then even with only a 35 % royalty rate, you’ll end up making more money than if you had sold the books at $2.99.
- If you start your book at $.99, you won’t be able to lower the price later. If you start selling your book at $4.99, you can always lower the price later to try and increase sales.
- the 70% royalty rate is for all books priced between $2.99 and $9.99. Above that, it goes back down to 35%.
- If you sell your book to a customer in certain countries, the rate goes down to 35% no matter what your list price. Don’t worry, countries like the US, Canada, England, France and Germany are safe (but not Australia or New Zealand).
When deciding to go for a higher price or a lower price (and trying to make up the difference on volume), sometimes you have to look at your advertising strategy. For example, if you’re spending a lot of money on advertising and you already have built up a readership over many books, you’ll probably want to charge a higher price. Your fans will probably pay a higher price, and if your advertising is any good, it will convince audiences that your book is worth a higher price. If however you are an unknown author and your primary advertising is through social media, then it might make better sense to use a $.99. People don’t know you, and a social media campaign usually doesn’t have the same clout as a paid media campaign targeting multiple outlets.
The beautiful thing about the Kindle publishing platform is that you can adjust the price when you want to. Sometimes it will make sense to go for a higher price, while other times it will be more beneficial to shoot for volume with a lower price. The important thing is to keep your book popular. Even if it’s not on the top 100 bestseller list, you want to gauge its sales numbers and adjust your price to keep the book popular.