What Amazon's new royalty rate means to me

Amazon's 70% royalty rate for indie authors is kicking in w/in the next couple of days (provided the book is priced no lower than $2.99), and after much hemming and hawing, I've decided to opt in on it.

You may recall earlier in March, when I changed my price from 99 cents to a buck-99, my rankings especially took a hit (and kept falling, albeit gradually). In hindsight, I was either too hasty in raising the price, or too hasty changing it back to 99 cents after less than a week (because the sales units weren't that bad once I saw them on the spreadsheet)--I can't tell. I suppose the more accurate, technical description of my response is that I freaked out a little. But in the last couple of months, I've grown disenchanted w/ the 99-cent price-point; and yet, I was still reluctant to change, fearful of another plummet in the rankings. As of an hour ago, I was hovering around #450 for Faking It and #1200 for Ordinary World-- not bad, considering there are currently over a half-million books in the Kindle Store. Kindle Store rankings seem to be the equivalent of location, location, location in a brick-&-mortar store.

Prices usually go down, not up, after a product has been on the shelf for some time. Certainly this new strategy does not conform to the norm. How will customers respond? Besides, Kindle readers typically don't want to invest more than 1.99 on an indie/unknown author. Will a reader who's not heard of me be willing to take spend the extra two bucks? Would I?

On the other hand, I've read discussion threads in which readers automatically assume that the writing (i.e. content) of 99-cent books is just as cheap as the price, and won't go near them for that very reason. I have no doubt that I wouldn't have sold as many units as I did had it not been for the 99-cent price-point, but I'm sure I lost sales as well.

Which leads me to the deciding factor: value.

I ultimately chose to raise the price because I believe my book is worth more. When I originally set my price, I put readers before royalties, and I achieved my goal of establishing a readership and good reviews. 65% of reader reviews for Faking It are 5-star. To date, I've sold approx 50,000 Kindle units of Faking It and Ordinary World combined. Faking It peaked at #6 on the best-seller list, Ordinary World at #35. All phenomenal accomplishments. The market has spoken: these books have value.

Of course, all books have value. I don't mean to imply that my book is worth more than another indie author's simply because it ranked higher or sold more. But, as I said, I achieved my goal. 99 cents no longer works for me. I'm now willing to take the risk and lose my place in the rankings in exchange for perceived credibility. Note the word choice. Indie authors who price their books so low are already credible. I was already credible. But the 2.99 minimum is a good thing for indie authors, I believe. And while I think Kindle owners will be reluctant to jump on board at first, they'll come around when it becomes the norm. I'm already noticing that many traditionally published Kindle books (including best-sellers) are priced higher than $9.99, and I remember how many Kindle owners were refusing to pay more than that for an ebook.

And, as for the royalty increase, I won't know how that pans out until I get my July statement. Maybe I'll make more by selling less. Maybe the past two months I made less while selling more. Maybe I'll break even. We'll see.

One thing is for sure: this is one more incentive for authors to seriously consider self-publishing. If they've got a book that is well written and edited, with a professional cover, then they have a chance at making more than they ever could w/ a traditional publisher or literary agent. And it's one more shift in the publishing paradigm that I suspect the Big 5 publishers (are there even that many?) have yet to negotiate for themselves.

(P.S. As of the time of this writing, the price change hasn't gone through, and my books are still 99-cents--get 'em while you can!)

join me tonight!

I'm going to be on Stacey Cochran's "Book Chatter" LIVE tonight at 9:00 pm, EST-- I'm going to talk about my recent sales successes and failures. Hope you'll join us!

I can now assess my mistakes. For one, I raised the price too high. Fifty cents doesn't seem like much, but think about what it would be like if a zero was added to that. Imagine raising a price from 99 dollars to 149 dollars. Would you be willing to pay that much more? I still want to try $1.19 and see how I do. If I don't fare much better, then I'll go back to 99 cents.

Second, the problem may have been that I raised the price on an existing product. I think I'd do better releasing a new book at $1.49 (or higher, once the new Amazon royalty rates change). Clearly the appeal of Faking It wasn't only the book itself, but a "great book at a great price". I thought perhaps it was time to let the value of the writing speak for itself, but I underestimated that readers loved that just as much (even though some said they'd have been willing to pay more).

Good lessons all around. It'll kill me to have to take the book offline even for 24 hours while the new price reduction goes into effect, but hopefully sales and rankings will rebound as a result.

Finally, I got two happy surprises today. Came across this glowing review of Faking It and Ordinary World, and the WickedWriters website re-posted the guest blogpost I did for Anthony Policastro and The Writer's Edge. So, if you missed it the first time, check out WickedWriters!

Have a fab weekend, everyone!

the pricing experiment: day 4

It's not going well.

That is to say, I'm not getting the results I'd hoped for. My rankings are tanking big time (I apologize for the unfortunate rhyme). Sales have dropped by about half. Interestingly, Ordinary World still seems to be holding its own. Faking It, however, is not.

Indeed, this was a huge risk, raising what is, relatively speaking, quite a price hike even though it's only 50 cents. Percentage-wise, it's a high markup. Add that to the fact that most people slashed their e-book prices, some down to free, for Read an Ebook Week, while I actually raised 'em. Points for me being gutsy, yes?

Groan.

Have decided to wait until the end of the week, then I will lower the price to $1.19 and see if I fare any better. The downside is that for some reason, when you lower your price, Amazon takes the book offline for 24 hours. (Why don't they do that when you raise the price?) So I'll have to lose a whole day of activity, and lord knows how that will affect my rankings.

Alas, this is what business is all about. If you want to make an omlet, you've got to break some eggs. There are important lessons to be learned here. I just hope I can reclaim my former rankings.

pricing experiment: the first 24 hours

Well, it happened. After 44 consecutive days on the Kindle Top 100 Bestseller list, Faking It fell to #107. Ordinary World, on the other hand, jumped from #337 to 292. Go figure. There's nothing worse than a broken streak. I have no idea whether this is the result of the price change, or if it was on its way down already (it kept threatening to, fluctuating between the upper 80s and lower 90s), but I sure hope it wasn't the former. And it's not like sales have tanked so horribly that they're down to nothing (#107 ain't bad, and it's still #1 in special categories!), but still...

Of course, I'm tempted to restore the original price. Another option I'm considering is to keep OW at $1.49 and reduce FI to $1.19. I may just have to give it a few more days.

I remember a musician saying this about becoming famous (namely, topping the charts): The work you do (mental and physical) trying to get there is nothing compared to the work you do trying to stay there. I get it.

The activity at Smashwords, however, is exciting and encouraging. In fact, Smashwords has been so overloaded with traffic that people are having trouble getting in. Keep trying, though! I'll keep you posted throughout the week.

Read an Ebook Week

So, this is officially Read an Ebook Week. I'm not sure how the brick-&-mortars feel about it, but I think it's pretty neat. Many indie authors are offering their books for free at Smashwords, or slashing their prices by 50%.

I, on the other hand, just raised my Kindle price to $1.49.

I either just shot myself in the foot or practiced smart pricing. Time will tell.

So why would I do such a thing?
For one thing, it was time. Faking It and Ordinary World have been selling at 99 cents for at least six months now. They sold over 37,000 units for January and February combined. Sales have been slumping for the last few weeks (I thought perhaps this was due to the Olmypics, but I've seen no improvement). As far as I can tell, the sales have plateaued. It's time to raise the price, even if only by 50 cents.

For another thing, the book's value added has increased significantly thanks to the success of the last two months. I still have to wrap my brain around the magificent thing that happened. I may still be an indie author, but I'm no longer an unknown author (at least not to 37,000 readers!). Besides, several reviewers admitted that they would have paid more for my books. When I hear that, I know I've got something of value. Those in business will tell you to give customers what they want. If they're willing to pay more, then charge more. Besides, I always thought they were worth more. I think they're worth more than a buck-forty-nine, but it's a reasonable raise w/out price-gouging.

Third, with Amazon doubling royalty rates in June (provided authors set base prices at 2.99), I'm gradually preparing for that. With my writing partner's approval, I'm planning to charge Why I Love Singlehood 2.99 right out of the gate once it's ready (and can now do so thanks to FI and OW's success). I'm curious to see what other indie authors do come June, and how Kindle readers respond. Will 99-cent books disappear? Will this be a factor as e-reader prices come down? Time will tell.
But Elisa, why not give your book away for free? It's Read an Ebook Week, after all...
I respect authors for being so generous, and if I was going to do such a giveaway, I would do it for one day only, perhaps (I gave away lots of print and e-book copies of FI and OW to lucky winners throughout the blog tour last month). Call me a greedy capitalist (and I know several who will), but I believe in charging money for my books. Yes, I have always maintained that I wanted a readership more than I wanted royalties. But I believe as self-publishers we should also be entreprenuers. That is, we should sell our product for a price. That's just me. Feel free to disagree, and give a boatload of books away this week. I'll still support you.

The hardest part about being a self-publisher is just that: you are no longer just an author engaged in the process for the love of writing. The moment you decide you want to sell your book, your creation becomes "product", and you are the "publisher" (not to mention marketer, distributer, and seller). You have to take the risks that any businessperson will take. You will undoubtedly make mistakes. The smartest businesspeople see mistakes as stepping stones to future successes. The rest see mistakes as failures.

So to indie authors and self-publishers, don't be afraid to take a risk or make mistakes. But, learn as much as you can about the business to minimize your mistakes (or, at the very least, the consequences).

To the rest of you, try an e-book this week! You can go to Smashwords to check out all the free or reduced books this week (including mine), or download Barnes & Noble's e-reader software to your computer for free (you don't need a Nook), and check out their catalog of free ebooks. Finally, don't forget that you can download the Kindle app to your iPhone, iPod Touch, or Black Berry if you don't own a Kindle.

And, as always, a heartfelt thanks to every single reader who purchased and read my books, regardless of what you paid (or didn't pay) for it.

Happy reading!