Amazon.com and SmashWords have opened the doors for self-publishing authors to distribute their e-books worldwide, and many authors are quick to take advantage of this opportunity. They upload their book files, fill in the book descriptions and other information, and then get to the question of price. How much should an e-book cost?
Many new self-publishing authors are looking for the most readers possible, so they choose a low price. Perhaps the author is hoping consumers will buy the book on impulse because the price is so low. Perhaps the author thinks that the low price will result in massive sales volume, which would compensate for the lower profit per book. I see many books with a $0.99 price tag.
This isn’t always the best approach to setting the price for an e-book. In fact, it’s usually the wrong approach. We can turn to the field of micro-economics to understand why gaining more readers isn’t always desirable, and why high sales volume doesn’t always produce the most profit. We’ll look at sales price from the basis of three concepts: