I was strolling through the comments to a recent post on Chuck Wendig’s writer blog when I came across a commenter lamenting that recent changes in Amazon’s pricing structure have slashed profits for self-published authors. Having planned to go into the indie writing arena myself, I was understandably concerned and immediately visited Amazon’s pricing page to see what the changes were. I’m not entirely sure this is everything they changed since I don’t have an earlier version of the contract for comparison, but the major potential change I could identify is this: in order to qualify for Amazon’s 70% royalty rate, e-books now have to be priced at $2.99 or higher. Books from lower than $2.99 to $0.99 only receive the 35% royalty payout.
Brutal. I sympathize with authors who must have found their income decreased by 35% in just 24 hours. Except for one problem–they shouldn’t be selling their books for $0.99 in the first place.
Keep in mind I’m not talking about short-term promotional discounts where you lower your book’s price to $0.99 from some higher number. I’m talking about setting your book’s regular price to under $2.99. There are two reasons this is a bad idea that could actually negatively impact your sales (even before the Amazon pricing changes):
People perceive something they receive cheaply as having less value. Especially when self-publishing was getting started, many indie writers priced their books low with the expectation that readers would see them as a good deal and be more likely to buy. However, when a product (and that is what a book is) is priced noticeably lower than products in the same category and it’s not obviously a short-term sale price, buyers are more likely to evaluate its worth critically. This is a side effect of what’s called the “anchor price” phenomenon: within a small range, whatever price people are accustomed to paying for a product is the anchor price, whether it’s a book or a diamond ring or a plasma TV. The anchor price is the perceived market worth of that product. When a buyer sees a product priced significantly lower than other products in the same category (especially if it isn’t part of a sale), they are likely to be suspicious about its quality.
In contrast, a phenomenon called the “zero-price effect” means people often perceive a product they received for free as being more valuable than it is. However, when it comes to works of subjective value like a book, the tradeoff of higher perceived value is often more critical reviews. It’s true: people are more likely to review a book harshly if they received that book for free.
This seems counterintuitive at first. After all, if you didn’t have to part with your hard-earned cash to get the book, aren’t you more likely to go easy on it? I’m not a psychologist, but if I had to guess, when you receive a product for free you’re less likely to forgive its flaws because part of forgiving flaws involves rationalizing our own purchase decisions. You want to convince yourself that money you spent on a book was money well spent, that the book was worth what economists call the “opportunity cost” of the money to acquire it and the time to read it. But readers who receive a book for free have no skin in the game. They don’t have to rationalize their purchase decision. Instead, they may be looking for reasons why the book is free, and one of those might be that the author didn’t think it was of high enough quality to sell. Which brings us to point two:
Pricing your books low sets you up to devalue your own work. Putting your books out there for consumption by a global audience is scary, I know. I think the motivation behind a lot of indie writers selling their books for $0.99 is the perception that buyers will be less likely to balk at making a purchase if the book is cheap (see the “good deal” argument above). But I think the perception often goes deeper than a tactic to goose sales. Self-published authors are still struggling with a certain amount of stigma, especially with the perception that their books are lower quality than traditionally published books. That inner voice sounds something like this: How can I make people pay full price for a book that wasn’t good enough to get published?
Let me say, simply, stop that. Stop that kind of thinking right now.
First of all, the quality of a book has nothing to do with how it was published. Nothing. As a self-published author or indie author, you chose to use the tools available to provide your work directly to readers rather than go through the intermediary of a publisher. That’s it. Avid readers will be the first to tell you they’ve read plenty of crappy traditionally published books. Buying a traditionally published book no more ensures quality than buying a self-published book means it will be crap.
It is true that with self-publishing your book’s quality is entirely on you. As an indie writer, you are an entrepreneur in an international business*. And of course, as an entrepreneur, you would never publish a book that isn’t of publishable quality, right? Your book has been professionally edited, proofread, and formatted before going up for sale, right? You’ve hired the talent to do up a professional cover and invested in a website, right? Of course you have. You’re a professional writer using the tools available to you to reach readers directly.
This is the attitude I encourage indie authors to adopt toward their business. It’s definitely an attitude I’m still cultivating as well. Pricing our work at market value is one way to signal to readers that we’re serious, we realize this is an international business, and we’re doing our part to make our work competitive in this business. Competitive doesn’t mean as cheap as possible. It means selling our books at a fair price that reflects the years of hard work and out-of-pocket investment we’ve placed into each and every title. Because if authors don’t value their work at its market price, why should readers?
*Thanks go to Kristine Kathryn Rusch and her blog on the business of publishing for helping me cultivate this perspective.