The Self-publishing journey – price elasticity & market dynamics – update (3)

For self-publishers, the most popular list price for an e-book is €2.99. I think of my target customers as urbane, educated and appreciative of the finer things in life. Surely they would not consider an investment of $2.99 to be a major decision in their support of literature? I believed that dropping my price even lower, in an effort to entice them to buy, would be met with indifference and disdain.

I was wrong. My sales figures are not chart-topping but they do spike in the US when I combine an email advert (cost $25) with a promotional price of $0.99. I guess urbane and discerning readers like a bargain just as much as the next guy. Can my empirical experience of price elasticity be extrapolated? If I offer my book for free will many thousands of people download it? Will they then tell all their friends how great it is such that they will rush to buy the book at the full price?

A popular theory says that if you give away your book for free then the reader expects it to have no value. However, some people just love getting stuff for free. They download the book but never read it. Worse than this, others download it even though they don’t like it and then they give it a bad review.

I have never offered my book for free. There may be a little bit of pride in this but I like to think it’s more to do with the theory above. Many full-time, “traditional” writers seem to be more hung up about low prices. They believe that e-books sold below, say, $5 are being undervalued. The reader should pay more because so much effort and cost has gone into making the book.

Market dynamics tend to ensure that only private monopolies and public services can price on a cost-plus basis. The rest of us have to compete on price and value. A market with barriers to entry fosters feelings of entitlement and overblown expectations among those who are inside the barricades. The technology provided by Amazon and others has removed the barriers to entering the publishing market. What was once a dream – to establish a 24/7 shop window to the world for your e-book at an affordable cost – is now a reality. Anyone can do it – including you!

He’s a little uncomfortable but he’s a stoic