New ebook pricing? Too high?

MichaelJSullivan · 2017-02-05T17:41:26+00:00

Actually it'd be a great deal for books sold in the warehouse pricing model. The books would be priced "below market value" which would generate a lot of sales, and the authors and publishers would make their full income. Amazon would take a cut, but they would be doing so to gain marketshare - something they are really fond of.

For books in the agency model, any discounting is set by the publisher, and usually the author doesn't have a say. The hope, of course is the increased sales at the lower price makes up for the less profit per book - sometimes it works, others times not su much.

MichaelJSullivan · 2017-02-05T17:38:00+00:00

A good approach. If you ever run across a title that you don't want to read, and it's not in your library. You might consider using the "patron suggestion form" - to ask them to order a copy or two. Libraries have limited funds, but they almost always put high value on suggestions from patrons. Especially those with a lot of check outs.

MichaelJSullivan · 2017-02-05T17:36:19+00:00

Publishers get the rights you sell them. They have no say over books that aren't signed ;-) I'm a hybrid author and I have self-produced books and books that are signed to Hachette and Penguin Random House.

When I write a contract, I ALWAYS get the ability to sell signed copies of the print books from my site (that is a change I have to put into the contract, but so far it's not been a problem. It shouldn't be, because I buy the books from them at a discount that is similar (if not identical) to what they charge bookstores, so they are getting their money either way.

For ebooks - I do have one contract (Hollow World, which is under contract to Tachyon Publications) where they have the print right and I have the ebook right.

For Riyria Chronicle #3 (The Death of Dulgath) and Riyria Chronicle #4 (The Disappearance of Winter's Daughter) I sell only the audio rights and have full control of print and ebook versions.

MichaelJSullivan · 2017-02-05T17:32:00+00:00

DRM is independent from Matchbook so you could have:

DRM Free & Matchbook Enabled
DRM Enabled and Matchbook Enabled
DRM Free & No Matchbook
DRM Enabled and No Matchbook

For my books, I always choose

DRM Free and Matchbook enabled.

MichaelJSullivan · 2017-02-05T17:29:41+00:00

Yeah the "price set by seller" isn't dictated by price. It merely shows which ones are on the agency model, and which ones are on the wholesale model. At least as far as I know.

MichaelJSullivan · 2017-02-05T17:28:18+00:00

The efforts of authors such as yourself to educate us on the publishing industry over the last few years on here has been super interesting.

You are very welcome. One of the big reasons for going from self to tradition was for me to get a peek behind the publishing curtain.

It's crazy how little I knew about an industry that has had such an impact on my life.

Me too! I've learned a great deal, and I'm pleased to share that knowledge with others.

As for my assumption, it's based on the fact that they've greenlighted another 3-4 books in the series. If the first hasn't paid off by the time book 4 is released... that just seems like bad business.

Oh, as for the green-lighting. That actually happens when the first book is bought. Most publishers want three-book contracts (although they'll sometime do four or five). So yeah, they are making the decision not only before the first one is paid off, but before the first one has even hit the street. Why?

Well, it's because they expect to lose money on the first book, are hoping to break even by the second, and then turn a profit with the third. Making good money with one book is nearly impossible, few authors do that. The publishers know that with each new book released they'll pull in some new readers for the books before, and by the time everything is said and done, they hope to be in the black.

Now, sometimes a contract is cancelled when the sales of book #1 are just really really bad...which is why it hurts authors when people wait of the whole series to be released before starting reading at all. In this case, however, the author does make some money as they still get to keep the "signing" portion of the advance, and if some of the other books got to "acceptance" then they can keep that as well. Because the publisher has already made what could be a substantial investment, they might just release anyway since the incremental cost of the printing might be small if the advance was big.

MichaelJSullivan · 2017-02-05T17:22:00+00:00

Glad to hear it.

MichaelJSullivan · 2017-02-05T17:21:31+00:00

I'll agree that when ebooks first came on the scene, that many of the "old titles" were produced in the way you mentioned. By OCR'ing print books and putting out poorly formatted material. I don't think that is the case these days. Every new book that is produced has a digital file and it's this same file that acts as the basis both for the "layout" of the book and the "conversion" of the ebook. You won't find, for instance an "ae" combined to a different letter or other OCR problems.

So, yeah, for really old books, I can some pretty poor versions, but I think that is a slightly different topic than this one which is referring to the price of new books by a debut author.

MichaelJSullivan · 2017-02-04T19:53:43+00:00

I'm not sure I can it's a "thing" in that it is widespread. But it is certainly something I do, and I know some other authors do as well.

MichaelJSullivan · 2017-02-04T19:53:08+00:00

You are correct about having to renegotiate, but the part about keeping the agency model isn't 100% correct.

Yes, most books ARE in the agency model, but there are ebooks sold wholesale, just like print books. Whenever you see "the price was set by the publisher, it is an agency agreement. When you don't see that wording on an ebook, it's being sold through the wholesale model and Amazon can, and does, discount it. Some of the really high selling titles are done wholesale because Amazon wants to discount their prices deeply to keep market share. As long as they are paying at least $1 to the publisher over the course of a year (in other words not deeply discounting EVERY title to drive out the competition), then they are in compliance.

BTW - this deep discounting of wholesale titles is hugely beneficial to the author and publisher. They get their same "cut" regardless of what price Amazon sets, so they make a lot of money while having their ebook at bargain prices, which is good for the consumer as well.

MichaelJSullivan · 2017-02-04T19:47:36+00:00

Hey nice...glad you are enjoying the read. Thanks for letting me know.

MichaelJSullivan · 2017-02-04T14:46:51+00:00

Nice! I hope she continues to love books.

MichaelJSullivan · 2017-02-04T14:46:17+00:00

Buy direct from the author!! I do exactly that with the ebooks I control:

DRM free
Pass the retailer's piece on to the consumer
Offer free ebooks for anyone that buys a print or audio version

;-)

MichaelJSullivan · 2017-02-04T14:41:16+00:00

The pie chart makes no sense - it shows no money for the retailer.

Yes, the publisher usually takes 1/2 the list price, but from THAT is deducted the other pieces: royalty, printing, warehousing marketing, etc. Where did you get this source?

This breakdown comes from a publisher: (as shown to their investors)

http://amazingstoriesmag.com/wp-content/uploads/2013/06/profit.jpg

Also your Amazon model is the model for self-published books. Publishers don't have the same model. (If they did, they would never sell and ebook for $12.99 as they would change their royalty rate from 70% to 35%. They used to have an agency model where the % was 30%, but the DOJ lawsuit changed things and now they each have their own %'s. From my royalty statements it would appear that Penguin Random House is getting a bigger discount than Hachette Book Group, which makes sense since PRH is the biggest publisher and can exert more pressure.

MichaelJSullivan · 2017-02-04T14:39:48+00:00

This should help:

http://amazingstoriesmag.com/wp-content/uploads/2013/06/profit.jpg

MichaelJSullivan · 2017-02-04T14:38:08+00:00

Keeping "retail chains" happy has certainly been a goal of publishers in the past. But, recently the shift has been to "increased margins" and they are getting those with ebooks.

http://amazingstoriesmag.com/wp-content/uploads/2013/06/profit.jpg

So the "protectionism" of print isn't such a big deal as it was in the past.

MichaelJSullivan · 2017-02-04T14:36:42+00:00

Exactly...although I do want to add one clarifying point.

Most of the time, Amazon can't discount ebooks - because most publishers are selling on the agency model. But post the DOJ suit, they CAN have wholesale pricing for some books (or for some publishers as a whole) and in those cases, Amazon CAN discount the ebook.

MichaelJSullivan · 2017-02-04T14:33:01+00:00

There has always been a pricing gap between self and traditionally published authors. And the market seems to show that both do well.

People are wiling to pay more for traditionally published work, because it has been vetted, edited, and professionally produced.

Self-published authors sell their books for less because they want to give readers an incentive to give them a try. Without "vetting" they feel they have a "bigger risk" and so if the books were similarly priced, they would skip past the self-published book.

When I started to self-publish I sold my books at $4.95 - $6.95 which was about half of the traditionally published works. And that price point worked well for me. When switching to traditional, many self-published authors don't do well because they can't keep readers at the higher price points. Fortunately for me, that wasn't a problem.

Now when I self-publish books I don't discount them as such. I price them at $9.99 when first released and reduce Tham to $7.99 once they have been out a while. That price point seems to work will for me, but each author and each book of each author is going to have it's own "sweet spot."

MichaelJSullivan · 2017-02-04T14:25:07+00:00

I think in the UK, the price of eBooks is linked to the print copy that is available

Same as here in the US. But I usually see ebook prices as:

50% of hardcover
same price as paperback when the paperback is released.

MichaelJSullivan · 2017-02-04T14:22:23+00:00

As a byproduct of the DOJ price fixing lawsuit (brought on because of collusion of publishers), there was a provision made to Amazon as well. Which was they were not allowed to sell ebooks at a loss to gain market share. They can discount INDIVIDUAL books at a loss, but they must be in the black with each publisher. Now, this only counts to books they sell which are using the wholesale sales model (which is the minority of books), most ebooks are still sold with the agency model, where the publisher sets the price of the ebook.

MichaelJSullivan · 2017-02-04T14:17:57+00:00

I've spoken about this in other areas of this thread...but I'm sure you aren't reading them all.

It's because of Amazon discounting the paper version. Standard pricing for traditional publishers seems to be.

When in hardcover, the ebook is priced about 1/2 of the print edition
When the paperback is released the ebook is price the same as the print edition.

So it might break down like this:

Hardcover $26 | ebook $12.99
Paperback $7.99 | ebook $7.99

But then if Amazon discounts the paperback to say $6.99 then the ebook is a $1.00 more. The publisher didn't set the price of the print higher..it BECAME higher because Amazon discounted the print book and the publisher didn't discount the ebook to match or beat the discounted paper price.

Amazon changes discounts all the time (and sometimes doesn't discount at all), and the publisher can't keep track when they change prices and adjust the ebook price. I do think when they find out there is a difference, they do lower the ebook price, but this 'constant tweaking' is definitely something that is hard to keep up with.

MichaelJSullivan · 2017-02-04T14:13:32+00:00

An excellent point.

MichaelJSullivan · 2017-02-04T14:13:08+00:00

Well, controlling the pricing is one of the significant advantages of self-publishing, for sure. Just make sure the quality of your book (both the writing and the production (cover - layout, etc), has the same quality as traditionally published books. That's my biggest advice to people going the self-published route.

MichaelJSullivan · 2017-02-04T14:12:05+00:00

I was going to say, $13-15 is a lot to pay to try something you might not like, but then I realized one regularly does that with restaurants, and that experience is far more fleeting. Huh.

An excellent point.

MichaelJSullivan · 2017-02-04T14:11:29+00:00

Look for books that are in the Matchbook Program - it's exactly what that program was set up for.

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