Saturday, April 30, 2011

Update: The Great John Locke 99 cent Experiment

It's been three days since I lowered the price of The Soulkeepers on Amazon from $2.99 to 99 cents following what I dubbed the John Locke pricing strategy.  Not surprisingly, my sales have increased.  What may surprise you is the other side effects of the price change.  Remember, I've done very little promotion.  In fact I've only tweeted about it maybe two or three times, significantly less than normal in an attempt to isolate the price variable.  Here's a brief recap of how things stand so far.


  • My sales have almost tripled the last three days.  You will recall I would have to sell six times the number to make up the difference in royalties.  So far, that hasn't happened.
  • However, my Amazon rank his improved significantly from approximately 80,000 to a high of 10,000 yesterday.  This is something that fluctuates every day and throughout the day but the movement was significant.
  • I sold books in the UK for the first time this month. (I don't target this market so I was pleasantly surprised to see this)
  • A couple of readers who bought the book on Wednesday night have already read it and entered reviews on Amazon and Goodreads.
  • For the first time, free books have appeared in my "customers also bought" section, meaning I've attracted a new audience, one that also downloads free books.

Bottom line, I'm making less money but entering new markets.  As a new author, that's pretty important.  The question in my mind is if the pool of 99 cent buyers is the same as the pool of $2.99 buyers.  If there are buyers out there that assume the book is of poor quality because it is listed at 99 cents, then I'm missing out on potential customers at this price.  I'm also curious if there will be diminished interest at a stale 99 cent price.

I plan to leave it at this price point for one full week.  Be back Wednesday with the final results.

14 comments:

  1. God, that's fascinating.

    Looks like one 99 cent book in a book series, as you will someday soon have, may be the key(?)

    Nice, GP

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  2. That's pretty much the way the numbers seem to fall for other authors I've read and the Kindle reader polls. There are a few different camps of readers: those who want free or $.99 cents; those who will buy books between $1 and $3.99; readers who buy between $3.99 and $9.99; and those who only buy "traditionally published" books that are $9.99 and up. Does this mean someone who usually buys a $.99 book won't buy a $2.99 book? No, but it would be more difficult to get to them since they are going to be looking at the $.99 lists.

    I have problems with the $.99 price point from a business standpoint. It's not like we are dealing with early adopters and don't have similar, if not better, marketing techniques available in comparison to the Big 6. Anything less than half of their industry standard $9.99 is going to win the price war. Below $4.99, we're just fighting amongst ourselves. Will there always be writers who price at $.99? Sure. But I learned 6 months into ghost writing non-fiction articles that pricing what you're worth is better in the long run than trying to undercut another writer.

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  3. This is interesting. Can't wait to see what the next few days bring about.

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  4. Thanks for stopping by everyone.

    EAW - I just want to address something you said. I don't think of pricing at 99 cents as undercutting other writers or fighting with other writers. I think of it as reducing the risk a customer has to take to give my writing a chance. The Soulkeepers is a brilliant series but unless people read the first book, they won't read the second. Those who have read it have loved it. So, the more people's hands I can get this first one into, the better. In this economy, price matters to readers and if you are burning through several books a week like I do, a low price really helps the budget. But there's no intention at all to somehow "steal" a reader from another author with the low price.

    I'm interested in what others think of this? Does pricing at 99 cents undercut other authors or does it increase the size of the pie by allowing customers to buy more books overall? Opinions?

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  5. GREAT question. My book is priced at $2.99 and it's without a doubt worth it. Unfortunately, it doesn't really matter what it's worth to a customer who doesn't know what to expect. They might read it and then say, "Hmmm. I'd have paid $2.99 for that."

    My plan has been to lower my price to $.99 just before the second in the series is published, pricing the second in the series at $2.99. I don't necessarily feel like a book that's priced at $.99 is undercutting the other authors, or that the book is no good just because it's priced that way.

    I do feel like there are other markets to explore with different prices, just as you stated.

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  6. Ah, the great debate ensues... and it will never end. So many arguments on each side and nobody's right and nobody's wrong. My only great fear with the $0.99 point is if you start there, you'll get stuck there.
    However, I believe that using for for sales and for tier pricing, it's great. Take your series... when book two comes out, make it $2.99 then drop book one to $0.99... tier price it all to sell! :)

    I blogged about the pricing thing again this past week... with some honest opinions (that are my own).

    http://jimbronyaur.info/?p=1391

    FYI... I've added The Soulkeepers to my Wishlist... I'll buy it once it's back to $2.99. :)

    -jim

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  7. I'll share my experience. In February, we dropped my 1st book from $4.99 to $2.99 and kept 2nd book at $5.99. Sales increased quite a bit and became steadier, but 1st book was still sitting at about 10-12K ranking on Amazon. For April, we dropped 1st book to 99 cents and 2nd to $4.99. 1st book is now sitting steadily in top 400s of all Kindle paid and in the top 10 of three categories. 2nd book is sitting steadily in top 1400s of all Kindle paid and in the top 50 of three categories. They spike on Mondays-Thursdays, then hold fairly steady until the next spike.

    I'd suggest you give it more than one week. That's certainly not enough time for new readers to get the word out, especially because some buyers might not have even read it yet (especially if they knew 99 cents was temporary). However, if it's your only book, it might not be worth it to you yet. If you're new and NO ONE knows you yet, you're more likely to get the question, "At 99 cents, is it any good?" I think timing played a major role in our success because we'd been spreading the word and garnering reviews for months before. Also, because I have a second book at $4.99, its royalties would have made up for any loss on the 1st. But, as it turned out, we ended up making more royalties on 1st book in April than we did any other month and 2nd book's royalties are just lovely (when we get them anyway LOL).

    I call this 99KM (99 cent Kindle Millionaire) pricing model because it's what Amanda Hocking and other hyper-successful writers have used. 99 on 1st book in series to grab the reader, then higher on the rest of the books. It's really a very basic pricing/marketing model used in almost every industry - let the customer try for nothing or low cost and then hook them for (higher) follow-up sales.

    I don't see it as undercutting. We're not selling cars where, usually, when the customer buys one, they won't be buying another for several years. Just because someone buys one book doesn't mean they won't be buying another. Undercutting is a competitive term and writers don't need to be competitive. We can be the opposite. We can promote others' books without losing anything ourselves. In fact, if the books are similar, we might even attract new readers for our own books.

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  8. I agree Kristi! That's what I think. I never think that because I sell a book it means someone else isn't selling. At these low prices, customers can read/buy more than ever before.

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  9. Personally, I think the freedom to play with pricing is as important as finding a price. You might be seeing, as I wrote in my own eBook pricing post, the people going "BARGAINZ!!1!" and grabbing something 1/3 of its regular price.

    99¢ is the impulse purchase level. If it's getting good reviews, or recommended by someone I trust, I won't turn up my nose just because it's cheap.

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  10. I'm following this with interest. I can't quite get my head around the fact that you at this price of 99c will have to sell so much more when $2.99 isn't dear in the first place...


    But as you know I am very new to all of this, so I will watch and learn. :)

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  11. Ha! Jim's was a classy move. Waiting for full price.

    I'm curious, GP - will you ever share all your sales numbers? I know most authors are very tentative about these things and wouldn't blame you for withholding them. Even the "tripled sales" notion, base numbers aside, is useful. I wonder if you stayed in this price range if it would affect sales drastically from returning to the $2.99 price point.

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  12. Undercutting is probably a poor word choice. I don't think someone pricing their book at $.99 is going to "steal" a sale of my book when it's priced at $3.25 or $2.23 etc. However, I don't think there's anything magical about the $.99 price point. You made the lists when your book was priced higher for that price range, and now you are on the bargain radar. It's two very different audiences, and if that's what you're going for, I think you made the right choice. $.99 is just one way to get your book noticed, and as more and more authors do it, it's growing less and less effective.

    $.99 books are throwaways on an e-reader. I have many that I bought and didn't finish. I didn't go back and leave a poor review either because my investment wasn't enough to warrant my time.

    There are so many sites/blogs/newsletters cropping up with daily $.99 reads. That's a reader with a $30 monthly budget for reading. Except I'd be willing to bet they buy more than just one $.99 book at a time, expecting two or three of them to be worthless. Why not convince this customer to buy one well-written book at $1.98 or $2.97? Then you've got someone who is more likely to read your book, form an opinion, and talk about it to someone else. I don't tell my friends about the $5 T-shirt I bought at Walmart, but I gush about the $40 dress I found at the mall. People do talk about books they've read that were awesome and will say "And it's only $.99!" but the fact that it was priced at $.99 isn't what made them think it was an awesome book.

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  13. Every one these days are looking for bargains. If they were on the fence about buying your novel, the lower price change may close the deal. Basic economicmics prevail. Impulse buying and this looks interesting I'll read it later. All these things could go through a book buyers mind. How much of a return is not always seen immediately as the buyer may like your book and become a fan where he never would have looked at you before the price change. In for a penny in for a pound. http://characterswellmet.blogspot.com. Reggie Ridgway

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  14. OKay just a thought, but as a reader, I think the self published (SP) author's blogs that spend too much time on the marketing and pricing of books are missing the point. Sure, Konrath can do it, he knows plenty of authors for co-marketing/bradning, and his blog is The NewBie's Guide To Publishing. But for most authors, do we really need to see "the numbers"? Isn't an emphasis on numbers off the target of what readers--i.e. customers--really want? We really don;t need to see the "mighty Oz behind the curtain" to know and love an author. Frankly, the traditional publishing authors never blog about this stuff. Is it a service to readers?

    All this said, I do not direct this at GP Ching; she's getting her feet wet and that's understood, and more than 1/2 of her blog is about the book(s), and the writing process, which is best. The more intimate the reader can feel to the writer, the better. Let's see some photos the desk like Amanda's blog) where the magic happens, that sort of thing.

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