Quote:
Originally Posted by ZodWallop
You keep talking about price points. What should those price points be based on?
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Basic economics says that the price should be what the market will support. Obviously, the price point can't be less that it cost to produce. Contrary to the old joke, you can't lose money on each sale and make it up with volume. Past that, it comes down to what you think will maximize your profits. Publishers (and most major companies) do a lot of research into this sort of thing.
From the outside looking in, prices of an item category tend to converge over time. That is what appears to be happening with ebooks, at least for ebooks that I buy. There are, of course, a number of price categories for ebooks, new best sellers aren't priced the same as backlist.
Look at a current best seller, Artemis by Andy Weir.
It just came out this week, so it's in hard back. The list price is $27.00 with the actual price being $16.20 at Amazon. The Kindle version is priced at $14, i.e. a bit over $2 less. The Martian, which came out a bit over 2 years ago is now in paperback. The ebook price is $10 as is the paper price. After a year or so, that price will probably drop down to the backlist price (somewhere between $5 to $8).
My guess is that Artemis will be the sort of major seller that supports the publishing industry. Apparently The Martian has sold over 3 million copies. Don't know if Artemis will reach that figure, but I'll bet it's on the best seller list for more than a few weeks.
There is a lot of psychology involved in setting price points. Car prices are a prime example of this. Cars have a list price, which almost no one actually pays. In general, car price points don't go down, but rather, car manufacturers add new features. Car price points have very little to do with the actual price of manufacturing. That is what the big pricing battle between the publishers and Amazon was all about.
The interesting thing about indies and backlist is that there is a lot more freedom and experimentation going on. If a particular author finds a new price point that generates more money, then other authors will follow.