Sunday, 10 November 2013

Price Positioning: Doing Prices the Right Way

Insights on how to research prices for your target segment and genre

Once you have figured out your target reader segment and your genre, you should dive into which price segment you want to compete in. Beyond that you should start having an eye out for when other authors and retailers in general discount products and to what purpose.  This will be relevant for your long-term pricing strategy. Today, however, we will concentrate on defining a base price for your ebook.

Searching for your base price

Your base price will be your regular book price in your home market, e.g.: the US. Doing price research will give you a valuable insight into the market you are launching your book into. There are four simple steps you can take to figure out your base price.

1) Find a price range for your genre

This doesn't have to be too sophisticated and can be as simple as looking at the first ten books shown in your target genre category by two online ebook retailers. I picked Smashwords and Amazon, simply because I do most of my book shopping there.

At Smashwords for example the first 10 books shown to me in the fantasy category are prices between 0.99$ and 4.95$ with the first 3 having a price of 0.99$. At Amazon the ten first titles range between 3.58$ and 12.86$ and all of them are currently discounted. 

2) Compare book prices across retailers

For Step 2, take 2-4 titles from the list of 10 titles you got at one of the retailers in Step 1 and compare what the same title costs at the other retailer. 

In my case The Door by Erin Bartels was the first title on Smashwords at 0.99$. At Amazon I found it priced at 1.16$.

Digging into the detail pages for the particular book on both retailer websites showed me that The Door is actually a short story of only approx. 5.800 words and 0.99$ is a pre-release discount price on Smashwords. 

Important note: Amazon, Apple and Barnes & Nobles require authors to sell their ebooks at the same price across platforms. Which doesn't mean you can leverage different platforms through smart discounting later on.

3) Get prices for comparable titles


As a third step it is a good idea to have a look at titles similar to your own for a final gauge on your base price. If you are still in search of those titles I would recommend having a look at the bestseller list for your chosen genre. Ignore industry bestsellers for this exercise and instead have a look at titles who within the genre will cluster the closest around your own title post-launch.

E.g.: if you are planning on launching a post-apocalyptic novel in the Sci-fi and fantasy genre, try and find titles occupying that space within the category instead of looking for elvin fantasy epics.

4) Define your base price

Once you have your ranges from the three previous steps eliminate discount prices and consider that the lower range of your choice spectrum should still allow for you to discount reasonably in the future. 

The range I hit on in my example of a hypothetical post-apocalyptic title was 2.99$ - 5.38$ for same length titles in a similar genre niche. To land on a final price, I decided to further segment by cover and blurb quality. I dismissed unprofessional covers and looked for concise blurbs. This gave me an optimal base price of 4.29$ for my hypothetical novel.

Which final criteria decide your base price is a personal choice. You might even decide to go with your gut on your first book. One thing is for certain: like with anything else, you will learn a lot about pricing as you go.

Base Price vs. Launch Price

For your book launch you might have to make your first price decision, if you don't plan to go out the door with your base price. Technically, you could go both ways: either offer your book at a discount for the first days, weeks, months, maybe even for free for a time. Or you could go out the gate at a higher price and later lower your price to the base you landed on. This is a personal decision and should definitely be a consideration in your launch planing.

Figured out your base price?

Now that you have your base price, what is your launch price going to be? Share your ideas, opinions and comments below.

Best of luck in your pricing journey!

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