As an indie-author, I’m always trying to decide what to charge for my books in different situations. All businesspeople do this. What is the value of the product or service as perceived by the buyer? If we charge too much, not as many people will buy our product or service. If we charge too little, we won’t make as much as we could. It’s also possible that in the buyer’s mind low price equates to low quality. It’s always a balancing act.
I think oftentimes we underprice our goods and services. When we do, we might also be undervaluing our goods and services in the customers’ minds.
I’ll use my books as an example. My paperbacks retail for $14.99. I get about 70% royalty from Amazon, which is about $10.50 when people buy my books directly from Amazon. In the past when I’ve sold my books at book shows, I’ve usually charged $10.00 per book to encourage people to buy. Since I need to pay Amazon about $4.00 per book (including shipping), I would make about $6.00 per book. (Actually, this is inaccurate as it does not include the cost of copyediting, proofing, interior design, cover design, and everything else that goes into publishing a book, never mind the value of my time spent writing. However, it works for this example.)
Last month I did a book show with many other authors in Barnes and Noble in Madison. It is common for bookstores to keep 40% of the book sales to cover their costs of having a bookstore. I wasn’t surprised that B&N wanted 40% of what we sold during the show. I decided that with that in mind, I was going to charge the full retail price of $14.99, which would give about $9.00 per book, minus what I paid Amazon for the books, which would leave me making about $5.00 per book. (Which would be better than $2.00 if I discounted the price like I usually do.)
I sold just as many books at $14.99 as I usually do for $10.00. The higher price did not seem to be an issue. Interesting.
At the Lakefly Writers’ Conference this month, I decide to charge $14.99. Again, it did not seem to affect the number of books I sold. Price didn’t seem to be an issue for those that were interested in my books.
I also tried something else that worked well. I offered all three of my books for $35.00. That increased books sales more than discounting individual books ever had.
If you are in a situation where you think you might be undervaluing your goods and services, evaluate this closer. Charging more might be good.