The Business Rusch: Pricing Part 2 Or (Discoverability Part 7 Continued)
As expected, I couldn’t answer e-mails or work long on my blog last week. I may take that tactic this week as well, because you folks had a much better conversation in the comments than you would have had with me involved.
Besides, I don’t like talking about pricing. Yet here I go with the second part of this series.
Some of you e-mailed me personally, some of you commented here, and some of you carpet-bombed me on other sites (you know who you are). I have a hunch I didn’t get all of the comments/e-mails either, because of some of the things said. So sorry if I missed yours. If you donated and didn’t get an acknowledgement from me, I apologize. I usually say thanks, but I got only about half the e-mails sent to me, including the ones from PayPal.
That said, some things came up that I will address before moving into the last part of this post.
First, bookstore questions. Every once in a while my 30-year history in this business bites me in the ass, particularly when it comes to clarity. When I tell you that you will get on bookstore shelves if you price your paper books correctly (which means at least $2 profit to you in extended distribution—not $1.50, not $1.68, but $2), I don’t mean you’ll get on all bookstore shelves. Nor do I mean actual shelves.
Here’s the hard truth about bookstores—and yes, I need to write a long post on this—no bookstore carries every book published that week, let alone that month or that year. When I was travelling last week, I stopped in bookstore after bookstore, from Hudson News to Powell’s to some other indies whose names my tired brain can’t remember, and none of them had one of my favorite mystery author’s latest book. He’s a New York Times bestseller and his book came out the day I left. I had special-ordered a copy, and figured I would regret it, because I’d see it everywhere. Instead, I saw it nowhere.
That’s pretty common these days. Not even the Times bestsellers are getting physical shelf space.
Why? Because bookstores now have virtual catalogs, and the authors their customers buy less frequently aren’t on the shelf, but in the virtual catalog. Which is where you will not be if you price your books incorrectly.
Readers who don’t want to shop at chain stores or through Amazon or who just want to support their favorite indie will buy books off the indie bookseller’s website.
As an example, let me show you the site for Mysterious Galaxy. They carry many of my Kristine Kathryn Rusch books, from WMG and from traditional publishers. Yet neither I nor WMG ever contacted them directly about taking a book. How did they get these books? Through Indie Bound, the program that the Independent Booksellers Association runs (which helps bookstores build websites, btw). Indie Bound took the books after a few stores requested them (again, not instigated by me or WMG), and supplies the books through one of the distributors (either Ingrams or Baker & Taylor).
That’s what I mean. You don’t have to lift a finger. Someone just has to ask for a paper copy of your book at an independent bookseller, and that bookseller has to order the copy (and pay for it). Voila! Your book will be warehoused with a distributor (who generally orders more than one copy). Then, your book will be in that distributor’s catalog, which is a good thing. It’s another way to be discovered.
The blistering e-mails: A number of you wrote me very heated e-mails telling me I have no idea what I’m talking about, that no writers you know ever get into bookstores even if the writers hit e-book bestseller lists, so why am I filling people’s heads with lies? Well, because I’m not lying. If the writers aren’t getting in, they’re either approaching the stores incorrectly (yes, I know, another post), or they have bad covers, or their books are priced wrong for the paper market and the bookstore can’t make a profit. I would bet that the books are priced wrong, given the tone of the rest of the e-mails.
I know some of you sold your first books very well by under pricing. I know that a handful of you hit the Times ebook list with 99-cent ebooks, and then people are buying the rest of your series. I know some of you are using price to game Amazon’s algorithm. If what you’re doing is working for you, continue doing it.
Realize, of course, that once Amazon realizes a bunch of writers have gamed their algorithm, Amazon fixes the algorithm so that game no longer works. In other words, the things that were effective on Amazon six months ago might not work at all in 2014.
No One-Size-Fits-All: So many of you believe that I’m obligated to tell my readers “the truth” and that truth is your truth, which is the only way things should be done.
I don’t believe in a truth, particularly in publishing.
The point of this entire series is to show writers their options, so that they can make informed choices about the things they do make sure their books get discovered.
The biggest mistake that indie writers make is the same one that traditional publishers make: they believe that just because something worked for one writer, it’ll work for all writers. I find it ironic that when there is such freedom of choice, writers glom together and believe that one way is the only way.
I hope that you will use these discoverability posts as guidelines for your work. And that you will chose Path A for one of your books and Path K for another. Because one size does not fit all, even with the same author. Got that?
I also realize that some of you comment after reading about 1,000 words of the post. So before you do, please look at the assumptions I’ve listed at the end of this post and make sure you understand where I’m coming from before you set a single finger on your keyboard. I don’t care if you disagree with me; I do care if you disagree with something I’ve already written about and you can’t be bothered to read the previous post.
Okay. Back to pricing.
Please read last week’s post before reading this one, because I dealt with important pricing topics last week.
Please remember that every time you price your books, you must do so with a strategy in mind. That strategy should not be “become a bestseller” or “sell as many books as Famous Author John Doe” but an actual business plan, which you should have for your books. (Jeez, last week I mentioned profit margin; this week, business plan. Imagine! I’m asking you to think like someone running an actual business…)
A Final Word On Discounting
Last week, I told you to set your prices properly, so that the books could be discounted. Many of you worried that Amazon (or B&N or some indie bookstore) would discount your book upon receiving it, and advertise it for the low price. Some writers even lower their prices to prevent that, proving that they have no idea how bookstores work.
Amazon will discount your price and, depending on the terms and conditions they have with you and your company, you might get a percentage of the discounted price, or you’ll get your percentage of the full price. These things vary according to the type of book you’re publishing, how you’re doing it, who you’re doing it through, and how the percentage gets paid to you. I can’t tell you if your book will end up paying you a full royalty or not.
Accept standard business practices. Amazon discounts everyone. If you don’t like the policy, don’t do business with them. It’s that simple.
If you want your prices to look low, and you want your customers to have choices, here’s how to do it without lowering any of your prices. Have a paper edition. Seriously. Take a look at this listing on Amazon for the Kindle edition of my novel, Snipers. You’ll see that Amazon lists the print suggested retail price of $18.99. Then you’ll see that Amazon lists the Kindle price of $7.99. And then, Amazon kindly tells you how much you’ll save if you buy the Kindle edition: $11.00. Amazon has done this for years, and readers will compare across formats because many, many readers like both paper and ebooks, and will base their purchases on price. (If the prices are close, then the reader is more likely to buy paper.)
And now, let me touch the third rail of publishing blogging:
When used properly, “free” is a strategy that works.
The problem is that most writers have no idea what “properly” means. Unfortunately, in the early days of self-publishing, “free” worked, even when it was misused. Amazon’s algorithms took a book on the top 100 free, and for 12-24 hours after the book’s price got restored, that book would shoot up on the top 100 paid.
Shortly after Amazon established Kindle Select, that strategy stopped working. Why? Because every writer discounted their books to nothing, and the top 100 paid got cluttered with books that really weren’t selling. Those books were given away.
“Free” no longer works that way. If you’ve read advice telling you to market your book for free so that book will make an Amazon bestseller list for paid titles, then you’re reading advice that is either four years old or based on advice that’s four years old.
And yet, here I am, telling you that “free” works sometimes—when used properly.
The best term for “free” isn’t “free book” but “loss leader.”
According to The Business Dictionary, a loss leader is:
Good or service advertised and sold at below cost price. Its purpose is to bring in (lead) customers in the retail store (usually a supermarket) on the assumption that, once inside the store, the customers will be stimulated to buy full priced items as well.
You aren’t running a grocery store, but you are running a business. And the moment you offer a loss leader, you are using a retail strategy. You’re discounting a book not to sell the book (remember last week’s note on discounting). You’re discounting the book to lead a customer to other products.
Again, entire marketing classes exist on the use of loss leaders. And marketing professors write entire scholarly papers on the effectiveness of loss leaders. Not to mention the fact that different schools of economic thought believe completely different things about whether or not to ever use loss leaders.
When loss leaders are used in actual retail environments, like grocery stores, the stores do many things that we as writers cannot do. For example, the stores put the free item at the back, so you have to wade through aisles of product to get to the free thing. That will increase sales of fully priced goods. We don’t have that placement option in an e-shop.
An effective loss leader displays the full price, so that the consumer knows what a great deal they’re getting. With luck, that consumer will already buy other items like the loss leader, so that price knowledge exists deep in the consumer’s subconscious.
Back in the day when traditional publishing ruled the world, we all knew that a book cost anywhere from $5 to $25. So a free book was worth at least $5 (mass market) or $25 (hardcover). Now, with so many people offering books for free, that special feeling you get from receiving a free book has pretty much disappeared, particularly with ebooks.
All business books recommend that a limited number of loss leaders. In other words, if you’re giving away television sets to get people into your Best Buy, you better have no more than 100 television sets in stock, so that deal vanishes fairly quickly.
We can’t do that with e-books, except by limited the time of the free giveaway. So free for one day is better than free for one week and free for one week is better than free for one month. Perma-free defeats the point of a loss leader entirely. (However, I will discuss perma-free below.)
Loss leaders should be scarce, to prevent stockpiling. This is where “free” has lost its power. With so many writers offering so many books for free, readers have stockpiled books. If I read every free book on my e-reader, I wouldn’t have to buy books for a year. (Don’t tell Dean that.) Fortunately for you all, I do buy books anyway.
Honestly, the best loss leaders are high priced items, discounted to an obscenely low price. Not free. In books, for example, Nora Roberts’ Donavon Series sells as a collection on Kindle for $25. If you want to make that a loss leader, then you would discount the collection to $5 for one day only. That’s a hell of a savings, and it would introduce readers to Roberts’ work (the ten people who’ve never read her work). Time that with the next release of her latest novel, and hope that the loss leader means you will sell more copies of the new book.
In other words, whenever you’re offering a loss leader, you’re taking a deliberate loss with the hope of later gain.
This strategy works as intended only if you have more than one product, and generally more than ten. So, if you offer one of your books for free, then you are gambling (and I mean gambling) that readers will then flock to your other books and pay full price for them.
The more books you’ve published, the better this strategy works. If you’ve published five sf books, three romances, and two mysteries, then offer your loss leader in sf, because that gives you the greatest chance of recouping the loss you’ve taken on discounting your price to nothing.
The best use of the “free” strategy, however, is to give away the first book in a series for a limited time only. Make sure you have at least two more books in that series, or the math will not work.
What is the math? The sales on Books Two and Three have to increase enough to make up for the loss of the income on Book One.
For example, let’s assume Book One sells ten copies per month, Book Two sells ten copies per month, and Book Three sells ten copies per month. You decide to offer Book One for free for a month. Then Books Two and Three must sell 15 copies each to break even from your “free” giveaway.
Sometimes “free” works, and Books Two and Three sell significantly more. Sometimes “free” fails, and Books Two and Three don’t sell more than 15 copies each.
That’s a strategy and a gamble. If readers don’t like Book One, they won’t move to Book Two, no matter what they paid for Book One. In those instances, “free” doesn’t work at all.
There are two other reasons that “free” is a gamble, even as a loss leader. The first is that most people who take the free product, whatever it is—perfume, a show ticket, a song, or a book—toss that product away or never look at it. When we were in Vegas this week, I was offered free moisturizer (twice), free show tickets, free meals, and a free lighter. I took everything but the moisturizer (I’m allergic to perfume; didn’t want to touch the stuff), and tossed all of them away before I left.
Everyone I traveled with received something free last week, and to my knowledge, none of us used the free item.
That’s the risk you take. If you have 1000 free downloads of your novel, be happy if 10% read the book, and be ecstatic if 5% buy another book. Most people download a lot of free at various points in their e-book reading career, and most people usually stop doing so after the newness of the e-reader wears off.
The other big risk of offering a book for free? The increase in negative reviews. Everyone who has ever offered a book for free has experienced this. Reviewers who wouldn’t normally buy a book based on title, subject matter and genre feel obligated to comment on that book. Often, you’ll see reviews of romance novels that slam the happy ending or the fact that the book focused on a relationship, reviews of mystery novels that are “too bloody” for the reviewer’s taste—or not a rehash of Agatha Christie, and so on.
The number of reviews you’ll receive will rise, but so will the number of negatives.
When you offer a loss leader to everyone, then a good percentage of the recipients will not like the product. You have to factor that into the success rate of your “free” campaign.
There are better ways to use “free” than a blanket offering across all platforms. Here are a few:
1) Offer a book for free to your dedicated fans if they sign up for your newsletter.
What do you get out of this? You get names for your newsletter, e-mail addresses, and a chance for positive reviews because these folks are already your fans.
2) Offer the first book in a series for free when the latest book the series appears.
What do you get out of this? Theoretically, you’ll get new fans who will then flock to the next books in the series, including the latest book. If you let people know on social media that the first book is free because the new book is out, you’re doing double-duty advertising: your fans will become aware that your latest book has just appeared—and if they really like your work, they’ll tell a friend about the free book. This strategy starts word-of-mouth on both the series and the latest project.
3) If you sell books on your website, set up a buy-two-get-one-free offer. Buy two full-price books, and get the third book free.
What do you get out of this? Well, you don’t have to set the book for free on any of the online retailers. Again, you’re getting names for your newsletter. If you set your prices right, you get more money when you sell off your website, so you can afford to discount all three books (which is, effectively, what you’re doing).
Those are just three free strategies. There are a million others. I do mean a million.
But…think twice before you use a strategy that has become really common among indie booksellers.
Do not pay to give away your book for free.
Places like BookBub and other advertising newsletters will list free books, but you have to pay to buy an ad with those companies. The only way to recoup that ad money is to have many books published, preferably in the same series. But most people don’t read their free books. So you’re losing money on your BookBub ad, at least in the foreseeable future.
It’s okay to discount to a lower price (not free) for those ads—again, if you have a strategy in place (and more than one book published)—because you will probably recoup the cost of your ad.
But advertising a product for free is something you should do only if you have deep pockets and money to burn. And a lot of other published books. Even then, I don’t recommend it.
Why? See the math for the free promotion above. You’ve just added the cost of your BookBub ad to the halo effect of your free promotion. Instead of selling 15 copies each of Books Two and Three, now you’ll need to sell 50 or 100 copies each of those books (depending on price) to pay for that ad.
Always have a strategy for your free books. Always. Then measure that strategy and see if it actually succeeded. Often, these strategies do not. Or they succeed on the free title, and not other titles.
I know a lot of writers are having success with this strategy right now. I have my doubts about it. (And please, if you’re one of those writers, don’t hijack my comments section. Write your own blog post, telling us how long the book has been free and how that has benefitted your other titles (with numbers) then link to that post here, so we can go see for ourselves.)
The only way I can see a perma-free book working is for that book to be the first in a series. And even then, you’re appealing only to the discount buyers. So many people search only for free books, and they’ll never buy other books in the series, unless those books are for sale.
Most book buyers, in truth, are more comfortable paying for books. It’s weird, I know, but there are books on the Amazon paid bestseller list right now that prove my point.
The first is Twelve Years A Slave by Solomon Northup, which is in the public domain and has been for about a century. The movie tie-in edition is selling as a $6.99 paperback and as of this writing, is #75 on Amazon’s paid bestseller list even though there are free paper editions.
The second is The Catcher in the Rye. This week, PBS aired a documentary on J.D. Salinger. As of this writing, The Catcher in The Rye, a $5.99 paperback, is #4 out of the top paid 100 on Amazon in books despite the fact you can get the book used for less than a dollar at any used bookstore in the country. (Or free and battered, since so many schools made the novel required reading.)
And finally, nearly a year after the movie came out, a $9 paperback of The Great Gatsby is #39 on the Amazon paid bestseller list even though Gatsby also exists in a million editions, many free or as low as 99 cents.
Readers don’t care about free. They buy a book because they want it, not because it’s on sale.
Free, Perma-Free and Discoverability:
Remember, this series is on discoverability. “Free” is not your best tool for discoverability. Why? Because, let’s be honest, free books are everywhere.
Don’t believe me? Then walk into your public library (Americans). For the price of signing up for a library card, and a time limit on how long you can enjoy the book, you can walk out with any title in that library for absolutely nothing.
Writers, you want to increase your visibility? Get into libraries. It’s not as easy as it sounds, especially with paper books. You can’t give your books to a library; they’ll put the book in the library book sale, not on the shelf. They have to purchase the book through library distributors (which is too complex a process to describe here).
However, if your e-books are available through Overdrive or if you’ve clicked library distribution on Smashwords, then your e-books are in most libraries’ databases and can be checked out.
Perma-free—at no cost to you.
That’s about all I can stomach on pricing. I always write these pricing blogs while cringing, because I know that price is a religion for a bunch of writers who’ve never owned a business in their lives and would never ever touch an economics text or read actual research on the way that pricing works in the real world.
(By the way, I have to say this: statistics always account for the outlier—the event at each end of the bell curve. If 99% of all writers experience what I just wrote about, then that means there are writers in that 1%. It doesn’t invalidate their experiences; but it also does not mean that their experiences will translate to the 99%.)
I am now going to move on to other things that enhance discoverability for writers with more than one published book. Next week, we’ll hit a different strategy for discoverability. Remember, these are not one-strategy-takes all, but a series of techniques that might or might not work for your current project.
As for me, I’m using a pricing strategy on this blog. It actually has a name. “Pay What You Want” pricing. As the marketing texts say, this strategy is high-risk, because many people will pay nothing. That’s why most texts suggest setting a floor price, which I have not done here. My floor is simple: the minute funding dries up for this blog, I stop writing it.
So far, a lot of you have funded the blog—and I’m very grateful. As much as I complain about the folks who attack me based on some blog topics, I appreciate those of you who come here every week so much more. You’re great. You challenge me, and make me think, and send me links. I love that.
“The Business Rusch: Pricing Part 2 or (Discoverability Part 7 continued)” copyright 2014 by Kristine Kathryn Rusch
Please Read These Assumptions Before Commenting:
I’m going to make some assumptions in the next group of blog posts, and I’ll repeat those assumptions each week until I’m done.
Assumption #1: I’m going to assume you’ve read the previous posts, beginning with this post here.
Assumption #2: With only a few exceptions, we will be talking about fiction here. There are promotion techniques that work for nonfiction—even on the first book—that do not work for fiction. I don’t want to muddy the waters here. We’re discussing fiction in these posts.
Assumption #3: You have learned your craft well enough to intrigue readers. You know how to tell a good story, you have grammar, spelling, and punctuation under control, you create interesting characters, and you write what you love.
Assumption #4: If you have indie published your work, then your work has a good blurb, a great cover, and a well-designed interior. Your work is available in ebook and trade paper formats. (I also hope you have audio books, but for our purposes here, I’m not going to assume it.)
Assumption #5: If you have indie published your work, your ebooks are available in every ebook venue you can find. Your paper novels are in extended distribution on CreateSpace or Lightning Source. In other words, if a bookseller whom you don’t know and never will know wants to order your paper book, that bookseller can call up a catalogue from a major distributor (Baker & Taylor, Ingrams) and order your book at a bookseller’s discount.
Assumption #6: If you are traditionally published, your books are with a company that makes the books available in e-book and paper formats, and your books are still in print. (If they aren’t, ask for those rights back and then publish the books yourself.)
Assumption #7: You have at least a minimal web presence. You have a website that readers can easily find. You have a list of your published books somewhere, also findable. You have some passive marketing in place. (A mailing list, a social media presence, or a contact button on your website. Something.)
Assumption #8: You have published more than one book. Most of what I tell you won’t work on one novel. You’ll need several—or at least a novel and some short stories. If you’re haven’t published much, make sure you’ve done 2-7, and write the next book.
Assumption #9: You will finish this discoverability series before you decide which of the things I mention is for you. Because one of the last posts I’m going to write is how to measure success. That should have been one of the first posts I wrote, but of course, I write out of order, and so it’ll go at the end. [VBG]
Those are the assumptions.
Now, I have one big WARNING:
Everything I say here, everything, MUST take place after you’ve finished writing your story/book/novel. Do NOT take ANY of this advice into your writing office. None of it. Be an artist: write what you love. When you’re done, then worry about marketing it. This new world of publishing allows us to write whatever we want and publish it. Please take advantage of that. When you write, be an artist, be a great storyteller, not a marketer or a salesperson.
I know, I know. Lots of warnings and assumptions. But I had to be clear, because these points are extremely important. I won’t get to everything this week or even the next week. So…you need to be on the page that I’m on to understand what I’m talking about.