Let’s Make a Deal – Setting Your Price
Just recently, we blogged about the importance of category research when choosing the right cover for your book.
Category research might be a theme for several posts from us moving forward. All to often, clients, potential clients, publishing friends and colleagues come to us with finished books (or book ideas). All to often, we come back to them with a myriad of questions – including, how did you come to that price, trim size, title, subtitle, cover, etc.?
For us, each of these “packaging” details must be dictated by the market into which we publish. While we always have an opinion, our number one goal is to ensure that our clients and colleagues are getting real-time feedback from the retail marketplace. In this case, our opinion doesn’t matter. The marketplace, however, does.
Which, for today’s post, brings us to price.
How do you choose the appropriate price for your book?
The first place to start is, of course, your P&L. Once you factor in your advance (for our publisher friends), your editing fees, copyediting fees, layout, design, printing prices and marketing budget, what is your profit margin?
As you know, a P&L is only as good as the person that creates it. For example, if I price a 196 page trade-paperback business book at $24.95, I’m most likely going to see a healthy profit margin in the end. The cost for editing, printing and producing such a book is often dictated at a per-word or per-page rate. Tiny book, tiny costs, big profit margin. That all sounds good, right?
The only problem with this particular analogy is that selling-in and selling-through a 196 page business book for $24.95 is going to be really difficult. People don’t have the disposable incomes that they used to. And, more importantly, this particular lightweight book may not scream “value” to your end customer. Especially if they can get a similar book on the same topic for $12.95.
So how should you really set a price?
Let’s work backwards.
Let’s say you’re publishing a book in Category X. Get on Amazon, go to the bookstore, peruse your bookshelf. Pull out all of the bestselling books in Category X. What’s their price point? What does the consumer get for their money? Is your category driven by a 336 page trade paperback for $14.95? Do “unknown” authors charge a dollar or two less for for their book? Does the price point reflect a big author’s name? A page-heavy book? Do some publishers actually charge less because price-point is their value proposition?
Here’s what you’ll discover through this simple exercise. The consumer is actually telling you, through book sales, the price they’ll pay for a book on your topic in Category X.
If, for example, it’s $9.95, $12.95, $14.95 or $19.95, then that’s the price you need to get to. It doesn’t matter that you’re convinced that your book is so extra special that you’re sure the consumer will pay an extra $10.00 for it. Research will show that’s most likely not the case.
Everybody’s on a budget these days. If your P&L shows that you have to sell 15,000 copies of your $5.95 book to make your money back, than that’s what you have to sell. Charging $15.95 for that same book just to make your money back, in a category that can’t sustain it, just means you won’t sell very many copies of your book.
What you need to do is go back to your P&L and take a look at real costs compared to a researched price point. Figure out how many books you need to sell and develop a sales and marketing plan to make it happen.
Like so many things in our business, strong market research can prevent you from making some of the simple mistakes that can have long term, adverse affects on your publishing program. Setting your price is just one area.
So, let’s make a deal. Next time you decide you need to charge $24.95 for that 196 page book to make your money back, rethink how – and why – you’ve gotten in to this business to begin with.