So you’ve written your eBook and now you’re getting it all formatted and pretty for the various distribution platforms out there: Apple (ePub), Barnes & Noble (PDF, mobi), Amazon (mobi), and potentially your own site (PDF). The next logical question is how much to price your book.
HOW TO PRICE YOUR EBOOK AND MAXIMIZE YOUR POTENTIAL
I’m going to share with you my thoughts on pricing from what I learned in business school, my experience from hundreds of business transactions of done in my career, and of course the experience of launching my very own eBook, How To Engineer Your Layoff: Make A Small Fortune By Saying Goodbye.
QUESTIONS TO ASK YOURSELF FIRST WHEN PRICING
* What is your book’s value proposition? Is it another book on how to make money writing books on how to make money? Because if it is, you should probably give it away for free because there is no value proposition. If your book teaches you how to bring great happiness to others for the rest of their lives, then your book’s value proposition is high and can command the upper reaches of market price.
* What does the current market look like? When I submitted my book proposal to the two literary agents who accepted my work, I had to include a portion on what other books like mine are out there in the market. The only book I could find about leaving your job was from 12 years ago, and another book from seven years ago is a comedy. Do a quick Google search on how to make money online, and there are literally thousands of such products, many of which are probably better than yours.
* How good are you at marketing your product? Do you have an existing platform? Do you have authoritative connections in the genre in which you are publishing to sing your praises? Do you have a brand you can leverage? You’ve got to be able to sell your book’s value. Some people value $90 designer t-shirts, while other people are happy to stick with hand-me-downs.
* Is there congruency with your perceived authority and what you are writing? If you are the CEO of some Fortune 500 company that outperformed its peer group under your 10 year tenure, then you have a lot of authority in running a company, leadership, and possibly a whole host of other things. If you have only two years of experience playing golf with a mediocre 20 handicap, there’s no way anybody will buy your book on how to play good golf.
PRICE HIGH FOR QUALITY SIGNALING, PRICE LOW FOR VOLUME
Now that you’ve thought about the various questions above, you should consider the two opposite extremes of pricing.
* High price strategy. You are signaling to the market that you believe your product is worth a much higher price than the average priced book in your industry. Perhaps it’s because you feel your product offering is unique and will provide a lot of value. There is certainly a correlation with higher prices and higher quality as demonstrated by luxury goods products. The problem is, at some point, people will just pass. For me, that price is anything above $50. For others, it might be quite different.
* Low price strategy. If you are writing fictional novels for entertainment, prices are commonly as low as 99 cents. At this price point, you are hoping for massive volume to drive revenue. The problem with this strategy is that the consumer starts thinking about what HIS or HER time is worth. 99 cents signals low quality to me, and therefore I start calculating what each hour of my life is worth. When I do this, I then become hesitant in wasting my time because I have a business that charges $300 an hour.
THE IDEAL PRICE STRATEGY
Your price should obviously be where you maximize your product’s worth without losing customers. Lost customers can also include those who pirate your work by illegal distribution or hacking, which is a big problem in the online publishing world. The good thing is that there are such things as DRM (digital rights management) features such as copy/paste protection and PDF stamping that you can enable for every eBook purchased. You don’t want your version passed around or else!
The best strategy is to ask your target audience what they are willing to pay. If you sample enough people, then you should have a good enough idea of what that range might be.
The keys are to:
* Understand the market e.g. saturated, rare, normal.
* Understand your perceived authority e.g. charlatan, experienced veteran.
* Understand your target audience e.g. don’t sell ice to Eskimos.
As for my book, How to Engineer Your Layoff, I priced it at $38. $38 is a high enough price where I think value is reflected, and a low enough price where it doesn’t break a reader’s bank account. There are of course some who won’t buy the book because $38 is too high for them, even if they are about to make one of the biggest life decisions of their lives. I wish them good luck. They can always buy my book after seeing how it goes.
My value proposition: A unique book that teaches people how to profitably quit their jobs by earning a severance. There are no books I’m aware of on the market that teach people how to leave their jobs. Just by getting yourself laid off instead of quitting allows you to collect up to $21,600 a year in unemployment benefits in California if you’ve made at least $45,000 a year for the past year. The severance package is a bonus that can amount to tens of thousands of dollars depending on your income. Both windfalls are greater than $38.
Audience: In a recent study, 44% of American workers are unsatisfied with their jobs. We’re talking tens of millions of people in America alone who are dissatisfied! The percentage of disgruntled employees is not much lower in other parts of the world. People are dying to do something new with their lives that provide more meaning. Do something long enough and you will get bored. Readers on Financial Samurai are generally older (35-45) and therefore have longer careers and higher net worths.
Marketing prowess: The Financial Samurai platform has roughly 140,000 unique visitors a month and 200,000 pageviews a month. I should be better than the average author at marketing my own book due to my platform. I have a dozens of articles on the subjects of career and retirement because I thoroughly enjoy the topics. I will write a series of articles related to How To Engineer Your Layoff to bring about buzz and discussion points. Furthermore, I will leverage the relationships I’ve built over the past three years online and through the Yakezie Network of personal finance bloggers. Marketing takes time, and the true results won’t be known until after six months.
Congruency with my perceived authority and writing. I’m a 13 year veteran in finance, got my MBA, and write a personal finance blog. Furthermore, I was a manager for the past five years of my career, helped many other people engineer their layoffs, and engineered my own layoff. The book is from firsthand experience.
So that’s it! If you can ask yourself the above four questions and come up with reasonable answers, I’m sure you will find the right price. You can always adjust your price after launching the product to match market demand. My main goal for writing the book has always been to help others figure out a way to take that leap of faith. Earning $1,000+ a month in passive income is just a side affect that at the very least, signals its value to the public.