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Pricing my book

I'm getting to the final stages of putting my book on Amazon.  My cover's almost done, the content is formatted properly, and I've finally convinced myself that I'm not making a complete ass out of myself by self-publishing.  Next step: profit!

I've spent a good deal of time thinking about the right price.  This is one of the only parts of the entire publication process so far that feels fun or reassuring since it directly involves payment for my efforts, and yet even this is something I've over-thought to a point that makes me sick to my stomach.

There's many factors to consider.

First there's the obvious question of what's an attractive price for a debut novel.  I'm convinced there's no price that's inherently too much to ask for a book as long as the audience can see the value.  So, one day, when I've won every possible award a writer can get three times over, I can charge $50 a pop and nobody will bat an eye.  Until then, I'm going to need all the help I can get to convince people to come my way.  The cheaper, the better.

Next there's the standard question, "What's everyone else doing?"  Not that this should drive too many decisions - my philosophy is that you succeed by not doing the same thing as everyone else - but all the same, extreme outliers are likely to be punished.  A quick survey of Amazon.com tells me the standard list prices are $2.99, $3.99, $4.99, and $5.99.  Unless it's a bestseller, in which case the price is whatever the hell they want.

If I stopped there, I'd probably just go with $3.99 or $4.99.  The problem is, there's some other curveballs.

For one thing, Amazon reserves the right to discount your book at whatever they feel is appropriate to give the world the best price.  I haven't put much thought into every store I plan to sell "I Need a Job" yet, but I imagine I'll expand at some point.  This opens the door for an unexpected cut in revenue.  To be safe, I'll have to assume that my list price is automatically going to be slashed by 25%. (A helpful Something Awful forums thread points out a source-uncredited table of common discounts, and they all hover around this range.)

Then my mind starts to wander to completely bizarre and unfounded disasters.  Suppose my book actually defies chance and expectations and sells 50,000 copies in two months.  A massive hit!  I cheer and thank the stars and think about the most hilarious way to quit my day job.  Then April comes around and I realize I'm totally screwed on my taxes.

So, for some added insurance, I'm going to assume that I'll need to set aside 50% of whatever I make just in case.  This is probably the smartest thing to do, anyway, since any portion that's left over after I pay taxes will just go into a rainy day fund.  Oh, look at that!  I'm being responsible.  Isn't that precious?

Now time for some (more) math.  A best-case scenario gives me 70% royalties.  This means that if my other assumptions are valid, then I'll need to multiply my list price by a shockingly low 26.25% to get a realistic idea of actual income (70% royalties x 75% discounted price x 50% post-tax revenue).  If I'm working backward, I can ask, "How much do I want to get per copy?"  I'd love to get a cool $5 in my pocket, but that's probably unrealistic just yet.  I definitely don't want to get less than $1 a copy.  Dividing $1 by 26.25% gets me $3.80.

So, $3.79 is pretty much as low as I'm willing to go.  For the hell of it, I'm going to add an extra dollar to that and hope for an extra quarter on each sale.

Which is a long way of saying that I'm planning a list price of $4.79.  It's just different enough to stand out, high enough not to totally screw me on unexpected discounts, low enough to still be cheap and attractive, and it will net me a fair baseline profit per copy.

Wait... I'm supposed to be selling this to you, not me, aren't I?  Shit.  I'm not good at marketing.