Setting a Price for Your Book

Deciding what to charge for your product is an art form. This is especially true for books, as each one has a slightly different demand curve. Of course, if you knew the demand curve and your costs, you could pick the point where the difference between sales and expenses was the greatest.

Knowing your costs should be easy. You have printers' estimates and pricing tables, you have a marketing budget, you know the cost of fulfillment and sales commissions, etc. So far, so good.

Ideally, you should be able to estimate the price elasticity of your audience with either a focus group or comparative data on similar titles. In our dreams!

So, we mouse on over to Amazon and scope out the competition. Collect the absolute sales rankings of a number of competitors, as well as their price, page count, trim size, binding type, and whatever else seems relevant.

Then, we check Foner Books' site for an analysis of the number of copies sold through Amazon that this ranking would imply, and try to guess what that means in terms of total sales.

You can also look up your competition in Bookscan or in Ingram's iPage. Then you estimate the fraction of total sales that go through those channels.

Sadly, none of these estimates is complete, especially for a niche book. You should use as many sources as you can.

Now we grab Excel and try to derive a formula that fits all this data. Is there a pattern? Eureka! But be careful: that pattern will depend upon the competitive titles you choose. Repeat it several times, and look at the range of outcomes.

Now feed the price vs. sales numbers into your title p&l, and look for the maximum margin. That's the rough price to choose.

Simple. Well, maybe not. But is it worth the effort? Suppose you can increase your profit margin by $0.25 per copy. If you sell 2,000 copies, you have still made $500. Not bad for a couple of hours' work.

Want more help? Check our Do It Yourself products. We have programmed much of this into our packages in order to assist you.

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