How to Price Your E-Book

by Dr. Ralph F. Wilson, E-Commerce Consultant
Web Marketing Today, Issue 122, March 5, 2003

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Selling information fits the Internet well, since up-to-date information can be transmitted electronically and quickly. Moreover, people are willing to pay for information, especially hard-to-obtain data or business reports that can be crucial to guide a business towards profitability. Advantages of your own e-book are:

• Full and exclusive control over the product.
• Writing and formatting the e-book are the only product costs.
• No printing, manufacturing, or shipping costs are incurred.
• You can command a good price if information is of a highly technical or exclusive nature,

But there are drawbacks as well. Since self-published e-books are easy to produce, it is more difficult to remain the exclusive information source about a topic. Some topics, such as Internet marketing, how to make money, etc. are flooded with literally thousands e-books all competing for the same group of readers.

How should you price your e-book? Here are the main factors:

Value Analysis

What is the value to the reader? How-to information on a hobby, for example, won't command the kind of price that critical business information will, since it isn't perceived by the customer as crucial. Businesses don't judge value so much on actual price, as on what the information will do to help the business. Thus critical business marketing data or technical how-to information which help a business compete and move forward may be priced at $150 to $1500 or higher. This will be a similar price to printed reports for the same kind of materials, if they are available.

Market Analysis

Your pricing will be related to prices of similar materials sold to the same market. While major corporations may pay $600 for a key business report, small businesses will balk. If you're writing for Fortune 500 companies you'll be pricing much differently than if you are writing for SOHO entrepreneurs. If most e-books in your field are selling for $15 and you price yours at $45, you'd better have something more to offer. The more exclusive or hard-to-obtain the information, however, the higher the price. Customers also judge value on the basis of price. If material is high priced, it is judged to be more valuable than if it is bargain priced -- even though the contents of the high priced Internet marketing course may be inferior to the low-priced product. For example, Ken Evoy's Make Your Site Sell! 2002 (http://sales.sitesell.com/myss) sells at CND $39.95 or USD $26.15 -- much lower than materials by high-hype marketers. Yet the content is excellent, voluminous, and as good or better than packages costing 10 times as much.

Fame and Reputation

eBookMall suggests pricing mainstream fiction and non-fiction at $2.99 to $9.99, but well-known authors can command a much higher price, up to about $19.99 for Michael Crichton's novel Prey (HarperCollins, 11/02) that has a hardback price of $26.95. However, the price is likely to drop dramatically when the mass market paperback appears at $8 to $10. Stephen King's Dreamcatcher (Scribner, 3/01), prices the hardback at $28, the mass market paperback at $7.99, and e-books at $9.99 before discounts. In business topics, too, a well-known author can command higher prices than unknowns for similar kinds of materials.

Cost Analysis

For print books, for example, the price formula to break even is eight times costs divided by the number of books in the first print run. E-books have costs of production, editing, design, and promotion, but no printing and distribution costs, so the minimum price can be much less than for print books. Cost analysis is seldom an important factor in pricing e-books, since their value is more closely related to the sale price of similar material in print books than to their actual costs.

These are the main pricing factors that I have in mind for my own e-books (www.wilsonweb.com/ebooks/):

Budget of my readers

My e-books range from $12 to $34.95. Some of the e-commerce information I sell is just not obtainable elsewhere at any price. I've priced it low because I really want to make it accessible to the people I write for -- small to medium business owners, marketing staff, and SOHO entrepreneurs who can't really afford the $197, $297, $397, $497 price tags of my competitors. I'm writing web marketing and e-commerce materials to help the small guys grow great online businesses, not to make a killing. I care about my readers and their budgets.

Pricing of my paid newsletter

Instead of pricing e-books relative to my competition, I price them relative to my premium e-commerce e-zine, Web Commerce Today (www.wilsonweb.com/wct/) which sells for $49.95 annually. I want people to see a price of $17.95 or $29.95 or $34.95 -- then realize that for just a bit more they can get a full year of Web Commerce Today plus five or six free e-books valued together at $158. I over-deliver value because I know that if I can upsell from a sales total of $34.95 to $49.95 I haven't lost any real sales, but have gained $15 while my customer will be delighted with the value received. It's a win-win formula using an up-sell pricing strategy.

So what should you charge for your e-book? The answer is a clear and precise: "It depends." :-)

[For more on competitive analysis and pricing theory, see my print book Planning Your Internet Marketing Strategy (Wiley, 2002, ISBN 0471441090), chapters 9, 10, 11 and 20. http://wilsonweb.com/go/to.cgi?l=pyims ]

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Read additional articles from Web Marketing Today, Issue 122, March 5, 2003