Dec 13, 2021

Ebook Pricing and Royalty Rates: What You Need To Know

Updated: May 2, 2023

Pricing Ebooks can be a challenge. If we charged what we think our books are worth, due to time, effort, and how fantastic we think they are, we would all overprice our books.

If you price too low, readers may think the book is flawed.

If you price too high, readers may feel they aren't getting their money's worth. If you are a new author and price too high, readers may be unwilling to pay a higher price for an unknown author.

But there are a few things that can help you figure out the best price point for your book.

First, look at the length of your book.

Here is a quick breakdown regarding where to classify your book.

Flash Fiction: 300–1500 words.
Short Story: 1500–30,000 words.
Novellas: 30,000–50,000 words.
Novels: 50,000–110,000 words.

Second, genre

Different genres have different expectations of price. Fantasy books which are usually upwards of 100,000K words can cost more. Fantasy readers rarely squawk at the higher prices. But Romance books are usually 50K to 65K and those readers wouldn't pay the same high price.

While 7.99+ will work for those long saga books or a very well-established author, as a new author, you might not pull that price off. So you might drop your price to $4.99 - $6.99 until you have more books out or even some reviews that give you some credibility with readers.

Genre and length are the first guidelines to look at. They still don't tell you what to price your book at.

One of the most important factors, if not the most important, is royalty share.

At Apple and Barnes and Noble you receive 70% royalties no matter what the book is priced. Other retailers vary. However, most are 45%-65%. Again, no matter what you price the book at.

Amazon is the only one who has to be different. Not surprising.

For Amazon, the royalty rate breaks down like this.

.99c - $2.98 = 35%

$2.99 - $9.99 = 70%

$10 - $199 = 35%

Let's address the 35% royalty and when pricing in this royalty range makes sense.

If you have a series and you are offering the first book in that series for a discount.
The length of the book is relatively short. (Fan fiction or short story).
You are running a special for a short amount of time.

There may be other reasons to list a book for under 2.99 but these seem to be the top 3.

.99c works best for promos and first in series (if you will not be listing the first in series free.)

$1.99 should really be used for the short story range and even then only books with the higher word count. Readers may consider it a decent 'deal' price, but only in certain promo situations. Like if the book is normally priced at $4.99 or above (maybe even $3.99). It won't do anything for a book priced at $2.99. In all honesty, I would avoid this price point. I price even my shorter side books at $2.99.

70% royalty.

This is the price range where most authors will price their books. I suggest to everyone, make that first book $2.99. Right from the start. It isn't a huge price. So most will be willing to pay that for a new book. Then when you get sales and reviews, you can raise the price to $3.99 and it more than likely won't impact sales in a negative way.

There is a sweet spot in pricing...$2.99 - $5.99. This is a general price point that many readers are willing to pay for any Ebook.

Here are my breakdowns and suggestions:

Standalone or first book out: $2.99 unless running a promotion, then .99c.
First in series $2.99 until you have 3 or more books out in the series. Then price the first book either free or .99c.
Second and subsequent books in a series - $3.99. Some will stagger their series pricing to something that looks like this: .99c, $2.99, $3.99, $3.99, $4.99...(usually capping out at $4.99 or $5.99)
Bundles 1-3 books or 1-4 books: $6.99 - $9.99 (depending on price of individual books. You always want to make the bundles look like a good deal to the reader. This usually amounts to $2 plus dollars in saving vs buying the books individually.

What about pricing over $9.99?

You can see from above that Amazon will drop your royalty back to 35%. Why? They want to keep pricing lower than their competitors. By placing a cap on the 70% royalty that forces you to keep your pricing cheaper.

This is my one of my arguments for selling WIDE. Meaning sell your books on all platforms. No other sales platform caps the royalty for books priced over $9.99.

Real world example:

I have 3 book bundle priced at $6.99 on Amazon. My first book in this series is free. All other books are $3.99. I make $4.89 royalty on that bundle. When I created my 5 book bundle (all books) if I priced that at $9.99 to keep the 70% royalty, I would make $6.99. But if I priced it at $13.99 on Amazon, I only make 35%. ($13.99 at 35% = 4.89) Because of this, I don't even sell my big bundle on Amazon. Only from my website or other retailers.

For those of you who sell only on Amazon, what can you do? Not much except to create only 3 or 4 book bundles. Anything more and you leave money on the table.

Here's my take.