Tuesday, June 7, 2011

Will Kindle and other eBook Prices Eventually Have to Rise?

Everyone seems to be jumping on the ebook train right now. I certainly have. May, June and July are the slowest three months for me in terms of print book sales. The same is not true for Kindle sales so far. May of 2011 was good and this June is looking like it will be the best month ever for Kindle sales since I ventured into the Kindle market.

While introducing Kindle editions does not seem to have hurt my print sales, and in fact I believe it helped boost the sales of one print edition, it remains to be seen if the trend will continue. I plan to pay close attention to print and Kindle sales trends for the next year or so.

One of the reasons for this is the fear I have that my Kindle sales WILL negatively impact my print sales at some point in the future. Why is this a concern? I make considerably more money per sale for a print book than I do a Kindle book, even with Amazon's generous royalty system. The price of Kindle books is so much lower than the price of the print edition, there is no possible way to make up the difference in net profit per sale and still take advantage of Amazon's pricing/royalty structure.

My books are non-fiction niche market books. Selling my books for the lowest possible price to drive sales is not a long term strategy for me. I think this strategy works well for fiction, new fiction authors and general market non-fiction.

As ebook readers and reading books digitally becomes more common, this is going to become more and more of an issue. More so if authors bypass the publishing houses and deal directly with Amazon for Kindle sales. The math will drive the issue.

For example, if an author is going to sell a print edition of a book that nets $6 per copy and the Kindle edition only nets $2 per copy, it will take three Kindle book sales to match the profit of one print copy being sold.

If the book is going to only sell 5,000 copies total for the author, Kindle and print combined, the ratio of print to Kindle sales is a significant one. 5,000 print copies at $6 net is a $30K net profit. 5,000 Kindle copies is only $10K net. The difference of $20K is nothing to sneeze at.

As the market trends towards digital books, will authors need to drive the prices upwards so they can make a living selling their books in a digital format?

Right now, I suspect many of my Kindle sales are impulse, price driven purchases I would not have made otherwise. In the future this might not be the case when people by digital books as the dominant format of consuming books.