Wednesday, August 31, 2011

Kindle Price Increases? POD Sales versus Kindle Sales - Something to Think About

Things change and with technology they seem to change faster and faster. When I published my first book print-on-demand (POD) was the way to go as a self-publishing author. POD using either Lightning Source or CreateSpace, combined with Amazon allowed an author to enter the world of self-publishing and not have to break the family bank to do so.

eBooks has produced more change and the ebook revolution is picking up more steam. Amazon's Kindle leads the way with B and N's Nook trailing along. If you are going to self-publish, you need to get on the ebook express or get left behind.

Amazon's Kindle is changing the publishing world quickly and to a lesser extent so is the B and N Nook. Kindle sales are climbing, already surpassing hardback sales at Amazon and if Kindle sales have not already done so, they will soon surpass paperback sales as well.

Amazon's fantastic 70% royalty for authors is great (if you follow the required Amazon pricing guidelines). Where else can you find that kind of a deal for a self-published author?

But what happens when your individual Kindle sales surpass your POD sales? This is a problem few have addressed in terms of profitability for the self-publishing author. Some have argued Kindle sales are sales an author would not have made otherwise. In my case that was certainly true a few months ago. It isn't now.

My total sales in terms of copies sold for Kindle this past month was nearly three times that of my more profitable POD sales, yet I made only 2/3s as much money on the Kindle sales.

Clearly, I need to change my pricing structure for my Kindle titles. But how much do I raise the price? One of the most attractive considerations for purchasing a Kindle book is the price. It is significantly less than the cost of purchasing a paperback. Yet, if I raise the price too high, might Kindle users balk at the price increase, even though the Kindle version is still much cheaper than its print counterpart?

I write non-fiction and am hardly a household name who can command higher prices. Raising my prices might result in lower sales in terms of volume which will have a negative impact on the Amazon long tail effect. 

Or will higher Kindle prices impact my total sales volume negatively? Why worry at all? My total combined sales is vastly higher than one year ago and so are my profits. The issue is as more and more customers purchase Kindle books and fewer and fewer purchase paper, over time my profits could decrease.

Fighting the ebook trend is pointless. All of my future books will appear sooner or later in both versions. The question is how do I make up the shortfall of anywhere from 2 to 6 dollars a copy difference between a Kindle edition and a POD edition?

It is one thing to deliberately price a Kindle version at a super low introductory price once both the POD and Kindle version are linked to drive the title up the Amazon search results quicker. It is another to leave the price too low and lose money over time. It is also an issue of "losing money" as more and more customers purchase the Kindle edition and POD sales decline.

Greater volume might well be the answer for a fiction author, but a niche market non-fiction author only has so many potential readers. This is an issue I believe many authors will face in the hurriedly approaching future. How do your optimally price a non-fiction ebook in the face of declining POD sales as your ebook sales increase?