Setting the Launch Price for a Newly Released Kindle E-Book

A book is about to be released as a Kindle e-book. How would you decide what price to put on it? Walk through the information you would gather, how you would arrive at a launch price and how you would check whether the price is right. ```hint Start with who is deciding The right price depends on who sets it (the store, a publisher or the author) and what they want from this launch. Once that is clear, look at what readers compare the book against and what one extra copy costs to deliver. ``` ### Clarifying Questions - Are you pricing as the store, as a traditional publisher or as an author publishing on their own, and is the goal revenue, the number of readers, a high bestseller rank or building an audience for future books? - What kind of book is it: fiction or nonfiction, which genre, how long, a debut or an established author, a standalone or the start of a series? - Is there a print or audio edition, and if so, when does it come out and at what price? - Which countries is it launching in, and will it also be offered through a subscription reading service? ### What a Strong Answer Covers - Who sets the price and what the objective is, and how each changes the answer - The economics: near-zero marginal cost, how the royalty or revenue share varies with price, and why cost-plus pricing does not apply - Reference points for willingness to pay: comparable titles in the genre, the print edition, the author's existing readers and how price-sensitive the target readers are - A launch price and a plan for the book's life: promotions, later changes and effects on a series - A way to test the price, the metrics that judge it, and risks such as anchoring and signaling low quality ### Follow-up Questions - Sales are strong for the first month and then flatten. How do you tell whether price is the problem, and what would you change? - Should the first book of a series be cheap or even free? How does that choice affect earnings across the whole series? - If you are the store rather than the author or publisher, why would you care what a single e-book costs, and what levers do you have?