Pricing anything you create can be tricky. If you don’t value your time and effort, no one else will. The fact that you are pricing your own creation and that it is digital can really stress an author over his work's true value.
Still, the true value of a book, whether it’s in paperback, hardback, or digital form, is its content. From the author’s point of view, the time spent researching, writing, and editing should be factored into a book’s value. From the consumer’s side, the content of the publication is what matters. Whether the book is meant to inform, entertain, or instruct, its value derives from how desirable and unique it is in the market place.
Only when you truly understand both sides of the equation, will you be able to justify whatever price you’ve decided on. From that point, you will begin to use a more scientific approach to determining what price point will be best to use for your eBook.
The easiest way to research the market is to visit the sites where you plan to publish your book. From the main page of Amazon’s Kindle, search for books that might sit on the shelf next to yours. Look at the prices that those authors charge. Remember you’re probably new to the whole process and might want to give readers an incentive to buy your book, so think competitively.
Next, click through a few other book websites to see how prices vary. For example, one author might charge $2.99 for their eBook on Amazon, but only charge $0.99 on Smashwords. This difference exists because Amazon has a minimal threshold that’s higher than Smashwords. This policy will factor into how much profit you will be able to take home.
The final factor that you want to consider is the total amount you want to net on each sale. You’ll want to make a decent return on each sale without standing out as overpriced. You will also want to capture volume. You need to discover that sweet spot between return per sale and optimum volume, as it relates to you and your genre.
Books that sell for $0.99 easily out sell any others but you profit will be small. (30% on Amazon and between 47% and 59% on Smashwords) Boosting the price to $2.99 on Amazon will cause your profit percentage to jump to a full 70%.
So do your homework, price accordingly, and your sales will thank you.