Jenny Melzer started out selling her new novel Goblin Market at $2.99, the generally acknowledged sweet spot for indie authors. Then she lowered it to 99 cents for a promotion, and sold more copies, though we don’t know if she broke the six times more copies she’d have to sell to make 99 cents with a 35% royalty generate more money than $2.99 with a 70% royalty. Still, she got new readers, right? And she could always go back up to $2.99 once the promotion was over.
Not so fast.
I was going to raise the price of The Goblin Market back up to $2.99 on Tuesday, and I did for about twenty-four hours before Amazon crawled the net and discovered the price was still showing up at $.99 on competitor stores. Amazon’s policy is to price match the lowest price found online, so they slashed the price of The Goblin Market right back down to $.99.
This cross-store automatic price matching is also why people are complaining about Apple’s 30% vig for subscriptions. It’s practically impossible to charge more one place than another, regardless what the payout terms are for the author.
For “Do Over!” I’m starting at 99 cents and keeping it there, and I’m only worried about placing it on Kindle, Nook and maybe Google if I can find a cheap enough ISBN provider (Amazon and Barnes & Noble don’t require ISBNs). For my Unification Chronicles books, I’ll be starting at $2.99 and keeping them there as well. For those, I’ll probably go through the effort of securing an ISBN and getting the books placed on Google, Apple and possibly Sony’s ebookstores as well as Kindle and Nook. But I’m not going to bother with aggregators like Smashwords, as I don’t believe I’d get enough new readers there who wouldn’t already be using one of the other venues. The book market is fragmented, but as long as there are only half a dozen or so major players, I don’t mind dealing with them individually.
That said, I’m not so sure Jenny is losing money over this. Joe Konrath is trying an experiment with one of his titles, lowering the price to 99 cents and seeing how much money it generates. Keep in mind that ebooks are a post-scarcity good. Traditional supply and demand economics don’t apply if the supply is infinite. The value of an ebook as an asset to the author has nothing to do with the price, and everything to do with revenue. If Joe (and Jenny) sell more than six times as many copies at 99 cents than they do at $2.99, they make more money overall. So far, Joe is just about breaking even with The List, selling almost exactly six times as many copies. But the market is still growing, and this definitely hasn’t been settled yet.