Saturday, February 16, 2013

On the Pride of Pricing

The Bible says that Pride goes before a fall. Even the ancient Greek tragedies usually revolved around hubris or inordinate pride. Unfortunately, a lot of writers today, especially those self-publishing, are letting the Pride of Pricing put them out of business.

I remember talking to a woman awhile back who asked about my self publishing efforts. I told her a bit about the novels and books I had up on Kindle. When I told her that I set my price at 99 cents, she very proudly told me that she would never set her price that low. She went on about how many hours she spent writing it and editing. Then she said something like, "You demean your writing offering it for that price. I have my pride." Unfortunately, a few weeks later when I was reporting out a couple hundred sales that week, she didn't have any. She had her pride. What she didn't have were readers.

Too many writers come from an hourly wage mentality. This is natural. Most people work an hourly-wage job. We measure our success by how much per hour we make. Coming from education where you get paid the same if you work eight hours or you work 18 hours, I'm maybe not quite as tied to the hourly wage perspective. I'm more of a bottom line person. I don't care if I make $5.00 an hour or $50.00 if I have X amount of money at the end of the month. After all, I would be writing either way.

But the real danger of hourly-wage thinking is that it undermines one's business. You are no longer working for an employer. The freelance writer is selling a product. You have to sell the product for what the customer is willing to pay. If you are a well-known author with a huge following, you can charge the same for an ebook as for a paperback and get it. However, if you are an unknown quantity, you have to reduce the uncertainty of your reader by setting your price lower than those "name brand" people.

Think about it this way. I go to the store. I have acid reflux. So, on the shelf is Prilosec and the Store brand generic. The store brand is half what the name brand is. Which am I going to buy? They both have the same active ingredient. Well, that's a nobrainer. I'm going to get the generic. Now, some people simply are not going to believe the generic is as good. Or their pride makes them assume that costlier is better, but at the end of the day, I can be pretty sure at that store, the store brand will sell more units. The name brand and the store brand will produce similar profits, but the store brand will have higher sales.

Now, the store could get all prideful and say, "We have the same active ingredient. We are just as good as the name brand. After all, we have our pride," and charge the same as Prilosec. Now, who would be making the sales? Well, given the choice between the name brand and a no-name brand at the same price, most of us will go with the name brand, if for no other reason, than familiarity.

I know, it can offend our "artistic" sensitivities to compare our baby, our great work of literature, that literary offspring we labored over for years to a heart burn remedy, but sales is sales and customers are customers. Money is one aspect of making a buying decision. If you let pride in yourself and your work make you stupid about how consumers make decisions, then you will be like my friend. Full or pride, but empty of wallet.

[Pricing is one aspect of self publishing I discuss in Point of Sale: Secrets of Supercharging your Sales on Kindle. And, of course, it's just 99 cents.]


  1. Interesting perspective, Terri. I saw your email on the ACFW loop so popped over.

  2. There's a balance in all things, isn't there? And pride swings the pendulum in the wrong direction.

    I wonder how people do when they choose to price their products in the middle of the road? Just a thought I had after reading this.

  3. Am I too proud to admit you've nailed this one? Nah...

  4. Deborah--

    I believe pricing to be one of the most difficult things to do in any business. Set it too high and nobody will buy it. Set too low and you don't have a profit margin (note profit margin cannot take into account the business owner's time only his/her expense). When basically, cost of production is close to zero, and your customer knows it is, you have a serious problem on your hands, especially as an unknown writer. Now, the question most people ask is how MUCH can I charge and get away with it. I prefer to ask how LITTLE can I charge. This is not only a philosophical issue, it is also a marketing one. I'm not saying everyone should price things at 99 cents like I do. In part, that is a matter of simplifying my life to have everything one price. However, the lower I can set the price and still show a profit, the more people can afford the book and the more likely they are to take a chance on a writer they don't know. The more people who get my books, the larger my audience - my platform - grows for the next book. So, while my pride says, "This book is worth _____," my good sense says, "I'll sell more copies and make more money in the long run if I sell it at this minimum amount." Instead of basing the price on my estimate of it's inherent worth (which is always going to be huge in my own eyes), I can base it on the amount someone else is willing to pay and still show a profit. In other words reader-centric pricing instead of writer-centric.

  5. Good logic, Terri. I wrestled with this for my book, Tale of Tails with a Thirst for Verse. I went with the 99 cents.

  6. Very good insight Terri. Thanks much for sharing it. Makes sense.