Note: For my most current advice on writing and selling your ebooks, check out my guide eBooks The Smart Way (Editor’s Note 09/2015).
What is the price that will maximize whatever you’re selling online? That’s the question we’re all trying to figure out, and it’s not an easy thing to do. Where do you even start? We’ll get to this…
Here is what we have in our eBook series so far:
- Part 1—Why I chose to go with an eBook rather than a hard copy version.
- Part 2—How to Get Started after you have an idea about what you want to write about.
- Part 3—Important things your eBook you should include.
- Part 4—Getting Ready to Sell it Online.
- Part 5—Tools, websites and Automation.
- Part 6—10 Steps to a Great Sales & Landing Page
Today I’m going to go over how you can begin to price your eBook.
The prices we see in stores and online are carefully determined, well researched prices that are there for a reason. The pricing game is a crazy psychological battle between yourself and your potential customers, and here’s my take on how you can figure things out.
Remember: I’m not an expert and you may have a better way of determining a good price for your products. This is just what I did and I’m passing it along to you.
Check Out Your Competitors’ Prices
Competitor prices are important to realize before you get into the market yourself. They give you an idea of what people are paying for material that is similar to yours, and it provides you with a good starting point. Don’t just look at the prices of other eBooks, but similar hardcover books being sold online and offline too. It’s really easy to check prices on amazon.com, just type in a few keywords that are related to your subject and see what comes up.
How much you charge in relation to your competitors is up to you, but going higher or lower will have an impact on how you should market your material. Why? Because it’s a lot easier nowadays for people to comparison shop, especially since it’s usually just a keyword and click away. Let me explain:
If You Price Higher Than Your Competitors…
…then you better have a reason for doing so. In this case, you wouldn’t highlight your price more than you would the highlight the benefits and features of your eBook.
People aren’t going to buy your item if they can get the same item for a lower price somewhere else. Another way to think about this is, you’d better show them why you are able to charge more than your competitors (i.e. your item has better value).
Therefore, your strategy here is to create some kind of features or benefits chart that will attract the attention of the customers on your sales page. Make this stand out, since it’s the thing you want your potential customers to see the most. Don’t highlight your price. If people see your price before they see anything else, you may lose some customers right away. Your job is to make them drool over your product first, and then when they are in “I want this” mode, that’s when you shoot them the price (at the end of your sales page). Usually, they’ll already have their minds made up and won’t care if your price is a little higher.
In addition, you’ll often see actual comparison charts that show that there are more benefits and features of a product being sold compared to those of it’s competitors. Of course, the item being sold is always shown having more. If you choose to do this, don’t put the price of the other products in that chart.
If You Price Lower Than Your Competitors…
…then you’ll want to make sure you highlight your price throughout your sales page. Make it stand out! Your price becomes a selling point.
This is the strategy that I chose with my book. A lot of the material that already existed for the LEED exam was super expensive (as well as the price to take the test itself), so I chose to market my eBook as “the most inexpensive LEED study guide you can buy”. I made sure to mention that I could have chraged more, but I realized how much money people were spending already. I’ve gotten emails from customers who told me they appreciated the fact that my eBook was reasonably priced and well worth their dollar.
If You Choose A Low Price, Be Careful—Losing Money
Choosing a lower price can be great for the reasons that I just mentioned, but be careful about how low you go. It can hurt you more than it helps if you’re not careful.
For one, if you price too low, you might lose out on potential earnings because people might have been ok with paying a little bit more. Let me give you a real life example:
When I first launched my eBook, I was worried about charging too much. I knew I was pricing lower than my competitors, but I wanted to make sure my price still wasn’t so high that it would drive customers away. So, I charged $19.99.
I was selling books slowly at first, but then the momentum started to pick up. Then, I got this email from somebody:
“Just my opinion, I think you could raise the price of your LEED Walkthrough Guide. You’re already well below the competitor’s price, and I anticipate you will have the volume to support it and an additional 5 to 10 bucks will be a big difference in your bottom line. People will pay it.”
It’s crazy to think that one of my own customer’s actually wrote me this email, but I found out he was just really surprised with how low my price was, and because the eBook helped him out, he figured he pay me back by giving me this tip. Well, that was over a $20,000 tip. Let me explain:
To date, I’ve sold about 2000 eBooks (this doesn’t include the eBook + audio package, just the eBooks sales alone). If I had sold them all at $19.99, that’s about $40,000 total. If I had sold them all at $29.95, which is the price I sell it now, that’s about $60,000—a $20,000 difference! It’s crazy to think about, but raising the price of my guide less than $10 earns me $20,000 more.
The moral of the story: don’t price your guide too low.
If You Choose A Low Price, Be Careful—Losing Credability
One other reason you want to be careful about having a low price is that it might be so low that people won’t think it’s good. Yes, it may be cheap, but customers may be thinking that they’ll get what they pay for: a book that isn’t worth much.
I heard a funny story once about a guy selling something for X dollars (I apologize I forgot the details, but bear with me). He was doing okay, but just for fun he raised his price 10 times the price he was originally charging. Guess what happened?
Not only did he make more money because his product cost more, but he was getting more customers too! So wait…he raised his price, and got MORE customers? Yes, this is right. Why? Because people saw the larger price as the product having more value than it did at the original price. People were thinking to themselves “At this price, it must be really good!”
That being said, you can price something too high, obviously. Using the last example, if the price is too high, people aren’t going to be thinking it must be really good, but rather “this price is ridiculous” instead.
Finding the Perfect Price
It’s our job to find that perfect price that isn’t too low, but not too high either. Luckily, we can change our price at any time with the click of a button. This is the online advantage that we have.
If you were selling products in a retail store, just imagine how many steps and how many days (not to mention how much money) would be involved in doing a price change, especially if the price was printed on your product.
Working online, if we think our price is too low or too high, all you have to do is go into E-Junkie (or your shopping cart of choice), and change the price. You’ll have to update your price on your website and any graphics as well, but this isn’t too much work considering what exactly you’re trying to do.
It’s all about experimentation. It’s going to take a while to find the right price, and make sure when you make a price change to not base any of your decisions on just 1 or 2 days of sales. A good week is usually sufficient enough to see if your price change has made any difference in your numbers.
Price Changes Are Scary, But They Don’t Have to Be
At least for me, I was a little reluctant to make any price changes at first. Why? Because I was scared of two things:
1. People seeing a price higher than they saw before. I was worried that a potential customer would see that I raised the price and they would email me and ask for the price they saw earlier. Let me tell you why this is nothing to worry about.
For this to happen, a customer would have to come by your website once, and then again after the price change. This may or may not happen too often, but even if it did, the customer would then have to take the time to email you and request the lower price, which definitely happens even less. Even if it does happen a few times, it’s best to just answer their request and give them the lower price. There’s nothing wrong with that, and they will definitely appreciate your understanding and probably spread the word about your website and the great customer service.
2. I was also worried that if I lowered the price (this is after I raised the price too high at first), then previous customers would then request a refund for the difference.
I had raised the price of my eBook initially from $19.99 to $39.95, but after a week I noticed the number of sales drasticaly decrease. I wanted to try for a happy medium, so I changed the price to $29.95. Out of about 100 customers who purchased my eBook at $39.95, no one ever contacted and asked for a $10 refund.
I think people understand that prices will change, but even if a few customers email you, I would just go ahead and issue them the refund. Again, they will probably appreciate your customer service, because I’m sure they won’t expect you to say yes.
You can follow my advice (or not) all you want, but it’s important to never forget that you have the power to do what ever it is you want to do. If you believe your product should be sold for much more, then do it! Try it out and if it is successful, that’s awesome. If not, you know you can easily change the price and find that price that works for both you and your customers.
Don’t be hesitant while doing business online. Whatever you do, do it with authority and the belief that what you’re doing is the right move.
There are a lot of ins and outs with pricing your eBook, and I’ve only begun to hit the surface. I plan to write one more part in this series about pricing, specifically about certain promotions and techniques you can use to increase your sales.
Again, thank you for all of your comments and questions. Cheers!