Amazon Reviews and eBook Pricing

Authors and bibliophiles alike should read this post by Larry Correia in response to an Amazon review for Son of the Black Sword.

Son of the Black Sword

Your time is valuable, so if you're disinclined to following the link, the short version is that a reviewer gave Larry's book one star for the sole reason that he thought the price was too high.

Setting aside the fact that the reviewer is wrong about the eBook costing more than the paperback, and that complaints which have nothing to do with the product but are instead directed at the seller violate Amazon's review guidelines, his stated aim of "trying to convince the author to choose to self publish in the future." is misguided and ultimately counterproductive.

Let's talk price
I've written before about how to price a self-published book.

To give Larry's disgruntled customer the justice he didn't do to authors, I agree with him on a few points.

Publishers spend far less in production costs and overhead for eBooks than print books.
Granted, the cost of physically printing a book are lower than most people think. Not having to pay for storage, shipping, and insurance on physical inventory is where publishers really save on eBooks.

An eBook should be priced lower than a paperback--or any print version--of the same book.
As a result of point one above, eBooks have far bigger profit margins than print books. I know, because I make and sell both print books and eBooks.

Publishers only earn about 6% on the sale of each print book (the same as authors). But with Kindle books, publishers get 70% of the selling price after Amazon's cut. According to almost every book contract, authors get 25% of the publishers' 70%. (This is a simplified version of an eBook's profit breakdown, and it doesn't take the return of agency pricing into account, but the general idea's the same.)

Charging more for a product that earns you nearly 10 times greater profits is just a brazen cash grab. Growing numbers of readers and authors know it.

Publishers who sell eBooks at excessively high prices do a disservice to readers and authors.
Even being generous with their relatively negligible costs, the publishers' take of every eBook sale is easily half or more. And although most authors get 25% eBook royalties, that's 25% of net; not gross, so the author's real cut is more like 12.5% of the selling price.

Which is why I make more from the sale of a $2.99 eBook than a tradpub author does at $10.99.

Meanwhile, it's plain greedy to artificially jack up prices on a commodity that a) there is an infinite supply of, and b) isn't actually being sold to the reader at all. You own every print book that you pay for. With eBooks, you are purchasing a license that can be--and has previously been--revoked.

I'm no economist, but it seems unjust to set what's essentially a licensing fee higher than the price for ownership.

The common practice among most big publishers (note: I didn't say all) of selling eBooks at dramatically inflated prices will continue driving readers and authors toward indie.
The Big Five's eBook sales are declining while Amazon reports that Kindle Store sales are growing overall. No doubt there are many reasons why readers are leaving the big boys for smaller publishers, indie authors, and Amazon's own imprints, but you can bet that price is a major factor.

Now that the devil's had his due, let's discuss some areas where the reviewer and I part ways, or...

Why punishing authors for publishers' pricing decisions is evil
When an author signs with a publishing house, he forfeits control over his books. Publishing contracts establish the legal fiction that the publisher created the work. From the moment an author signs away his rights, the publisher is the author as far as the law is concerned.

As a consequence, traditionally published authors have no control over the marketing, exterior and interior art, or pricing of their books. Unless you're a best selling author, you may not even be consulted on any of these decisions.

I'm not bashing publishers, here. Not every writer has the skills or disposition to handle editing, marketing, and art design. Giving up control is part of the trade off for being relieved of these burdens.

But at the same time, reviewers should understand that penalizing an author for something outside of his responsibility and control is a coercive, 100% dick move.

I'm willing to accept responsibility for every area of my publishing business, from writing the books to commissioning and approving the covers, to setting the prices. I know how tough this racket is. That's why I would never coerce anyone into shouldering the burdens of a publisher.

Self-publishing ain't an ideology and it ain't for everyone. Are many trad publishers behaving in objectively and obviously unethical ways? Yep. But labeling all of them as villains is indulging in guilt by association. By way of counterexample...

Baen is one of the good guys
Even when I'm taking trad publishers to task for screwing authors or alienating readers, I'm always careful to make an exception for Baen Books. Why? Simple. They fight for the readers.

This mini-controversy over SotBS is a perfect example. First, contrary to the reviewer's premature complaint, the Kindle version costs a dollar less than the paperback. Second, and more to the point, the eBook is priced correctly.

Without going too deep into the nuts and bolts of book pricing (which I covered in greater detail elsewhere), Amazon strongly recommends that eBooks be priced between $2.99 and $9.99. They heavily incentivize pricing eBooks in this range, going so far as to double the royalty rate.

Though the optimal price varies per book, my extensive research shows that the sweet spot for most eBooks is somewhere in the $2.99 to $5.99 range.

Granted, SotBS is currently listed at $7.99 for Kindle, but let's not forget the vital factor of author brand. Marketing gurus often remind us that an author's job isn't so much selling books as selling himself. The fact that readers will reliably pay a 60% premium on works by their favorite authors bears this wisdom out.

And unless you've been stranded on Mars since 2008, you know that Larry Correia has one damn strong brand.

Starting at $5.00--well within the eBook sweet spot--and adding 60% gets you eight bucks, which happens to be what Baen is charging for Son of the Black Sword.

Consider the above and ask yourselves, indie pub ideologues, if SotBS is really the hill you want to die on. You might have a case if you were militating against one of the $15 eBooks peddled by the Big Five. But even then, directing your ire against the innocent writer instead of the guilty party--the publisher--is just asinine.

Next steps
Frequent readers of this blog know where my sympathies lie (for now) in the tradpub vs. indie debate. That said, what should a self-pub evangelist--if you insist on being one--do to ensure the victory of readers and authors over the establishment?

As I said in my now infamous post about technology-driven changes in sci-fi fandom, the answer is nothing. The Big Five that have exerted a stranglehold over the book industry for better than a century are now locked into the death spiral of growing shares in a shrinking market. If they were willing and/or able to take the necessary steps to pull out of that nosedive, they already would have.

I don't want a market composed entirely of self-published authors. Like I said before, not everyone is cut out for indie. We'll always need publishers in some form, and frankly a traditional publishing industry with Baen in charge would be my version of returning home to 1985 to find my family successful and functional while Biff Tannen waxes the Bimmer.

Biff BMW
My ideal vision of the future, if you replace the McFlys' car with Toni Weisskopf's and Biff with PNH.
If you're really sore about an overpriced eBook, how about communicating your displeasure to the publisher after not buying it? They probably won't listen, but since listening is the only way to save themselves, you win anyway.

In the meantime, consider spending your hard-earned eBook budget on reasonably priced and well-received indie titles such as these.


  1. I agree. I read Larry's article and I believe yours is rather more balanced.

    As he points out, capitalism means the seller can choose whatever price he wants for his wares. ...but it also means that buyers will reject non-essential wares they perceive as ridiculously overpriced in favour of more reasonably-priced ones.

    1. Excellent point--which the Big 5 are finding out to their sorrow.