A week ago I set out to test the 99 cents ebook? Here is the result.
I have been very vocal about that I do not believe in the 99 cent ebook. I have written about it in several articles, the most popular one being "The Myth of the 99 Cent Book". But people kept sending me examples of authors who did, and told me "you don't know until you tried."
Last week I decided to try. I reduced to the price of "The Future of Social Commerce" from $9.99 to just 99 cents. And then I started promoting it. I wrote an article about the new price. I tweeted about it continuously and I change the website to highlight the new price under each article. I did everything I possible could to promote this book, at a price of 99 cents.
How did it go? Is the 99 cents book really as good as people want you to believe...or is it just financial silliness?
First, let's take a look at how many books I sold before and after reducing the price.
As you can see, reducing the price to 99 cents actually caused my sale numbers to increase by 600%, which was great. Six times the books sold! Wow, I'm going to get rich!
But, quantity of sale is irrelevant. What matters is how much money I make. I earned $6.69 for every book I sold for $9.99, but only 35 cents for every book I sold at 99 cents. That is a big difference.
The result being that if we look at "total profit", the profit dropped considerably...to just 31% of what it was before.
Let me repeat that. After selling six times as many books, I only earned one-third of my usual profit.
But there is more this:
My book is sold in all Amazon stores, but sales in UK, France and Germany was no different from when the book was priced at $9.99. Even though the price was 1/10 of what it was before, sale only increased in the US store.
The reason might be that, in Europe, the 99 cent price was converted to local currency (like 0.63 GBP). As such, in Europe I didn't have the psychological effect of the "99 cent" price tag.
Also, most of the increase in sale happened within the first two days. After that, the sale dropped just 2x the quantity. This indicates to me that if I hadn't announced this is a "special offer" sales would have been a lot worse.
It seems that what people actually reacted to was the special offer, and not the price.
I also noticed a drop in subscription rate. Now that people could buy the book for 99 cents, nobody decided to become a Baekdal Plus subscriber. Why subscribe when you can get the book five times cheaper than a monthly subscription?
Not only did I make less money, it also made it harder for me to get new subscribers - and that was a disaster!
Finally, one might have expected sharing of the book to explode. And it kind of did the first day or two. But for past 4 days, the sharing level was the same as when the book was priced at $9.99.
There were no indications that sales would have increased in the future because of sharing. None!
I fully admit that I expected this experiment to fail. I did not believe in the 99 cent book, and I certainly do not believe in it now.
I gave it the best try. I took my best performing book, and I promoted it aggressively on all my channels.
But the fact is that the math doesn't add up.
One example. In my latest article, I mentioned a woman who had written a book and tried to sell it at $9.99...and couldn't. She then reduced the price to 99 cents and sold 3,000 copies.
I hear stories like that all the time, and it sounds impressive. And it is the same when you look at my numbers. I sold 600% more books ...600%!!
But do the math!
When you sell a book for 99 cents, you earn 35 cents on each book. Meaning that the woman selling 3,000 books only earned $1,050 in total.
That is not even enough money to pay the rent, nor is it enough money to cover the cost of writing the book. Yes, the quantity was high (for an amateur author), but she did not make any money.
Short of Amanda Hocking, I cannot name one example where an author has actually made a profit selling books at 99 cents. I can name several examples of high sales figures, but not high profit.
And even Amanda Hocking isn't selling her books at 99 cents. What she is doing is something brilliant. The first thing you have to remember is that Amanda's books are actually very short, each book is about a third of a regular book (150 paperback pages).
What she is doing is this:
She sells the first book of a series for 99 cents, but the other two books for $2.99. She uses the 99 cents as a marketing promotion tool to attract people and get them hooked on the story. But then people have to pay up.
Remember the size of the books. She has essentially cut the regular sized book in three. Sold the first part for 99 cents, and the remaining two for $2.99 - causing you to pay a total of $6.97 for the full book.
This is absolutely brilliant! She fools people into thinking that her books are really cheap, but like Apple's in-app purchases she is getting (almost) full value on each "complete" book.
This is the true story of the 99 cent book. You use the 99 cents to lure people in, cut up your product to the size of snacking, and get people to buy the full price for all the snacks combined.
That is the true power of the 99 cent book.
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