How to Price an eBook

Many authors make the premature assumption that all customers buy eBooks based on price rather than value, even before they’ve done a thoughtful evaluation of their target market. Who is buying the book? Why are they buying the book? Will the content of this book help them to improve their finances—or their lives—in some measurable way? These are all very important questions to ask before deciding on the price of any book, whether it’s a paperback or an eBook. Production costs are only a small part of this equation.
There are two schools of thought when it comes to pricing out an eBook (or any book, for that matter):
1. Some customers buy based on price
– they spent money on an eBook reader so they could save money on books
2. Some customers buy based on value
– they bought an eBook reader for the convenience (value) of having all their books in one place (i.e. so they don’t have to cart around lots of heavy books)
– they see value in the content of the book (i.e. it contains information and/or instructions that can help them to earn more money or better themselves/their lives in some measurable way) 
– they see the value in going paperless to help save trees
– they see the value in having the latest technology in their hands before anyone else has it (these people will always pay more to stay one step ahead of others)
These are just a few of the reasons why people may buy an eBook reader and/or an eBook. There are probably many more. Robert Plank provides a wonderful example of a time when value is definitely more important to a customer than price in his online article titled Sell Based on Value, Not Price:

“Let’s say you went to the store and saw two parachutes, side by side… one looks okay and costs 50 bucks. The parachute next to it looks HALF as good and costs 25 dollars. Which one do you choose?
The ‘regular’ $50 one, right?
Then you notice there’s also a 100 dollar parachute on the shelf. It comes with an extra emergency backup chute, a checklist for what you should check for before jumping out of an airplane, and a DVD with skydiving tutorials. You also get one free skydiving lesson included… and one free issue of ‘Skydiving Magazine.’ (Ok I’ll admit, I’ve taken this analogy way too far.)
NOW which parachute would you go for… the regular one or the fancy one?
You might be able to get by with the regular parachute, but you’d feel a lot better if you had that checklist, the DVD, the magazine, and the lesson.
People will pay more for handholding. Don’t try to sell the smallest amount for the lowest price, try to sell the most USEFUL stuff for the highest price.”
Do you see? While price is a consideration for some people in some situations, oftentimes customers buy based on perceived value first. (If value weren’t more important to some people than price, we wouldn’t see any BMWs on the road, would we?) 
As an author, it is important for you to evaluate your customers—and the value of your book’s content to those customers—before determining your eBook’s final retail price per unit. Market to them. Price your eBook based on who your customers are, why they buy, what they appreciate most (i.e. price or value)—not based simply on production costs or other authors’ prices. Remember, those other authors may be selling to an entirely different market than you.
PPG is a Canadian book publisher dedicated to serving Canadian authors. Visit our book publishing website to learn how you can publish your book today.