Monthly Archives: August 2014

The War Over How to Price Ebooks: Kindle versus Hachette Book Group (Value-based Selling)

Kim Staflund: founder and publisher at Polished Publishing Group (PPG) and author of the PPG Publisher’s Blog

In addition to my book publishing background, I also worked in the world of print advertising sales for many years—a truly valuable experience for me on so many levels. Each of the companies I worked for were industry leaders within their own fields, and the greatest privilege I derived from working with them was a true understanding (and appreciation!) of the many benefits of value-based selling. I’m grateful to all of them for this education … thank you.

Excerpt from How to Publish a Bestselling Book … and Sell It WORLDWIDE Based on Value, Not Price!:

“…most people are already pretty comfortable with price-based selling (i.e., offering sales and discounts to try to undercut the competition’s price); therefore, we’re going to focus on value-based selling here, instead. It’s an important skill to master because, at the end of the day, anyone can sell on price. But here’s the biggest problem with that plan: if price is the only thing you’ve got, and then someone else with a similar offering comes in at a lower price than you can match, you’re done. You’re finished. You’ve got nowhere else to go. However, if you can learn how to sell based on perceived value right from the start, you’ll always be able to justify your price as it is. You can even increase that price down the road by adding even more value to your overall offering.”

How does this relate to Kindle and the Hachette Book Group? Well, as most people in the digital publishing industry are already aware, there is an ongoing battle between these two giants regarding how to price an ebook. And it’s a passionate war! It’s so passionate, in fact, that Kindle sent out a mass email to all its ebook publishers seeking support of its stance against Hachette, and containing the direct email address for Hachette’s CEO (ouch!), with the hopes we would all send him angry letters in support of Kindle.

In a nutshell, here is Kindle’s stance on how to price ebooks:

“Just ahead of World War II, there was a radical invention that shook the foundations of book publishing. It was the paperback book. This was a time when movie tickets cost 10 or 20 cents, and books cost $2.50. The new paperback cost 25 cents – it was ten times cheaper. Readers loved the paperback and millions of copies were sold in just the first year. With it being so inexpensive and with so many more people able to afford to buy and read books, you would think the literary establishment of the day would have celebrated the invention of the paperback, yes? Nope. Instead, they dug in and circled the wagons. They believed low cost paperbacks would destroy literary culture and harm the industry (not to mention their own bank accounts). Many bookstores refused to stock them, and the early paperback publishers had to use unconventional methods of distribution – places like newsstands and drugstores.…

…Well… history doesn’t repeat itself, but it does rhyme.

Fast forward to today, and it’s the e-book’s turn to be opposed by the literary establishment. Amazon and Hachette – a big US publisher and part of a $10 billion media conglomerate – are in the middle of a business dispute about e-books. We want lower e-book prices. Hachette does not. Many e-books are being released at $14.99 and even $19.99. That is unjustifiably high for an e-book.”

I replied to Kindle’s email and also cc’d Hachette’s CEO on that reply, at their request; but, perhaps, they were expecting a different answer than the one they got from me. I told them I completely disagree with them. I told them that when Kindle tries to control the price of an author’s ebook by saying is must be priced at $9.99 or lower, it is Kindle that is being unfair. For this reason, I won’t put my next book (the one named above) online in Kindle format. It will remain a paperback on the Amazon site along with various other sites, and an ebook on several other ebook sites such as Kobo.com; and it will be listed at $19.99 USD because that is the price I choose to sell it at. The content inside my book is definitely worth the higher price regardless of what format I’m selling it in. (On that note, for the avid Kindle authors out there who believe that a book sold online can only become a bestseller if it’s an ebook that is priced low or given away free of charge, think again. The POD paperback version of my book, How to Publish a Book in Canada . . . and Sell Enough Copies to Make a Profit!, became an Amazon.ca bestseller only a short month and a half after it was first published and was also listed as a bestseller in the Calgary Herald a short while later. The recommended retail price for that book is $19.99 USD.)

Let me put this into another context for you. Kindle’s stance that every single ebook should be priced at $9.99 or lower is the equivalent of saying that every single car should be priced at $20,000 or lower, whether it’s a Toyota Corolla or a BMW. That’s absurd, plain and simple.

Pricing a book is a very important component of your overall marketing campaign; and, you have to take many different things into consideration when you’re deciding on that retail price. You have to understand your demographic—your book’s target market—and create your marketing campaign around that. You also have to base your retail price on your own projected profit margins.

It will likely take you forever to make back the money it cost you to properly publish your book (the word “properly” referring to professional copy editing, design, and proofreading) if you set your retail price at $2.99 per copy. Not only that, but such a low price truly devalues your content. When you price a book that low, what you’re telling people is, “This is a cheap book full of cheap content.” It is what it is.

I was surprised to receive a reply from Hachette’s CEO. I figured my email to him would end up in some type of spam blocker along with the thousands of other emails he probably received after the crew at Kindle sent his email address to the world.

In a nutshell, here is Hachette’s stance on how to price ebooks:

“As a publisher, we work to bring a variety of great books to readers, in a variety of formats and prices. We know by experience that there is not one appropriate price for all ebooks, and that all ebooks do not belong in the same $9.99 box.”

Anyone who follows this blog and/or has read my books knows full well I don’t agree with everything the traditional publishers have to say. But I agree with this one wholeheartedly. Hachette understands value-based selling, and I think Kindle should rethink their stance on this. If Kindle truly wants to empower self-publishers in the sale of their own books, then let them set their own prices. Give them their freedom back.

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PPG is a professional book publisher dedicated to serving serious-minded authors around the world. Visit our group of websites today:

PPG Book Publishing Website: http://www.polishedpublishinggroup.com/
PPG Publisher’s Blog: http://blog.polishedpublishinggroup.com/

As a user of this website, you are authorized only to view, copy, print, and distribute the documents on this website so long as: one (1) the document is used for informational purposes only; and two (2) any copy of the document (or portion thereof) includes the following copyright notice: Copyright © 2009 to [current year] Polished Publishing Group (PPG). All rights reserved.

Coming soon to the PPG Publisher’s Blog…

Kim Staflund: founder and publisher at Polished Publishing Group (PPG) and author of the PPG Publisher’s Blog

I’ll begin by saying there are times when I’m just as guilty as the next person for not keeping up with my blogging. Life gets busy, as it certainly has for the Polished Publishing Group (PPG) as a whole over this past year. All that said, I’m very grateful for all this busy-ness. It means the company is alive and well, and that’s a wonderful thing.

On that note, I have to admit that busy-ness is only part of the issue here. As I learn this new WordPress blogging platform, I also find myself battling far more spam messages than I did through our previous blog provider … over 300 spam messages per week! Yikes! I’m learning which Plugins I need in place in order to combat this type of annoyance; and, once I have this all worked out, I’ll allow for our valued subscribers to begin commenting regularly again. I’ll also be posting more regular entries once again. Thank you in advance for your patience with this. (Life is a constant learning process, isn’t it?)

In any case, you can look forward to these three upcoming blog entries very soon:

And many, many more to come!

In the mean time, there are plenty of old (but still relevant!) blog entries to read through here regarding book reviews, editing, graphic design, indexing, copyright, et cetera; and you can also check out some of my newest sales and marketing advertorials on EzineArticles. Of course, you’re also encouraged to purchase one or both of these insightful books that will answer just about every single question you might ever have regarding how to write, publish, and sell a Book:

How to Publish a Book in Canada … and Sell Enough Copies to Make a Profit!

How to Publish a Bestselling Book … and Sell It Worldwide Based on Value, Not Price!

See you again soon! 🙂

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PPG is a professional book publisher dedicated to serving serious-minded authors around the world. Visit our group of websites today:

PPG Book Publishing Website: http://www.polishedpublishinggroup.com/
PPG Publisher’s Blog: http://blog.polishedpublishinggroup.com/

As a user of this website, you are authorized only to view, copy, print, and distribute the documents on this website so long as: one (1) the document is used for informational purposes only; and two (2) any copy of the document (or portion thereof) includes the following copyright notice: Copyright © 2009 to [current year] Polished Publishing Group (PPG). All rights reserved.