As my income from ebooks continues growing, I find myself paying more and more attention to the trends in the market. My income is not at the level where I think it could be so I can see a large market that I’m not fully going after yet.

I know some readers don’t enjoy reading ebooks, but the market for them is still going strong. Sometimes that can be hard to tell from the reports that you read. Depending on the source of ebook data, it can be very skewed.

  • Some studies only look at ebooks with an ISBN number: More and more e-books are being published without one, though, because it’s not needed. My physical books need one to make it easy for bookstores to use. My Kindle ebooks get an Amazon code for tracking through their system so I don’t need an ISBN, which saves me money.
  • Some studies include all ebooks, including free copies: Free copies will make your sales numbers increase, but they aren’t really sales in my mind. The author isn’t getting anything out of the transaction. Ebook sellers will separate free and paid bestsellers because a book has more value when a reader
  • Paid sales do include reduced-price ebooks: Selling a book at a reduced price will certainly bump up your sales and it can be argued that if you run a lower-price offer for a book that is normally sold at a higher price, the results will be somewhat skewed when comparing that title to other ones. However, the same is true for physical books that are sold at a discount in bookstores.

Another author introduced me to Authorearnings.com. It shows the most-complete picture I’ve seen of the market and breaks it out in ways that I understand.

The most-recent report that looks at the previous 23 months ending in February 2016 shows that indie-published ebooks account for nearly half of e-book paid sales while the ebooks from the big publishers has fallen off dramatically. This seems to dovetail with the news that Amazon gave the big publishers more control over the pricing of their titles.

From my experience, I’ve seen titles from my favorite big-name authors priced at $7.99 or higher. I am reluctant to pay that much for an ebook unless I really, really want it. This doesn’t happen much because I’ve got something like 40 ebooks on my reader that I haven’t read yet. Instead of buying that high-priced book, I put it on my wish list and check to see if it goes on sales. Meanwhile, I’ll read my other unread books. It’s a pile that never seems to shrink because I do buy books by new authors who have priced their books very competitively.

Ebooks should be priced lower than paperbacks since there are no physical costs to producing them. It’s not devaluing the product, it’s just pricing it reasonably. You wouldn’t expect to pay hardback prices for a paperback book. That’s because the production costs of a hardback are more than a paperback. The same thing holds true for ebooks vs. paperbacks or hardbacks.

This difference in pricing strategies between indie publishers and traditional publishers can be seen in this chart.

gross-sales-trend-20160110

From Authorearnings.com

Indie books sell for less and so they generate fewer overall dollars (45% of unit sales but only 25% of dollars). That fine because ebooks are very profitable for an indie author.

Selling a $25 hardback earns the author around $3.25 (15%) and selling an $8 paperback earns the author around 80 cents (10%).

An ebook priced at $8 will earn the indie author about $5.40 (68%). A traditionally published author will be lucky to earn $3.20 (40%) from the sale.

An indie author selling a $5 ebook will make around $3.40 (68%). That means indie authors can sell their books at a lower price and earn more per copy than traditionally published authors get from selling higher-priced ebook or even hardback books. In addition, the lower price of an indie ebook helps it sell more copies.

The reader gets a value-priced ebook and the author gets a higher royalty. There’s nothing wrong with that unless you’re a traditional publisher.

 

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