Pricing is not an exact science, but there are some formulas and guidelines you can refer to when setting a price for your book.
One element of your price is the cost of production. But remember that you are not selling paper, you are selling the information or experience readers receive when they read your book.
Consider how you will sell the book, and what your marketing expenses will be. What discounts will you have to offer? Or choose to offer? How much do other books in your genre sell for? What is the perceived value of the information and the package it is in?
Pricing products and services involves much more art than science. There are so many variables to pricing that there can’t be a magic formula telling you exactly how much to charge in every given situation. However, you can rely on some guidelines to help you set your prices.
One rule of thumb to keep in mind when pricing books is that you should charge at least 8 to 10 times your cost of production. If a book costs you $1.50 to produce, can you price it at least $11.95? Better yet, can you charge $14.95 or more? This assumes that you are producing your books in quantity, and that you are offering discounts to resellers, wholesalers, etc. Your cost per copy may not allow you to charge 8 to 10 times cost if, for example, you are producing perfect bound books in small quantities.
Rather than basing your prices on the cost of producing your materials, price according to the value. It is important to remember that you are not selling paper, tape or other materials–you are selling the information contained in your book, report, audio tape, etc. What is the information worth to your customers, and how much will they be willing to pay for it? An item may cost you $15 to produce, yet be worth every penny of $495.
What are your competitors charging for similar products? You can charge more if your product has a higher perceived value, but not if your products are seen as the same as something available at a lower price.
Consider your marketing costs. Will you have to give discounts of 25%, 40%, 55% or more to retailers or distributors? Make sure you can do so and still be profitable. If you plan to sell through direct mail or two-step classified ads, your marketing cost may be $10 – $20 for each book you sell. Obviously, you won’t be profitable selling a book for $11.95 this way.
You also have to consider the value of your time in creating and marketing the book, so make sure your pricing leaves room to recover payment for your time.
Copyright Cathy Stucker.