Famous Last Words: The Tricky Business of Setting Prices
Incidentally, a Kindle order is a one-off sale; it's either in my Kindle or in the private electronic library that Amazon maintains for me. I can't resell or give it away. Six months later, my brother-in-law gave me his old copy of "Game Change," which I read and then left with the folks at The Book Trader in Philadelphia, who would sell it to somebody else. My brother-in-law's copy will have been read by at least three different people.
Book publishers also have their knickers in a twist over the low price of e-books—averaging $9.99. A book is worth more than that, they argue. No it isn't, because it is no longer a book—no paper, no printing, no binding, no shipping, no shipping back to the publisher and no reshipping to a landfill. (Forty percent of all hardcover books are returned—destroying profitability and turning the book publishing industry into a train wreck.) This one-pound thing has been reduced to a blip of electricity and $9.99 would be gorgeously profitable split three ways: $3.33 each for author, publisher and bookseller, with zero cost of goods sold.
So what is the secret of setting prices? Put yourself inside the head of the buyer. Think how he thinks. Feel what he feels. What would you pay for this thing? Would a premium or two sweeten the deal for you?
"The right offer should be so attractive," said the great direct marketing genius Claude Hopkins, "that only a lunatic would say 'no.' "
Denny Hatch is a freelance direct marketing consultant and copywriter, and author of the email newsletter, Denny Hatch's Business Common Sense. Visit him at www.businesscommonsense.com or www.dennyhatch.com, or contact him via email at firstname.lastname@example.org.