New Minimum Book Price of $4.99 (Or Free, Of Course!)
We’re changing the minimum dollar value for which Leanpub books can be sold.
In the past, you could sell a Leanpub book for free, or any price from $0.99 all the way up to $500.00.
With our change, you can sell a Leanpub book for free, or any price from $4.99 to $500.00.
This seems like a big change that will affect the way authors can experiment with book pricing, and we wanted to take this opportunity to explain what we’re doing.
(We say “seems like”, not “is”, since not many of our sales are between $0.99 and $4.99. Most sales are either free or over $4.99 — usually way over $4.99. The average price of a paid Leanpub book purchase is over $10.)
How to price books is an unanswered question in the self-publishing world. It depends on the nature of your project and your audience, what you’re trying to achieve, and many other factors, including established conventions, innovations, and changing customer expectations.
Here’s an interesting example of one approach from the self-publishing world: Goodreads, which is owned by Amazon, charges authors and publishers to give away books through special free-book promotions. This is how the change was reported in The Verge:
“The site is introducing two tiers for giveaways: a “standard” package, which will cost authors $119 to give away up to 100 copies; and a “premium” package, which will cost $599, but gives the author an “exclusive placement” on its Giveaways page. That’s only for a single giveaway campaign, however; if you’re marketing two books, you’ll have to pay again.” (Here’s a link to the original article.)
In a world where self-published authors will pay to give their books away for free, pricing is obviously tricky, and everyone who provides services to authors and publishers, from Leanpub to Amazon, needs to take a position on what’s best for authors.
Now, at Leanpub, we have always placed a high priority on a few things, including: 1) authors earning high royalties and letting readers know about it; 2) letting authors set their prices and letting readers choose what to pay; and 3) letting authors set a minimum price of free.
Essentially what we’re saying with this change is that authors who would otherwise set prices between $0.99 and $4.98 should be encouraged to look for higher margins on their lowest-priced sales.
For example, at our royalty rate of 90% minus 50 cents per sale, on a $0.99 sale, an author gets 39 cents, or a 39% overall royalty rate. But a $5.00 sale gets you $4.00, or an 80% royalty rate — more than double the margin. And it’s even better than that: $4.00 is $3.61 more than $0.39. Heck, it’s even better than that: $4.00 is more than 10x as much as $0.39, so you’d have to sell more than 10x as many books at $0.99 than you would at $5 to earn the same amount of money. (And if you’re just wanting to reach the largest number of readers, nothing beats a free minimum price to do that. Free minimum price books can also be very lucrative — some of our bestselling books, both by lifetime revenue and number of readers, have free minimum prices.)
Finally, this new $4.99 (or free) minimum price policy sends a message to readers about Leanpub: that it is a place for high-quality books. There is an old debate about how ebooks should be priced that we don’t want to get into here, but essentially we are taking the position that all authors, from tech book authors to romance authors to serial science fiction authors, should be sending the message that their books are worth at least $4.99. This is even true when a book with a free minimum price and, say, a $4.99 suggested price, is bought for free. Free is a special discount, but Leanpub books are premium things. A Leanpub book can be downloaded for free, or bought for $4.99 and up, but it can’t be bought for 99 cents. Free is value-neutral, and can even signal generosity, or that something is a gift — but 99 cents just signals that something is cheap.
Thank you for taking the time to read this explanation, and as always, thank you for being a Leanpub author!
[Note: Originally this post referred to a $5.00 new minimum non-free price, not $4.99. We changed to price to $4.99 based on feedback from Leanpub authors.]