Fiction Rules the E-book Market – Says Who Exactly?

As a result of poor form in e-publishing by requiring users to login to comment, below is a response to the following recent Publisher’s Weekly article stating that fiction rules e-book sales (in both units and dollars): Fiction Rules E-books. I highly encourage you to read the article and see the data for yourself before reading my comments below.

Has anybody contacted the major traditional e-book sales platforms for nonfiction e-books before releasing stats like these? Clickbank? E-junkie? (That’s just to name two of the more well-known ones.) Where did these survey respondents come from? That clearly influences their book-buying habits and what markets they truly represent.

Even if fiction sells more in terms of units due to traditionally lower pricing and their mass appeal and presence on sites like Amazon, nonfiction e-books published often sell for significantly more in outlets that don’t drive down prices because of their highly targeted niches. That could have a very real impact on the financials of which bring in more (not even counting the fact that many nonfiction e-books are still sold privately via author and business websites which you couldn’t easily track).

I think it’s important to acknowledge that you don’t really have the full picture before releasing statistics that make it sound like you’re truly speaking to an entire publishing model when that isn’t usually the case. And if you really do believe that your statistics represent the entire e-book industry, then there should be adequate background data on methodology to back that up included with any statistics publicly released, knowing that others will share them without purchasing the full report.

I’m just curious how the study accounted for these types of e-book sales which are usually targeted more to business audiences than your average book-buyer. I didn’t see any information about this other than last year’s report release noting info simply came from online survey respondents — not how those people were targeted or approached to participate in said survey.

Note that I’m not saying the survey didn’t include this information, but rather that (as usual with these kinds of industry reports that benefit by being able to publicize specific trends) an acknowledgement of how the survey was really conducted is quite absent. When you publish any excerpt from a survey in this way to promote that survey or report, that information needs to be included and anyone passing along that information in a responsible way needs to consider and ask those kinds of questions. An update clarifying that respondent targeting issue would be a very welcome addition to the PW stats release.

Why Most of My E-books Won’t be Sold on Amazon

Despite the Amazon craze (and Smashwords and all the other shiny new e-book selling tools and platforms), the majority of the e-books I release will never be sold through such marketplaces. That’s because for years I’ve focused on writing “information product” e-books — which are highly profitable, are what I usually refer to here as “traditional e-books,” and are often ignored by today’s e-book newcomers and those hyping e-books in the publishing industry.

Why I Say “No Thanks” to Amazon

Amazon isn’t an ideal place to sell these types of e-books for a few reasons:

• The overall market there is too generic.
• Buyers in large marketplaces mistakenly compare niche markets based on price (if a novel sells for $.99 a $29 e-book won’t even be considered by many there).
• Information product e-books should be thought of as almost mini-courses  rather than e-books in a broader sense. Lumping them in with other types of e-books risks hurting sales as much as potentially helping them.
• The best way to sell this type of e-book is by targeting a very specific niche audience and building your own reach or platform. I already have a significant audience in the niches where I publish most e-books, and you need more trust to sell these higher priced products. You do that better through your own site than through marketplaces like Amazon. That said, if an e-book author didn’t build a platform first and they don’t have significant reach in their niche yet, then Amazon might be a fine option for their early information product e-books.
• There are already better marketplaces and distribution tools for information product e-books (E-junkie.com is my preference although ClickBank.com is another longstanding leader in e-book sales). This is especially true if you want to promote your e-book through an affiliate program as Amazon’s affiliate program generally can’t compare to those through these other types of services (you set the affiliate rates, attracting more prominent affiliates who sometimes only promote products for a larger cut than the minuscule one Amazon offers).
• While some people dismiss these other e-book marketplaces because they don’t like some of the hyped up marketing-oriented (read: “spammy”) e-books sold there, I find there are far more crap titles released on Amazon and similar sites. That’s less of a reason to go out and try these other options, and more a dismissal of a typical excuse for not doing so. If you’re worried about who you associate with based on how you sell your e-books, stop. They each have their fair share of bad apples.

Where Amazon Has a Place

I don’t try to hide the fact that I’m not a fan of Amazon’s recent hijacking of the e-publishing industry. But that doesn’t mean I dismiss them as a bad option all-around. There are certainly exceptions. For example:

• When I release my first novel and my nonfiction book (not an “information product” type of book), Amazon will give me a little more reach in those relevant markets. That’s because these books will appeal to a somewhat broader audience than the super-targeted information product varieties do.
• I think these newer e-book marketplaces are a good option for those just getting their feet wet who don’t yet have a strong reach in their target market.
• If you plan to price competitively with the style of e-books sold there, the marketplaces make sense as a part of your marketing plan.
• I’d say any book released in both print and e-book formats should probably be included there for sale — letting buyers choose the versions they want rather than forcing them to visit two or three different sites to buy a copy of your book.
• If you already have strong e-book sales independently, there’s no harm in trying to increase those numbers even more by making the e-books available more widely. For higher priced information product e-books in extremely narrow niches, this isn’t likely to skyrocket your numbers and may not be worth the time. But if you have a lower to mid-range information product e-book and it might appeal to new verticals you hadn’t considered before, it might help you reach those folks without changing your general Web presence (like a freelance e-book targeting writers that might also sell well with freelance designers and other similar professionals).
• Some information product e-books are given away for free as marketing tools. Personally I use these as a form of link bait — offering something that attracts natural links. So it doesn’t make sense to put them on Amazon. That would also be the case if you use the free e-books to solicit email list subscriptions. But if you give it away solely to get your name out there in your niche in an effort to attract business of another kind, it might make perfect sense to release your e-books for free on Amazon and other services. [Edit: You generally cannot release an e-book for free on Amazon without their permission. You can price only as low as 99 cents. See the link in the comments below for more info, or check out other options like the Apple store or Smashwords.]

Amazon has its place, but it’s not the be all and end all in e-book sales. That’s especially true when we talk about traditional e-books or “information product” e-books. Have you written e-books of this kind? How do you prefer to release them? If you haven’t, have you considered it? What would be your goal out of that kind of e-book — more promoting your business or yourself, or to make money directly since they’re often priced higher due to the high value action-oriented information they generally contain? Share your thoughts in the comments below.

Revisiting 99 Cent E-book Pricing

This post was intended to be a comment on Joanna Penn’s recent article explaining why she chose the 99-cent price point for her novel. My thoughts are directed at a comment she posted rather than the article itself. But my thoughts on the issue were extensive enough that I decided they deserved their own post. I think I should say up front that I have nothing against Penn or her decision on e-book pricing and nothing in this post is meant to be a personal attack. I’ve read the blog on and off and have been aware of her for quite a while because she has a strong presence in the writer community in general. And I have no reason to think she had any ill intentions whatsoever.

That said, in a comment she mentioned two things that are pretty big pet peeves of mine when it comes to advice and insights I frequently see shared with new indie authors regarding e-books.

So first, here is Penn’s comment that I want to respond to:

Hi Adam,
as briefly mentioned above, you’ve got to think about the actual income for the book, not per sale.
John Locke is selling a book every 7 seconds for 99 cents each, so the return is not 99 cents, but thousands – and check out Konrath’s numbers. You are not getting 99 cents for your hard work, you need to multiply that by your sales FOREVER! These books never go out of print.

Note: This post is not me telling you that you shouldn’t price your e-book at 99 cents. What any other author chooses to charge is of little concern to me. If you can responsibly do the market research and 99 cents feels like the right price to you in that it will cover the cost of contractors, production, and the value of the time invested and continue to earn beyond that, then go for it. If you’re more than happy to attract hoarders in addition to real readers because you’ll take any dollar given to you with a grin, then again, go for it. If you’re publishing your e-book as a hobby and are in it for the joy of it or to get your creative juices flowing, and you don’t care much about the money, go for it. Not all authors are looking for the same thing, and it’s up to you to decide what to price your e-books. (If you want to read more on the 99 cent pricing debate, you can take a look at our past interview with Zoe Winters about it and the resulting discussion.)

The comment left me with two different concerns beyond the usual 99 cent rate debate:

1. Stories of exceptions are mentioned as though they’re the rule. This is a much wider concern I have about what new indie publishers are told to expect than just Penn’s comment.
2. There’s an implication that because there’s no limiting print process, the lifespan of an e-book is indefinite (in theory, okay; in practice, not so much).

But So-and-So Made $X,XXX,XXX…

Your average indie author is not Locke, Konrath, or Hocking. Nor do most have Penn’s existing platform. There will be exceptions to every rule. And there will be countless who follow expecting to be the next, and most of them will be disappointed if that’s the level of success they’re hoping for. This happens every time the “next big thing” comes around in pretty much every industry, especially on the Web.

That’s not to say a brand new indie author should expect that they won’t succeed. But there are different levels of success. If you have the existing platform with a built-in demand for your e-book in the five figure range, that’s awesome! You can price low and still expect to earn quite a bit through your book. If you have a solid readership from past book sales (with or without a traditional publisher’s backing) that’s great too. But most first-time authors I meet who are considering e-publishing because of all of the hype around Amazon don’t have these things going for them. And there’s something I tell my audience of writers on the freelance side regularly that I think needs to be repeated here:

Never expect to be the exception to the rule.

Yes, you can succeed in indie publishing. People have been doing it for decades and that doesn’t look like it’s going to stop any time soon. But you need to keep your expectations reasonable given what you have to work with on an individual basis, and you need to be prepared to work your ass off. Pricing alone will not carry most books. There’s a reason pricing is just one aspect of the larger marketing mix (one of the classic “4 Ps”).

When a new tactic is tried, there will usually be successes for the early birds. But eventually you run into the issue of saturation where you need to work even harder to make someone else’s previous tactics work for you. It’s not impossible, but there’s much more to it than “So and so made a bundle this way, so I will too.”

My own preference is to look at the long-term market realities given my specific target markets. And yours will likely be different buyers with different expectations and available in different numbers. Writing in a huge niche means you might be able to get away with low pricing indefinitely or as a lead-in tactic because you can sell a large number of copies. If you write for a relatively small niche, you can’t assume that you can mimic the success of someone appealing to a much broader audience by doing the same things. This is why “information product” e-books can be extremely profitable and sell well in their niches for several times your typical book price — niche markets are well-targeted. Just as that high price strategy won’t likely work for most novels, the low-ball option won’t automatically work for you either.

Do you really want to know if 99 cent e-book pricing could be a good option for you? Then please, please, please do the research first and go beyond the “so-and-so” stories. Look at typical conversion rates of major online retailers like Amazon. Install analytics tools that will let you track conversions of visitors to your site who click links and even bother to visit your e-book’s page on Amazon.com. And remember, their more than 20% overall conversion rate — based on 2009 stats — is sitewide and includes people who visit already knowing what they want. Yours will depend on how many targeted buyers you can actually get to your page in the first place.

Saying “there are three million people who might have an interest in my book” doesn’t cut it. How many of them can you really reach? Now how many of them can you get to your sales page (on Amazon, another bookstore, your own site’s sale page, etc.)? Now you can try to estimate conversions. If you have no audience waiting on you and you don’t have solid marketing and PR skills, that initial reach can severely limit your success. You can hope against hope that because X, Y, and Z did it that you will too. Or you can be realistic about the things that helped them — existing audiences, timing, etc. — and you can figure out the best way to sell your book, understanding it likely won’t be the same as theirs.

Yes, E-books Go “Out of Print”

It’s also important to remember that e-book sales do not go on forever. E-publishing is not new. Most e-books sold successfuly five years ago seem to have dropped off the face of the earth now with a few exceptions (Aaron Wall’s SEOBook being one example, although I believe even that is only available through a subscription service now).

There is an equivalent to being out of print that many newer e-publishers don’t seem to understand early on. Word of mouth is great, but it doesn’t last forever with no further effort on your part. When you stop marketing, your books eventually will stop selling.

Most e-book authors I know who have been at this for years either cease to update their products (in nonfiction e-books where it’s often vital) or they move on to other e-books or projects that can bring in even more money. Product A borders on death as soon as it’s no longer a sensible business decision when compared to investing the same time and resources in the profit potential of Product B.

Will there be exceptions? As always, yes. Some people will build a huge name for themselves and appeal to such a large audience that their e-books will continually sell for many years to come (or until the next interesting technology comes along and they don’t want to bother to upgrade their past work). But again, it’s not smart to expect to be the exception. You should prepare for the long-haul instead of assuming sales will continue to accrue indefinitely.

This argument is very much like one that has taken place for years on the freelance side of the writing profession. In that case it revolves around residual earnings sites. Writers would claim it was okay that they weren’t paid up front because they could earn even more by letting their articles sit on these sites for years. Some had more foresight and found more productive uses of their time. A few were the exception and made out really well with them. And others sat by surprised when these residual earnings sites closed down, were sold off, or had payment models changed. Why? The market became saturated. There were too many sites doing the same thing. There weren’t enough ad dollars to support them all anymore. There were quality issues associated with them that hurt the larger brands. Things had to change.

And things will also change in indie publishing. They usually do when people start thinking more about the long haul than what might work right now. I think the problem now is that a lot of people talking about indie publishing and e-books specifically haven’t figured out the long haul yet. Those who came in with the Amazon e-book boom are still relatively new to e-publishing. And there is absolutely nothing wrong with that. I think the success some have seen is both admirable and inspirational. But those who have been at this a while know that “forever” isn’t as long as we might like it to be when it comes to e-book sales. You either release new products or you update your existing product or marketing plan to attract new readers.

It can be an “update or die” type of work, and sales do thin out over time. That’s why people keep releasing more. You can count on continuing sales as long as you continue to write. But counting on an e-book to indefinitely bring in income and using that to convince people to price extremely low? That’s when I get really concerned about what new indie authors are are taught before making the leap for themselves.

It’s one thing not to be concerned about the money as an indie publisher. If you can say that, then that’s wonderful for you. But it should be a pretty big consideration when making the case of low pricing to other indie authors while on the other hand also justifying it with third party stories of financial success. Is more money the reason to do it? Or that you don’t care about money right now and are happy with the long-term trickle-in at a lower price point? I don’t see how you can make a logical case for something based on those two extremes. I have to imagine the reality for most falls somewhere in between.

How to Market an E-book

People want to publish e-books (of the .pdf variety) for many reasons — to promote their business, share information or tutorials too long for traditional Web publishing, or just to share a story for example. But no matter what reason they have for wanting to write an e-book, many come to the same question in the end: “How can I market my e-book?” And in response they get the same old solutions:

• Launch an affiliate program.
• Write a long sales letter.
• Get testimonials.
• Submit to article directories.
• Start a newsletter.
• Use pay-per-click ads or other online advertising.

These tactics are all fine and dandy. They won’t all work for all e-books. But many do work well, and have for years. The problem, though, is largely in the question. People treat e-books as some completely unique product that needs to be marketed in some super-special way that’s different that everything else out there. But the reality is this:

So if you’re trying to market an e-book you’ve written, begin by getting out of that mindframe and accepting two things:

1. An e-book can be marketed very much like a book in print.
2. An e-book’s website  (or sales page) can be marketed just like any other website or blog.

There’s no magic formula for e-book marketing. Just take traditional marketing methods and tailor the tactics to your needs, abilities, and target audience. For example, here are a few book publicity tactics you can use to market your e-book, whether it’s a novel or a more traditional nonfiction “information product.”

• Book Tours – Instead of a traditional book tour, launch a virtual book tour hitting the blog circuit.
• Book Reviews – While top book reviewers may not want to make time to review an e-book, plenty of bloggers and influential people in your niche would probably love to. Send out advance review copies just as you would with a print book.
• Press Releases – Send out an e-book “launch” news release and a release for any events you may hold to promote the e-book.
• Seminars – You can still hold seminars (or better yet, webinars and e-courses) to promote an e-book, just as an author of a print book might do.

If you treat your e-book as professionally as you would a print title, there’s no reason why you can’t follow tried and true book publicity and marketing strategies to attract more sales and recognition. The same goes for your e-book’s website. Look at what authors and publishers are doing to promote their print books online, and tailor the tactics to meet your needs (set up a social networking profile, blog on the subject of your e-book, etc.). Better yet, learn from industries that tend to adapt even better to Web-based promotions, such as software companies. Authors of e-books and print books alike can still learn a lot about successfully promoting digital products (or promoting physical products to an online audience).

Zoe Winters on E-book Pricing: Does Low-balling Attract the Wrong Kind of Reader?

As an e-book publisher should your rankings be based on your low-ball rates or on the merit of your work? Coming from the traditional side of e-book publishing, I’m a fan of the latter. I believe in premium pricing when you put out quality work. And I believe in letting your individual market help determine your rates — not Amazon or the general masses.

Nonfiction e-books are my specialty right now (although I’m working on my first novel). You’ll never see me engage in the Amazon-induced pricing wars because I’m a big believer in the quality of your customers over simple quantity (although having both doesn’t hurt).

I’ve made it work for me quite well, selling e-books at price points of $9.97, $17, and $37. Because I have a strong promotional background, had a solid platform already built when each e-book was published and intimately knew my target markets, this was a successful strategy for me. Then again, I can’t speak to the fiction side. There’s a big difference between selling e-books for entertainment versus selling nonfiction to readers who see it as an investment because they’ll get a real financial return from the information you provide.

Knowing I’ll have to price my own novels in time, the fiction side of the e-book pricing conversation is of interest to me. I saw Zoe Winters talking about this very issue over on the Keyboard Hussy blog, and just had to pick her brain. She kindly agreed to an interview. And here’s what she had to say.

Jenn: What convinced you to initially price your e-books at 99 cents and stick with that price for a while?

Zoe: I was basically trying to build audience. I thought it was important to get as high as possible in the Kindle store so that when the wave hit, I would be well-positioned. I did do pretty well, and in May 2010 all three of my novellas got into the top 200 of the Kindle store and stayed there for six weeks. Mated got all the way up to 105, but it was too hard to maintain those types of sales, and the money was crap (for all the copies I was selling). Though, it felt like a lot of money at the time, since I’d never made that much in a month before doing anything (sad, I know).

Jenn: What triggered your first e-book price increase, and how did you choose that price point?

Zoe: I realized I couldn’t maintain decent earnings at that price because although I sold a little over 6,500 ebooks in June of last year, that’s just hard to maintain. If you aren’t the ebook flavor of the month, it’s just not sustainable for most people. I started raising my prices, partly in response to the realization that to make a living I needed higher prices. I also got tired of people who read Kept at 99 cents and complained that it should be free because it was “short”.  That was ultimately what made me raise prices when I did. That attitude from some readers was the last straw for me. I noticed that 99 cents drew some unappealing customers.

I’m not saying everybody who buys 99 cent ebooks is “bad”, but, there is a big number of readers who buy at 99 cents just to hoard. They don’t read, they just buy thinking maybe they’ll “get around to it”. But they didn’t invest enough money in it to really care if they ever read it or not. And many who do read, act “entitled”. A strange but true rule of business is that the customers paying the least amount for a product or service always complain the most and try to squeeze more out of you. I really don’t want to participate in the Walmartizing of literature or cater to that audience.

Zoe Winters' Becoming an Indie Author

Then there was the fact that I wanted to cultivate a loyal following and most people who expect ebooks to be 99 cents aren’t that loyal. They’re shopping by price as their main deciding factor. I just don’t want those readers. Anybody that price sensitive just isn’t the demographic I’m going after. (And there are plenty of readers who pay 99 cents who would gladly pay more, but when you’re priced at 99 cents, there is no way to separate that demographic out.)

I want people willing to invest in my work and in me because I work hard at what I do. And I want readers who respect that. I made my novellas all $2.99 because I felt that was a reasonable price point. I raised Blood Lust to 3.95 in the effort to slowly ease it up to it’s final price point of $4.95. Eventually it went up to $4.95 as did Save My Soul. With my novels I intend to do a $2.99 intro price for the fans/newsletter subscribers, but raise up to the full price as soon as possible with each book.

Jenn: If you could start over again and price your e-books differently from the beginning, would you? If so, how would you handle things differently?

Zoe: I’m really not sure. Right now I think 99 cents isn’t a great idea. I feel like it drives the prices down, and it’s hurting everybody. I’m not sure 99 cents has a huge positive result for most authors right now anyway. There are plenty of indies priced at 99 cents who are hanging out in the 200,000′s in sales ranking on the Kindle store. So clearly price isn’t the only factor of why people buy.

Often what determines whether or not someone buys a book is cover, description, if it was recommended to them, etc. Your book can be 99 cents, but someone still has to find it. Then, most of the types of readers you want, will have to get over their fear that it is “probably crap”. Most of the loyal long haul type of fans are going to look at 99 cents and be suspicious. Why not just price higher, avoid suspicion, and make more money?

I also know several authors have started at higher prices and done well, like Michael J. Sullivan.

But I don’t know. I can’t really say it would be better for me to do something different “at that time” because there weren’t that many people indie publishing when I started. 99 cent ebooks were actually a strategy at that point. It was a totally different landscape than it is now. I think it’s a bad idea now in general and for me, but that’s now. I can’t go back in time, and even if I could, doing things differently may or may not have been beneficial.

Jenn: Do you think low pricing schemes for e-books will prove to be sustainable in the long run? Why or why not?

Zoe Winters' Save My Soul

Zoe: I think what will happen is many indies will train a lot of readers into entitlement and “expecting” super cheap ebooks, which will make normal prices like $4.95 seem like “too much”. I think almost no one can make a solid living with 99 cent ebooks because you have to have huge volume for that. When I sold 6,500 ebooks in June 2010, that was around $2,300. Well, most people can’t live on that, especially after you take out Uncle Sam’s cut.

I’m not saying that everybody or even most indies will be able to make a living anyway, but if it’s your goal, 99 cents might not be the way to go. You only have to sell 677 ebooks in a month to make that same $2,300 if you are selling at $4.95. And while that may still be hard for a lot of indies to accomplish, especially if they don’t have a backlist, the math just doesn’t favor 99 cent ebooks for anyone hoping to make a living. And I think writers should be able to make a living. Or at least have the potential to do it. If everything goes to 99 cents, I just don’t see that happening. I see publishing becoming little more than a hobby for most.

Jenn: What differences have you seen, if any, in audience response to your e-books after prices were raised?

Zoe: I think the readers I attract now are truly interested in MY work, and not just a bargain. I feel like the readers I’m attracting are the types of readers who are going to be passionate about the work and tell other people. I also think that people don’t expect it to “probably suck anyway” if it’s $4.95. That negative assumption with 99 cents devalues the work because human beings are psychologically wired to get the experience they expect with many things. Fiction is one of those things. Reading fiction is a totally subjective experience, so any attitude you bring in up front about a book or author is going to color your experience. So to those who think 99 cents doesn’t devalue the work, think about the people who will click “buy” but think: “Well, it’s only 99 cents. It’ll probably suck, but who can pass that bargain up?”

That’s just not a thought I want a single one of my readers to ever have. At the higher price point, people just expect it to be good. And I work hard to deliver on that expectation.

I’d like to thank Zoe Winters for taking the time to share her thoughts on e-book pricing. Check out her author site to buy her books or stop her blog to say “hi.”