Calculating the Price of Ebooks

The publishing world is changing quickly, making it difficult for authors and publishers to accurately judge the value of an electronic book. When ebooks first became available, there were no numbers to crunch to calculate their price. Should they go for free because they’re not permanent (in the same sense as a printed copy), or should they be priced the same as their paper counterparts?

Now with several years of ebooks behind us, a general pricing by publishers is taking shape. It’s aided by the facts more readers have devices to read ebooks and ebooks are becoming more popular. Have you looked at the price of the ebook version of the recent paperback you just bought? I did. The paper copy cost about $15.00 whereas the ebook cost $10.99.

Browsing Chapters online, I found many ebooks selling for more than ten dollars, some more than $30. Wow. I never thought electronic books would sell for so much, but then, this is a whole new world for books, authors and publishers. They—we—are learning as we go.

When I published my first ebook, Mystery Light in Cranberry Cove, in 2010, I believed $2.99 was a fair price. I still think it is because it’s a youth (8-12) novel containing about 30,000 words.

For the past six months, I wondered what I should price my upcoming fantasy novel, Shadows in the Stone. It’s just over 127,000 words. It’s not something I whipped up in a few months; it took a few years of writing, rewriting, editing, applying the ideas and corrections of other writers, more revising and eventually the services of a professional editor to arrive at the end. It went through the same stages as the average novel selling at a book store.

Shadows in the Stone - Diane Lynn McGyver
Coming this May in ebook format: $6.99

And I believe Shadows in the Stone is a great story with memorable characters. That’s important for me, as an author, to believe in my story. And I do.

The question I’m left with is: What would a traditional publisher charge for an ebook of this quality, size and genre? From what I’ve seen $10.99.

But I’m not a traditional publisher; I’m a freelance novelist. I don’t have the overhead costs associated with big companies, so I don’t have to charge as much. Still, I have the cost of editing services and a program I purchased to make formatting into Kindle a breeze. I’ll need to sell almost 100 ebooks (at the price I’ve chosen minus fees from the retailer) to cover these costs before I even see a hint of payment for my time, paper, ink and various other items used to create this book. But I’m thinking long term…eventually I’ll see some sort of profit in the years to come.

I believe the free to 99 cent market for good, solid fiction and nonfiction books is over. There are two main reasons for this. The first is that a writer can’t make a living writing books for that price. The second is that readers have come to think the bargain bin—free to 99 cents—contains poor quality books. If you want to be taken seriously as a writer and not thought of as bargain garbage, don’t price your full-length books—the ones you slaved over for months, perhaps years—at or below a dollar. (Short stories can still be sold at 99 cents.)

From what I’ve read and experienced, there are three reasons why someone would price a full-length novel (or nonfiction book) for 99 cents or free:

1) the writing is poor, and the author knows this

2) the book is the first in a series or writer’s career, and it’s placed at a low price to attract readers to their other books (more about this below; 99 cents is still too low as far as I’m concerned)

3) the author lacks self-confidence in their book and doesn’t realise the true value of it.

The fourth reason doesn’t count for authors who take their writing seriously and want to someday make a living at writing: I just want my book to be downloaded by as many people as possible, so free is great!

So what will I price my ebook? $6.99

I came to this amount from reading several articles on the Internet regarding ebook pricing and by looking at the ebooks available online which seemed similar to mine. Of course, they were priced higher, but as I mentioned, I don’t have the expenses of a large company.

A website which provides a lot of information on self-publishing is Dean Wesley Smith’s ( There, you’ll learn the average ebook price is set at $8.60.

So don’t be concerned with pricing a full-length novel (50,000 words and up) between $5.99 and $7.99…people are already doing it…and readers are buying them.

Perhaps you won’t sell a hundred books your first week or your first month, but remember, you’re in this for the long haul. Look two years in the future, not two months.

Pricing books fairly in the beginning gives the freelance novelist room to move. If they want to put their book on sale, they can drop it by $2 and still make a wee bit of money. The only type of sale you can have on a book priced at 99 cents is FREE! And free books have nowhere to go.

When the second book in The Castle Keepers series is released later this year, one of my promotions will be to offer the first book at a discounted price for a short time. This will provide readers with the ability to snatch the first book for a great price (probably half price).

Marketing like this allows the publisher to gain an audience who are more likely to purchase the second book in a series at the regular price after reading the first book.

Don’t believe the author gets all this money. They don’t. Every time a book sells on Chapters, the company (Chapters) gets 40% of the listed price, leaving the author with 60%. Whether I publish with Smashwords, Kindle or other ebook store, I lose a percentage off the cover price. That’s business.

I’m often told this ration doesn’t sound fair. All Chapters does is post your book information and they get 40%. Well, yes, but not exactly. Chapters-Indigo lists the book, is the store front for your product and handles all the money exchange. You simply get paid for the sales.

If another alternative is considered—the traditional publishing path—you, the author, gets a maximum of 10% (probably more like 8%, less for ebooks) per sale. This means, the author of a $16.99 paperback gets $1.70 per sale. Compare that with the $4.19 generated from a $6.99 ebook published by a freelance novelist.

Gee, $1.70 or $4.19…I wonder.

Which do you think is the better deal for the author?

It might not be fair that Chapters gets $2.80 for every sale of a $6.99 book, but as I tell my kids…life isn’t fair. Get used to it.

Have you bought an ebook lately? How much did you pay? Please, note the word count and genre (fiction, nonfiction; fantasy, romance, mystery) to give us a better perspective on what you received.

6 thoughts on “Calculating the Price of Ebooks

  1. Thanks for the info Diane…this is good to know as I am positive I am going to upload ‘Sugar Bugs’ to Create Space…so I will keep this post in mind 🙂

    Thanks again


    • You’re welcome, Mindy. When it comes to CreateSpace, that’s a papercopy, so I would price the book the same as any other papercopy. “Shadows in the Stone” on CreateSpace is priced at $14.99.

      Thanks for commenting.


  2. Interesting and thanks for sharing. You’ve confirmed my gut instinct – I plan on pricing my novel ‘The Prince’s Man’ at £3.99: fairly comparative to your choice. Like yours, mine is the first in a trilogy, its 127K words long (now there’s a coincidence!), and it took several years of work to write and polish. It’s good enough – it was taken on by the first agent I approached – but it wasn’t ‘on trend’ for the publishers so failed to sell. I’m not prepared to give it away, and as I have plenty more planned and another mostly written, I’m in this for the long haul.
    My non-fiction books, traditionally published hardbacks, paid out an advance, but even after 3 years and over 3K sales, they still haven’t earned back the advance and I make my best income from them by selling them myself to clients and at horse shows.
    I look forward to reading Shadows in the Stone.


    • Wow, that that is a coincidence. 127,000 is such a random number.

      I did a lot of back and forth with the price. Time will tell if it pays off (pun intended). The wonderful thing about pricing is if the trend for ebooks go up, we can rise it; if the price goes down, we can adjust it accordingly.

      I’m glad I confirmed your gut feeling; it means that my gut feeling is also right.

      Thanks, Deborah.


  3. Excellent info. I will look to your site if I ever get the point of publishing. And all the best with your book! Will it work with e-readers like google?


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