Data-Driven Pricing

Amazon introduced a new beta tool that uses their sales history to recommend what price nets you the most revenue for a given book. It takes into consideration genre, review history, sales history and more before spitting out its recommendation.

I decided to play with this a bit. I ran my horror novel, The Desolate, through the engine and it suggested I drop my price by a dollar to $2.99. I figured, why the hell not? So I did it.

It’s early, but results so far are good. Last month I sold three copies of The Desolate. This month I’ve already sold four copies, only six days into the month.

Looks like there might be something to this.

I then ran both of my Badlands novels through the engine. The first time I did it, the engine recommended I raise the price from $3.99 to $5.49. Today when I checked again it suggested I raise the price to $6.99!

Well, I’m not sure about that, data or not. But I know that’s my own personal bias showing through.

Today Hugh Howey posted findings by Data Guy that bear out a $4.99 price point as being effectively the best at moving books and earning royalty. The “sweet spot”, so to speak. Amazon uses this price point extensively on their own imprints and I know they’re not pricing based on which way the wind blows that day.

I’ve also read some theorizing that Amazon is now tweaking their algorithms to push higher-priced indie books. Books closer to $4.99 would do better than $.99 books, using this theory.

All this made me decide to get some balls and pull the trigger on $4.99 for both Badlands novels. No guts, no glory…right?

I think I’ll run this experiment through the end of the year, maybe even through Christmas, depending on how things go. As I go along, I’ll be able to compare year over year sales each month and see if the new pricing is working compared to last year.

Worst case, I change it back if it’s a bust. Best case, I increase my earnings and get more visibility for my book.

I’ll post again once some time has passed and I’ve had a chance to crunch the numbers. I need to post some of my numbers anyway. It’s been a while.

[Update 8/10/14: I actually dropped INTO THE BADLANDS back down to $3.99 because it’s the first book in a series. I want to provide less barrier to entry there. Subsequent books in the series are  planned at $4.99. I also plan on pricing my latest book THE CROSSOVER GENE at $4.99, after its initial promotional price run is over. See more in this follow up post.]

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