Amazon sent me a letter about the brouhaha
surround their disagreement with the publisher Hatchette. I am reprinting this
quote from that letter because I think this elastic pricing concept is one many authors miss and understanding it might make them feel more comfortable with many kinds of book promotion and marketing that I cover in my multi award-winning Frugal Book Promoter:
" . . .e-books pricing
is highly elastic. This means that when the price goes down, customers buy much
more. We've quantified the price elasticity of e-books from repeated
measurements across many titles. For every copy an e-book would sell at $14.99,
it would sell 1.74 copies if priced at $9.99. So, for example, if customers
would buy 100,000 copies of a particular e-book at $14.99, then customers would
buy 174,000 copies of that same e-book at $9.99. Total revenue at $14.99 would
be $1,499,000. Total revenue at $9.99 is $1,738,000. The important thing to
note here is that the lower price is good for all parties involved: the
customer is paying 33% less and the author is getting a royalty check 16%
larger and being read by an audience that’s 74% larger. The pie is simply
bigger."
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Carolyn Howard-Johnson, author of This Is the Place; Harkening: A Collection of Stories Remembered; Tracings, a chapbook of poetry; and how to books for writers including the award-winning second edition of, The Frugal Book Promoter: How to get nearly free publicity on your own or by partnering with your publisher; The Frugal Editor: Put Your Best Book Forward to Avoid Humiliation and Ensure Success; and Great Little Last Minute Editing Tips for Writers . The Great First Impression Book Proposal is her newest booklet for writers. She has three FRUGAL books for retailers including A Retailer’s Guide to Frugal In-Store Promotions: How To Increase Profits and Spit in the Eyes of Economic Downturns with Thrifty Events and Sales Techniques. Some of her other blogs are TheNewBookReview.blogspot.com, a blog where authors can recycle their favorite reviews. She also blogs at all things editing, grammar, formatting and more at The Frugal, Smart and Tuned-In Editor .
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