How to Price Kindle eBooks – KDP Royalties and Pricing Explained

Kindle Ebook Pricing – Healthy Market Competition Will Position Amazon Kindle as #1

You may have noticed that the price of Kindle books published by mainstream publishing houses is substantially higher than self published books.

This is mainly due to restrictions these publishers put on competitive pricing for their book. Since the recent e-publishing revolution much attention has turned to the pricing of eBooks online.

In March the US government began pressuring publishers to adjust pricing policy on E-Books

While many online self publishing platforms such as the Amazon Kindle encourage self publishers to price their Kindle eBooks below $9.99  by awarding the highest royalty option for this price range (see royalty structure breakdown below), traditional publishing houses eBooks are priced substantially higher.

Many would argue that a significant appeal of eBooks are reduced prices since there is no printing or shipping overhead involved, thus making digital books more accessible to the general public. However publishing houses are keen to retain their uncompetitive model, without it they stand to loose substantial market share.

Amazon Kindle Publishers Dominate the Market

Amazon has been positioning itself as the digital eBook consumption and publishing platform for sometime, and now Amazon threatens to corner the entire market should the Department of Justice Lawsuit against Apple and other publishers to reduce eBook prices succeed..

Amazon appeared poised to drop prices on e-books in response. Andrew Herdener, a spokesman for Amazon, said in a statement about the settlement, “This is a big win for Kindle owners, and we look forward to being allowed to lower prices on more Kindle books.”  source Justice Dept. Sues Apple and Publishers Over E-Book Pricing; 3 Publishers Settle

It is increasingly obvious that Kindle Publishing is the way to go! Read on to better understand how to price Kindle books.

How to Price Kindle Books

When you publish your book to the Amazon Kindle you determine the price of your book.

The big question is; how much should you charge for your Kindle eBook?

There are several elements to consider before pricing your masterpiece.

  1. The royalty you will receive per sale or per borrow
  2. Competitor pricing
  3. Value of the information in your book
  4. Book / article length

1. Kindle Publishing Royalty Basics – How Much Will You Pocket?

There are two basic Royalty price points you should be aware of when pricing your Kindle book. Books priced between $2.99 and $9.99 will earn you 70% royalty whereas any other price will awards you only 35% of the list price.

It is easy to see that it makes the most sense to go for the 70% royalty. No author would ever price a book between $10 and $25, and few authors with any confidence in their product would ever price a book below $2.99, except in the case of very specific promotional campaigns.

Withing the $2.99 – $9.99 price range there are a few internal psychological milestones:

  • $2.99
  • $4.99
  • $5.99 and above

To better understand how royalties are calculated within the Kindle Direct Publishing platform see the below is an example of the royalty breakdown in this photo of a Kindle book priced at $2.99

Kindle Direct Publishing Royalty Pricing Calculation

When Should You Charge Less?

 You may decide to charge only 99-cents for your Kindle eBook. While this may not seem intuitive, you stand to benefit from this special price for several reasons:

  1. Many sites publish the feed of 99-cent Kindle books
  2. 99-cent Kindle books are a daily purchase
  3. Selling more copies will increase your Amazon Sales rank
  4. Get more people to review your book

2. Competitor Pricing – Scoping Out The Competition

 If you are new on the market it is a good idea to check out what your direct competition is charging.

Research the similar books per category in the Amazon Kindle Store. Try to position your book in the same price range until you have more reader feedback to go on.

3. Value of the information in your book

You may find it hard to be objective on the value your book provides. Try to assess your book value relative to other similar books on the market. Ask your reviewers what they would be happy to pay for the book.

4. Kindle Book (or Kindle Article) Length

A good formula for pricing an article presented by Harper, Kate (2011-02-04) in How to Publish and Sell Your Article on the Kindle: 12 Tips for Short Documents

  • 10 pages (3,00 – 5,000 words) or more = 99 cents
  • 20 pages (5,000 – 10,000 words) or more = $1.99
  • 30 pages (10,000 – 30,000 words or more) =  $2.99

This calculates to about 10-cents per page. ‘Beyond 30 pages, the formula starts to break down, since you are then entering into the territory of books. It is not reasonable to attempt to sell a 300 page book for 10-cents a page since a $30 book is way and beyond the typical price of $9.99 for a Kindle book.

I believe the biggest opportunity in publishing articles is the price point of $2.99 because you royalties more than double once you reach that price threshold. Anything priced under $2.99 only offers 35% royalty.

Changing Your Kindle Book Price Post Publish

You can always change the book price at any time. To do so:

  1. Log in to your KDP account
  2. Go to your bookshelf.
  3. Click on edit book rights and pricing
  4. Edit the book price and republish.

You will receive a message notifying you that your price change is under review:

 

 

 

 

Share your Comments Thoughts and Questions Below!

 

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Shira Gal is a Bestselling Kindle author, Internet Marketing Consultant, Kindle Publishing and Marketing coach, who has helped dozens of aspiring authors realize their dream of becoming a bestseller. Schedule your free "get published" consultation by clicking here now!

Comments

  1. says

    Thanks Shira. I was looking into Kindle publishing for the first time and the thing I did not find was length and pricing until I ran across you great article. I copied your suggestion out to my reminder gizmonic. From what you said, a book is not necessarily a book! Good, because my first stuff is 9-20,000 words. I had NO idea.

    You did good!!!

    Thanks again!
    Norm

  2. says

    I wonder if you can help please. I published a book of short stories to Kindle. Initially I set the price to US$3.75 and selected the 70% royalty option. The book appeared on Amazon.com and on a Kindle marked at US$5.75.
    I then read some more about pricing options and changed the price to US$0.99 with the 35% royalty option. On Amazon.co.uk the book is now priced at Pounds 0.77 which is the equivaqlent of US$0.99. But on Amazon.com the price is still, after some days, remains at US$5.75
    Why is this please ?

  3. says

    Hi Peter,

    You might want to log in to your KDP account and double check the modified book pricing settings.

    If you see the pricing to be different than you intended in the book pricing settings, make the necessary changes and republish.

    If your US pricing was really changed to 99 cents and this is a weird mistake contact Amazon and tell them about it in as much detail as possible.

    Click on the “Contact Us” link at the bottom of your KDP account page and send then an email. They should get back to you within 24 hours.

    Please let us know how this is resolved :)

    Best,
    Shira

  4. says

    Hi Shira.
    Many thanbks for your comments. Here below is the text of my message to Amazon this morning.

    Good morning.

    I now find a conflict within the Amazon.com web site. When I load the
    following page –
    http://www.amazon.com/s/ref=nb_sb_noss?url=search-alias%3Daps&field-keywords=parrots%2C+witches+and+call+centres a
    price of US$0.99 is shown, but when I click on the book cover to drill down
    to detail I get the following page –
    http://www.amazon.com/Parrots-Witches-Call-Centres-ebook/dp/B008ETKEJG/ref=sr_1_1?ie=UTF8&qid=1341556662&sr=8-1&keywords=parrots%2C+witches+and+call+centres
    which shows the price as US$5.75.

    These 2 pages are both from the current Amazon.com website today 6th July 2012 at 8h45 local time (GMT plus 2).

    Please let me know why this could be.

    Best regards
    Peter Hall, Author

    • says

      Hi Peter,

      I checked your listings and they seem to be in synch now at 99 cents.

      I have the feeling you do not reside in the US – If you reside in Europe for example you will receive a higher dollar price for the book when looking at an Amazon.com listing.

      By the way your book title is intriguing!

      Best,
      Shira

  5. says

    Hi Shira.

    Many thanks for your help. You’re right, I live in South Africa.

    I had read that pricing was different according to country, but I confess that the gap between US$0.99 and US$5.75 seemed pretty huge. Add-on of US$4.76 sounds like our tax system needs an overhaul :-)

    • says

      Hi Peter,

      You’re welcome!

      That price gap does sound kind of excessive… you might ask Amazon about that :)

      The real question is what countries are your buyers from? If you know this then you know the average “actual” price they are paying.

      In any case reducing your book price on Amazon.com to 99-cents will place you in their 99 cent book feed and should get more traffic than a higher price.

      Best,
      Shira

  6. Stephen says

    If we price a book with Kindle at $15.00, do we receive a 70% royalty on the first $9.99, and a 35% royalty on the balance up to $15.00? Or, do we only receive a 35% royalty on the full $15.00 price?

    • says

      Hi Stephen,

      You will receive a 35% royalty on a $15 book – leaving you with $5.25 royalty. Your best price point would be $9.99 – you would earn $6.99 per sale :)
      Amazon is trying to keep the book prices low…

      Congrats on publishing!

  7. uday mitra says

    I am in a fix regarding the pricing of my first book on KDP… the fictional biography is about 30,000 words and deals with life in exotic Bhutan. Please suggest a realistic price under $9.99.
    I also have a second book which is a collection of poems and short stories again dealing with the natural paradise called Bhutan.
    Will the price be exactly the same converted to different currencies in other countries? Asian countries will require a more reasonable price compared to Europe and America.

    • says

      Hi Uday,
      A realistic price would be $5.99 – $7.99 – keep in the 70% royalty options.
      When you are setting your price in KDP you can specify a price per country so that countries you feel require a lower price can still afford to buy your book and enjoy it.

      Best of luck,
      Shira

  8. says

    I am considering publishing for the first time. I am totally confused about the lending program. Is it good to allow that or not? please help!

    • says

      Hi Amna,
      I always like to include the Kindle Lending Program as it opens the possibility of more people reading your book!

  9. jimmieransom says

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    settle for book-marking and adding your RSS feed to my Google
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  10. Rhonda Spangler says

    I found your article very informative about how to price. I will be releasing my first book in the next few days and wasn’t sure what to price it. Thanks for the information!

  11. brian burke says

    Hello Shira, fantastic article. You’ve basically summed in a few paragraphs what takes others 10 pages to do. Can you please take a moment to answer my question?

    I am a new author. I’ve never published on kindle before, but I plan on making the leap in the coming weeks. Now, my book is a fantasy of 386,000 words – roughly 700 pages. What would be your recommendation in regards to the 35% option or the 70% option? I’ve also studied the fantasy line on Amazon and a lot of them seem to be charging $3 up. I live in Ireland by the way.

    I’d really appreciate your input here

    Thanks.

    • says

      Hi Brian,
      I would recommend going for the 70% royalty option. Of course this doesn’t apply to purchases from several countries outside the US where the default royalty is 35%.
      Your book sounds like it should be priced at least at $4.99 or higher, but I haven’t reviewed it or your competition so this is a blind suggestion proceed with caution.
      The good news is that you can test your price point and adjust it easily post publish so don’t worry too much about it.

      Best,
      Shira

  12. brian burke says

    Hello, fantastic article. You’ve basically summed in a few paragraphs what takes others 10 pages to do.

    Can you please take a moment to answer my question?

    I am a new author. I’ve never published on kindle before, but I plan on making the leap in the coming weeks. Now, my book is a fantasy of 386,000 words – roughly 700 pages. What would be your recommendation in regards to the 35% option or the 70% option?

    I’ve also studied the fantasy line on Amazon and a lot of them seem to be charging $3 up. I live in Ireland by the way.I’d really appreciate your input hereThanks.

    • says

      Hi Brian,
      Your book sounds awesome! I would go for global publishing, meaning that for most locations you will receive the 70% royalty and for some outside the US you will still receive only around 30% when selecting the 70% royalty option.

      Best of luck with your book,
      Shira

    • says

      Hi Patricia,

      Please log into your KDP account and click on the support button at the bottom of the page to request assistance for this Amazon matter :)

  13. Kevin says

    Shira:

    I started a storyline about 5 years ago for a short novel about 2 kids in the eighties going through some personal issues and ending up in criminal activity to get the money to resolve it. The main idea has to do with a song title of a popular song from that era (but has nothing to do with the songs lyrics themselves). Do I need to get authorization from anyone to use the song title anywhere (including title) in the book, or to reference to any other iconic titles and ideas from the time period?

    I stopped working on the story after I found out how much it would cost to publish it myself. It looks like the way to go is through ebooks.

    Thanks for all the tips you have provided. Great resource!

    • says

      Hi Kevin,
      Thanks for stopping by :)

      Self publishing is definitely the best option for you based on your message. As to your question about using copywritten materials:
      If you are just quoting a name or title you can do so and add in a reference to the source and trademark. If you would like to use content from the source you will need written permission. I am not a lawyer so this is only a suggestion. If you want to be 100% sure about your sources you may seek a legal consult once you have a feull list of what you want to include in your book.

      Hope this helps!
      ~Shira

  14. Vince says

    Hi, my friend has his book on the kindle website, however, he never kept track and in the process lost his account info. He doesn’t remember is old email address and asked me to help. He wants to know how many books have sold and if so where is the monies. All I have is the book title, “Rewriting the Constitution” written by Angel Velez. the isbn number is 978-0-615-30451-9
    thank you

    • says

      Hi Vince,

      I can find the book on Amazon, however without the KDP account login details you will not be able to get any sales information. Your friend will need to contact Amazon to sort out this mess.
      If they are not sure of what do do I may be able to assist via my Kindle Coaching (for this please contact me directly).

      Best,
      Shira

  15. Jaggu says

    Can i know what is paperback and how does it work? do we get the same royalty? is it like a book that will be delivered to the reader on making an order?

    • says

      Hi Jaggu,
      Great question! A paper back book is a printed book with a soft cover. You can easily self publish such a book with Amazon Createspace.
      Since the book is a physical product the cost of printing and delivery weigh into the royalty structure – which is lower than Kindle. That doesn’t mean it isn’t profitable.
      Royalty wise, Kindle is the best way to go, since the book is digital there are no real costs (other than minor delivery costs related to file size) to the book delivery.

      Hope that helps,
      ~Shira

  16. Jared says

    Hi Shira, I just had a quick question about the royalty percentages. If I want to price my ebook at $0.99 with the 35% royalty, could I then raise the ebook price to $2.99 and change my royalty to the 70%, or vice versa? Or do you have to stick with the royalty percentage that was originally chosen?

    • says

      Hi Jared,

      Absolutely, you can raise the price at any time, just note that it can take up to 48 hours for the changes to reflect worldwide after you republish your new price point.

      Rock on!
      ~Shira

  17. LaShonda says

    Hi!
    I’m in the process of putting my first short story together and putting it on kindle. I want my work to appear professional. Who or what company would you reccomend for editing purposes.

    Any words of encouagment for this newbie?

    • says

      Hi LaShonda,
      That is great news! I don’t work with a specific editing and proofing source though I will write a post on this topic to get some resources available.

      Be sure to check out the Kindle short documents category!

      When I began publishing with Kindle my first publication was a short document, so I encourage you to continue and be prolific!

      Best of luck on your publishing journey,
      Shira

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