How to Price Kindle eBooks – KDP Royalties and Pricing Explained

by Shira on April 11, 2012

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!

 

This post was written by...

– who has written 17 posts on publishingwithkindle.com.

+Shira Gal is a Kindle published author, personal coach and Internet Marketing Mentor and Consultant.

{ 23 comments… read them below or add one }

Norm June 30, 2012 at 8:31 pm

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

Reply

Shira July 2, 2012 at 5:12 pm

Glad to hear it Norm, looking forward to seeing your document on Amazon Kindle!

Reply

Peter July 5, 2012 at 6:22 pm

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 ?

Reply

Shira July 5, 2012 at 7:38 pm

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

Reply

Peter Hall July 6, 2012 at 6:48 am

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

Reply

Shira July 6, 2012 at 9:28 am

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

Reply

Peter Hall July 6, 2012 at 10:56 am

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 :-)

Reply

Shira July 6, 2012 at 12:30 pm

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

Reply

Stephen November 2, 2012 at 7:52 pm

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?

Reply

Shira November 3, 2012 at 12:41 pm

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!

Reply

Karen E Martin March 20, 2013 at 3:54 am

Thanks for the very helpful & informative article!

Reply

Shira June 18, 2013 at 1:12 pm

My pleasure Karen. Are you already published on Kindle?

Reply

Karen E Martin June 18, 2013 at 3:26 pm
uday mitra July 22, 2013 at 8:41 am

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.

Reply

Shira June 1, 2014 at 9:31 pm

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

Reply

amna July 24, 2013 at 5:28 pm

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!

Reply

Shira June 1, 2014 at 9:29 pm

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

Reply

brian burke January 26, 2014 at 4:19 pm

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.

Reply

Shira June 1, 2014 at 9:22 pm

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

Reply

d May 19, 2014 at 5:56 pm

How would you price a 56 or 66 page novella that is a thriller?

Reply

Shira June 1, 2014 at 9:18 pm

Hi D,
It is hard for me to give you a magic number without seeing your book. Check out similar works on amazon and their pricing. It would probably fall into the $4.99 or $2.99 price range. I provide a table on recommended pricing in my Kindle book 11 Essential Tips To Make More Sales Publishing With Kindle

Reply

Patricia Thomas May 31, 2014 at 7:57 pm

Kindle will not accept my tax details input? Please help

Reply

Shira June 1, 2014 at 9:14 pm

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 :)

Reply

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