Inflation and book pricing

So with inflation being what it is, one of the questions on my mind these last few months has been whether I should raise my book prices to keep up with the increased cost of living. We’re definitely feeling it every time we go to the gas station or the grocery store, and I’m sure that all of you are feeling it too—and those of you overseas are probably feeling it much worse than we are.

Short answer: No, I do not plan to raise my prices in the immediate future. In fact, I’ve actually lowered some of my prices. When I do raise prices, it will be because Amazon and the other retailers have changed their printing costs and/or royalty structure.

Long answer: My books are currently priced according to the following schedule (all prices in USD):

• Free or 99¢: Short-term sales and permafree books.
• $2.99: Ebooks only, typically novellas.
• $4.99: Ebooks only, typically novels and collections.
• $8.99: Audiobooks only, where the ebook is $2.99.
• $9.99: Ebook bundles and some paperbacks.
• $14.99: Paperbacks.
• $16.99: Audiobooks only, where the ebook is $4.99.

Every year, I conduct a reader survey around October-November. A couple of weeks ago, I got the results back from this year’s survey, and the answers to the pricing questions are largely unchanged. If anything, it seems like readers are more price conscious than they were last year.

And that makes sense, when you consider that books—especially genre fiction books—are a luxury item for most people. When the budget is being squeezed by the increasing price of food and gas, it makes sense that readers would cut back on their book buying habits. After all, paperbacks have very little nutritional value—ebooks and audiobooks even less so—and burning them is a very expensive way to keep warm.

All joking aside, though, I don’t think that now is the time to raise my prices. From a business perspective, the data just doesn’t support it, but also from a human perspective it just seems like a bad thing to do. I like my readers. I don’t want to put the screws to their wallets just because everyone else is, too.

(In fact, the data indicates that I’ve been making a mistake by pricing all the first books in my trilogies at $4.99. One of the questions on my survey was “from which of my series have you read at least one book?” and none of my series received more than a 45% response. This tells me that there isn’t enough series crossover happening, and that I need to treat the first book in every series as a potential entry point into my catalog. So I’ve decided to drop my ebook prices to $2.99 for every first book in a trilogy, even where I haven’t finished the trilogy yet.)

The other side of that, of course, is that my own wallet is getting screwed. Jeff Bezos famously said that “your margin is my opportunity,” and as much as we indies may love Amazon, Amazon is definitely not our friend. But so far, the screwing has not been much of a problem, at least as far as inflation is concerned.

When Amazon essentially created the indie ebook market, they did it on an agency model, where publishers set the prices and receive a percentage from the sale in royalties. For the last decade, that royalty structure has not changed: ebooks priced between $2.99 and $9.99 get a 70% royalty rate, and everything else gets 35%.

Things are a little different on the print side of things, which follows a wholesale model and delivers a physical product. Printing costs are definitely creeping up, though so far it’s only been by a few cents. At $14.99, I’ve got a fair amount of wiggle room, but if per-unit print costs go up by a couple of dollars, I will have to raise my prices.

Same thing with the digital products. If inflation continues to accelerate, or even if it continues at its current pace for a sustained period of time, there is a very good chance that Amazon will change their royalty structure for ebooks, and all of the other platforms will likely follow suit. If/when that happens, it really will put the screws on us indie authors, and you’ll probably see most of us raise our prices as a result.

I don’t know how I’ll respond when that happens, but I’ve decided that until it happens, it will be better to keep my prices where they are. So until the increasing print costs or changes to the ebook royalty structure force me to increase my book prices, I plan to keep them where they are.