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Hi Cheri,
I'm not sure I know what you mean by "doing stats," but I'll give a stab at an answer, from my limited knowledge. If I am telling you things you already know, I apologize :p When you choose to set your price below 2.99, you will make only 35% royalty.  This means that a book at .99 needs to sell six times faster than a book at 2.99 to break even as your royalty at 2.99 would have been 70%.

Many authors experiment with their pricing.  This takes time.  That is, you must be willing to wait a month or so to get statistically significant feedback.  Well, maybe it's not actually statistically significant.  I avoided Stats like the plague in college! :D But I think you see what I mean.  If you find that there isn't a market for your book at the 2.99 price point, it is probably worth playing with the price and lowering it to .99.  There are a few authors who price at 1.99, but since 1.99 is twice what the "bargain hunters" are looking to pay, and still only nets you .69 profit, most authors choose either .99 or 2.99.  (Authors who choose 1.99: chime in!  Let us know why you price it there!)

You might spend a day searching for titles which you feel appeal to the same crowd you are trying to reach.  Are these books priced at .99? 2.99? 4.99? The info you get from such a search can really help.

Does that begin to answer your question?
Cheers!
 

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My regular price is $2.99 but I'm running a $1.99 sale for the month of June.

I chose $1.99 as opposed to 99 cents because I'm not looking for so-called bargain hunters. I've looked at my also-boughts, and ignoring the books that are not in my genre (which is YA contemporary romance, including with suspense elements), I've found that the average price of the books in my also-boughts list is $5.83, which is significantly higher than the $2.99 I sell at. And the best selling books in this genre really aren't the 99 centers (there are a few, but not many). In fact, even the best-selling indies in this genre tend to be priced between $2.99 and $5.99.

This tells me that my audience isn't the bargain-hunter crowd. So even though I decided to play with price to see if it would give me a sales ranking boost, I didn't feel a need to drop down to 99 cents, like seems to be the norm in some other genres. $1.99 is already a pretty huge bargain in this genre (heck, so is $2.99, for that matter!).

Amazon price-matched my $1.99, so I actually have the slash through my price, announcing it's a sale. I hear a rumor that I'll still get the 70% royalty rate since it's a price match, but I'm not holding my breath, nor was it my intention, actually. I just wanted the slash.

So anyway, I'm unsure whether I'm making 69 cents per copy, or $1.39 (minus delivery charges of approx 12 cents, since it's a graphically-intensive file). I guess I'll find out once I get my next Saturday sales report in the "last 6 weeks sales."

I've only been at $1.99 for a couple of days, though, so I can't really say whether it has helped yet. But I'm confident the lower price will lead to a ranking boost soon. I cna only hope, right?
 

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Bob Mayer did a blot post about pricing: http://writeitforward.wordpress.com/2011/05/30/the-pricing-of-ebooks-and-perceived-value/

There are a lot of threads here about pricing. The bottom line is price is a marketing tool. There is a base low price and there is a base high price for products and not all prices on all books works the same with the same results. We have found leading a series with a 99cent book when all or close to all of the series is available is a very viable option. It draws readers in and when they love it, they will by second book at higher price.

Other big publishers are doing this--dropping the price of the first book when second books comes out and it is often effective.

We can way too caught up it all this. The key is to have a plan, and then execute the plan and be patient. Give it some time to build and gain traction. If it doesn't work, do an after action review and try something else.
 

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Amanda Brice said:
I chose $1.99 as opposed to 99 cents because I'm not looking for so-called bargain hunters. I've looked at my also-boughts, and ignoring the books that are not in my genre (which is YA contemporary romance, including with suspense elements), I've found that the average price of the books in my also-boughts list is $5.83, which is significantly higher than the $2.99 I sell at. And the best selling books in this genre really aren't the 99 centers (there are a few, but not many). In fact, even the best-selling indies in this genre tend to be priced between $2.99 and $5.99.
. . .

I've only been at $1.99 for a couple of days, though, so I can't really say whether it has helped yet. But I'm confident the lower price will lead to a ranking boost soon. I cna only hope, right?
Amanda, now there's an example of a smart, well-researched reason to sell at 1.99! Thanks so much for posting a response to that question of mine. And come back to let us all know how it goes! ;)
 

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Thanks folks. And thanks for the ideas. I certainly understand the 35/70% price break. What I'm trying to decide is $1.99 worth it. Like Joe Konrath's blog mentioned, you need to sell 6x's the number of books at 99 cents to make the same profit you were at 2.99. When I lowered Fateful to 99 cents I saw that type of growth. It's actually done very well and I'm pleased. I'm pondering doing something similar to my Fair Maiden book. Like Amanda, perhaps price it at 1.99 to avoid the bargain hunters. The other advantage of 1.99 is that you only have to sell 3x's as many books to make up the lost revenue. Since Fair Maiden and Fateful are in slightly different genres I'm not sure Fair Maiden has the power to do 6x's the sales. 3x's - maybe.

 

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My book is 2.99 and I make a 70% royalty.  I think that is the top dollar you can ask and still make 70%.  I have sold in the 300's for the last 5 months.
 
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