Crunching Some Numbers

As some of you (especially those from Kindle Boards) may be aware I've recently tried a few promotional pricing tests. Today I'll share my results with you.


First let me start out by telling you about the books in the test. I used Michael Sullivan's Riyria Revelations (5 books released, first four normally $4.95 and the last one $6.95). Before the test I had a post holiday steady sales state of 270 per day.


Below is a graph showing my sales during the promotion:

Through a fluke of a promotion I did in November Avempartha became unexpectedly free in January for a period of time. This "moved" a lot of books (866 per day). But produced a pretty substantial hit to monthly income.

After Avempartha was returned to its normal level I found sales had reached a new base level of 314 books. I then took the first book Crown Conspiracy to $0.99 to make it a loss leader to the series. My intention was to try and see if I could get this book into the Amazon Top 100.

My hope was that the people who actively look for $0.99 would buy in droves and I felt a 200% increase in sales could drive it into the Top 100. To my surprise the sales increased only 10% !Far from the 200% increased I needed to become firmly planted in the Top 100. Rank did improve (from 600 to 300) and the "other boats" did rise as well - but even so another substantial hit to the monthly income.

The above tables shows the price and sales volume during each of the tests. To see the impact into the bottom line monthly income please refer to this table:

CONCLUSIONS:

• Adding a $0.99 loss leader results in approximately 10% increase in number of books sold but a loss of income of $9,665 a month!! Okay, probably not a worth doing for an extended period to try and get to the Top 100.


• Using a free book results in a significant number of books getting into the hands of the reading public 275% and results in an income loss of $7,072 per month. Not as drastic as the $0.99 but still leaving a lot of money on the table.


• The current pricing model $4.95/$6.95 is working well and seems to be producing the best income ratio.


• Sales levels rebounded to almost identical steady state income levels although the distributions of books shifted to provide a nigher number of the first book.

Please keep in mind that this is the results of my test and your mileage may vary substantially. A lot has to do with how you have positioned your books, what the volume of sales are. How long from the last book's release and whether people are looking forward to the next release etc.

So...I'm not sure you will come to the same results with your book(s). Each book has its own sweet spot and the $4.95/$6.95 may not work for you. That being said I encourage you to do your own testing (change only 1 variable - price (don't change promotion etc)) to help you determine what pricing technique will provide you the best results.