How Sustainable is the $0.99 ebook Price Point

In terms of eBooks the $0.99 price point is still very common – its taken some criticism over the last few years, but by and large a lot of self-published and public domain classics still retain the $0.99 price point. I don’t use it for pricing my novel length titles, but I do have some short stories at that price.

But how long will it last? Surely with the effects of inflation we won’t always have the $0.99 price? The retailers will realize the costs associated with selling titles at this price are unsustainable at some point. When will that be?

I thought it would be interesting to see how much the revenue for indie/self-published publishers has declined at the $0.99 price point over the last few years and what might happen in the future.

I’m not economics expert, so if my maths is awry then let me know. I used a US Inflation Calculator to do the sums.

Let’s say you started publishing titles in 2010 at $0.99. If you are publishing via Amazon you get 35% of that back in royalties, which is $0.35/sale according to the reports I get from Amazon.

That $0.35 is now worth in reality $0.33, 6.8% less than it was worth in 2010. That’s quite a dramatic difference! Customers are paying effectively the equivalent of $0.99 – assuming of course their disposable income has increased at the same rate as inflation.

What would happen if inflation was a similar rate for the next 5 years say?

If you go with an inflation rate of 2% a year, then $0.99 in 2018 is worth only $0.89 now, the royalty is $0.32, not too bad perhaps, but still a 10% reduction. If you applied that over all your sales you can see that sticking at a $0.99 is unsustainable.

I think it’s likely that those sticking with the $0.99 will inevitably have to start putting up prices fairly soon. And I suspect there will be more pressure from retailers to decrease the royalties on books below a certain price.