This article, by Jason Davis, originally appeared on his BookBee site on 1/17/11.
Dave Slusher is a smart guy. He’s a scientist, a computer scientist and a blogger at the Evil Genius Chronicles.
More than that, he still uses math (or maths, depending on where you’re from) in the real world. Yikes! In this case, he’s used it to prove that the optimum price point for ebooks is between $2.99-3.99. And not just optimum in number of sales, or because it looks nice – the best price in terms of total revenue.
Yes – as I said, and Slusher reiterates – the bleating of publishers, many of whom currently set their own prices, that they can’t afford to lower the standard ebook price from the common $9.99 is misguided. It assumes that there is no price sensitivity in ebooks.
That is, publishers claim that if they lowered ebook prices, sales wouldn’t go up enough to cover the shortfall, and revenue would drop.
That, as they say in the classics – is complete balls. In every other retail sector, price is a factor. Sure, consumers are price-sensitive to different degrees in different markets, but price almost always has a bearing on sales. That’s why retailers have “sales” – lower margins, but more buyers.
As Slusher proves, ebook publishers can’t afford not to lower prices.
Read the rest of the article on BookBee.