Editor’s Note: This is a guest post by Ali Hale from Aliventures.
Maybe you buy ebooks. Maybe you sell them. Maybe your Twitter stream and RSS reader have been full of launch after launch.
I’d bet that, at some point (perhaps years ago, when you first bought an ebook), you’ve asked yourself how can a pdf cost this much?
It’s a valid question. In a world where information is free and bountiful, why pay $49 or $65 or $97 for a few thousand words of text?
Let’s come back to that. First, here’s some thoughts on other areas where we find ourselves thinking “how can it be worth THAT?”
One Man’s Trash
“One man’s trash is another man’s treasure.”
There are a lot of products and services which you’d never pay for. You filter these options out almost without thinking. Let’s say you hate sport: tickets to the soccer World Cup finals aren’t going to be worth anything to you. Conversely, maybe you’re the biggest Jonas Brothers fan ever … you’d pay thousands to have dinner with them.
But it’s just a meal with a couple of people.
Forget about price for a minute, and think about what you value. What would you pay $500 for?
- A piece of unique artwork?
- An amazing set of computer speakers?
- A three course meal at a fancy restaurant?
- A snazzy mobile phone?
- A dinner service?
- A cookery masterclass?
Some of these, you’d rule out straight away. Others, you’d take up happily.
When it comes to ebooks, similar logic applies. You’re not just paying for a pdf. (When you buy a book, are you paying for the ink and paper – or the words in it?) You’re buying information, advice or help on some particular topic. Whether it’s worth $0 or $1000 or something in between depends on how valuable those words are going to be to you.
Ebooks verses Books
One of the big objections to the price of an ebook is the fact that a regular book – nicely printed, longer, vetted by publishers – costs around $10 – $30 whereas it’s common to find ebooks priced $50+.
Are they really comparable, though?
Printed books from a publisher (rather than self-published ones) have a certain cachet. They may turn out to be nonsense on stilts – like fad diet books, for instance – but you can generally expect a certain quality. Authors also tend to have real expertise or experience in the field which they’re writing about – whereas anyone can write an ebook.
There are several areas where ebooks shine, though.
- Fast moving fields. I rarely buy a physical book about blogging, the internet or software, as these areas change so quickly. The lifecycle of a published book is typically a couple of years – an ebook can be written and published within weeks.
- Specialist information. Publishers need to sell several hundred or thousand copies of a book to get a return on their investment. Ebook authors may only need to sell five or ten. This means that ebooks can cover all sorts of tiny, niche topics – giving you an in-depth look instead of a populist overview.
- Multimedia content. You can get lots of digital products which aren’t simply ebooks: videos, audio material, images, even software can all be included. Although some physical books come with a CD, this is far from the norm.
(Note – while I’m using “ebook” in this post to keep things simple, you can apply all of what follows to any information-based product – including physical books, teleconferences, videos, and so on.)
Is It Worth It?
Ultimately, the price – low, high, medium – isn’t so significant. After all, you’d rather pay $20 for something great which did the job, than $5 for complete garbage.
So how do you figure out if an ebook is worth it?
If you’re buying it for business purposes, it’s pretty straightforward. Take into account:
- How much the ebook costs (say, $50)
- How much time you’ll spend reading and implementing advice from it (say, 4 hours) and your hourly rate (say, $60) = 4 x $60 = $240
Are the results you get likely to exceed the cost of the ebook itself and your time? If so, then buying it should be a no-brainer. 😉
Problems arise, of course, because:
- You’re not sure how good your results will be
- You aren’t making a straightforward money in < money out equation.
Firstly, look for reviews. Find people who’ve bought and used this ebook, and see what they say. Pay particular attention to specific results and figures, or case studies – rather than blanket “I loved this ebook” recommendations.
If you’re not buying an ebook for a straightforward business-related purpose, you’ll want to figure out what results you are expecting, and whether the price of the ebook is worth it.
For instance, you might be buying an ebook because you’re hoping you’ll free up more time (in which case, you can make rough estimates using your hourly rate, or using a figure which you’d be willing to “spend” for an extra hour in the day.)
Ultimately, if your reaction to an ebook’s price is an outraged “it can’t be worth that!” then, for you, it isn’t. But if you think “that seems high – but this is exactly what I need right now” – then why not go for it?
Raul Sim says
after all, it doesn’t matter. the content is important. “give before you try to get”. let the author receive for his giving. the author had to give a lot of his time in this stressful process. so, appreciate other’s hard-work and stop whining for a couple of dollars in return of great practical ideas!
A point not covered here is for publishers. How do you determine a reasonable price for your eBook? How do you get valuable reviews to help sales along? These were thoughts stirred up in my mind after reading this post – and perhaps fodder for a future, related post?
Either way, thanks for giving me something to think about.
Great point, Rasmus. Have you checked out the short(ish) series I wrote on the 3Ps of Pricing? Pam also has a great interview series on pricing, too. Those two series should keep you busy for a while. ;p
C. A. Kobu says
Also, if an ebook disappoints you and doesn’t keep the author’s promise, the return/money-back process is easier. And people are OK about it. I don’t know how many people would return a printed book. It would be strange after literally turning the pages and using it. But you wouldn’t feel bad about returning an expensive ebook if you’re of the opinion it doesn’t match what was told on the sales copy. Besides, the money-back guarantee is a part of the sales copy anyway. So far, I’ve never returned an ebook. I wonder if any did and how they felt about it. By the way, Charlie, it would be great if you wrote a small guide solely covering how you should price different information products. I’d definitely purchase it (up to 15 bucks for sure). I think may others would, too. I know so many people who get lost when it comes to pricing their ebook or membership program, etc.
Thanks for the product idea, C.A. You may or may not know that I’ve been getting ideas about what people would like me to create, so this is a timely and helpful comment.
Ali Hale says
Good point about returns. I’ve never had to return an ebook myself (I’m pretty cautious about who I buy from), but I definitely find that a money-back guarantee gives me peace of mind.
Scott Webb says
Interesting blog post about eBook pricing. I was actually talking with some people on twitter a few days before this post regarding eBook pricing.
A lot of people started to mentioned they would pay up to $197 if it’s really good.
I started to realize a skewed view of eBook. This term doesn’t just mean ‘Book’ to a lot of people. When I questioned the $197, people would use Fire Starter Sessions as an example. Thing is that’s not a straight eBook in my view. It’s got multimedia content and workbooks or worksheets.
I view an eBook the same as a book. Purely written content, you should be able to sell the eBook below the cost of published books. Remember cutting out the middle man? However, I believe we see a rise in pricing with eBooks due to affiliate marketing. Pricing your eBook at 9.99 and 50% affiliate program kind of kills a lot of work. But $40 and 50% affiliate program still gives the seller a nice profit.
Are eBooks with affiliate programs simply overpriced because of the affiliate sale possibility? What if you could offer your customers a much better deal by not having the affiliate program or by offering a much lower % of sale.
I believe it has a big part in the pricing we see today.
I’ve also got some things up my sleeve regarding ebooks. Not sure how it will play out but this got me thinking. Thank You.
Ali Hale says
I’m seeing two key types of ebooks:
– Traditional books available in electronic format (e.g. for Kindle), published by mainstream publishers, sold by big companies
– Multimedia content packaged and sold by experts, entrepreneurs, etc — this is more the kind of thing I was talking about in my article.
I feel we need a different word to distinguish the two, but I suspect that what you’ve found holds true, Scott, and many people will use “ebook” for pretty much any downloadable information product.
I feel that affiliates do end up pushing up the price (after all, if you know that half your ebooks will be sold with 50% going to someone else, you’ll be tempted to raise the price — plus some affiliates won’t promote low-priced products). I enjoyed your post on Affiliate Marketing & eBook Overpricing — thanks for taking a thought from here and running with it! 🙂
Thanks Ali (and Charlie) for this great post!
I agree that reviews are your best bet, though remember those are often affiliate relationships. If an eBook doesn’t have a money-back guarantee, steer clear.
You could extend these ideas to all forms of information-as-product that in our online business world, where more and more prices is based on perceived value as the cost of production (paper, ink, shipping) fades away.