The Technium blog had an article about the price of their ebooks. They experienced a 16 time increase in sales by dropping the price of their book. This translates to an increase of about 250% in profits. (It is not a linear process, as their post might imply).

My thinking was that people will not bargain shop on books. I thought that cutting the price on a book was cutting the value of a book and although sales would increase, total profits would decrease.

Two things have to be taken into account. When you drop the price of book to 99¢ the profit margin at amazon drops to 35%. A $2.99 book can be sold at 70% profit.

The other thing is that people who don’t want your book, won’t buy it anyway. A drop in price does not necessarily mean that more people will want your book. What it means is that cheap bastards will go for the 99¢ when they would not spring for the $2.99.

The Technium is a high profile blog with millions of readers. I don’t know how their math will convert to the one or two sales a month that I get from my Science Fiction book.

I’ve decided to repeat their experiment and see if I get a 16 fold increase in sales.

My book is now available for Kindle for 99¢

via The Technium.