What this section looks like

This section consists of a couple different parts. First, you choose the royalty rate you want, either 35% or 70%:

Select a royalty option

Above: You can choose from two different royalty rates

Below that, you set the price of your book on the following country-specific Amazon websites:

  • Amazon.com (US and worldwide)
  • Amazon.in (India)
  • Amazon.co.uk (United Kingdom)
  • Amazon.de (Germany)
  • Amazon.fr (France)
  • Amazon.es (Spain)
  • Amazon.it (Italy)
  • Amazon.co.jp (Japan)
  • Amazon.com.br (Brazil)
  • Amazon.ca (Canada)
  • Amazon.com.mx (Mexico)
  • Amazon.com.au (Australia)

For each of the country-specific sites above, there is a “Set price automatically based on US price” option that is pre-checked. If you’d like, you can un-check it and manually set a price.  Here’s what the pricing table looks like before any prices have been set (click for the larger version):

The pricing table (before prices are set)

Above: The pricing table before prices are set

And then here’s the same table once I’ve set the price of the book to $2.99 on Amazon.com and kept all of the “Set price automatically based on US price” boxes checked (click for the larger version):

The pricing table after prices are set

Above: The pricing table after prices are set

Delivery fees and the various royalty options details/options are discussed below. Note the “Your book file size after conversion is X.XX MB” message at the bottom of the table. This is important because the bigger the file size, the higher the delivery fee.

Royalty rates

In most cases, the sticker price of your ebook should be between $2.99 and $9.99 (inclusive of those two prices). Why? Because you then have the option to get a 70% royalty. If your book is $0.99, $1.99, $2.98, $10.00, $12.99, or $29.99, you get a 35% royalty, since the price is outside of Amazon’s set $2.99–$9.99 sweet spot. This means that you can potentially make more money from selling a $9.99 ebook than a $19.99 ebook.

That’s the quick and simple version, but there are some asterisks here that need to be addressed. The royalty rates as stated above aren’t so cut-and-dry. You’d think that if you sold an ebook for $9.99, you’d make $6.99 on each sale, right ($9.99 x 0.70 = $6.993)? Well, you’d be wrong. There is also the delivery fee to consider. If you choose the 70% royalty option, Amazon skims a bit more money from the sale price for the delivery fee. This is to cover the cost of the bandwidth used by Amazon to transfer your ebook to the Amazon/Kindle account of the person buying the book.

If your book is a 150-page novel with no graphics, the delivery fee will be minimal. If your book has hundreds of photos or other images in it (to the point that the book is many, many megabytes in size), this delivery fee will be significant. All authors, even those who do price their books in the $2.99–$9.99 sweet spot, do have the option of choosing the 35% royalty, however. Why would you want to do that? Because there is no delivery fee then. You get a straight 35% cut of the price of your ebook and Amazon absorbs the delivery costs. If you have a massively large book with a ton of images in it, you may actually make more money by going with the 35% royalty rate. You’ll have to crunch the numbers for your book and see which options works best for you.

Also, the 70% royalty option is available only when people in certain countries buy your book. These are the countries:

  • Andorra
  • Australia
  • Austria
  • Belgium
  • Brazil
  • Canada
  • France
  • Germany
  • Gibraltar
  • India
  • Ireland
  • Italy
  • Japan
  • Liechtenstein
  • Luxembourg
  • Mexico
  • Monaco
  • New Zealand
  • San Marino
  • Switzerland
  • Spain
  • United Kingdom (including Guernsey, Jersey, and Isle of Man)
  • United States
  • Vatican City

For all other countries, the royalty rate is 35%, as Amazon states:

Your Royalty on sales to customers outside [these territories] will be as provided under the 35% Royalty Option (i.e., at the 35% Royalty Rate calculated as indicated for that Royalty option).

You can learn more about royalties and royalty rates on Amazon’s Pricing page (which is where the above quote is from).

For most books and most authors, choosing the 70% royalty option is the way to go. That means pricing the book at $2.99, $9.99, or somewhere in between. The exact price you set will depend on a number of factors.

Pricing

Most of my ebooks are relatively short when compared to a print book. They are the nonfiction equivalent of a novella (a nonvella, perhaps?). So I don’t want to charge $9.99 for them, because that isn’t what I would want to pay. I tend to charge $2.99 or $3.99. I think this is a fair price. It’s cheap enough for a potential reader to not have to think too long or hard about the purchase, but I still get a respectable couple of dollars for each sale. It’s a win-win situation.

Generally speaking, nonfiction books can command higher prices than fiction books. You might think that totally unfair, but it’s the reality. Charging $2.99 for a 10,000-word vampire story will not win you any friends, but charging the same amount for a dense nonfiction book of similar length is not unreasonable.

Charge whatever you think your book is worth, but be realistic. I’ve seen people try to charge $9.99 for a 40-page ebook because “the information in this book is worth far more than what you will pay!” Come on. Don’t be a jerk. Don’t be a used car salesman scuzzball. Don’t try to scam or trick people. Be reasonable. Recognize that what people are paying for is a collection of bits or bytes. Recognize what other books in your niche are selling for. And in a similar vein, think about your own ebook buying habits. Honestly, I rarely spend more than $5 on an ebook these days, so I don’t know if I would personally price any of my Kindle books above that.

The price of your book should also reflect the function you would like the book to serve. Generally speaking, the lower the price of your ebook, the more copies you’ll sell. If you want a ton of people reading your work, don’t charge very much for it. It might be a good idea to charge only $0.99 or $2.99 if your goal is just to get your idea or story out there in as many readers’ hands as possible. If you are using the ebook to get leads or clients, again, a low price makes sense. If you have multiple books in a series, an inexpensive first book is a great way to get readers hooked and willing to spend more on the rest of the books in the series.

The thing to keep in mind here is that every book is different. What works for my books may not work for yours. Happily, Amazon makes it easy to adjust the prices of your books. Price your book at $X for one week or month and then at $Y the next week or month. See if you can find a sweet spot. Pay attention to whether sales drop off when you up the price or increase if you lower it.

Near the top of the “Set Your Pricing and Royalty” section, there is now a new beta feature that you may or may not yet see (it may not be available to everyone). It’s called Kindle Pricing Support (here’s a screenshot). Click on the button and it will show you a graph that will help you optimize the price of your ebook for maximum sales and revenue.

Official Amazon documentation

I’ve tried to make all of this information as straightforward as possible, but if you want to dive into the details, here are some useful pages from Amazon that are worth looking at:

 

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