Why a 99-Cent E-book Can Make Financial Sense

December 19th, 2011

KindleThere’s just something magical about buying a product for 99¢. And in the digital world, where the cost of producing another copy is essentially zero, you can make serious money from a quality item that’s priced at 99¢. Steve Jobs figured this out, and it’s part of what made the iTunes Store so popular. Later, when the music labels wanted to raise the price slightly on newer songs, he fought them tooth and nail, saying that even a small price increase would ruin things. The labels won that battle, but that doesn’t have to be the case with self-published books on Amazon. The profit on a 99¢ book is 35¢, and it really adds up if you sell a few hundred thousand copies. The linked article is a bit old, but it reinforces the benefits of this sales model where you sell many, many digital copies of an item for a low price. The author of the article, for instance, saw his sales of The List go up by a factor of 20 (to 800 per day) when he dropped the price from $2.99 to 99¢. (I do find it funny, however, that the price is now back to $2.99.)

Link: http://jakonrath.blogspot.com/…
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