The Engineering Problem
Most authors price their books based on feelings. "I think $3.99 sounds good." That's not a strategy. That's a guess.
This guide treats pricing as an optimization problem. Every price point has different royalty math, different reader psychology, and different profit potential.
By Ameen A. Mohiyuddin - I've tested dozens of price points across thousands of sales. The data doesn't lie: the "right" price is the one that maximizes profit, not revenue.
The Three Sweet Spots
$2.99 - The Volume Play
Royalty Rate
70%
Net Profit (eBook)
~$2.04
The Math:
$2.99 × 70% = $2.09 - $0.05 delivery = $2.04 profit
Best For:
- • Series starters (hook readers cheap, profit on sequels)
- • New authors building audience
- • Genres with price-sensitive readers (romance, thriller)
- • Books under 200 pages
$4.99 - The Sweet Spot
Royalty Rate
70%
Net Profit (eBook)
~$3.43
The Math:
$4.99 × 70% = $3.49 - $0.06 delivery = $3.43 profit
Best For:
- • Standalone novels (200-400 pages)
- • Established authors with reviews
- • Non-fiction with clear value proposition
- • Maximum profit per sale
Why $4.99 > $2.99: You earn 68% more profit per sale ($3.43 vs $2.04). You only need to sell 60% as many copies to make the same total profit.
$9.99 - The Premium Play
Royalty Rate
70%
Net Profit (eBook)
~$6.93
The Math:
$9.99 × 70% = $6.99 - $0.06 delivery = $6.93 profit
Best For:
- • Box sets (3+ books bundled)
- • Premium non-fiction (business, technical)
- • Epic fantasy/sci-fi (500+ pages)
- • Authors with strong brand
Warning: Higher price = lower conversion rate. Test carefully. You need strong reviews and a compelling value proposition.
The Psychology: Why $4.99 Beats $5.00
Left-Digit Effect
Readers process prices from left to right. $4.99 registers as "$4-something" while $5.00 registers as "$5."
The Data: Studies show $4.99 can increase sales by 8-12% compared to $5.00, despite being only 1¢ cheaper.
Perceived Value Anchoring
Readers compare your price to similar books. If competitors are $4.99, pricing at $3.99 signals "cheaper quality" and $5.99 signals "overpriced."
Strategy: Match the median price in your genre's top 100. Don't compete on price alone.
The "9" Effect
Prices ending in .99 are perceived as "on sale" or "discounted," even when they're not.
Exception: Premium non-fiction ($19.99, $29.99) can use round numbers ($20, $30) to signal quality and authority.
Free Book Strategies: The Loss Leader
Permafree (Series Starter)
Make Book 1 permanently free to hook readers. Profit on Books 2-5.
The Math:
• Book 1: Free (0 downloads/month)
• 30% read-through to Book 2
• Book 2-5 at $4.99 each
• Average reader value: $4.99 × 3 books = $14.97
Best For: Series with 3+ books. Not recommended for standalone novels.
Countdown Deals (Limited-Time Free)
Amazon's Countdown Deal lets you temporarily drop your price (even to $0.99) while still earning 70% royalty.
Strategy: Run a 5-day countdown from $4.99 → $0.99 → $4.99. Spike visibility, collect reviews, return to normal price.
Box Set Pricing Formula
The 60% Rule
Price your box set at 60% of the total individual book prices.
Example:
• Book 1: $4.99
• Book 2: $4.99
• Book 3: $4.99
• Total: $14.97
• Box Set Price: $8.99 (60% of $14.97)
Why This Works
- ✓Readers feel they're getting a "deal" (40% off)
- ✓You earn more per reader ($6.23 vs $2.04 × 3 = $6.12)
- ✓Higher price point = better perceived value
How to Test Prices (The Engineering Way)
Week 1-2: Baseline ($4.99)
Track: Sales per day, total revenue, total profit
Example: 10 sales/day × $3.43 profit = $34.30/day
Week 3-4: Test Lower ($2.99)
Track: Did sales increase enough to offset lower profit per sale?
Example: 18 sales/day × $2.04 profit = $36.72/day ✅ Winner
Week 5-6: Test Higher ($6.99)
Track: Did profit per sale offset lower sales volume?
Example: 5 sales/day × $4.83 profit = $24.15/day ❌ Loser
Result: Optimize for Profit
In this example, $2.99 wins with $36.72/day vs $34.30/day at $4.99.
Calculate Your Optimal Price
Use Kitaab's profit calculator to compare different price points. See exactly how much you'll earn at $2.99, $4.99, and $9.99.
Calculate Your Profit →5 Pricing Mistakes That Kill Profit
❌ Pricing Based on Feelings
"I think $3.99 sounds good" is not a strategy. Test with data.
❌ Optimizing for Revenue, Not Profit
$10 in revenue at 35% royalty ($3.50 profit) loses to $5 at 70% royalty ($3.43 profit).
❌ Never Testing Prices
Set-and-forget pricing leaves money on the table. Test every 3-6 months.
❌ Ignoring Genre Norms
If romance readers expect $2.99-$4.99, pricing at $9.99 will tank sales.
❌ Underpricing to "Be Competitive"
$0.99 books signal "low quality." You're not Amazon. Don't race to the bottom.
Price for Profit, Not Vanity
The "right" price is the one that maximizes your profit. Test, measure, optimize.