AMS and Pricing And Experiments

About a month ago I decided to take my romance novels out of Kindle Unlimited. Not because I necessarily expected them to sell on the other platforms, but because I just grow sour on KU and how it operates at times and I think there’s a growing schism in self-publishing land that somewhat revolves around KU and I’d rather be on the “people pay for my books specifically instead of borrowing them because what the hell” side of things.

(No judgement here on anyone who chooses or feels differently and not saying that there aren’t authors in KU who have name recognition and a loyal fan base, there definitely are. If you’re making money at this, go you.)

Anyway.

One of the things I try to do when I advertise a book that isn’t in KU is to also only target books that aren’t in KU. I do this because I think it cuts down on the number of clicks without buys that my ad gets because I’m not attracting buyers who are looking for a title to borrow.

When I was going through the list of authors who’ve been good targets for AMS ads on that first romance novel, I noticed that many of those authors were priced at $6.99 in ebook. My price on that novel at the time was $4.99.

Now, if you were to go to any of the author forums and suggest that you wanted to list your romance title for sale at $6.99 as a self-published author, you’d be laughed out of the building. Who on earth is going to buy a self-published romance novel at $6.99 when they can buy a box set of twenty romance novels for 99 cents? The market just doesn’t support that. Maybe you can get away with $4.99, but $6.99? No.

Well…

It turns out there are some readers out there who will buy a self-published novel at $6.99. And that I can still run successful AMS ads on a romance novel that’s not in KU at that price point.

I’m not burning up the charts by any means, but the outcome I’m seeing is pretty much the same as when this novel was in KU and priced at $4.99. In the 30 days before I pulled the novel it had 13 paid sales at $4.99 and 21,000 page reads. (Keep in mind this is a novel that’s been out for over four years and where I only have two titles out under that name and the last novel was published two years ago.)

In the 30 days after I pulled the novel it’s had 28 sales at $6.99.

The only problem is that the ad doesn’t result in borrows/buys as often as when it was in KU at a lower price, so I’m not sure the ad will continue to run. AMS likes success and if you fail to hit that level that it deems successful, you get shut down.

I do think, though, that this highlights an important issue to think about with respect to AMS. There are a number of moving parts to running an AMS ad. One is how much per click you have to bid to have your ad shown, another is how much you have to pay for clicks on your ad, another is how many clicks to a purchase or borrow, and another is how much you make on a purchase or borrow of your book.

All four of those factors come into play in determining whether you can successfully run AMS ads long-term. It’s easy to bid really high and get visibility on a title. You might even get sales. But if you’re paying $1 per click and it takes 5 clicks to a sale and you only earn $2 on that sale, you’re very nicely losing yourself $3 per sale of your book. If you instead make $5 on that sale, you’re at least breaking even.

It seems counter-intuitive, but sometimes raising prices makes your ads more profitable. At each price point there is very likely a differing number of clicks that will lead to a sale and if you can find that sweet spot where the number of clicks needed is smaller relative to the income from a sale, you can increase profitability even if sales or the number of readers go down slightly.

Of course, you have to back that up with a good product, too, or long-term a poor customer experience will take you down. But that’s a whole other discussion…

I should also add here that when I looked at prices for fantasy novels that the price point I was seeing a lot of was $9.99, but I just couldn’t bring myself to try it, so even I have my psychological stopping points when it comes to pricing ebooks. (I put those books to $7.99 again because they actually do alright there and that is yet another pen name I am not actively adding to at the moment. Sigh.)

Author: M.L. Humphrey

M.L. Humphrey is a former securities regulator, registered stockbroker (although only briefly), and consultant on regulatory and risk-related matters for large financial institutions with expertise in the areas of anti-money laundering regulation, mutual funds, and credit rating agencies. Since 2013 M.L. has also been a published author under a variety of pen names and across a variety of subjects and genres.

2 thoughts on “AMS and Pricing And Experiments”

  1. I admire you for making the attempt. To be honest, I have a hard time paying more than $4.99 as a reader. It has to be a book I really want to read and at just the right time as far as my TBR pile goes. Since I feel that way as a reader, I find it hard to price above that as an author.

    Liked by 1 person

    1. It is easier to run these kinds of experiments on titles where I’m not actively trying to develop the name and where I think it’s pretty much had a good run already so am not worried about damaging performance. I figure I can always use price promotions for the readers who don’t want to pay above a certain amount. At least on the fiction side.

      Liked by 1 person

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