Indie Authors – Bookbub Explains Their Pricing

indie author handbook

Indie Author Handbook

Recently Bookbub wrote a blog post about their pricing strategies and I thought it was interesting, especially for us indie authors.  I’ve used Bookbub a few times for advertizing, and I’ve been turned down by them once.  I have mixed feelings about Bookbub (you can read it in my post Indie Authors – Questioning Bookbub), and this new post addressing questions about their pricing (we authors and publishers are called partners – hmm, given what I pay for an ad, I don’t feel much like a partner) did little to change my opinion.  Read on…

Indie Authors And A Positive Return On Your Investment

According to Bookbub, their goal when determining pricing is:

to ensure that the vast majority of our partners receive a positive return on their investment

They also state:

we do our best to price our lists fairly and to select only deals we believe will perform well, so that authors and publishers have the best possible chance of making a profit

On the face of it, fair enough.  But my questions are what is a positive return and what constitutes making a profit, in their eyes?  If I make one dollar more than what my advertizing cost, I made a profit (unless I’ve just published the book and I’m still in the red in terms of paying editors, cover artists, etc.).  Does this mean Bookbub succeeded?

Indie Authors And Optimal Pricing

Bookbub adjusts their pricing twice a month (seems excessive to me, but what do I know).  bookbub logoThis is in order to reach an optimal pricing framework.  What does this mean?  That they’re covering their expenses and making a little profit?  An exorbitant profit?  Or what?  Just asking…

They say this is calculated by sales data, average sales number, and expected royalties.  From Bookbub:

To determine the price, we employ a model that uses the factors above to calculate a listing fee for each category and each price bracket. It suggests an amount that will allow us to continue to support the Bookbub service, while on average generating a profit for most of our partners.

Indie Authors And Profit

Okay, makes sense, except determining what constitutes profit for them versus the partners (authors and publishers).  I get their email and if I calculate what they’re charging (and I’m only listed in a few categories), they’re making thousands of dollars each day.  Hmm, how much does it really cost to support the Bookbub service?  I’m in IT and I know it can’t be that much to run their operation.

Bookbub also factors in average purchase rate, not just subscriber counts (which I’ve heard is a somewhat iffy count because one subscriber is counted in multiple genres).

Indie Authors And The Breaking Point

I appreciate Bookbub trying to be transparent, but the post still left me wondering how they can justify continually raising their prices.  At some point this seems like it will come back to bite them.  Should their pricing continually be adjusted so that the authors barely makes a profit (I realize there are exceptions to this)?  At what point does this strategy turn on them, where authors say the investment isn’t worth it anymore (or will it)?  It’s becoming harder to get your book accepted, and we indie authors are now up against Big Five published books.  I’d like to try a listing higher than 99 cents, but I can’t afford the investment, and I’m sure there are many others like me.  Will we get priced out at some point?  Given that many indie authors are feeling like free isn’t a good strategy anymore, and 99 cents and above is where the future of a bargain is headed, this makes the cost of their advertizing even more an issue.  I’ve read on more than one site (if I can find the links, I’ll post them), that authors are speculating about how effective Bookbub will be in 2014 and beyond.  It will be interesting to see.

What do you think?

PS – one speculation about Bookbub’s effectiveness is on a Russell Blake post – 2014 Predictions.  In the comments, one author says:

Bookbub was great at the beginning — but less effective as 2013 winds down.

And I’ve read this sentiment elsewhere.  Again, what happens remains to be seen…

About Renée Pawlish

Award-winning author Renée Pawlish writes the bestselling horror book, Nephilim Genesis of Evil, the Reed Ferguson mystery series, short stories and non-fiction ghost stories.
This entry was posted in Indie Author Handbook, Promoting Your Books and tagged , . Bookmark the permalink.

8 Responses to Indie Authors – Bookbub Explains Their Pricing

  1. Kathy Golden says:

    It seems to me that Bookbub is determined to take advantage of the fact that big-five publishers are able and willing to pay a lot more money for this kind of easy marketing and exposure.

    Since Bookbub can’t discriminate in their pricing – and by that I mean they can’t offer indie authors, one price and big-five publishers, a different price, indie authors who want to use the service are forced to pay the ever-increasing fees or find alternative sources for promoting their books.

    I understand that BookBlast is less expensive than Bookbub. I subscribe to both websites. If BookBlast is a better deal, it may be advantageous to indie authors to begin testing the site and reviewing it to help the site gain more exposure.

    There are other sites such as Goodkindles, eBook Daily, and Bookgorilla that might be worth investigating.

    • Renée Pawlish says:

      That thought crossed my mind. It’s interesting though that The Fussy Librarian has been advertizing Big 5 books and they’ve committed to not charging outrageous prices. It really does seem like for BB it’s all about them making a buck, and as some have pointed out, this can ultimately hurt them. We shall see…
      As for the other sites you’ve mentioned, I did Bookgorilla and found it not to be very helpful, but not the others. Thanks for mentioning them, and I appreciate your comment.

  2. I’ve yet to be excepted by BookBub (I didn’t have enough reviews on Amazon US when I applied. I’m currently working on that). I did run a free promotion through Book Blast, which was very successful. I saw the free downloads leap up on the day Book Blast promoted it. However unless those free downloads translate into reviews and purchases on the second book in the series, it’s effectively “dead” advertising money.

    The main problem is that a lot of indie authors are not raking in the cash, so we have to be somewhat discerning about paid advertising campaigns, BookBub included.

    I receive their email each day for a couple of categories. There’s generally between 3 and 5 books listed in total. Assuming they actual promote around 20-30 books a day, they are making a LOT of money. Even taking into account the hosting costs, time spent generating the emails and their own advertising costs, they must be making a lot of profit every day. Probably profits that most indie authors can only dream of.

    Ultimately, if an author uses BookBub and sees a positive return, they will go back again unless Bookbub raise their prices above that threshold in the interim. I think that would make most authors think twice.

    • Renée Pawlish says:

      Thanks for sharing your thoughts and experiences with Book Blast, I’ll have to check out that site. And I agree that BB is most likely raking in thousands a day in profit. It will be interesting to see if/when indies can’t afford them and the list becomes all (or mostly) mainstreamed published. Will this cause readers to leave BB because they want indie/unknown authors? Who knows…

      • Given that it started as a mainly indie platform, I would think that a good % of the subscribers would either unsubscribe, or just delete the incoming emails if the balance tipped to mostly traditionally published books.

        Doing some quick maths, if they had one book to promote in each genre at the lowest price bracket, they’d be making $3,430 a day. Obviously, there will be more books in some genres and perhaps none in others. Some authors will have paid more to list their books at $0.99 and above. I doubt their running costs would be anywhere near $400 a day, but let’s be kind and say they are. That’s $3k profit a day.

        I’m pretty sure if Bookbub wanted to be more cost friendly to authors, it could be.

  3. Interesting maths, I’d never actually thought it through. It’s pretty clear that this is a juicy business!!

    That returns are low for authors, and likely to get lower in future, doesn’t surprise me. Because there’s no garantee on the part of BookBub (nor on the other sites) that the books they promote are any good. I know that I NEVER buy their promotion unless I happen to know about the book in question! I wonder how many people react the way I do…

    • Renée Pawlish says:

      Yes, they have to be making a LOT of money, much more than most of the authors make on any given promo.
      Who knows how buyers react, that’s an interesting question. If we knew the answer, we’d get rich :).
      Thanks for the comment.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>