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). This 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…