How To Price An Ebook

I’m trying to decide if I should sell my ebook for $.99 or $2.99. Actually, I think the ideal price would be $1.99. My reason is wordcount.

Let’s say that I want to earn $1 per 20,000 words. A short story (like Amazon Shorts) of 10,000 words or less would be 50 cents, a novelette of 20,000 words would be $1, and my anthology, which is 47,000 words would be about $2.40. But it is an anthology, which is less popular than a novel. The problem is that at anything less than $2.99, Amazon will only give me 30% of the price rather than 70%. So there is a huge difference to me in how much I make on $2.40 book vs a $2.99 book. If I go down to .99 cents the difference is even more drastic.

There is also the issue of loss leading. In a sense the purpose of the anthology is to drum up interest in my novels, when they appear on the scene. However, I would like the book to pay for itself, which means making a minimum of $1000. (If I can’t sell more than 30 copies, as I anticipate, this might be a problem.)

At the $2.99, I need to sell 500 copies to break even. At .99, I need to sell 3000. That’s quite a difference. Will .99 attract 2,500 more buyers than $2.99? That’s the question.