Answers.Body: <p>Since some users want to close this question as off-topic or opinion
  based, I decided to give my own tentative answer, based on my own
  thinking since I asked the question, and influenced by some of the comments.</p>
  
  <p>I am well aware of cost issues in publishing, but I have little
  experience as a customer where e-books are concerned. Having to fix my
  own price as an e-book customer is a new experience to me, and I was
  wondering how it is perceived and analyzed by other e-books customers
  and sellers. This type of pricing is not usual where paper books are
  concerned.</p>
  
  <p>Is this off-topic on this site? I believe not. The <a href="https://ebooks.stackexchange.com/help/on-topic">topic page</a> states:</p>
  
  <blockquote>
    <p>The main focus is on the processes involved in publishing and/or
      consuming ebooks (and related tools), rather than on the content of
      ebooks.</p>
  </blockquote>
  
  <p>Though this does not explicitly include economic aspects, it does not
  rule them out. A question such as pros and cons of  publishing in XYZ
  format can typically have economic answers.</p>
  
  <p>What is explicitly ruled out is questions about specific books or
  sites, or discussing specific ebooks or ereader retailers, when it can
  be <em>shopping</em> or <em>opinion based</em>, which does not rule out technical
  questions.</p>
  
  <p>My question is about pricing in the general sense, not specific items,
  and it is an issue that is seriously analyzed by professionals and
  economists. It is a technical and scientific issue.</p>
  
  <p>Many documents do address this issue, for both traditional paper books
  and more recently for ebooks.</p>
  
  <p>It is true that many statements are opinion based, because all kinds
  of people have an opinion to voice, with or without competence to
  justify it (see <a href="http://www.digitalbookworld.com/2012/consumers-upset-and-confused-over-e-book-pricing/" rel="nofollow noreferrer">Consumers Upset and Confused Over E-Book Pricing</a>). Some people have also an interest in keeping this fuzzy,
  so that their market is not understood or analyzed too closely,  especially by authors and consumers.</p>
  
  <p>My own usual references on books cost are not in English.
  However, I was  able to find rather quickly some new ones on the web,
  such as
  <a href="http://ireaderreview.com/2009/05/03/book-cost-analysis-cost-of-physical-book-publishing/" rel="nofollow noreferrer">Book Cost Analysis – Cost of Physical Book Publishing</a>
  which does itself use several external references.</p>
  
  <p>This article agrees that about 50% of the printed book cost comes
  from distribution (10%) and retail (40%), to which one can add around
  10% of printing costs. This is reduced to nearly nothing in the case
  of e-books.</p>
  
  <p>Clearly, ebooks have their own costs, but they are very unlikely to be
  comparable to what is being saved (some more than 50%) on the material
  aspects of printed books.</p>
  
  <p>What is more likely is that market behavior changes significantly, because eproducts have no marginal cost
  (it costs nearly nothing to make extra copies).
  That is to be taken into account by both the producers and the
  consumers of ebooks. One aspect of it is that the market is a lot more
  competitive as more authors can enter it (I am currently reading a
  very nice ebook that is available only for free).</p>
  
  <p>Another consequence is that some sellers consider that letting the
  customer fix his own price, possibly within limits, is a good way to
  do business. Why do they do this? Fixing my own price as a customer,
  in a way that is fair, also depends on my understanding of the
  economics and of the economic analysis of the seller. There can be, as
  always opinion based assessments of it: some people still have strange
  opinions about well established scientific facts. But this is clearly
  a matter for scientific and technical analysis.</p>
  
  <p>The major point is that paper books both have fixed costs, independent
  of the number of books sold, and marginal costs for each (additional)
  book. They also have a high investment cost in the printing, since it
  must be done in large numbers to be economically acceptable.</p>
  
  <p>The ebooks business has a lesser up-front investment, because no mass
  printing is needed, and no marginal costs (the more than 50% in
  printing, distribution and retail. Once the book exist in epub, mobi,
  or whaterver, it is essentially free for the publisher (except for
  advertising possibly, but that is done only when return is expected).</p>
  
  <p>What matters to the publisher is not the number of books sold, but the total
  income it brings. Any addtional dollar is worth taking, since what is
  given in exchange no longer costs anything.</p>
  
  <p>That is probably the motivations for open pricing and bundle pricing.</p>
  
  <p>Then, I would think that what matters for the producers of ebooks is
  not to get a given price for a book or a bundle, but how much of my
  money I will input in the book production system every month. Giving
  me additional books, that I will probably not read all, cost them
  nothing and may increase my inclination to buy.</p>
  
  <p>So <strong>my conclusion is that there is no real fair price for each
  individual buy</strong>. Rather one should spend monthly a global amount
  proportional to one's means and one's amount of reading.</p>
  
  <p>The role of the seller is to induce a consumer behavior that will
  maximize the total income, rather than the profit per book sold.
  One role of the consumer is to make sure the producers can make a
  living (and keep producing), which does imply a level of spending, but
  not necessarily a high cost per book.</p>
  
  <p>This analysis may not be totally accurate, but it is fairly precise (in a qualitative way) and
  can be disputed on objective facts and arguments, rather than opinions.</p>
  
Answers.ContentLicense: CC BY-SA 3.0
Answers.CreationDate: 2016-03-20T09:56:16.903Z
Answers.LastActivityDate: 2016-03-20T12:48:31.337Z
Answers.LastEditDate: 2017-04-13T13:00:05.480Z
Answers.UserDisplayName: babou
Answers.Body: <p>I don't have any substantial answer to your question, but I have been thinking hard about it over the years. </p>
  
  <p>Let me summarize some dynamics of ebook pricing and then talk about "fair price." </p>
  
  <p>Ebook production is a very speculative business. You have no idea whether there even exists an audience for your product. </p>
  
  <p>Pricing for digital goods is elastic. You have very little capital costs (the supply is unlimited), and you can price it at whatever you want. </p>
  
  <p>Marketing and promotion is the most significant cost here, and there's some debate whether money spent on marketing and promotion even is cost-effective.</p>
  
  <p>I wrote elsewhere, (NAGLE’S FIRST LAW OF EBOOK PROMOTION AND DISTRIBUTION: Comparatively speaking, it requires more effort to persuade a reader to invest TIME in an e-book than MONEY).</p>
  
  <p>Big 5 have two reasons they can justify increased marketing expenditures: 1)selling the publishing brand and 2)subsidiary rights (movies, translations, TV shows, etc). For most books though, these potential revenue streams don't exist; therefore there's more shoestring marketing involved. </p>
  
  <p>An indie author could spend a lot of money on promotion and it might work, but it might make little difference. Publishers have more capital to spread the risk.</p>
  
  <p>Should the author be entitled to a fair price for his labors (in much the same way as a fair-trade coffee grower should be entitled to a fair share of the profits)? </p>
  
  <p>The more fundamental question is whether the author should be entitled to ANY profits. In other words, some profits are better than none. </p>
  
  <p>Is the author entitled to a fair contract with a publisher? This is harder to pin down because an author wants the publisher to have a substantial enough stake in revenues to have an incentive to promote the ebook. If a book contract gave an author 1% of royalties, in some cases that could be a good deal if the publisher could bring substantial volume. </p>
  
  <p>What attitude should the author have about promoting a "fair price" for the ebook?</p>
  
  <p>In 2005 (before the Kindle) I wrote this article about ebook pricing: </p>
  
  <p>DRM doesn't really matter for the little guy. It matters mainly for mega media companies who have made significant capital investments (in thousands, if not tens of thousands of dollars) and need to recoup their investment by selling tens of thousands of copies. The pricing strategies of big publishers have pretty much been "anti-chump change." In other words, set a retail price that no one seriously will pay (aside from library institutions) and then gradually lower the price until the merchandise starts moving somewhere (even if it is only to the remainder table). But for the independent content creator (say a popular litblogger who is selling ebook novels on his website) the pricing strategy is different. His strategy is not necessarily to maximize price, but to maximize audience. His strategy is to guess the price point readers would regard as "chump change" (so insubstantial that people used to getting things for free won't be bothered by paying it). This may not be the route to becoming a millionaire, but publishing royalties now aren't much better, and at least the poet or novelist doesn't have to wait forever to convince a publishing company to take a risk selling his work. </p>
  
  <p><a href="http://www.kuro5hin.org/story/2005/5/16/143632/005" rel="nofollow">http://www.kuro5hin.org/story/2005/5/16/143632/005</a></p>
  
  <p>The problem here is that Big 5 publishers typically price ebooks at significantly higher levels than indies to pay for the marketing machinery. </p>
  
  <p>But low price is also a significant marketing device! Part of Amazon's genius is giving authors maximum control over how to price their ebooks and just giving them a consistent share of the profits. Therefore, the author can decide for themselves what is fair. </p>
  
  <p>Now that I have put these thoughts down, I have concluded that a "fair price" is whatever an author determines is the best way to receive a consistent stream of revenue over time... </p>
  
  <p>If an author prices a 1000 page novel at 99 cents,then that is a fair price (because the author assumes that the lower price will make you more likely to buy it). The author might be banking that you will buy future ebooks as well. </p>
  
  <p>One final thing. Places like noisetrade (and even Humble Bundle) let the buyer decide. There is some debate about whether this works (I think it works when you already have some visibility), but the advantage is that some people can compensate the author according to their subjective estimation of value. That might result in more revenue, or it might not. </p>
  
  <p>There is no magical formula, and every author and publisher is trying something different. I've learned not to dismiss any publishing or pricing model just because it doesn't resemble mine. </p>
  
  <p>One final thing. Every year on his Smashwords blog Mark Coker reports on what price has been shown to maximize revenue. I think his most recent survey revealed that $3.99 seems to be the most effective price for a new ebook-- and one might argue that empirically, this is the current "fair price" according to prevailing standards. </p>
  
Answers.ContentLicense: CC BY-SA 3.0
Answers.CreationDate: 2016-03-23T00:39:30.227Z
Answers.LastActivityDate: 2016-03-23T00:46:03.933Z
Answers.LastEditDate: 2016-03-23T00:46:03.933Z
Answers.UserDisplayName: idiotprogrammer
Answers.Body: <p>Ebook pricing is interesting topic and iritating as well.</p>
  
  <p>For example here in Poland, there is like a few percent difference between a paper book and ebook cost. It is all about taxes, which in Poland are really harsh. And people who get used to paper books - it is obvious what would they choose.</p>
  
  <p>And even because ebook "production" costs are way lower than printing a book, you can't see it because of the prices.</p>
  
  <p>I heard that the situation should be better soon but I hear it since two, three years already. And there's nothing going on except talking and talking about it.</p>
  
  <p>The worst thing is that ebook is considered as a service, not a product. Except when you buy ebook on a CD for example, then it is considered as a product and tax value is 12% different (polish example). But hey - it is unluckily still not that much. Because we are still talking about tax cost difference, not 12% of the whole ebook price. Ridiculous.</p>
  
  <p>As I run a blog about electronic way of reading, I see that a lot of people are sceptical to pay for something they can download for free or have it in a paper version. They still keep a distance to buy something that they can't touch.</p>
  
  <p>Somehow, the most popular way people are buying ebooks here are discounts, which can be really huge and you have a possibility to buy a few ebooks in a bundles which you mentioned. We have a polish portal that works like a comparision site which alerts you via e-mail when there is a discount on ebook that you are interested about. On a bigger bookstore events you can get your ebook for even 90% (!) less price (example of a last holiday event of one of polish bookstores - "Napoleon the Great" by Andrew Roberts which is a huge and expensive book was about 90% cheaper).</p>
  
  <p>Going back on taxes topic - I heard that France and Germany made a revolutional change of pricing and made the taxes for ebooks way smaller. But then EU came up with anger that it conflicts the constitution and rules and I heard that it doesn't work the way they managed anymore... That doesn't help as well...</p>
  
  <p>Content? I don't think so. Unless it is for example a historical, huge book which costs in normal way a lot (again the closest "Napoleon the Great" by Andrew Roberts example), the difference in ebook price is much more seen than in case of a 'common' popular (f.e. fantasy, thriller) book/ebook which costs - let's say - a half of it in the beginning.</p>
  
  <p>I don't say that ebooks should be close to be free-to-download. I just say that if you would see for example up to 50% difference between paper version and ebook version, people would be much more interested in convincing themselves to read ebooks. And what comes after - a scale of a piracy would be way lower.</p>
  
  <p>And it wouldn't harm the paper books sale for sure. Because if someone like to have impressive library - they will buy paper books anyway.</p>
  
  <p>Because no matter how - reading counts in every way.</p>
  
  <p>But let's be fair and don't pay for something you can avoid.</p>
  
  <p>And the most important: Less price = higher sales, doesn't it work like that?</p>
  
Answers.ContentLicense: CC BY-SA 3.0
Answers.CreationDate: 2016-03-30T09:53:51.463Z
Answers.Text: This is a rant about the Polish tax system, not an answer to the question whether there is a fair price for an ebook. Apart from that I never noticed **any** difference with taxing eBooks compared to normal books in Germany in the last 13 years I lived there.
Answers.UserDisplayName: Anthon
Answers.ContentLicense: CC BY-SA 3.0
Answers.CreationDate: 2016-03-30T09:59:44.797Z
Answers.Text: Well maybe it was just a France. All I meant by my answer is that the prices are not how it supposed to be. I gave example of Poland because I was born here so it was the closest one. But as I presume we are not the only one having problems with a fair prices of ebooks. I guess the problem lay in that ebooks are still not so popular way of reading. Hopefully it will change nowadays when the popularity is higher and higher everyday. Maybe I understood the question wrong, but I guess you missed my point.
Answers.UserDisplayName: MoRo
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Answers.CreationDate: 2016-03-30T06:42:33.947Z
Answers.LastActivityDate: 2016-03-30T06:42:33.947Z
Answers.UserDisplayName: MoRo
Body: <p>What is the cost of an ebook? What criteria should I use to decide a
  fair price when the price is left up to me. How can I be fair to the
  seller and to myself?</p>
  
  <p>Several sites offers ebooks, often as bundles, at a low price, or at a
  price to be chosen by the buyer, usually above a minimum threshold.
  Examples I have seen include <a href="https://en.wikipedia.org/wiki/Humble_Bundle" rel="noreferrer">Humble Bundle and similar sites</a>, or
  <a href="https://en.wikipedia.org/wiki/Phoenix_Pick" rel="noreferrer">Phoenix Pick</a>.  Phoenix Pick also sells individual books, many of which
  are classic (more or less old), but seems to be mostly established
  authors, with significant price variations.</p>
  
  <p>Then you have sites like <a href="https://en.wikipedia.org/wiki/Smashwords" rel="noreferrer">Smashwords</a>, more oriented towards indies
  (independent authors) who self publish. These are usually recent
  books, with little quality filtering (but is there much with some
  other publishers). Some books are free, others vary significantly in
  price, and prices vary in time. Here again, some books  are sold for
  the price the buyer will give.</p>
  
  <p>Thus I often wonder how much I should pay for an ebook, which is fair
  to the seller and to myself. (The problem is compounded in the case of
  bundles with the fact that one may be interested in only some books of
  the bundle.)</p>
  
  <p>Hence I wonder what is the cost of an ebook, independently of the
  content value, which is the subjective part.</p>
  
  <p>AFAIK, and I did look into some actual figures, most of the price of a
  paper book goes into its more material aspects. More than 50% is due
  to printing, storing, transportation, bookstore costs, not to mention
  the destruction of unsold copies. Hence, the cost of an ebook should
  not exceed half the paperback cost, without penalizing the author or
  the publisher. This does not seem to fit what I observe.</p>
  
  <p>There is the cost of digital formating, but from looking at the ebooks
  available at the <a href="https://archive.org/details/texts" rel="noreferrer">Internet Archive</a>, it seem that many have been epub
  formatted mechanically. The result does leave much room for
  improvement, but it shows that digital formatting remains a quite
  tractable task.</p>
  
  <p>Then, I am aware that contents matter. But still, what should be
  considered a reasonable payment for, say, the equivalent of 300 pages in
  paperback.</p>
  
  <p>To give a bundle example, Humble Bundle asked for a minimum of $15 for a
  rather good selection of 20 books, while Phoenix Pick asks a minimum
  of $7 for a selection of 4 books, a lower limit in both cases. </p>
  
Comments.ContentLicense: CC BY-SA 3.0
Comments.CreationDate: 2016-03-16T01:07:34.163Z
Comments.Text: This is an interesting question. Unfortunately, it doesn't really fit here for a number of reasons: it's primarily opinion based, it's very broad, and it isn't really the sort of question we deal with; we're more technical issues with ebooks than broad publishing questions.
Comments.UserDisplayName: Tom
Comments.ContentLicense: CC BY-SA 3.0
Comments.CreationDate: 2016-03-16T08:38:26.290Z
Comments.Text: interesting question so thumb up. Maybe it is better to modify the title to make it more clear.
Comments.UserDisplayName: Sadegh
Comments.ContentLicense: CC BY-SA 3.0
Comments.CreationDate: 2016-03-16T10:22:46.567Z
Comments.Text: @Tom An important point of this question is that a good part of the answer
  is not opinion based. There are precise figures, actually needed by
  professionals, to determine the cost of publishing a book, and
  specifically an ebook. The market structure is well known, if not so
  much advertised. I suspect that ebooks often carry higher profit per
  book, and I am asking for objective data. I did check the on-topic
  page, and it says "the process of publishing and consuming
  ebooks". Economics is part of it, as long as it is general facts,
  rather than specific occurences.
Comments.UserDisplayName: babou
Comments.ContentLicense: CC BY-SA 3.0
Comments.CreationDate: 2016-03-18T00:13:31.000Z
Comments.Text: @babou the cost of publishing a book is not that matched to the price to sell for. The price will depend on marketing etc as you say but the cost depends on the time the author, editors, publisher spent on it and cost of artwork etc
Comments.UserDisplayName: mmmmmm
Comments.ContentLicense: CC BY-SA 3.0
Comments.CreationDate: 2016-03-20T00:01:47.707Z
Comments.Text: @Mark You are correct that these things matter. Nowever, there are clear guidelines for most books on how the final price, as seen by the buyer is divided in chunks corresponding to the various phases of the book production, distribution and sales. And these figures show clearly that half the price of print books has no ebook counterpart. The votes to have my question closed as opinion based shows that either the voters are incompetent and rely on a naive view of the business, or they have an interest in hushing the issue (sorry, I do not wish to be rude, but I do have some experience).
Comments.UserDisplayName: babou
Comments.ContentLicense: CC BY-SA 3.0
Comments.CreationDate: 2016-03-20T00:06:13.760Z
Comments.Text: @Mark This being said. My initial motivation for this question is to
  determine how much I should pay fairly for open price book offer. And
  I came to a conclusion that what matters is how much money I pour in
  the system, independently of the number of books I get in return. The
  whole point is that ebooks have zero marginal cost. Paying many books
  at a low price is equivalent (for the ebook economy) to paying fewer at a higher price.
Comments.UserDisplayName: babou
Comments.ContentLicense: CC BY-SA 3.0
Comments.CreationDate: 2016-03-20T00:16:20.060Z
Comments.Text: @Mark In a well run business the cost does not depend on how much you spend
  on the book. Rather, you have to estimate ahead of time how much
  income the book is likely to create, and you spend accordingly on the
  various steps of the book production and distribution. Customers will
  not accept to pay more because you spent more. They pay for what they
  get, not for what was spent on it.
Comments.UserDisplayName: babou
Comments.ContentLicense: CC BY-SA 3.0
Comments.CreationDate: 2016-03-20T12:58:56.360Z
Comments.Text: @Woeitg Thanks. I had to write my own answer to understand your suggestion (change title). I hope it goes the way you had in mind.
Comments.UserDisplayName: babou
Comments.ContentLicense: CC BY-SA 3.0
Comments.CreationDate: 2016-04-18T13:47:19.443Z
Comments.Text: That depends. If you write your first book and there are 10-20 word usage errors, and people have to pay $1.99 for that, they're going to be pissed and give you bad reviews. Remember, spell checkers do not check for word usage errors like using one of these words in the wrong place: their, they're, there. [This site](http://nanowrimo.org/forums/critiques-feedback-novel-swaps) has a forum where you can get critiques on your chapter or book. I find word usage errors in about 70% of the free ebooks I read.
Comments.UserDisplayName: Bulrush
Tags: <publishing><pricing><sales><smashwords>
Title: Is there a fair price for an ebook?
UserDisplayName: babou
ThreadText: # Is there a fair price for an ebook?
  
  (Asked by: username_0 on 2016-03-15)
  
  What is the cost of an ebook? What criteria should I use to decide a
  fair price when the price is left up to me. How can I be fair to the
  seller and to myself?
  
  Several sites offers ebooks, often as bundles, at a low price, or at a
  price to be chosen by the buyer, usually above a minimum threshold.
  Examples I have seen include [Humble Bundle and similar sites](https://en.wikipedia.org/wiki/Humble_Bundle), or
  [Phoenix Pick](https://en.wikipedia.org/wiki/Phoenix_Pick). Phoenix Pick also sells individual books, many of which
  are classic (more or less old), but seems to be mostly established
  authors, with significant price variations.
  
  Then you have sites like [Smashwords](https://en.wikipedia.org/wiki/Smashwords), more oriented towards indies
  (independent authors) who self publish. These are usually recent
  books, with little quality filtering (but is there much with some
  other publishers). Some books are free, others vary significantly in
  price, and prices vary in time. Here again, some books are sold for
  the price the buyer will give.
  
  Thus I often wonder how much I should pay for an ebook, which is fair
  to the seller and to myself. (The problem is compounded in the case of
  bundles with the fact that one may be interested in only some books of
  the bundle.)
  
  Hence I wonder what is the cost of an ebook, independently of the
  content value, which is the subjective part.
  
  AFAIK, and I did look into some actual figures, most of the price of a
  paper book goes into its more material aspects. More than 50% is due
  to printing, storing, transportation, bookstore costs, not to mention
  the destruction of unsold copies. Hence, the cost of an ebook should
  not exceed half the paperback cost, without penalizing the author or
  the publisher. This does not seem to fit what I observe.
  
  There is the cost of digital formating, but from looking at the ebooks
  available at the [Internet Archive](https://archive.org/details/texts), it seem that many have been epub
  formatted mechanically. The result does leave much room for
  improvement, but it shows that digital formatting remains a quite
  tractable task.
  
  Then, I am aware that contents matter. But still, what should be
  considered a reasonable payment for, say, the equivalent of 300 pages in
  paperback.
  
  To give a bundle example, Humble Bundle asked for a minimum of $15 for a
  rather good selection of 20 books, while Phoenix Pick asks a minimum
  of $7 for a selection of 4 books, a lower limit in both cases.
  
  **Tags:** publishing, pricing, sales, smashwords
  
  > **Comments:**
  > **username_1**: This is an interesting question. Unfortunately, it doesn't really fit here for a number of reasons: it's primarily opinion based, it's very broad, and it isn't really the sort of question we deal with; we're more technical issues with ebooks than broad publishing questions.  
  > **username_2**: interesting question so thumb up. Maybe it is better to modify the title to make it more clear.  
  > **username_0**: @username_1 An important point of this question is that a good part of the answer is not opinion based. There are precise figures, actually needed by professionals, to determine the cost of publishing a book, and specifically an ebook. The market structure is well known, if not so much advertised. I suspect that ebooks often carry higher profit per book, and I am asking for objective data. I did check the on-topic page, and it says "the process of publishing and consuming ebooks". Economics is part of it, as long as it is general facts, rather than specific occurences.  
  > **username_3**: @username_0 the cost of publishing a book is not that matched to the price to sell for. The price will depend on marketing etc as you say but the cost depends on the time the author, editors, publisher spent on it and cost of artwork etc  
  > **username_0**: @Mark You are correct that these things matter. Nowever, there are clear guidelines for most books on how the final price, as seen by the buyer is divided in chunks corresponding to the various phases of the book production, distribution and sales. And these figures show clearly that half the price of print books has no ebook counterpart. The votes to have my question closed as opinion based shows that either the voters are incompetent and rely on a naive view of the business, or they have an interest in hushing the issue (sorry, I do not wish to be rude, but I do have some experience).  
  > **username_0**: @Mark This being said. My initial motivation for this question is to determine how much I should pay fairly for open price book offer. And I came to a conclusion that what matters is how much money I pour in the system, independently of the number of books I get in return. The whole point is that ebooks have zero marginal cost. Paying many books at a low price is equivalent (for the ebook economy) to paying fewer at a higher price.  
  > **username_0**: @Mark In a well run business the cost does not depend on how much you spend on the book. Rather, you have to estimate ahead of time how much income the book is likely to create, and you spend accordingly on the various steps of the book production and distribution. Customers will not accept to pay more because you spent more. They pay for what they get, not for what was spent on it.  
  > **username_0**: @Woeitg Thanks. I had to write my own answer to understand your suggestion (change title). I hope it goes the way you had in mind.  
  > **username_4**: That depends. If you write your first book and there are 10-20 word usage errors, and people have to pay $1.99 for that, they're going to be pissed and give you bad reviews. Remember, spell checkers do not check for word usage errors like using one of these words in the wrong place: their, they're, there. [This site](http://nanowrimo.org/forums/critiques-feedback-novel-swaps) has a forum where you can get critiques on your chapter or book. I find word usage errors in about 70% of the free ebooks I read.  
  
  ---
  
  ## 3 answers
  
  ### Answer by username_0 on 2016-03-20. Score: 3
  
  Since some users want to close this question as off-topic or opinion
  based, I decided to give my own tentative answer, based on my own
  thinking since I asked the question, and influenced by some of the comments.
  
  I am well aware of cost issues in publishing, but I have little
  experience as a customer where e-books are concerned. Having to fix my
  own price as an e-book customer is a new experience to me, and I was
  wondering how it is perceived and analyzed by other e-books customers
  and sellers. This type of pricing is not usual where paper books are
  concerned.
  
  Is this off-topic on this site? I believe not. The [topic page](https://ebooks.stackexchange.com/help/on-topic) states:
  
  > The main focus is on the processes involved in publishing and/or
  > consuming ebooks (and related tools), rather than on the content of
  > ebooks.
  
  Though this does not explicitly include economic aspects, it does not
  rule them out. A question such as pros and cons of publishing in XYZ
  format can typically have economic answers.
  
  What is explicitly ruled out is questions about specific books or
  sites, or discussing specific ebooks or ereader retailers, when it can
  be *shopping* or *opinion based*, which does not rule out technical
  questions.
  
  My question is about pricing in the general sense, not specific items,
  and it is an issue that is seriously analyzed by professionals and
  economists. It is a technical and scientific issue.
  
  Many documents do address this issue, for both traditional paper books
  and more recently for ebooks.
  
  It is true that many statements are opinion based, because all kinds
  of people have an opinion to voice, with or without competence to
  justify it (see [Consumers Upset and Confused Over E-Book Pricing](http://www.digitalbookworld.com/2012/consumers-upset-and-confused-over-e-book-pricing/)). Some people have also an interest in keeping this fuzzy,
  so that their market is not understood or analyzed too closely, especially by authors and consumers.
  
  My own usual references on books cost are not in English.
  However, I was able to find rather quickly some new ones on the web,
  such as
  [Book Cost Analysis – Cost of Physical Book Publishing](http://ireaderreview.com/2009/05/03/book-cost-analysis-cost-of-physical-book-publishing/)
  which does itself use several external references.
  
  This article agrees that about 50% of the printed book cost comes
  from distribution (10%) and retail (40%), to which one can add around
  10% of printing costs. This is reduced to nearly nothing in the case
  of e-books.
  
  Clearly, ebooks have their own costs, but they are very unlikely to be
  comparable to what is being saved (some more than 50%) on the material
  aspects of printed books.
  
  What is more likely is that market behavior changes significantly, because eproducts have no marginal cost
  (it costs nearly nothing to make extra copies).
  That is to be taken into account by both the producers and the
  consumers of ebooks. One aspect of it is that the market is a lot more
  competitive as more authors can enter it (I am currently reading a
  very nice ebook that is available only for free).
  
  Another consequence is that some sellers consider that letting the
  customer fix his own price, possibly within limits, is a good way to
  do business. Why do they do this? Fixing my own price as a customer,
  in a way that is fair, also depends on my understanding of the
  economics and of the economic analysis of the seller. There can be, as
  always opinion based assessments of it: some people still have strange
  opinions about well established scientific facts. But this is clearly
  a matter for scientific and technical analysis.
  
  The major point is that paper books both have fixed costs, independent
  of the number of books sold, and marginal costs for each (additional)
  book. They also have a high investment cost in the printing, since it
  must be done in large numbers to be economically acceptable.
  
  The ebooks business has a lesser up-front investment, because no mass
  printing is needed, and no marginal costs (the more than 50% in
  printing, distribution and retail. Once the book exist in epub, mobi,
  or whaterver, it is essentially free for the publisher (except for
  advertising possibly, but that is done only when return is expected).
  
  What matters to the publisher is not the number of books sold, but the total
  income it brings. Any addtional dollar is worth taking, since what is
  given in exchange no longer costs anything.
  
  That is probably the motivations for open pricing and bundle pricing.
  
  Then, I would think that what matters for the producers of ebooks is
  not to get a given price for a book or a bundle, but how much of my
  money I will input in the book production system every month. Giving
  me additional books, that I will probably not read all, cost them
  nothing and may increase my inclination to buy.
  
  So **my conclusion is that there is no real fair price for each
  individual buy**. Rather one should spend monthly a global amount
  proportional to one's means and one's amount of reading.
  
  The role of the seller is to induce a consumer behavior that will
  maximize the total income, rather than the profit per book sold.
  One role of the consumer is to make sure the producers can make a
  living (and keep producing), which does imply a level of spending, but
  not necessarily a high cost per book.
  
  This analysis may not be totally accurate, but it is fairly precise (in a qualitative way) and
  can be disputed on objective facts and arguments, rather than opinions.
  
  
  ---
  
  ### Answer by username_5 on 2016-03-23. Score: 2
  
  I don't have any substantial answer to your question, but I have been thinking hard about it over the years.
  
  Let me summarize some dynamics of ebook pricing and then talk about "fair price."
  
  Ebook production is a very speculative business. You have no idea whether there even exists an audience for your product.
  
  Pricing for digital goods is elastic. You have very little capital costs (the supply is unlimited), and you can price it at whatever you want.
  
  Marketing and promotion is the most significant cost here, and there's some debate whether money spent on marketing and promotion even is cost-effective.
  
  I wrote elsewhere, (NAGLE’S FIRST LAW OF EBOOK PROMOTION AND DISTRIBUTION: Comparatively speaking, it requires more effort to persuade a reader to invest TIME in an e-book than MONEY).
  
  Big 5 have two reasons they can justify increased marketing expenditures: 1)selling the publishing brand and 2)subsidiary rights (movies, translations, TV shows, etc). For most books though, these potential revenue streams don't exist; therefore there's more shoestring marketing involved.
  
  An indie author could spend a lot of money on promotion and it might work, but it might make little difference. Publishers have more capital to spread the risk.
  
  Should the author be entitled to a fair price for his labors (in much the same way as a fair-trade coffee grower should be entitled to a fair share of the profits)?
  
  The more fundamental question is whether the author should be entitled to ANY profits. In other words, some profits are better than none.
  
  Is the author entitled to a fair contract with a publisher? This is harder to pin down because an author wants the publisher to have a substantial enough stake in revenues to have an incentive to promote the ebook. If a book contract gave an author 1% of royalties, in some cases that could be a good deal if the publisher could bring substantial volume.
  
  What attitude should the author have about promoting a "fair price" for the ebook?
  
  In 2005 (before the Kindle) I wrote this article about ebook pricing:
  
  DRM doesn't really matter for the little guy. It matters mainly for mega media companies who have made significant capital investments (in thousands, if not tens of thousands of dollars) and need to recoup their investment by selling tens of thousands of copies. The pricing strategies of big publishers have pretty much been "anti-chump change." In other words, set a retail price that no one seriously will pay (aside from library institutions) and then gradually lower the price until the merchandise starts moving somewhere (even if it is only to the remainder table). But for the independent content creator (say a popular litblogger who is selling ebook novels on his website) the pricing strategy is different. His strategy is not necessarily to maximize price, but to maximize audience. His strategy is to guess the price point readers would regard as "chump change" (so insubstantial that people used to getting things for free won't be bothered by paying it). This may not be the route to becoming a millionaire, but publishing royalties now aren't much better, and at least the poet or novelist doesn't have to wait forever to convince a publishing company to take a risk selling his work.
  
  <http://www.kuro5hin.org/story/2005/5/16/143632/005>
  
  The problem here is that Big 5 publishers typically price ebooks at significantly higher levels than indies to pay for the marketing machinery.
  
  But low price is also a significant marketing device! Part of Amazon's genius is giving authors maximum control over how to price their ebooks and just giving them a consistent share of the profits. Therefore, the author can decide for themselves what is fair.
  
  Now that I have put these thoughts down, I have concluded that a "fair price" is whatever an author determines is the best way to receive a consistent stream of revenue over time...
  
  If an author prices a 1000 page novel at 99 cents,then that is a fair price (because the author assumes that the lower price will make you more likely to buy it). The author might be banking that you will buy future ebooks as well.
  
  One final thing. Places like noisetrade (and even Humble Bundle) let the buyer decide. There is some debate about whether this works (I think it works when you already have some visibility), but the advantage is that some people can compensate the author according to their subjective estimation of value. That might result in more revenue, or it might not.
  
  There is no magical formula, and every author and publisher is trying something different. I've learned not to dismiss any publishing or pricing model just because it doesn't resemble mine.
  
  One final thing. Every year on his Smashwords blog Mark Coker reports on what price has been shown to maximize revenue. I think his most recent survey revealed that $3.99 seems to be the most effective price for a new ebook-- and one might argue that empirically, this is the current "fair price" according to prevailing standards.
  
  
  ---
  
  ### Answer by username_6 on 2016-03-30. Score: 0
  
  Ebook pricing is interesting topic and iritating as well.
  
  For example here in Poland, there is like a few percent difference between a paper book and ebook cost. It is all about taxes, which in Poland are really harsh. And people who get used to paper books - it is obvious what would they choose.
  
  And even because ebook "production" costs are way lower than printing a book, you can't see it because of the prices.
  
  I heard that the situation should be better soon but I hear it since two, three years already. And there's nothing going on except talking and talking about it.
  
  The worst thing is that ebook is considered as a service, not a product. Except when you buy ebook on a CD for example, then it is considered as a product and tax value is 12% different (polish example). But hey - it is unluckily still not that much. Because we are still talking about tax cost difference, not 12% of the whole ebook price. Ridiculous.
  
  As I run a blog about electronic way of reading, I see that a lot of people are sceptical to pay for something they can download for free or have it in a paper version. They still keep a distance to buy something that they can't touch.
  
  Somehow, the most popular way people are buying ebooks here are discounts, which can be really huge and you have a possibility to buy a few ebooks in a bundles which you mentioned. We have a polish portal that works like a comparision site which alerts you via e-mail when there is a discount on ebook that you are interested about. On a bigger bookstore events you can get your ebook for even 90% (!) less price (example of a last holiday event of one of polish bookstores - "Napoleon the Great" by Andrew Roberts which is a huge and expensive book was about 90% cheaper).
  
  Going back on taxes topic - I heard that France and Germany made a revolutional change of pricing and made the taxes for ebooks way smaller. But then EU came up with anger that it conflicts the constitution and rules and I heard that it doesn't work the way they managed anymore... That doesn't help as well...
  
  Content? I don't think so. Unless it is for example a historical, huge book which costs in normal way a lot (again the closest "Napoleon the Great" by Andrew Roberts example), the difference in ebook price is much more seen than in case of a 'common' popular (f.e. fantasy, thriller) book/ebook which costs - let's say - a half of it in the beginning.
  
  I don't say that ebooks should be close to be free-to-download. I just say that if you would see for example up to 50% difference between paper version and ebook version, people would be much more interested in convincing themselves to read ebooks. And what comes after - a scale of a piracy would be way lower.
  
  And it wouldn't harm the paper books sale for sure. Because if someone like to have impressive library - they will buy paper books anyway.
  
  Because no matter how - reading counts in every way.
  
  But let's be fair and don't pay for something you can avoid.
  
  And the most important: Less price = higher sales, doesn't it work like that?
  
  > **Comments:**
  > **username_7**: This is a rant about the Polish tax system, not an answer to the question whether there is a fair price for an ebook. Apart from that I never noticed **any** difference with taxing eBooks compared to normal books in Germany in the last 13 years I lived there.  
  > **username_6**: Well maybe it was just a France. All I meant by my answer is that the prices are not how it supposed to be. I gave example of Poland because I was born here so it was the closest one. But as I presume we are not the only one having problems with a fair prices of ebooks. I guess the problem lay in that ebooks are still not so popular way of reading. Hopefully it will change nowadays when the popularity is higher and higher everyday. Maybe I understood the question wrong, but I guess you missed my point.  
  
  ---
  
  