Tax and e-book pricing ~ RJ Scott: Outside the Margins

Join us as RJ Scott goes Outside the Margins.

RJ Scott I was thinking hard about what to blog about for the thinking outside the margins post this month. It’s Christmas and I’m in a good mood and controversy is softened by chocolate and alcohol… still… something happened in the last few days (this blog post was written 23 December) that has made me a little snarly.

It effects the second most controversial thing in ebooks after whether or not a woman can write a gay story (ROFL). By this I mean the thorny subject of ebook pricing.

Now, I’ve blogged about this before. In general the following applies for me:

    • I have no control over how a publisher prices me.
    • I DO have total control over how I price me through Love Lane Books.
    • A cup of hot chocolate (I don’t drink coffee) from Costa is £3.50, actually more expensive than all my books barring Christmas Throwaway and The Heart of Texas.

Now one of these statements needs qualification.

Yes I can set my own price through Love Lane, with a few provisos.

    • The first is that a book has to sell for a minimum of $2.99 to qualify for the 70% payment from Amazon. Any book under $2.99 or over $9.99 only qualifies for 30% (or 35% I forget!).

 

    • The second is that there is a general feeling out in reader land (of which I am a voracious member) that there is a limit to what people will pay. I will only pay more than $4.99 if the author is an auto buy. Some people I know will only buy books at $3.99 and under. Others don’t have an issue with price at all.

 

    • There are too many 99c sales which is possibly setting a precedent for price?

 

    • There is a keen perception of value for money from a reader and that informs the writer at the end of the day as to the kinds and lengths of books they write.

 
So, in general, with some exceptions, I (and by that I mean RJ Scott) sell at $1 for each 10,000 words. The exceptions are books under 30k, older books, and of course a couple of books that don’t fit into the rule because of popularity and/or sales. I thought I had found my happy place.

Then something happened.

Amazon pissed the EU off by charging percentages for VAT on ebooks then registering in Luxembourg and only paying over 3% (or some other devious dastardly plan in which Amazon attempts to rule the world!)

So why has this caused me angst?

Because the new VAT/Tax system will ultimately affect e-book price. Simple.

A book that might have been showing as a particular price will now appear higher and people may well be put off taking a chance on a book. Taking me as a reader as the example, it’s okay if you’re on my auto buy list, but what if you aren’t, and the VAT addition pushes the price of your book over the magic $5 (of course in equivalent pounds!)

I don’t know how this will pan out in the end, but I  really think 2015 could well be the year of an e-book pricing crisis. I am certain that the first to feel the pinch will be new authors, especially those with publishing houses who have overheads to cover.

I think 2015 will be a learning year and I hope by the end of 2015 we have all found our happy places with pricing.

What do you think is important in pricing an e-book? Do you have a buy ceiling? Are you an author uncertain of where to price your book?

About

Bodyguard-vol-1 Title: Bodyguards Inc Volume 1
Publisher: Love Lane Books
Genre: Action/Adventure, Contemporary, Gay Fiction, M/M Romance, Romance

Bodyguard to a Sex God – Bodyguards Inc book 1 Bodyguard Adam Freeman draws what everyone else thinks is the short straw at the convention for a procedural cop show – as bodyguard to TV actor Logan Brady. Or as the Internet has labelled him, Logan ‘Sex God’ Brady. Adam gets more than he bargained for when his client combines coming out of the closet with them both trying to stay alive.

The Ex Factor – Bodyguards Inc book 2 When Bodyguard, Ben Collins, finds Daniel Lincoln in a room, hiding and hurt, he doesn’t immediately think Daniel is the victim of abuse. Daniel is good at pretending and being a finalist in a TV singing competition he seems like he has it made. Daniel is trapped in a relationship where anger and controlling hate are the only emotions he is given. When his boyfriend crosses the line and leaves Daniel vulnerable and broken there is only one man that he wants to call. The sexy bodyguard who promised he could help him.

Bodyguard to a Sex God – Bodyguards Inc book 1 Bodyguard Adam Freeman draws what everyone else thinks is the short straw at the convention for a procedural cop show – as bodyguard to TV actor Logan Brady. Or as the Internet has labelled him, Logan ‘Sex God’ Brady. Adam gets more than he bargained for when his client combines coming out of the closet with them both trying to stay alive.

The Ex Factor – Bodyguards Inc book 2 When Bodyguard, Ben Collins, finds Daniel Lincoln in a room, hiding and hurt, he doesn’t immediately think Daniel is the victim of abuse. Daniel is good at pretending and being a finalist in a TV singing competition he seems like he has it made. Daniel is trapped in a relationship where anger and controlling hate are the only emotions he is given. When his boyfriend crosses the line and leaves Daniel vulnerable and broken there is only one man that he wants to call. The sexy bodyguard who promised he could help him.
Amazon US
Amazon UK

~ RJ Scott

Farewell Giveaway
I have a number of paperbacks, most of which are signed, to giveaway. Over the between now (11 Mar 2017) and 31 Mar 2017, every comment on the blog (this post and all other new posts), will be entered to win 1 of these paperbacks. There are also some misc swag items, so there will be a few packs of these to give away as well.

Thank you so much for your support over the last 4 years. Prism will be closing its doors on 1 April 2017. All content will remain available, but no new content will appear after 31 Mar 2017. As such all request forms have been turned off. Again Thank you,

Brandilyn
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Prism Book Alliance® assumes no liability for the ownership of photos or content used in guest posts and interviews.  The post author assumes all responsibility and liability for this content.

19 thoughts on “Tax and e-book pricing ~ RJ Scott: Outside the Margins

  1. After seeing mainstream ebooks on the Kobo site for up to $25, I cannot imagine complaining about the price of MM books, oh wait, I never did complain, in fact, I pay upwards of $20 CAD for paperbacks of my favourite authors AND have the ebooks as well. If a book is priced at $6.99 and is 50k words or more, that to me is a steal of a deal but I will not let price determine what I read, I also look at reviews, the cover, the blurb and listen to word of mouth. While these are not guarantees of a good reading experience, the tools are available and as the saying goes, (not quoted, but you get the point) everybody reads a book differently. In the end, if I want to keep reading, I need to make sure my authors get paid fair wage for the work they do, this IS a business and a pleasure.

  2. I dont have a price limit per se, anything over $6.99 I check I really want it – also have to factor in exchange rates on some sites! Amazon isn’t my first port of call but it does annoy that they charge

  3. I have a somewhat different view on this than most readers I know, I buy from ARe, or in a pinch, Smashword, because the VAT in Denmark is 25% and I only have to pay that on Amazon, but on ARe and SW I can get 2-3 ebooks for the price of one paperback (of similar length) from a local book store, basically, ebooks, for me, are very, very cheap, even at $6.99
    I love ebooks 😉

    (Non m/m books go on my birthday/christmas wishlists as paperbacks)

  4. Taxes schmaxes and more price wars and the readers won’t buy unless it stays affordable. Then the author is hit due to low sales, and on and on. Publishers only have so much say too to the big wigs like Amazon and Barnes and Noble. Something has to give. At this rate when a paperback on sale can be less than the same ebook. There is a problem. How do you get it solved and permanently I wonder if ever.

  5. A lot of publishers seem to go for $6.99 for a novel length – I will almost always wait for a 25%-30% sale before I buy, unless it’s an auto-buy author, and even then I have to try to justify spending that much on something that I can read in a day. There are a few books I’d really like but when they’re priced at $7.99 and up I give it a pass. I can’t really compare the m/m ebooks to paperbacks because most m/m ebooks aren’t nearly as long. No matter what, I spend way to much on ebooks, but I choose this over Starbucks any day.

  6. Well said! and I know this new ruling has hit many people who are selling online, whether it’s ebooks or craft patterns or whatever. We can only hope HMRC sees sense in the end and allows a reasonable level of smaller digital businesses back into the market by setting up a minimum threshold. Because the Amazons of this world will cope with it anyway :(, it’s e-publishers and readers who suffer.

    As a reader I have a price threshold in my mind when I buy and $6.99-7.99 always makes me think twice. The book would really have to be from an auto-buy author, and even then I’d wait for a discount sale, too. I suppose I compare it unfavourably to the price of a paperback – even though I can’t fit any more on my shelves! – or a pizza *g*. I think if the price is low, I’m much more likely to impulse buy. So I’d hope the author benefits from volume rather than a high margin.

    God, I sound like an accountant – oh yes, that’s right, I am 🙂

  7. Personally, if it’s a good book, I will pay $6.99 for 80,000 words+, 5.99 for 60-80k words, $4.99 for 40-60k words, $3.99 for 25-40k words, $2.99 for 15-25k words, and $0.99 for under 10,000 words. But it also does depend on the writer, publisher, and story. I generally don’t buy serials anymore. Instead I wait for them to come out as a complete version.

  8. I tend to stay around the $6.99 market unless the book is quite long and or is one I really, really want it. I’ve paid quite a bit for ebooks I really wanted in the past and it didn’t bother me, tbh.

    As someone who hopes to publish next year, I’m honestly not sure about pricing. I’ve sort of got an idea in my head, but this whole tax thing now has me sort of worried.

  9. I don’t really drink, I don’t smoke, I don’t gamble and I’m single so the only person I answer too about money is me. This means I don’t have a limit on book prices although I do think twice on the higher priced ones. If I see a book is on sale or priced at 99c I am likely to snap it up. Only then it is likely to stay in my unread folder cos I need a spare 6 months to catch up on my unread pile, so actually an expensive book is more likely to be read as I must have really wanted it. I do look at page counts and am actually more likely to pay a higher price from a publisher as a lot of self pubs can be poorly edited (not yours lol) The publisher charges more as they do provide services. That said there is way too much inconsistency in pricing which is why I rely on word of mouth when checking out a new author. What ever happens with the tax I just hope it doesn’t stop authors writing cos you are all fab and I need you 🙂

  10. As an author I have no say in the price my publisher set, and I have faith that they are covering all bases – watching the market, covering their costs and paying a decent amount to the author.

    As a reader, I will have to say I usually only purchase an eBook priced between $4 & $7. I prefer longer books, and this seems to be the market price for them. Anything less than this I assume the book is either too short, or from an author that isn’t any good (hence the low price). In fact, I usually bypass the 99c stories because I have been stung too many times with either a poor written/edited novel, or finding out on the last page I need to pay $5 to get the rest of the story because it just ended abruptly. I baulk at paying more than $6.99, but I also don’t pay less than $4 unless I know what I’m getting.

    As an Australian, the prices on my screen are usually in $AUD and are around $4.20-$7.30 when listed in $AUD. I know that little difference is just the exchange rate. I’m hoping to give credit to the readers, and that they understand that what they bought in 2014 for $3.99 will now be just a touch more. Same book, but new price that everyone has to pay.

    I’m a realist. Prices have to go up somewhere. Inflation, people. I’m happy to support my authors and the industry.

  11. Hmmm sounds like this might make things more tricky for small sellers online!

    I know for myself as a reader if I don’t recognise the Author, the cheaper the book the more likely it is to be impulse bought.

    If its over $7 then there is definitely a very close scrutiny of the review, blurb etc to see if I do want it.

  12. This just shows me that the world of epublishing is still in devellopment. It has been for a long time, with some good changes and some bad. For the most part mainstream publishers don’t know what to do with epublishing yet and no guidelines have been set that will hold. Amazon just has a big part of the market and they try to make the most of it. It’s all for the money.

    In light of there not being much guidelines, it much depends on the publisher and the author what I’m willing to pay for an e-book. Though it very rarely crosses 10 dollars. If it’s higher, I will get the printbook through BookDepository.

    Thanks for the insightful post, RJ

  13. As an author I’m with Renae here, I don’t have any self-published works out and I trust my publisher to handle that.

    As a reader, I can’t help wondering: Will I still be able to buy ebooks directly from the (non-EU) publisher? In Germany, VAT is 19% and German ebooks often are almost the same price as paperbacks. Also, there’s a price fixing law in Germany that basically says that books/ebooks have to be sold at the same prices no matter which shop. So what will publishers/distributors do – block international downloads as Amazon already does (I can buy kindle ebooks only at amazon.de, not at amazon.com)? Force me to buy via Germany-based shops? That would suck.

    I ‘m not generally put off by higher prices, but anything over 8 euros makes me stop and think twice if I REALLY need this particular book that badly. I don’t even link my decision to word count and such, only to the amount in and of itself. I’ve paid up to 15 euros for ebooks I really, really wanted to read, but normally 10 euros tend to be my absolute limit.If it’s higher, I can just as well buy a print book.

  14. I understand that. My limit is $9.99. If it is more than that I have to justify it to myself. That is weird because I have and do buy paperback books for more (usually craft books). It helps to know what is going on when I see an increase in the prices though.

  15. While I don’t have a max price I will pay, I am reluctant to buy a book over $6.99 unless I am well familiar with the author. And, for me, $2.99 is fine for short stories, as long as it isn’t a serial, unless the serial is complete and I know, up front, how much the whole thing will cost me. Serials are different for me because it can often seem like the author is just milking readers. For serials, I’ll pay $0.99 or $1.99 depending on the author. It helps, though, knowing what the royalty percentages are.

  16. I was wondering why I have been seeing more ebooks priced at $6.99. I am with Jewel though I am reluctant to pay that price for an author i am unfamiliar with. But this helps to know why ebooks have become so expensive.

  17. I have just brought several ebooks on a special New Years day promotion. before completing checkout I was asked to confirm it is was a UK billing address, $7 was added to the bill. Unfortunately it will now make me think twice about what I buy. I will still buy work by my favourite authors but it will be new authors that will not be brought as an impulse buy. I might stop buying via US sites, but sometimes that is the only way to get a copy without waiting ages for it to be released on iBooks or kobo.

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