There are several factors at play when it comes to determining the price of your book: how much your book costs to print, how much money you hope to make per copy of your book sold, and how much your readers expect to pay for a book like yours.
The last factor on that list is a good place to start. A simple way to figure out how much readers expect to pay for a book like yours is to first make a list of comparable books (in both genre and length) to yours and then find the retail price for each one. The more books on this list the better. Once you've done your research, you'll quickly see the price range most publishers stick to for books like yours. This is the range your readers will expect your book to be priced in.
The price you set within that range will be your suggested retail price, but it's not the only number to concern yourself with. You'll also need to know the following:
Your book's print cost
Your book's wholesale price
Let's look at how those numbers factor into play.
When you list your book in a print on demand catalog and make it available for stores to stock and sell, you enter a suggested retail price for the book based on your earlier research. However, you are not selling your book to readers at this point. You are selling it to bookstores, who in turn sells it to readers.
When a bookstore buys the book from you through a fulfillment service, you must offer it to them at a price lower than the price they will sell it at in order for them to make money. This is the wholesale price. The typical industry standard for a wholesale price is 55 percent off of the suggested retail price. That means if your suggested retail price is $15, and you are offering stores the standard 55 percent discount, the wholesale price would be $6.75. From that price, the printer will subtract the print costs. What’s left is your profit.
Let’s say your book is 250 pages long with a print cost of $4.20. Here’s how the math would work out:
Suggested retail price: $15.00
Wholesale price (assuming 55 percent discount): $6.75
Your profit after the $4.20 print cost is deducted from the wholesale price: $2.55
If you wanted to increase your profit, there are a few things you can do:
Opt for a higher suggested retail price (not recommended)*
Reduce the page count to lower the print cost
Offer bookstores a lesser wholesale discount
Although a 55 percent wholesale discount is preferred, most bookstores will be okay with you offering them the book at a 50 percent discount. If you drop that down to 40 percent (the lowest you should go), most physical bookstores won’t stock the book, but online stores will still list it.
Keep in mind that these numbers pertain only to books sold through stores. When you sell books directly to readers yourself at your suggested retail price, you keep all the profits after the print cost is deducted.
Also keep in mind that your suggested retail price is just that: a suggested price. Most bookstores will sell the book to customers at your suggested price, but some will sell it for less in an effort to lure customers away from other stores. The good news for you is that this will not effect how much you make on the sale because you make your money off of the wholesale price, which you control.
For ebooks, the same advice for setting your suggested retail price given above applies. Since you don't have to factor in the print cost for ebooks, you will have a higher profit margin.** For ebooks, you will generally make 60–70 percent of the ebook's suggested retail price.
* A typical mistake many self-published authors make is to increase the retail price to make more money per sale. This can do more harm than good. If you are pricing your book higher than the norm for your genre, people are not likely to buy your book. It is much better for you to sell several copies of a book with a lower profit margin than one copy with a higher one.
** Because ebook profit margins are higher than those of print books, a pricing tactic used by many self-publishers is to sell their ebook at a low retail price in the hope of driving up sales numbers (and getting better placement in online stores). A good range for this is $2.99–$3.99.