How Amazon Would Price E-Books

E-books should be sold to maximize profit. Without all the costs associated with physical books, e.g. printing, shipping, stocking, etc... there is no reason they should be priced the same as the physical book. Amazon also takes such a stance, noting they found a book was purchased 1.74 times more when priced at $9.99 than it was when priced at $14.99. While less money would be made per sale, it would be more than made up for in quantity. This is a topic I've wanted to explore for a while, so I'm really excited that Amazon has taken this on and has real sales data to support the argument.

I've always felt e-books would sell best in the $5 range, and I'd be really interested to know if Amazon had customer behavior data for that price point. At $5 it would seem you'd be entering the impulse-purchase range where people would take a chance on a book because even if they don't read it or don't end up enjoying it, they wouldn't feel as bad as they only spent a few dollars. It happens every summer during Valve's Steam Summer Sale. Video games are priced anywhere from 33% to 75% off. While I might not be interested in a game at $40, I'd definitely be more interested at $12; that price point lowers the risk of being burned by a bad game.

In the end, I hope publishers wise up, let go of their legacy pricing structures and embrace a lower price point. I know it's a psychological barrier, but greater profit tends to break those types of barriers down.