Amanda Hocking On Strategic Pricing 4 Ebook Millions!
Meet Amanda Hocking. A simple woman from Austin, Minnesota, who has been a struggling author… until April last year. She became a self publisher through the E-Publishing format.
Amanda have been writing for years, but have only been a self publisher for a year or so. She published her first ebook in April 2010. She inspires me greatly. She was working full-time, say from 3pm – 9pm and then she wrote 8 – 12 hours on end per day. If there’s someone who knows about marathon writing, it’s me. That’s how I wrote my first book. What we have in common is red bull and eats – keeps you going and ‘sort of’ fresh.
She then mentions that Ebooks are equally, if not better in quality (and stays that way, being electronic). Therefore people are likely to buy them more than traditional paperbacks. What I found most interesting, and perhaps the key to her success (not omitting her writing talent, of course), is what I cal her pricing strategy. I don’t know if she did it consciously, but here is my breakdown of what she’s done.
Amanda Hocking’s pricing strategy (that made her millions).
[Before we get to numbers, I have to add that I suspect that she had a writing strategy, along with her pricing strategy. I could be wrong, but she probably lures her readers in and make them so addicted to the characters (like a 12 year old on crack) that they cannot do without. They simply have to find out what happens next. You can find out a little on how to write a book series here. Along with those tips an open ending/cliffhanger is probably one of the many essentials]
- She priced the first book in her series (read about the elements I think she used above) at $0.99. If the internet were a book shelf, these ebooks would have literally flown off the floor. This of course is the lowest price allowed. The low price is part of a strategy to get you to buy the book, read it and be absolutely convinced that you HAVE TO get the next book).
- The next book is priced at $2.99, which is the lowest price to ask giving you a higher royalty percentage.
- I don’t know if there is a next price range, but even if she stayed on $2.99, the profit is still very good ( speaking under correction, I think her platfortm is Amazon and royalty is at 70%).
Amanda explains her strategy in plain terms.
If one person reads one of my books, simply because it’s so cheap, and they like it, and they go on to buy all my books, that ends up being a pretty decent profit for me.
I know what you mean, Amanda. I recently started explaining to bloggers how self publishing is a hidden monetization method.
How this strategy affects sales.
To get the full impact of this strategy, lets look at some sales numbers gathered from her interview [She started self publishing in April, and according to her, the sales took off from June].
- May, 100+ copies sold.
- June, 7000+ copies sold (Sales were going up every month).
- July – October, average between 5 000 – 10 000 copies sold.
- November, 25 000 copies sold.
- December, 100 000 copies sold.
Let me put the two in perspective for you. That amounts to about $1.4 – 2 Million in royalty payments. The fact that she’s a millionaire still has to hit Amanda. I wonder if it will hit me when I make my first million?
EXTRA!!! Author M.J. de Marco on EPublishing and how Amanda’s story affects the industry.
M.J. de Marco is the author of ‘Millionaire Fast Lane‘ and has an interesting take on the story. M.J. thinks, contrary than myself, that in stead of inspiring it gives opportunity to what he calls ‘money chasers’ to rape the industry through their hit-and-run methods.
He says this is a ‘fast lane’ story of epic proportions. It’s probably the worst thing that could have happened to the E-Publishing industry. He says the reason he feels this way, is because it has now caught the attention of the ‘money chasers’. This is because as soon as a viral story like this breaks, everyone jumps onto the bandwagon.
In his book, M.J. has a concept he calls ‘The Commandment of Entry’ – which basically means that as soon as the entry level into a profitable or viral market falls, so does the opportunities fizzle out. Also, as soon as entry barrier to a profitable or viral market become known, it also starts to decline. So, what this means for me and you is that the market then get’s flooded with crappy books (sic).
Then, according to MJ, there’s a fast lane prism we have to consider. As the market is flooded (according to his ‘Commandment of entry’), the market will degrade within a period of six months to a couple years.
My response to these statements.
I don’t agree with M.J. on this 100%. Sure, he may have put a lot of research into the concept, but I don’t think it could be correctly applied to E-Publishing. Here’s why I think so:
- There are around 6 Billion people in the world (and counting). Of those I guess 10% are active on the internet. That’s a potential of 6 million people you could possibly reach. Of course there’s different markets, but if you know how to do internet marketing properly, you can do it. I don’t think M.J. will refute this. However, his concern is quality banging up the market.
- Ebooks have been around for years. If you go onto Clickbank right now, you will find a dozen products telling you about the opportunity ebooks hold for online entrepreneurs/writers to make good money. They have been there for years, so I don’t think it will cause the market to drop. In fact, with new technology being born everyday, it will grow.
- The things about Ebooks, and books in general is that they are niche/trade specific. The concept of internet marketing is to produce a product that millions will use (like an iPhone app) and sell that. I don’t think Ebooks apply to this theory. Only Carpenters will buy books on woodworking and perhaps wood types.
- Authors don’t just sell books. They need a name and have to build a reputation to sell more books and to up sell to the $2.99 follow-up. Every internet marketer know you won’t get rich off of 99c products.
- Adding to previous point, if an author writes one crappy book that’s invaluable, he will not sell much of it and definitely no more. With the nature of the internet and possibility of news spreading like a virus, bad reviews will stifle sales very quickly. So not everyone can make a success of this. Not everyone can be an Amanda Hocking. You said it yourself, she’s good at what she does.
- The entry barrier being lessened everyday is a good thing. Especially with the gatekeepers that used to rule the industry and the stumbling blocks to getting published. This is what my blog is built on, encouraging people to keep hustling so they can make their dreams happen.
- The chances you’ll sell a 100,000 copies of a book when it’s a crappy, invaluable read is slim. You have to really have excellent copy and a lot of B.S. to make that happen. Not likely.
Let me tell you a story. If I got to a blog and download a free report offered on the blog and the book is crap, I won’t even go to the blog again. I won’t read his emails, in fact, I will completely unsubscribe. Forget about me buying his products. I’ve downloaded one or two of them that were so bad, I feel the time it took to download the book (however short) , was a waste of my time.
Do you think Amanda would have made a success of her books if she hadn’t been honing her craft for so long? Kinda makes one think that perhaps MJ’s statements were founded in some way. What do you think? Can one make a success with E-Publishing if you’re a crappy writer?
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Image courtesy of inforum.com
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