“Price Pulsing”: the Benefits of Dynamic Pricing on Amazon

Before reading this article I strongly suggest you read both my recent article Gaining Traction in the Amazon Ebook Marketplace and Amazon Best Practices. You will need the knowledge described in both of them to really take advantage of the information given here to enhance your royalties.
As noted in my latest article, Gaining Traction in the Amazon Ebook Marketplace, regarding Amazon’s internal recommendation system, the more books (units) you sell, the more you are recommended out into the queue and the more books you tend to sell. The contrary is also true. The fewer books (units) you sell, the less you will be put into the recommendation queue and the less you will sell, until you settle somewhere in the deep 100,000s or lower.
The other important fact regarding Amazon’s internal queue is that it appears to be “price blind.” It rewards you for total units sold, not for the royalties generated by those sales. Therefore you could sell 1,000 copies at 99¢, or 1,000 copies at $9.99, and your book would go into the internal recommendation queue at the same rate. It is also pretty obvious, with the bargain-shopping mentality of Amazon customers, that you tend to sell far more copies at 99¢ than $9.99. It so much easier to sell 1,000 units at 99¢.
This is the “inverse” effect between rankings and royalties. The cheaper your book, the more you will tend to sell, and the higher your rankings. Higher rankings may qualify your book for bestseller lists, which then help you gain more sales because of increased discoverability.
The only problem with this 99¢ bonanza is that it brings in dismal royalties (even when you rank in the low hundreds). Set your price higher, and you will garner more royalties per book. However, you will sell fewer and fewer books until you slide off the bestselling lists and back down into the 10,000′s–200,000′s range.
But there is a way to have the best of both worlds: “Price Pulsing.”
Price Pulsing is when you take a book down to 99¢ temporarily to gain more unit sales, get into the recommendation queues, rise into the bestseller lists, and then, as you “peak” (rather than gaining rankings, you begin to slip back down), switch back to your higher retail price. In general it will take you seven to ten days to reach your “peak” or “crest.” Changing prices at the height of your pulse puts your book into the recommendation queue/bestselling lists when it is the most discoverable, thereby reaping royalties you could not have seen any other way.
And don’t forget that all of those 99¢ sales are going to give you “traction” over the next week and even month, because of how Amazon rewards unit sales (see my last article here if you need to brush up on how Amazon’s internal recommendation queue works). Your book will go into the recommendation queues more frequently, selling more units at the higher rate for weeks to come.
However, as noted in my last article, this effect is finite.
As your sales decline, Amazon will reward you less and less until it “unlatches” completely and you are back down to the sales ranking you had before the pulse.

This is how you Price Pulse:

Reduce price (most of the time to 99¢; however, for books in the upper price range of $7.99–9.99 a drop to $2.99 will have the same effect, although not as powerful)
Ride out this wave of sales.
At the “peak” or “crest,” switch back to the regular retail price.
Fall in ranking, but gain additional royalties, thanks to greatly increased discoverability.
Enjoy this benefit of increased internal recommendations for up to a month.
Prepare to do it again.
Other key aspects of a successful “Price Pulse,” are:

Announce that this 99¢ price is a promotional price, as we never want to undermine the value of our books. Make it clear in the product description that 99¢ price tag is a special, limited time offer, and take advantage of the “get ‘em while they’re hot” mentality. In this way customers appreciate the sale but do not think your book is only “worth” 99¢.
Do NOT put a specific time frame in the product description. Use terms like “limited time,” “special promotion,” or “for this week” (which can run for as many weeks as you need it to run). We do not want to say “until September 24th,” because we do not know when our sales will peak and we do not want to be locked to any specific dates.
Once you have optimized your product description (see my article here on the subject) and our back matter (if you are unclear on how to accomplish this, I will publish a set of articles in November to help), so that any sale we get from this price pulse will travel downstream to our backlist.
You can also add social media promotions to the mix (because the one time people on social media are very likely to make a purchase is because of a low sale price) and paid advertising to drive your book up the bestseller lists as high as you can, to really enhance your discoverability.

Can we do a “price pulse” to the same book every month, month after month? Yes, but the effect tends to fade, especially if you are using any form of social media to help propel the pulse. Do not despair, though! This is where “sales nodes” (grouping like books together to into a discrete sales unit where they resonate, creating a lift for the entire node), come to the rescue. Those nodes will be the topic for my last article in this series.
As always I will be monitoring comments on this article (along with all of my others) and will try to respond to your questions within 24 hours!

By Carolyn McCray, Author
Carolyn McCray is a social media and sales consultant to writers and publishing houses alike. And using the principle laid out in this article, her recent non-fiction book, “Dollars & Sense: The Definitive Guide to Self-publishing Success” debuted at #1 on the Amazon Bestselling list for Study & Teaching and reached #2 on the Authorship Bestselling list beating out such rock stars as JA Konrath and Zoe Winters. Carolyn is also the founder of the Indie Book Collective, an organization dedicated to helping writers utilize social media to sell their books.

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