This will be the opening of a can of worms, talking about pricing. Not very appetizing but necessary to suffer through. There are so many little variants that even if you want to set the price for your book at a specific number, say, $4.99, you might not be able to. Let's examine them one by one.
1. Size of the file (ebook).
I didn't discover this little annoying fact until I tried uploading Blue Sparrow 2 everywhere. Some sites, like Nookpress, choked on it. It's a whooping 100+ Mb file because every page has an illustration. Who knew? I didn't. On top of it, I couldn't price it lower than $2.99 due to the size of the file for Kindle. Since Amazon is one of the major distribution channels I use, I had no choice but to price it $2.99 everywhere else too. We tried reducing the quality of the images with Stuart to reduce the file size, but they started getting blurry, so the slightly blurry version is the one that went to Barnes & Noble. The other places, like Amazing and iBooks, for the full-res one. Lesson learned.
2. Number of pages (ebook + paperback).
This is again not something you think about when writing your novel, but once you try pricing it on Amazon, if it exceeds a certain number of pages, you're not allowed to price it lower than a certain price based on that number. Again, this is tied to the file size for an ebook and to the amount of paper needed for a paperback. This is why I broke up Siren Suicides into 3 books. One book was simply too large. Again, who knew? So if you write a really long book and you're an unknown entity, it might be worth it thinking about breaking it into parts and offer those parts at a lower price as opposed to uploading the whole behemoth as one and charging some astronomical amount of money for it.
3. Size of the book (paperback).
The physical size of your book is also a factor. I have seen blog posts and articles suggesting to pick the 6" x 9" size for your self-published paperback. This is too large, in my opinion. I like holding a smaller book in my hands, so I made Rosehead 5.5" x 8.5" and it was still too large. I sized Irkadura at 5.25" x 8" and that's the sweet spot for me. Although here again the number of pages plays a big role. When you make the size smaller, the number of pages increases. You can decrease it by reducing the font size, but then you run the risk of making it too small, so it's a balance of all these factors. For example, Irkadura is 60K words, 262 pages, 5.25" x 8", and the font size is 11. I will make The Badlings the same size (it's 63K words).
4. Percentage of royalty (ebook).
Like I said before, there must be some useful information out there about this. The problem I'm having is, I can't set my books at 70% royalty in Kindle store because my books are not enrolled in KDP Select since I offer all my ebooks for free on my site and they're not eligible. I haven't found a way around this yet. I'm sure there is a way. If I learn of one, I'll let you know.
5. International distribution (ebook + paperback).
Naturally, you will want your books to be available internationally. If you select that option, depending on the distribution channel your price again may vary, and in some cases you'll need to adjust it and play around with different options. Just make sure that once you settle on a price for your ebook and paperback, it's the same across all channels.
6. Comparison to other books (ebook + paperback).
If you compare your book to others, your head will spin. There are too many things to consider: books in the same genre, at the same price point, traditionally versus indie versus self-published, books by similar authors, books in the series, etc. Once you start reading studies about prices, you might want to crawl under a rock and sit there for an eternity. How do you even decide? You just pick a price and go with it, and then see how it does. That's the beauty of self-publishing: you can always change it with a click of a button and see how it performs.
7. Comparison to your older books (ebook).
And here we come to an interesting point. Once you have more than a couple books out there, how do they stack up? What does your book portfolio look like? For example, I have decided to raise prices for my newer books by a dollar simply because the quality of my writing is improving and I feel I can charge more. Because Blue Sparrow (ebook) is priced at $0.99, I wanted to price Blue Sparrow 2 at $1.99. Hahaha. I couldn't because of the file size. And so, because Blue Sparrow 2 (ebook) got priced at $2.99, I went ahead and raised the price for Rosehead (ebook) from $2.99 to $3.99 because it's in a different category than Blue Sparrow 2. I can't charge the same amount of money for a little book of tweets and for a novel. There is a 1-year-old study I came across recently that says the sweet spot for ebooks is $3.99. That's not why I changed Rosehead to $3.99. Rosehead has proven itself to be at a price point higher than $2.99, that's all. I will experiment with paperback pricing too.
8. Making money (ebook + paperback).
In the end it comes to making money. Are you selling more ebooks? More paperbacks? Have you proven yourself trustworthy enough for your readers to fork out any amount simply because they know you produce quality stories? It's a game. Start out small and cheap, and then raise the prices gradually and see what happens. You might make more money by selling more books at a lower price than jacking up the price too high and selling none.
9. How much are your readers willing to pay (ebook + paperback)?
You can always ask your readers what they think your books are worth. I did that at the very beginning, about 3 years ago. And I'll do it again. What would you guys pay for my ebooks and paperbacks? Are the prices I have listed right now working for you? Would you pay less? More? Let me know.
10. It's not about the books, it's about the time.
Ultimately you're not competing with other books or even with other authors. You're competing with other things that your readers could be spending their time on, like watching TV shows, going to movies, playing games, staring at paintings in the museums (yeah, people still go do that), shooting ducks, shooting bears, drinking vodka, bribing police to let you run around naked. You know, there are a centillion ways to entertain yourself. Why would someone pick up your book? What is their time worth? How long does it take to read a book versus watch a movie and how does the price for either break down? Here is a good article about that, in case you're interested. So what you have to do is build your tribe, and then ask your tribe how much of their hard-earned cash they're willing to part with for you to entertain them. They'll tell you.