From Digital Book World:
Sometimes the simplest thing you can do to give your book a boost is play around with the pricing.
It’s one thing to have a book, but it’s quite another to have one that actually sells.
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Consider the ebook. In general, I find that most traditional publishers don’t know how to price an ebook. I’ll see ebooks priced at $9.99 and up, which is a deterrent for most readers. As you build your marketing plan, keep in mind that ebooks should not be priced equal to their print counterparts. Even pricing them within a dollar or two of a $14.95 book is too high.
I have talked to the folks at KDP (Kindle Direct Publishing) about this, and they’ve told me that their “sweet spot” for pricing (in terms of what they see gets the most traction on their site) is pricing between $2.99 and $5.99. Now while these numbers might horrify you, keep in mind that deciding to price your book to suit your market will actually help encourage a buy, rather than discourage it.
Price rotation. Now this is where the pricing strategy really gets interesting. When was the last time you changed the price of your book on Amazon? And I’m not talking about a price drop for an ebook promo; I’m talking about playing with your pricing.
So, for example, I cited the price range of $2.99 to $5.99, and while you may disagree with it, why not give it a shot for a week or so? Changing your book price can help spike your exposure on Amazon, because it triggers Amazon’s internal algorithm. Sometimes I work with authors who will shift their book pricing regularly, from $5.99 down to $2.99 down to $1.99 and then back up again. I would, however, be careful about doing this too much. You don’t want to be shuffling your book price two or three times in a week.
Take a page from physical stores and how they run their sales. If you go into a department store, there is always something on sale, but never the same item priced differently three different times in a week. Ideally, I’d look at playing with how you price your book once a month—more if you’re running an ebook promo that you’re advertising, which I’ll cover in a minute.
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Price promos. Whenever you do a downward price rotation, be sure to let your potential readers know you’re running a sale. If you have a super fan group, whether it’s a Facebook group or an email list, be sure to give them a heads up, too. Whenever I reduce a price on a print or ebook, I always, always do a promo, even if it’s just a small one, to let folks know I’m running a sale.
Link to the rest at Digital Book World