5.3 Selling Books in the Great Recession: Dennis Batchelder

I wrote this series on book selling in the Great Recession because I wanted to give my readers some concepts to help tame the beast. More than just concepts, wanted to give examples of people who are selling like crazy despite the recession. For those who haven’t read the previous articles, I am an economist with two academic degrees in the field and years of professional experience. Economics rules!

Dennis Batchelder, award winning author

The first of my guest bloggers is Dennis Batchelder. I first became aware of Dennis when someone steered me to an incredibly popular marketing forum in Amazon’s Thriller Community.

Dennis started and moderates the Shameless Self Promotion by Authors (3) forum, a discussion group which facilitates authors’ and independent publishers’ sales and promotion efforts. The success of this forum might be considered an indication of Dennis’ ability to bring people together and provide a platform for information sharing.

Amazon allows discussion forums to have 10,000 posts before closing them and requiring them to begin again. The Shameless Self Promotion forum is now on its third incarnation, with a total of 22,635 posts by hundreds of authors and writers. It’s one of the places I hang out on line, with the best marketing advice I’ve found anywhere––for free. I recommend it highly.

What does Dennis Batchelder have to say about selling in the recession? I asked him to outline his marketing ideas. Dennis replied:

“I’m convinced the mix of the current financial difficulty and the growing popularity of eBook readers has handed independent authors a great opportunity to be discovered by large numbers of new readers. We aren’t shackled to fixed costs, high royalties, inefficient supply chains, and expensive publicity like larger publishers are. We have the freedom to set our prices at ‘no-brainer’ levels: where readers don’t even have to think before one-clicking into a purchase.”

If I may interject, what Dennis is doing makes perfect sense to an economist. In an earlier post, I set out the equation for profit: Profit = Total Revenue – Total Cost  A producer tries to increase revenues and decrease costs all the time, but in a recession, it’s crucial.

The decreasing cost part of the equation involves using all available technology to get the product out better and cheaper––rolling with the punches and producing smart.

In the above statement, Dennis shows us how he takes advantage of the recession and his position as the proprietor of an independent press. He skillfully keeps total costs down and utilizes new technology––eBook readers––to capture sales that mainstream publishers miss. Note that he uses price to attract demand. His overall strategy is optimizing within the opportunities presented. This is economics.

Dennis has two books in print. Here is his pricing and business strategy:

“I sell the eBook version of Soul Identity for one penny on Amazon, and I give it away at smashwords.com. This yields me more than fifty sales a day, and it keeps my book listed as Amazon’s number one technothriller. I sell its sequel, Soul Intent, for 99 cents, and that sells between 10-15 a day.

“My goal is to become known by a large audience, and so far it’s working: I’ve sold 16,000 copies of Soul Identity since April, and 1,200 copies of Soul Intent since its release in September.

“I hope to have a hundred thousand readers by the time my third book in my Soul Identity series is published. In the meantime, long live the recession!”

You may not realize how huge selling 16,000 books is. Authors and independent publishers know that selling 16,000 books in seven months is a prodigious feat, not to mention an additional 1,200 copies of a new release.

Dennis’ pricing strategy deserves a couple of comments from an economist’s point of view. Notice that he has set his eBook prices very low: zero and 99 cents. He’s essentially giving the books away.

Does this mean he’s operating outside the standard economic profit motive? Yes and no. The cost of an eBook is in the set up. A computer professional can do it for nothing. Dennis doesn’t need to recoup many fixed costs and can price his book wherever he wants. In economics, the smart producer keeps selling his product until the revenue from the last unit sold (marginal revenue) equals its cost of production (marginal cost). That’s exactly what Dennis has done and perfect economics.

A note about price elasticity. I know you’re thrilled to discover all these economic terms, but I’ve heard the question asked in different ways a dozen times on the Shameless Self Promotion by Authors (3) thread. The question is, “How do I price my eBook? If I raise the price, will I cut sales?”

Price elasticity describes the response of sales to a change in price.

If you lower a book’s price by 10%, does the quantity sold increase by 10%? More than 10%? Less? The book is price elastic if a drop in price produces an increase in sales. An item is price inelastic if a drop in price produces no change in sales.

My experience selling my books as eBooks confirms Dennis’: eBook sales are highly price elastic. Drop the price, and sales will increase. Strategically, it makes sense to drop the price to the extent of giving them away. (I haven’t been courageous enough to do this, but Dennis’ experience tells the tale.)

The question then is: How to keep sales up and flowing after the price drop? I’ve heard others report, “Well, I dropped my price; sales spiked and then dropped off.” The rest of the marketing ball of wax comes in there: On-line networking, contests, Twittering, personal appearances. Word of mouth. Reviews. There seems to be a magnetism attached to some books that fuels sales, as evidenced by Dennis’s sales. Believe it or not, “selling” a book for nothing doesn’t mean automatic success.

Another point, if an independent publisher isn’t maximizing monetary profits, then what is he or she doing? The independent publishers reading this will know this right away, but for the benefit of newbies, money may not be the first or primary motivation. Independents operate in a world where hundreds of thousands of new books are introduced every year, some by major publishers with major publicity budgets.

In that world, getting noticed is the problem. Making a monetary profit may be a possibility somewhere down the line, but getting readers is is key at the start. With sufficient steady readers, an independent publisher may opt to stay an indie and do fine financially and otherwise. He or she may also find literary agents and traditional publishers coming to call, giving entry into a different marketplace.

The number of readers is the key to this. Dennis Batchelder’s pricing strategy is aimed at that goal.

Would you like to know more about the man who achieved the great sales results and the books he wrote? Here he is:

Dennis says, “I have been writing for ten years, and I’ve spent over twenty years in the computer security industry. I grew up in New England, moved to Maryland, and survived a nineteen month stay in Hyderabad, India. Now I live with my wife, our three youngest sons, and my mother-in-law in Bellevue, Washington.

“My novel Soul Identity is half techno-thriller, half existential journey. It depicts an organization that helps you leave your money and memories to your own future life. Think about a God-less, business-based take on reincarnation–and the consequences this could cause.

“Soul Intent is the sequel, and it explores why people do bad things for good reasons. It’s set both in Germany during the Nuremberg trials and the present day. This is an adventure tale of stealing, hiding, and recovering Nazi Gold.”

Dennis Batchelder can be reached at dennisbatchelder.com

Sandy Nathan

Sandy Nathan

• Award winning author of Numenon & Stepping Off the Edge
• Owner & hostess of Your Shelf Life

Happy holidays, everyone! I’m taking a few weeks off. I do have more guest bloggers lined up for Your Shelf Life. We’ll hear from them in 2010.