Most new authors think this is a no-brainer. “Obviously I want 70%! Why would anyone choose 35%?”

Well, let me tell you why that thinking can keep you stuck in the wrong strategy, and how understanding Amazon’s royalty structure–combined with some real-world testing–might be the difference between selling twelve copies to your relatives and actually building a sustainable author business.

Because here’s the thing I learned from my natural health website days: it’s a lot easier to sell one item at $5 than it is to sell five items at $1. And that lesson has completely shaped my bootstrap approach to book pricing.

The Royalty Structure That Confuses Everyone

First, let me break down Amazon’s royalty rates because they’re more complicated than they appear on the surface.

The 70% Amazon royalty rate applies to eBooks priced between $2.99 and $9.99, but Amazon subtracts a “delivery charge” based on file size. For most novels, that’s about 6-15 cents per sale. So you’re really getting around 65-69% after that delivery fee.

The 35% royalty rate applies to eBooks priced under $2.99 or over $9.99, with no delivery charges deducted. You get exactly 35% of the list price.

Here’s where it gets interesting: a $4.99 book in the 70% tier earns you about $3.44 per sale after delivery charges. A $2.99 book earns you about $2.04 per sale. And a $0.99 book in the 35% tier earns you only $0.35 per sale.

The math seems obvious, but the psychology is more complicated.

The Psychology vs. Math Reality Check

What Amazon doesn’t tell you–and what I had to learn through actual testing–is that pricing isn’t just about maximizing royalty percentages. It’s about finding the sweet spot where readers perceive value and you earn sustainable income.

Here’s what surprised me: after testing my earlier novels at every price point from $0.99 to $2.99, I consistently sold more copies at $4.99 than at the supposedly “impulse buy” lower prices.

Why? Because I learned something during my natural health website days that applies perfectly to book publishing: it’s easier to sell one copy at $5 than five copies at $1. Higher prices often suggest higher value, and people respect what they pay more for.

At $0.99, readers think “This must not be very good.”

For $1.99, they think “Probably amateur work.”

If $2.99, they hesitate because it feels awkward–not cheap, not premium.

At $4.99, they hopefully think “This looks professional” and make a decision based on the book’s merit.

The $4.99 price point has not only sold the most copies of my most popular novel, Halo, it generated more than double the income of the $2.99 price. And here’s the kicker: the higher price seemed to attract more serious readers who left better reviews and recommended the books to others.

This completely reversed my assumptions about pricing psychology.

The Value Positioning Strategy

What I discovered is that pricing isn’t just about affordability–it’s about positioning your work in the market. When you price a book at $4.99, you’re competing with other professional indie authors and some traditionally published backlist titles. You’re saying “This is quality work worth your investment.”

When you price at $0.99, you’re competing in the bargain bin with books that may or may not be worth reading. Even if your book is excellent, the price signals otherwise.

For my Lost Pages series, I’m starting everything at $4.99 as the introductory price. If and when I start getting consistent sales, I’ll gradually test higher prices–always with careful A/B testing to make sure I haven’t pushed too high.

My long-term strategy? Price testing until I can eventually charge a dollar or two below what the major publishing houses charge for their steady sellers. Think $12.99 instead of $14.99. But that takes lots of time, lots of hard work, lots of audience building, and plenty of testing to see what the market will bear.

The A/B Testing Approach That Reveals Truth

Here’s what separates successful bootstrap authors from struggling ones: they test everything and let data trump assumptions.

Price testing with A/B marketing isn’t just essential for optimizing sales–it’s actually fun to watch. Amazon makes it easy to change prices, so use that flexibility strategically.

My testing protocol:

1. Set a baseline (my $4.99 starting point)
2. Test higher ($6.99, $7.99) to find the upper limit
3. Monitor not just unit sales but total monthly income across all titles
4. Track secondary effects like review quality and series sell-through
5. Adjust based on data, not emotions

I’ve been surprised more than once by what readers will pay for quality work.

When the 35% Tier Makes Sense

Don’t get me wrong–there are still strategic uses for the 35% royalty tier:

• Free promotional periods (technically $0.00, but same concept)
• Market testing when you want maximum exposure over profit
• Series hooks if you have a long series and want volume over margin on book one
• International markets where Amazon’s pricing requirements differ

But for energetic and motivated nothing will stop me bootstrap authors building a sustainable business, I’ve found the 70% tier at professional price points ($3.99-$4.99) typically generates more total income than aggressive low pricing.

The File Size Factor Nobody Mentions

Here’s a detail that can impact your 70% tier decision: Amazon’s delivery charges are based on file size.

For my text-only eBooks, delivery charges run 6-8 cents per sale–negligible. But if you’re writing books with lots of images, maps, or illustrations, those charges can eat significantly into your royalties.

I’ve seen authors with image-heavy books lose 30-50 cents per sale to delivery charges, which changes the math considerably. In those cases, test whether pricing for the 35% tier actually nets more profit.

The Long-Term Pricing Strategy

My bootstrap approach to pricing reflects a long-term vision rather than short-term thinking:

Year 1-2: Establish $4.99 as my baseline, proving the market will pay professional rates for quality work

Year 3-5: Gradually test higher prices ($6.99, $8.99) as my reputation builds

Long-term goal: Price competitively with traditional publishers while maintaining indie agility

The compound effect I’ve talked about in previous posts applies to pricing too. Each successful book at professional prices makes it easier to charge professional prices for the next book.

What This Means for Your Strategy

So how should you approach the 70% vs 35% decision?

Test your assumptions. Don’t assume lower prices mean more sales. Test different price points and measure total income, not just unit sales.

Consider your positioning. What market segment do you want to compete in? Bargain bin or professional tier?

Think long-term. Building a reputation for quality at fair prices serves you better than racing to the bottom on price.

Use data, not emotions. Your gut might say “lower prices = more sales,” but let actual results guide your decisions.

Remember the real goal. You want maximum total income, not maximum royalty percentage or maximum unit sales.

The Bottom Line

The 70% vs 35% decision isn’t really about royalty rates–it’s about positioning your work appropriately in the market and respecting both your craft and your readers’ intelligence.

My experience has taught me that readers often equate price with quality, especially for unknown authors. Price your work too low, and you signal that it’s not worth much. Price it appropriately for professional work, and you attract readers who value quality.

The successful bootstrap authors understand that building a sustainable business means finding the price point where quality meets profitability. The unsuccessful ones either give their work away or price themselves out of the market entirely.

In my next post, I’ll break down the prolificacy premium–why authors with 61 books earn exponentially more than authors with six books, and how to build your catalog strategically rather than just writing whatever strikes your fancy.

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