Pre-orders are taking the place of free as a promotion tool for indie authors as the new Smashwords 2014 Survey reveals that using the pre-order facility boosts sales while the rate of free downloads has slumped.
The survey also reveals that the top 50 Smashwords authors earn $14-$18 per published word and more books mean more money. The top 50 authors published an average of eight books while authors in the top 10,000-20,000 range published only two books.
Smashwords analysed over $25 million in customer purchases aggregated across the distributor’s retailers, including Apple iBooks, Barnes & Noble, the Smashwords.com store, Sony (now closed), Diesel (closed), Oyster, Scribd, Kobo, public libraries and others.
The aim of the survey is to identify Viral Catalysts, which Smashwords CEO and founder Mark Coker introduced in 2012 and means anything that makes a book more discoverable and more enjoyable to readers.
Ebooks become bestsellers based on multiple Viral Catalyst factors, starting with book quality and also influenced by cover design, breadth of distribution, pricing, marketing, luck and many other factors.
This year’s survey shows that the ebook sales power curve is extremely steep. A few titles sell fabulously well while most sell poorly. An incremental increase in sales rank is usually matched by an exponential increase in sales.
Despite the steep sales curve, a lot of Smashwords authors are earning good income from their books. The challenge for an author is to do those things to achieve an incremental advantage to boost sales.
Romance dominates the Smashwords’ bestsellers, comprising 70% of the top 10 and 70% of the top 100 sellers. The contemporary romance category represents an overwhelming 54% of the top 100 romance ebooks while paranormal romance is on 13%, YA/New Adult on 7% and erotic at 4%.
The survey says longer books sell better and the highest-earning indie authors are pricing at a lower average than authors who earn less, but not at ultra-low prices such as 99c, as $2.99 and $3.99 are the sweet spots for most of the bestsellers. The findings also reveal that frequent price changes have a minimal impact on sales.
Free is still a good incentive but is losing momentum fast. The survey found free ebooks on iBooks generated 39 times more downloads on average than books at any price but the effectiveness of free has fallen dramatically from the last two years’ results.
In 2013, free books generated 91 times more downloads than books at any price and the figure was 101 times for 2012.
There were a total of 35 million free downloads of Smashwords’ books through iBooks in the last year.
Pre-orders, which were launched on Smashwords last year, have given authors a sales advantage and Coker considers pre-orders today are what free was five years ago.
The results point to ebooks that use the pre-order facility selling more copies and earning the author more money than ebooks that don’t use pre-orders.
The first authors to use pre-orders effectively will gain the most advantage, just as the first authors to enter new distribution channels gain the most advantage.
Series outsell standalone
For the first time, the survey examines the performance of series books after Smashwords launched Series Manager last year, capturing enhanced metadata on series. Series books outsell standalone books and the best-performing series have longer books.
Free series starters are a big deal, with strong evidence that series that have free starters earn more money for authors than those that do not have free starters. All Smashwords retailers support free without restriction. Seven out of the top 10 Smashwords series have a free starter and seven out of 10 are in the romance category.
Also for the first time, the survey looks at non-fiction pricing and found that non-fiction earns more at higher prices. Non-fiction readers are less price-sensitive and Coker says it appears that most non-fiction authors are underpricing their works and should experiment with higher prices.
Although $0.99 is the leading price point for non-fiction sales, $2-2.99 is only fractionally behind, and $9-9.99 is in a respectable third place, well ahead of all intermediate prices. $9-9.99 leads the non-fiction table for the price point which yields the highest earnings.
Here’s the whole presentation if you want to go into the details of the survey’s findings