Many of our most frequently asked questions from partners relate to BookBub’s Featured Deal fees. Understandably, authors and publishers want to be sure they’re making a smart investment with each marketing dollar spent, which is why we’ve always provided information like average sales and downloads on our website. But BookBub aims to be transparent and to arm our partners with as much information as possible, so we want to use this post as an opportunity to explain how we determine the fees you see on our site and in your invoices.
Our goal when pricing BookBub listings is to ensure that the vast majority of our partners receive a positive return on their investment. While there unfortunately isn’t a magic formula that allows us to guarantee every promotion will be successful, we do our best to price our lists fairly and to select only deals we believe will perform well, so that authors and publishers have the best possible chance of making a profit.
We adjust our listing fees twice a month to keep them accurate and up-to-date. And we use both quantitative and qualitative analysis — based on financial models, historical data, and external factors — to reach an optimal pricing framework.
The main factor in this calculation is sales data. We carefully track purchase statistics for every listing we run, so we’re able to look back at historical sales and download numbers from the past few months and determine an average purchase rate for each category. This tells us what percentage of the subscribers on that list are likely to buy or download a book.
We then multiply each category’s total subscriber count by the purchase rate, which allows us to arrive at an average sales number. This gives us an idea of how many copies an author or publisher can expect to sell during a typical promotion on that list.
And lastly, we consider the expected royalties at each discounted price band. Because an author or publisher earns more off a $2.99 sale than a $0.99 sale, for example, our listing fees are tiered accordingly.
To determine the price, we employ a model that uses the factors above to calculate a listing fee for each category and each price bracket. It suggests an amount that will allow us to continue to support the BookBub service, while on average generating a profit for most of our partners.
There are a number of qualitative factors that can also impact listing fees, and we take care to consider these before finalizing any prices. For example, we might think about how new a certain list is, or whether any extreme data points could be skewing our calculations in either direction.
But ultimately, because we’re not calculating price off of subscriber counts alone, this formula depends less on the size of the list and more on how active those subscribers are in terms of buying books. You can see the effects of this by comparing the pricing for our Erotic Romance category to our Action & Adventure list. Despite the fact that Action & Adventure has more than twice as many subscribers, listings in Erotic Romance are more expensive. This discrepancy is explained by the average purchase rate, which is higher for Erotic Romance, meaning the readers on that list are more likely to buy the books we feature there, and our partners are more likely to sell the number of copies that will earn back the higher fees.
While most BookBub promotions make their money back, we unfortunately cannot guarantee that every one will. Instead, we carefully determine our prices, continually adjusting them based on subscriber activity. And we work hard to select deals we believe will be worthwhile investments for our partners, always aiming to ensure the vast majority of authors and publishers have a positive experience working with BookBub.
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