Books and Loss Leaders

In the world of marketing, there's a concept known as a Loss Leader. It's an item that is discounted so deeply that the vendor isn't earning much - if anything - on the sale and could, in fact, be losing money on it. The reason that vendors do this is to entice people into the store and once they're there, they will perhaps purchase additional items that will more than make up for the income lost on the sale item - hence the term "loss leader".

My book, Ricochet, never quite took off though it received glowing reviews. I believe (through pure speculation) that it was due to two books being released about the same time with the same or similar titles: Sandra Brown's Ricochet, which rose quickly to the New York Times bestseller list, and Sue Grafton's R is for Ricochet. This occurred despite the fact that the title was registered with Bowker a full year in advance. And if you search for Ricochet on amazon without the author name, five pages of results are displayed.

So the publisher decided to turn the Kindle edition into a Loss Leader by offering it exclusively on amazon and enrolling it in amazon's Kindle Select program, in which readers enrolled in the Select program can read it for free and presumably the author and publisher still earn income from the experience.

The theory is by offering this one book at a deeply discounted rate (free for readers enrolled) readers will like what they read and return for more of my books which were not deeply discounted.

The gamble has been paying off. Usually around 800 copies of Ricochet are downloaded each month and sales of my other books have increased. Though it's difficult to tell how much the loss leader has to do with it, as advertising, marketing and promotional efforts are also underway, it was deemed a success.

However, last month the book was removed from the Select program. The reason: authors began reporting that once the book was downloaded for free, hackers could easily replicate it and offer it for sale on other sites. And one stipulation for being in the Select program is to agree not to sell the book anywhere except amazon. Once amazon saw the book on other sites (presumably because someone reported it) they were not only removing that book from their website but every book the author or publisher had listed.

So before this happened to me, the book was pulled from the Select program.

I have noticed for years that my books are offered on unscrupulous websites where the books were copied without the permission of the publisher or myself. Each time, the publisher has notified ICANN, who investigates. In every case that was researched, the file also contained malicious software that could infiltrate the reader's computer and retrieve their passwords and sensitive information.

Loss Leaders can be done without being enrolled in the Select program, however, simply by discounting it below the other books. Ricochet continues to remain in the Loss Leader category because while the rest of my Kindle or eBooks are priced at $6.99, Ricochet is priced at only $2.99.

How much does price impact whether you purchase a book?