E-book Break-Even Pricing Calculator

Formula used

Let:

• C = upfront production costs (one‑time dollars)
• P = desired profit (optional dollars)
• N = expected copies sold (units)
• f = platform fee percentage (e.g., 30 for a 30% fee)
• p = required break‑even list price per copy

The calculator uses this break‑even relationship:

In words: required price equals (costs + desired profit) divided by (expected copies × your keep rate), where keep rate = 1 − fee.

How to use the calculator (step‑by‑step)

1. Enter Upfront Production Costs ($). Include one‑time costs such as editing (developmental/copy/proof), cover design, formatting/conversion, ISBNs (if applicable), software used specifically for this launch, and one‑time launch marketing spend.

2. Enter Platform Fee (%). This is the percentage kept by the retailer/distributor. For example, a “70% royalty” is roughly a 30% fee (before any other adjustments). Enter the fee as a whole percentage number (e.g., 30).

3. Enter Expected Copies Sold. Choose a realistic unit estimate for the period you’re evaluating (first 30/90 days, first year, lifetime—just be consistent). Conservative estimates often produce more actionable pricing floors.

4. Enter Desired Profit ($) (optional). Use 0 if you only want to recover costs. If you want your project to generate a specific amount beyond break‑even, enter that profit target here.

5. Click Calculate Price. The result is the minimum list price per copy needed to hit your goal given those inputs.

Interpreting your result (what it means)

The number you get is a minimum required list price under a simplified model. Here’s how to read it:

• If the break‑even price is below common market prices in your genre, you have flexibility: you can price for reach (lower price, more volume) or margin (higher price, fewer copies) and still likely recover costs.
• If the break‑even price is above typical genre expectations, you have three main levers:
  • Reduce upfront costs (C): adjust scope, negotiate, or stagger services.
  • Increase expected copies (N): improve marketing plan, series strategy, newsletter swaps, ads testing, or launch cadence.
  • Lower the platform fee (f): consider wider distribution mixes, direct sales, or platforms with better net terms (where feasible).
• If you entered a profit target, the result is the price needed to cover both costs and that profit—useful for deciding whether the project’s economics match your goals.

Worked example

Suppose you have:

• Upfront costs C = $3,000
• Platform fee f = 30% (you keep 70%)
• Expected copies N = 1,000
• Desired profit P = $0

Your keep rate is 1 − 0.30 = 0.70. Expected net revenue per $1 of list price is $0.70.

Break‑even price:

p = (3000 + 0) / (1000 × 0.70) = 3000 / 700 = $4.2857…

Rounded to cents, that’s $4.29. If you price at $4.29 and sell 1,000 copies under a consistent 30% fee, you would approximately cover the $3,000 upfront cost.

If instead you wanted $1,000 profit, then:

p = (3000 + 1000) / (1000 × 0.70) = 4000 / 700 = $5.7143… ≈ $5.71

Quick comparison: how fee and sales volume change break‑even

The table below holds costs constant at $3,000 and desired profit at $0, then varies platform fee and expected copies.

Takeaway: small changes in sales volume and effective fee can move the break‑even price substantially—especially when expected copies are low.

Assumptions & limitations (read before relying on the number)

• Fee/royalty may not be constant: some stores use price bands, delivery charges, or regional terms that change your effective keep rate.
• Taxes/VAT/GST not included: depending on how platforms report and remit taxes, your net may differ from a simple percentage.
• Refunds, returns, and chargebacks ignored: these reduce net revenue and can raise the true break‑even price.
• Ongoing ads and promos aren’t modeled unless you include them in costs: if you plan recurring ad spend, either add an estimated amount to costs (for the chosen time horizon) or run scenarios with multiple cost levels.
• Multi‑platform blending: if you sell across multiple retailers with different fees, use a weighted average fee (or calculate separately per channel).
• Currency conversion & international pricing: exchange rates and local pricing rules can change realized revenue per unit.
• Rounding and psychological price points: the computed minimum may not align with common price endings (e.g., $4.99). Treat the result as a floor, then choose a market-friendly price and re-check the implied profit.

FAQ

What platform fee should I enter?

Enter the percentage the retailer/distributor keeps. If you’re told your royalty is 70%, your platform fee is about 30%. If you have multiple channels, consider a weighted average fee based on expected unit mix.

What if the store uses different royalty rates by price band?

Run multiple scenarios with different fee percentages that reflect the price bands you might choose. If delivery charges apply, your effective fee is higher than the headline percentage.

Should I include ongoing ad spend in upfront costs?

If you’re evaluating a specific period (e.g., first 3 months), include the ad budget you expect to spend during that period in upfront costs so the break-even price reflects your planned investment.

How do I use this if I’m writing a series?

This calculator is for a single title’s economics. For a series, you can treat book 1 as a lead generator and evaluate break-even across the series by pooling costs and estimating total series revenue, or run the calculator per book with different sales expectations.

What if my break-even price is higher than my genre can support?

That’s a signal to revise assumptions: lower costs, increase expected copies via marketing/positioning, adjust profit target, or choose a different distribution mix. You can also accept a longer payback window by increasing the expected copies sold over a longer horizon.