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by jonnathanson 5062 days ago
Fantastic and informative comment, as usual. That said:

"a great way to avoid getting emails by someone whining about getting a refund for the $8 they spent on your ebook is to never ever ever ever ever do business with people at the $8 price point."

I have one of those "yes, if," or "no, but" reactions to this statement. If you're doing business at the $8 price point, you should be doing it in the volume business. The scale business. A gazillion tiny purchases at $8 apiece, wherein the userbase is large and fairly undemanding. If the userbase is demanding about anything in this space, you want it to be demanding about price alone, and you want your $8 to be an insanely competitive price.

You should NOT do business at $8 per transaction if your good or service involves a lot of transaction costs -- whether in post-sale servicing, a salesforce of any kind, high-touch / personal presales, high return rates, or, generally speaking, any sort of customization that can't be automated to scale. In very simplistic terms, low prices should not be paired with high costs -- be they high COGS in the traditional sense, or high intensity of time and effort. In the case of most ebooks, I would agree with you here: a low unit cost like $8 [1], positioned to a very demanding niche audience, is a recipe for nightmares.

[1] Temporarily leaving aside, for the sake of everyone's collective sanity, any tangential philosophical debate about whether $8 is a "low" price.

1 comments

[1] Temporarily leaving aside, for the sake of everyone's collective sanity, any tangential philosophical debate about whether $8 is a "low" price.

Here's a question: we all know about reducing the price point to garner more sales, and therefore more profit; has anyone done similar studies on what price point elicits the least number of refunds (especially due to buyer's remorse)? $8 seems "low" to me, but only for some items; I suspect that most eBooks wouldn't meet this criteria (although I have payed an order of magnitude more for eBooks and still have a minimal Safari subscription). An eBook at $0.99 I wouldn't see the point in getting a refund, no matter how easy it would be to get it. If it was a really bad book, I might go after the refund just to make a point, however.

I have no idea how this is working with the app store but I know that on the Android play store to request refund was not simple. Now you'll have to get out of your comfort zone for let's say $0.99-3.99 - something you wouldn't even consider (your time is more valuable). Disputing that charge is even much more a time sink than asking for a refund as you would have to probably sign on several forms and fax them back to your credit card company, then you always have the possible cost of the chargeback being denied (I know my CC impose a penalty of $10).

I would say anything beyond $10-20 would be worth figthing. Of course it depends on where you are located (I would imagine someone in a poor country more likely to fight for a $5 refund than in a rich country), and your socioeconomic class (as I would imagine that a 18 unemployed year old would more likely ask for a refund than a 45 year old professor at Standford).

Just my 2 cents.