For the better part of a year and a half, I have ignored most of the advice bloggers have given about pricing your work on Amazon. It's not that I undervalue my work, but rather I was more concerned about building fans and reviews than making money.
With the exception of the one novella I have offered in print format, none of my work on Amazon has ever been more than $0.99. Each of the stories there are short stories, which themselves are a tough sell, so I never felt right about charging more than a dollar for a few thousand words of entertainment.
My other main driver for setting the pricing was to price things the way I shop: cheap or free will always win over more expensive for less. Except that's not really how Kindle works are perceived. Price, it seems, is an indicator of quality, not quantity.
When searching through books on Kindle, you do find lots of things for free. I have downloaded quite a few myself, hoping for some reasonable things to read to pass the time (mostly during air travel).
What I've found in these free books is a lot of barely-readable, poorly-edited or just plain boring stories. Some of them read like textbooks. Others were just bad. But I didn't pay anything for them, so I didn't get too upset.
For anyone publishing on Amazon, you cannot sell anything for less than $0.99. I know what my motivations were for selling at this price, but I am not able to convey those things to perspective buyers. What seems to be the pervasive attitude among buyers is that if you are selling it at rock-bottom prices, it must be rock-bottom quality.
For some writers, this is clearly the case. The self-publishing world of Amazon has opened the doors for a lot of people who probably shouldn't be selling stories or books on Amazon. (Some of my early work might fall into this category, frankly.) For a buyer, it only takes being burned once or twice on a cheap story to avoid them altogether.
And if you happen to have shabby covers (I have a couple) on your $0.99 bargain work, well, you probably aren't going to be doing much in terms of sales. In that sense, your price coupled with your cover gives off the impression that what's inside looks like what's outside. It doesn't matter what inside to most buyers on Kindle, they'll save their dollar for something which looks better, even if it is a few dollars.
So what is the right price? I won't really attempt to answer that definitively, since there are a few factors to consider.
First, no pricing is going to fix a lousy cover or book description. If you can't afford to hire someone to do a cover for you and your cover is terrible (even in the best of lighting), then you're better off going simple. Look at a book cover from the 1950's: red background, gold type in a plain font. It isn't going to be any worse than your current cover.
If your work has some nice artwork and looks compelling, you probably need to sell it for $1.99 instead of a dollar. It can be hard to justify paying that for a 1,000-word story if you're a buyer, but this seems to be the going rate for quality shorter works. It's a better bet to combine a few shorts together and sell them for a few dollars than to try to sell individual ones.
Books which are $1.99 or $2.99 are still a relative steal on Amazon, so you're not pricing yourself out of the market. At worst, you risk a poor review for having something be too short for how much someone paid for it. Those can hurt you a little, but the risk is probably worth it most of the time.
The other upshot to having higher-priced books on Amazon is that when you do a Countdown Deal or Free Promotion, it looks like a great value. Something which was a dollar and is now free is not nearly as appealing as something which was three bucks but is being given away for nothing. These promotions are necessary if you want some volume. And volume is key for reviews, which pushes you up the search results. The cycle feeds on itself from there, and the next thing you know, you've made 20 dollars on your book.
The blogs I've read haven't always been clear on some of these points, but I personally went ahead and made the mistakes in spite of the advice (you're welcome). The bottom line is that if you feel that your work is only worth $0.99, then don't try to sell it. Hang on to it and perhaps package it with something else which you can sell at a higher price.
If you only want part of the story when it comes to how to build yourself into an author who actually makes a little money, by all means, read the tons of blogs out there.
These blogs paint a rosy picture of hope and provide "a few simple steps" to launch you on your way to selling thousands of dollars worth of books, with almost no effort or money out of your pocket. The advice provided is often sound, but they tend to leave out the parts which would send most people packing before ever getting started: It takes a ton of commitment, you're probably going to fail repeatedly and you probably have to spend money to have any chance at making any (and you don't have much of a chance, frankly).
In simple terms, there is almost no path whatsoever for turning your hobby of writing into something which will provide a small, but steady, flow of income. This is not meant to discourage you from writing. To the contrary, it's a piece of advice I offer as a means to maintain your love of writing. Hobbies are fun. Trying to make money from a hobby is a good way to ruin said hobby for yourself.
Luckily, there are a few places you can go to "publish" your work and get feedback from total strangers. Most writers at least feel a desire to have validation of their writing talent, and using a tool such as Wattpad or Smashwords to get you that validation is perfectly acceptable. It might be a good first step if you are indeed exploring the idea of monetizing your hobby. If you are a terrible writer and just don't know you are, someone at one of those sites will probably inform you of such.
If you seek more than the simple adulation of total strangers regarding your writing, prepare to roll up your sleeves and open your wallet. Nothing but tons of hard work, failure, rejection and spending your own money to accomplish even modest goals will convince people to buy what you write.
You have left the world where publishing a first draft full of typos, plot holes and crazy formatting is acceptable. Those things can happen (but probably shouldn't) when you're giving your writing away. You wouldn't expect to get raw bacon at a restaurant when you order breakfast, this is the same principle. You need to institute quality controls, such as an editor. There is a distinct difference between relying on your best friend's niece to help you (a proofreader) and paying someone to find typos, provide critical feedback and suggest changes that sharpen your story (an editor). Know the difference.
Once you've managed to get a manuscript or draft that's reasonable, now you have to find ways to put it up for sale. Amazon makes it pretty easy for anyone to publish anything. The caveat is that it also makes it incredibly difficult for anyone to find your work unless you pay Amazon money to advertise it. You'll get the thrill of being on Amazon, which will wear off incredibly quickly when you sell zero copies of your work. (Don't count on your friends and family to buy your work, they'll want you to simply give it away to them, since you know them.)
You will invest tons of hours in self-promotion, researching keywords and other fruitless activities in the world of self-publishing. In return, you might earn a shiny check from Amazon every month for $3.18. From my own personal experience, based on the time I have invested, I literally would have earned more money relocating to a third-world country and taking a minimum wage job there. I'm not exaggerating. The hourly pay rate for the time I have invested is less than a penny an hour.
Add in the cost of your own website to build an author platform and submission fees for publications (what a gig that is, where people pay you to completely ignore them or refuse to acknowledge their existence) and you're really starting to dig a financial hole, just to try to earn money doing something you enjoy. The website will help you sell exactly nothing, the publications will indeed ignore you, or at best reject you in favor of a two-word poem called "Toilet Paper".
I really am not cynical about the whole process, I still do have hope to someday achieve a small measure of success in writing. You may defy the odds somehow. You probably won't, and you ought to be a little better prepared for the failure and frustration than I was.