What is a Loss Leader?

If you’ve ever considered self-publishing a book, you might have heard the words loss leader. What is a loss leader? Well, it’s an item you’re willing to take a loss on to gain sales in the future. In the world of self-publishing, it’s usually a book that you give away or set at a lesser price than the rest of your books. A loss leader doesn’t always have to be free, but it does have to be set at a lesser price than the rest of the books the author has written. The most common price for loss leader books is .99 cents, but some are listed at 2.99.

Why Should You Have a Loss Leader?

You’ve spent a lot of sleepless nights working on your masterpiece, so why should you give it away for free (or almost free)? Well, have you ever bought something after sampling it at Sam’s Club or Costco? If you answered yes, you purchased after taking the loss leader. Authors similarly use loss leaders. If a reader gets your book for free and enjoys it, they are likely to check out the rest of your books or at least leave a review that will draw in other readers. If you’re still not ready to permanently use your ‘book baby’ as a loss leader, Amazon offers a promotion where your book will be free for five days. You can use that promotion to test the waters and see how many reviews/downloads you receive.

How Do I Decide Which Book Should Be A Loss Leader?

Usually, a loss leader is the first book in a series or the first book an author has written. The reason for this is because you’ll want your readers to experience the story in the order that it unfolds. Sometimes an author who writes multiple series will use the first book from every series as a loss leader. What if you only write stand-alone books? Look at your earliest published works and decide which of them you’re willing to take a loss on.

How Do I Price My Loss Leader?

As I mentioned earlier, most loss leaders are free, however, not all loss leaders are. Another popular pricing is .99 cents. Most readers have no trouble buying a .99 cent book, and the author will still earn 35 percent of royalties from book sales (on Amazon). This price also corresponds with the remainder of books in their series, which are usually priced at 2.99. If your book is priced at a higher price point, you should price your loss leader a bit higher (1.99 to 2.99). If you want to earn more royalties from your loss leader you should go with the 2.99 price point, since it’s the first price point that earns 75 percent royalties.

When Should You Have a Loss Leader?

You want to wait until you have multiple books for the reader to devour, but when is the right time? You want to make sure some time has passed between the price change and the release of the book you’ve picked as your loss leader. Readers may become angry if they paid full price for something only to have it go on sale so soon after, and you don’t want to have a negative experience with your readers. It’s a good idea to wait until your book has been out for a while and is losing traction. Pay close attention to your sales, and possibly test the waters by doing a sale or giveaway on Kindle before deciding to permanently reduce your book.

Why You Shouldn’t Have a Loss Leader

While a loss leader is a great tool to utilize, there are some things you should keep in mind before giving away one of your books. Do you have at least two other books for sale? How many books are in the series? Is the series finished or ongoing? If the only book you’ve released is your loss leader, you may want to wait until you’re into your second series before making a book in your first loss leader. The point of a loss leader is to get readers to check out your other works, but they can’t read more of your books if you haven’t published any.