I agree with you, but just to play devil's advocate, there's a lot of articles in trade publications claiming that 2011 was the year of the 99-cent book, when several E-novels sold over 250,000 copies each at that price, and several authors claimed the price was the reason they did so well. The guy I know who had a 99-cent bestseller, published in March 2011, got a hefty internaitonal publishing deal for a hardback edition, plus a solid movie deal, and he believes it might have taken much longer for him to get that kind of notice at a higher price. That said, all his books are now $2.99 and up.
For sure a .99 cent price doesn't put any real skin into the game. $2.99 works far better. When I price a book at .99 cents it's only a short work. I'm really hoping at that price more for the exposure than profit. Now I'm working my way up to $4.99 for a combined three works in one of my guide books. That's still a bargain (if I do say so myself).
Your profits add up a lot faster at $4. compared to$3. After you have a good readership base of say, 20,000 or 30,000, you can charge $5. or $6. Just make sure your novel is at least 80,000 words, closer to 100,000 is better. The only limiting factor on more words is the extra cost of printing for paperbacks. So it's a conflict between making the novel long enough to justify charging $4 or $5+ and keeping the word count down to keep the paper version priced low enough to sell. Try to keep the paperback price under $12 and you can make $1,000 a month on paperbacks to add to your Kindle and Nook sales.
The real problem is writing both good novels AND a lot of novels. Not everyone can write fast AND well at the same time. I am convinced you need at least a dozen novels unless you have a few nonfiction books out. Nonfiction can be priced a lot higher than novels and still sell. I have nonfiction under different pen names.
I was going to publish my story about a celebrated jumping frog of a certain county, but I was told I had plagiarized someone. I swear I NEVER touched the guy! Then I was accused of misconstruing someone. What! I NEVER touched him!
I agree with you. I'm putting all my prices up, even my short stories. I'll probably have one or two in the bargain bin as a starter, but for steady sellers .99c is not worth the effort. Yeah, so it might take off and sell 100k, but it probably won't.
I'm a Brit so see prices differently. Even $2.99 is only 1.90 in the UK, which is nothing for a book. The secondhand shop in my local town only starts at 3 pounds a book. Trade paperbacks are 7.99 or more now. From now on, for the best part shorts will be $2.99 (you get a few bonus novel chapters, so its not just a five minute read, haha) and novels at $4.99.
I'm not convinced that length (number of words) should be determinate of price. (Once the writer passes the short story/novella length). The Boy in the Striped Pyjamas is a great short book and made into a movie. Bridges of Madison county is another excellent shortish book. (IMO)