E-books have become very popular over the last couple of years. A great deal of the credit for that should go to the Amazon Kindle reader which, whilst it may not have been the first reader to be released, has been a real driving force in the growth and development of the market for both e-book readers and the associated e-books. The large choice of Kindle books available was unquestionably a big selling point in favor of the Kindle.

E-book sales for 2011 are forecast to make up between 12 and 15% of total book sales. The market is still in an early stage, but e-books are becoming more and more important in the world of publishing. If anything, their importance may actually be a little higher than the straight percentage might suggest. At the risk of stating the obvious, it seems likely that e-book reader owners will be likely to buy, and read, a lot of books. Simply put, they are the target audience of the major publishing houses.

So, it would make sense for publishers to set the prices of e-books at the right level. They otherwise run the risk of disenchanting their best customers. So, what would a fair price for an e-book be?

There is no paper, ink or bindings used in the production of e-books. Also, since they are not a physical product, there are no fees associated with delivery. So you would expect them to be quite a bit cheaper than normal printed books, wouldn’t you?

Apparently not. According to publishers, the cost of paper, ink, bindings and transportation is only a small part of bringing a book to market. There are editing, proof reading and marketing costs associated with e-books just as they are with standard books. All things considered, the lack of a few reams of paper is, according to a number of major publishers, neither here nor there.

To a certain extent, you can see some logic in this argument. But you may also ask why, if the physical aspects don’t influence the price too greatly, there is such a difference between the prices of hardback and paperback books. It doesn’t make a lot of sense.

Until quite recently, Amazon had a publicly declared policy of setting e-book prices at $9.99 or less. Until they had a disagreement with some of the major publishing houses that is. At one point one publisher’s books (briefly) disappeared from the Amazon website. However, things have calmed down a little now and Amazon Kindle owners still have a huge selection of Kindle books to choose from.

Many publishers have now adopted the agency pricing model. Which just means that it’s the publisher who decides on the selling price instead of the retailer. If you are searching Amazon’s Kindle store for something good to read on your Kindle 3, you may just find the notice “this price was set by the publisher”, which is just Amazon letting you know that they didn’t fix the price for that particular book.

To be fair, a number of business analysts did not see Amazon’s $9.99 price policy as being viable in the long term.

When you’re finished with an e-book, you can’t pass it on to friends or family (although Kindle owners can now lend Kindle books to other Kindle owners for a two week period). Neither can you sell it to a second hand book store, donate it to a local library or a charity shop. You have fewer options with an e-book than with a normal printed edition. Lower functionality should lead to a lower price surely?

Today, the selling price of an e-book is whatever the publisher dictates. Of course, that doesn’t mean that you have to agree with them and pay the asking price. You could simply wait a month or two and e-book prices may, as is the case with video games, fall quite a bit just a few weeks after the initial launch.

You might even elect to spend your hard earned cash on something completely different – a video game, a DVD, tickets to a concert. You could watch TV or listen to the radio instead of reading a book. Books are, for the most part, a discretionary purchase and need to compete with a number of other products and services for both your leisure time and your money. In other words, an e-book should cost whatever you are prepared to pay for it. Not a penny more, not a penny less.