Considering a $50 discount and a guess of 70% for AppSumo, OP paid an effective $120 CPA. In return, did OP gain lifetime value from bought actions? Did he increase exposure for his book so that more people will buy at full price? Will he have repeat customers? Is this a positive ROI move? I think that is a better metric to measure this type of _marketing_, not "we sold x copies in y days!!".
I understand that there is no variable cost, but by offering a permanent "discount", OP may have permanently devalued his product. If that steep of a cut was viable, then author might have had a bad price point to begin with.
In general, the same thing must be considered for products with little to no variable costs. I'm not sure what the optimal solution is, but I would think that one would want to sell even at $0.01 - because a sale on a product with no variable cost has to be better than no sale at all...
I would think that one would want to sell even at $0.01
You definitely don't want to do that. You're going to be overwhelmed with support requests (for an e-book, even!) from the least competent potential users imaginable. Moreover, you're going to blunt the reason for writing the book in the first place, because the people best positioned to get value from the book will not do so because it is too cheap to be taken seriously as business advice.
You are right for $0.01 cost, but I wonder if that changes for $0.01 profit. What if your COCA (cost of customer acquisition) eats all but $0.01 of the revenue ? You are bringing in positive marginal revenue, and you don't have the downside you mentioned. Of course, you have others, such as this cost structure means you're making someone else rich, not yourself, and it's a very fragile situation, you can't absorb COCA increases.
Yeah, I came to write something similar. With a 34% discount, then a >50% commission he's selling for 1/3 of his usual price, and like Patrick says, this is further reduced by support costs from, well, cheap customers. It is like Groupon, but most Groupon successes make money from full priced add-ons, and I don't see that here.
A $100+ CPA is also a great way to think about it. I think you could get some decent affiliate traffic (which is what this is, really) for half that.
Side note: I visited App Sumo's site as a non member and there's nothing to tell me what the site is, or why I should sign up, other than it's a "store for entrepreneurs." Presumably they expect you to Google what it is, or perhaps more likely, arrive having already been explained elsewhere what it is and decided you want in. But it seems strange they wouldn't want more control over the message. I'm assuming this works for them, but I'm not sure why.
I understand that there is no variable cost, but by offering a permanent "discount", OP may have permanently devalued his product. If that steep of a cut was viable, then author might have had a bad price point to begin with.
In general, the same thing must be considered for products with little to no variable costs. I'm not sure what the optimal solution is, but I would think that one would want to sell even at $0.01 - because a sale on a product with no variable cost has to be better than no sale at all...