Ultimately, I did indeed settle on the $2.99 price point. But not for the reasons you might think.
I'd figured - and still do - that $2.99 was the sweet spot for a first-time writer. Low enough to attract readers willing to take a chance on something new, especially after reading the sample that Amazon provides, but high enough to actually kick a little money my way.
After all is said and done, I earn $2.04 for each $2.99 sale, which is a commission of roughly 68%. This is far better than the 15% most traditional authors make on hardcovers and infinitely better than the 8-10% they get on paperback sales.
Amazon, where I've done all of my selling so far (more on this in a minute), offers two commission rates: 35% and 70%, minus a "download fee." The lower rate is for public domain works being repackaged (think Shakespeare and the Bible), as well as for - and we come now to the other reason I picked $2.99 - books selling at $2.98 or less.
In other words, to get the 70% royalty rate, the minimum price I could set on my book was $2.99.
Meanwhile, I've also published my novel on Smashwords. Smashwords is a site that allows one-stop linkups to variety of e-readers, such the iPad, Kobo, and Nook, as well as Amazon's Kindle. The commission rate varies by platform but seems to average around 60%.
It would seem, then, that it is in my economic best interests to drive as many sales via Amazon as possible. This would be false. Accessibility is far more important to a new writer than high commissions. My first job is to find as many readers as possible across as many media as possible. Once that's done, the money will come, irrespective of platform.
In fact, the only reason I haven't sold anything on Smashwords yet is the site's uploading and review process. Formatting the book to their standards was laborious but, once it's in their "Premium Catalog," it'll be available directly through the iPad, Nook, Kobo, etc. Until then, it's available only on Smashwords itself. And on Amazon, of course.
In the end, I may still lower the price to drive sales, assuming I'm convinced that there's enough demand at a lower price point to make up for the lower commission. We shall see.
Meanwhile, I'm going to go back to doing the most effective thing I can to boost sales: writing the next book.