The Writer's Guide to Self-Publishing and Royalties

Royalties are one of the most difficult concepts authors need to grasp in the world of self-publishing. What are they? And how do you calculate them? This article provides a short guide for writers to understand everything about royalties.  

A book royalty is the percentage of the revenue an author receives on each book sold. Being a self-published author can be tough, just like setting up your own business. Without a traditional publisher backing your book, you have to pay for everything from cover design to editing and marketing. But one advantage of not depending on a traditional publisher is that you get paid a larger percentage in royalties (between 30% and 70%, as opposed to the 15% you would get with a traditional publisher on average) because there’s no intermediary. For example, at Rowanvale Books, authors receive 65% royalties on e-book and paperback sales. 

It’s important for authors to learn how royalties work, because they usually are the author’s main source of income. By learning what your royalty rate is, you’ll be able to calculate roughly how much you will earn from your book sales (you can also check out this book royalties calculator, which does it all for you!).  

The royalties you’re paid will be affected by a series of variables, especially if you choose the traditional publishing path. In self-publishing, the most common variables are: 

• Book genre 
• Book type 
• Book length (i.e. file delivery and/or printing costs) 

• Books sold 
• Retail price and retailer deductions 

The price of the book is particularly relevant when self-publishing e-books on a major platform such as Amazon KDP, which we will now look at in more detail as it’s currently the largest online retailer and self-publishing platform. 
 
Amazon offers two e-book royalty plans: the 70% option and the 35% option. In both plans, royalties are paid monthly starting 60 days after the first sale is made. Your ability to choose either plan will depend on the price you set for your book. To get 70% of royalties, you will need to price your book between £1.77 and £9.99 (check out Amazon’s list price requirements for more).  

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Image by Sofia Brizio for Rowanvale Books. Adapted, edited and translated from an original idea by Libroza 

Additionally, you will need to meet these conditions: 

• Publish something that’s not yet in the public domain 
  
• Pay for file delivery, which is a fee automatically deducted from royalty payments. This might be costly for emerging authors who aren’t selling much, in which case the 35% plan might be more cost-effective in the long run.  
  
• Adhere to geographical eligibility criteria or enrol in KDP select. This is because only books bought by customers in certain countries are eligible for the 70% plan, including the large Anglophone markets. By enrolling in KDP select, you can expand the list to include Brazil, India, Japan and Mexico. You will still get a 35% royalty on books sold outside of eligible countries.  
  

For print royalties on paperbacks, Amazon offers two distribution tiers, with printing costs being deducted from your royalties. There’s a fixed 60% royalty rate if you sell exclusively on Amazon marketplaces. If you opt in for Expanded Distribution (i.e. you sell your book through other distribution channels alongside Amazon), the royalty rate is 40%. Your royalty is therefore determined as follows:  

(royalty rate x list price) - printing costs = royalty 

Although we appreciate that it all sounds complicated, we hope this article helped you learn more about royalties. The key to understanding the ins and outs of royalties is to stay informed. At Rowanvale, we want to help you do just that and we value transparency. 

While you’re here, why not check out a few more of our blog posts here. Alternatively, if you’re interested in the services we offer, our plethora of packages can be found here. 
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