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:
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).
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:
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.
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