Do you find royalties confusing? As an indie author, it’s a straightforward calculation. But you still want to know the compensation so you can plan for how to price your book.
In the latest podcast episode, we demystify royalties for indie authors. Learn the key differences between traditional and self-publishing royalties, how royalty rates work on platforms like Amazon KDP and IngramSpark, and tips to ensure your book's profitability. Essential listening for anyone navigating self-publishing!
IngramSpark Compensation Calculator
You’ll find the key themes from the episode below, but here’s a bonus example of how KDP calculates royalties for books sold on Amazon:
Cover price: $15.99
KDP gets 40% of the cover price: –$6.40
Printing cost: –$3.49
Your royalty: $6.10
If your book sells through expanded distribution (via Amazon through another bookstore), they take another 20% of the cover price.
Take the number above and subtract $3.20.
That leaves you with $2.90.
Bottom line: Amazon gets a cut, and the other retailer gets a cut. So you’re left with a smaller royalty for books sold through other bookstores.
Once you do the math, it might lead to deciding to increase your cover price!
Key Themes from the Episode
Here are five key themes and takeaways discussed in the episode along with the main conceptual takeaway for each:
Definition and Importance of Royalties
Takeaway: Royalties are the earnings authors receive from the sale of their books. Understanding how royalties work is crucial for making informed financial decisions and optimizing publishing efforts.
Traditional vs. Self-Publishing Royalties
Takeaway: In traditional publishing, authors receive royalties after the publisher recoups marketing and production expenses. In self-publishing, authors directly earn royalties after covering printing costs and platform fees, potentially leading to higher profit margins per book.
Cost Calculations in Publishing
Takeaway: Cost structures vary between formats; e-Books generally offer higher royalties with certain pricing strategies, while print books involve additional printing and production costs that lower the author's royalty percentage.
Platform-Specific Royalty Structures
Takeaway: Different self-publishing platforms have distinct royalty structures; for example, Amazon KDP offers higher royalties for e-Books priced within a particular range, and provides calculators for authors to estimate earnings based on book characteristics.
Factors Affecting Royalties
Takeaway: Programs like Kindle Unlimited offer varying royalty options based on exclusivity and other terms. Authors must carefully consider these agreements for their impact on visibility, promotional opportunities, and overall earnings.
By understanding these key themes, indie authors can strategically navigate the financial aspects of self-publishing to optimize book sales and profits.
Next time, we will cover what kinds of contracts you might need to sign as an indie author.
Book Royalties: Understanding Independent Author Earnings