Question - What is a “royalty”? The word “royalty” or “royalties” refers to the money an author receives from the sale of a book. Many people claim that the word “royalty” only refers to money earned from traditional publishers, but in my experience, the word is used to refer to the money an author earns from sales of their book, regardless of how it is published. Question - How much will I get? This is a more complicated question. The short answer is, “It depends.” Let’s take the “It depends” answer and talk about what that means—here are the factors that control how much an author will earn from the sale of a book. • • • • • •
Traditional vs self/independent publication The price of the book Middlemen in the payment pathway Place of sale File size—e-book The country of sale/payment fees
• Let’s start with traditionally published. Most traditional publishers negotiate a contract with an author. This contract will outline all the various aspects of the publishing relationship between the author and the publisher, including the royalty amount. Like all businesses, each publisher will run their business their way. Speaking in general terms, the author can anticipate receiving about 10–12 percent of the sales of their (paperback) book. (E-books, audiobooks and hardcover books often garner a different percentage.) That number may be higher or lower, but it is generally a number that is negotiated. Self/independently published authors either publish their own book or hire a company to do the publishing. If a company is hired, then the amount the author is paid is typically part of the publishing agreement. 6 WORDWORKS ︱ 2021 Volume II
It is often much higher than 10–12 percent but many self-publishing companies charge a bookkeeping type of fee to transfer the funds to the author. If a self/independent-published author publishes directly with various retailers, they will receive whatever royalties each retailer will offer. • The price of the book may influence how much in royalties an author earns. This price is generally only important when talking about e-books. Most retailers offer a different percentage of the sale price as a royalty for cheaper books than for more expensive ones. For example, Amazon pays 35 percent royalties for e-books priced less than $2.99 but 70 percent for books priced over $2.99. • Depending on how a book is published, there are frequently “middlemen” in the payment pathway between the publisher and the author. Traditional publishers often pay for warehousing, salespeople, or distributors. The author may have an agent that needs to be paid. Self/independent publishers may face bookkeeping fees or distribution fees. Even bookstores will expect a discount and the ability to independently price a book. For self/independent publishers, these fees are not usually high. At most, these authors may have to pay 10 percent of the sale price to a distributor upon sale of their book, or a PayPal or bank fee upon receipt of their royalties. • Each place of sale or retailer will offer an author a different amount of royalty. Since this topic can get quite complicated, let’s do some generalizing and some ballparking. The royalties for e-books are determined by price and delivery fee (we’ll discuss the delivery fee in the next point). The price point tends to revolve around a sale price of $2.99—lower and the author will receive less royalty and higher the author will receive more. Most retailers will offer percentages that are comparable to what Amazon offers. Paperback books have a different calculation.
