Ask Barb

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.

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.

If the advance is not “paid back” or “earned back” it does not need to be returned, however …

Generally speaking, the self-published author receives 60 percent of the sale price minus printing costs. If this book is sold in a bookstore, the royalties are calculated differently, as it will depend on the discount the bookstore is offered.

If a book is sold in person by the author—let’s say at a reader festival or a conference or even a book signing, the royalty is the difference between what the author charges for the book and the cost of printing.

• Many authors are unaware that most retailers charge a delivery fee for e-books. This fee is based on the size of the file used to create the e-book. For many books this fee amounts to only a few cents. For a larger than usual book files, the delivery fee will be more.

• The country of sale and various payment fees influence the amount an author receives as well. Most books are sold in local currency for the country of the purchaser. The royalties are usually paid to the authors in the author’s local currency. Although this tends to have me cross-eyed, all these exchange rates can result in significant differences—especially if you are talking about larger sums of money. During times of exchange rate fluctuations, money can be easily lost or gained between the time of the sale and the time of the payout of royalties.

In addition to exchange rates, authors—especially self/independently published authors, can be faced with banking type fees. One of the retailers who sells my books pays me via a PayPal deposit. PayPal charges a fee for this money transfer. Authors may have to pay a wire transfer fee or a cheque fee as well—depending on where the sale originates. There are active discussions on line amongst budget conscious authors as to the best money transfer services and so on.

Question - What is an advance? Do I have to pay back an advance if my book doesn’t sell?

An advance is a lump-sum payment that a traditional publisher will offer an author upon purchase of the

rights to their book. Not all authors will be offered an advance from their publisher, and the amount of the advance is typically something that is negotiated.

The advance needs to be paid back via book sales before the author receives any more money from the publisher. If the advance is not “paid back” or “earned back” it does not need to be returned, however, the publisher may be unwilling to accept another book from that author.

Question - Does being published online count as being “previously published”? How about the work appearing in a podcast? Video poem?

The definition of “previously published” is a fluid one. Generally speaking, it means a work has been made available to the public. An article destined for a paper magazine can be considered “previously published” if it was made available as a blog post. A poem could be considered “previously published” if a recorded version of the author reading it was published on YouTube.

Since the definition can be fluid it is best to ask for more details when you are submitting work that may be ineligible.

Question - How would I start the process of creating an audiobook?

I am assuming that the person who asked this question is a self/independently published author, as most traditional publishers have their own contacts for audiobooks. Authors generally use one of two starting points for the creation of an audiobook—ACX (an arm of Amazon) or FindAway Voices. Both services allow an author to create a professionally narrated audiobook that is available to purchasers in most countries of the world. In my experience, authors are moving more towards FindAway Voices, as this service will allow the author to set the purchase price—ACX does not. Because of the equipment requirements, most authors do not narrate their own audiobooks unless they have applicable experience.