Book Royalties

Book Royalties under Basic or Advanced publishing packages (a.k.a POD Distribution)

Example A: Direct sales by Author at events, through Paypal, etc.

In any of these scenarios the author makes 100% of the sales price, less whatever she/he paid to print the book and any postage costs that are incurred by Author that are not covered by end-user. In order to sell, Author will need to have previously ordered copies. These sales could be at speaking events or through an author’s website, where the author may chose to install and manage his/her own credit card processing system, such as Paypal. You do not have to pay fees to a distribution company in this scenario because you are acting as your own distributor.

Example B: Sale through Author's website with Mill City Press Book Fulfillment

If you sell books through your website (one that we build for you or one that you obtain on your own), and choose the Mill City Press book fulfillment service there are a few fees. There is a one-time fee of $499 (which covers the cost to develop an entire software suite for your book) and then a fee of $1.50 per book for each book fulfilled. When we handle your book fulfillment the formula would be:

$14.00 (retail price)
-$3.90 (print cost)
-$1.50 (fulfillment fee)

$8.60 net to author (Mill City Press charges the shipping costs to the buyer directly)

As part of the book fulfillment service, authors will need to have books printed and shipped to our warehouse for participation.  POD runs can be as few as one copy.

Example C: Orders through Amazon and other online retailers

Selling the book through Amazon.com (or other online retailers) becomes a bit trickier from a math perspective, as they do take a percentage of each sale (20-55%). Mill City Press authors in the Basic or Advanced publishing packages can set the trade discount percentage anywhere between 20%-55% of the retail price. The “trade discount” is the fee the online retailer (e.g. Amazon.com) is paid to sell your book.

The Amazon.com (and other online retailers) payouts would work as follows for authors with POD Distribution (we use a 55% trade discount and a 200 page mythical book, for example purposes only):

You would take the retail cost of the book minus Amazon's percentage (we use 55% as an example below, but you can plug in any percentage), minus print cost of book, equals your net profit.

$14.00 (retail price)
-$7.70 (55% Amazon fee)
-$3.90 (actual print cost) 

$2.40 net to author

We advise our authors to plan a retail price based on the highest trade discount payable. When calculating your printing costs and trade discount, plan on giving 55% of the retail price to online retailers like Amazon.com. That is near the top of what you’d have to pay. In some cases, you may pay less, but budget for paying more. It’s simply more realistic.

There are some theories that Amazon’s algorithm, ranking, etc. is based in part on how large a discount Amazon receives for the book. For example, when you visit a book’s page on Amazon and see that the book is being offered for 30% off, that 30% is coming out of Amazon’s share of the sale revenue. If Amazon gets the full 55% trade discount, they can do that. If they are getting a 20% trade discount, you know they won’t be passing on any part of that sum as a discount / incentive to prospective buyers of your book.

Example D: Orders through brick-and-mortar retailers

Any brick-and-mortar retailer we’ve ever dealt with requires at least a 40% trade discount and requires that a book be marked as returnable in order for that retailer to consider the book. If you can sell directly to such a store without a distributor / wholesaler, you may be able to save the additional 15% (that you’d pay on top of the 40%). If you manage to sell directly to a bookstore (which is rare), this is an example of how it might look from a royalty perspective:

$14.00 (retail price)
-$5.60 (40% trade discount)
-$3.90 (actual print cost)

=$4.50 net to author

Royalties under Professional or Premium publishing packages (a.k.a Expanded Distribution)

The biggest difference with Expanded Distribution is that authors need to have books in our warehouse. This is because our distributor is the one handling sales of your book to retailers and wholesalers. Our distributor works directly with the buyers for the wholesalers and retailers meaning that your books have an audience with these folks. Your chances of selling books to the book trade is greater than if you were just in POD distribution. But for that advantage you are adding another party to the mix that needs to be paid for it’s efforts. Thus, you need to print enough books to lower the printing costs.

Our distributor takes 20% of the wholesale cost. The wholesale cost is the price at which a retailer or wholesaler can purchase a copy of a book. So, if you have a $15 book and a retailer can purchase it for a 40% trade discount, then the wholesale cost of the book is $9.00. Our distributor then takes 20% of that wholesale cost ($9.00), making the net wholesale cost, $7.20.

Direct sales by Author at events, through Paypal, etc.

This is same as Example A above and is not affected by the distributor because you are acting as your own distributor for these channels.

Sale through Author's website with Mill City Press Book Fulfillment

This is the same as Example B above and the distributor’s only function is to pack and ship the book from the warehouse. The difference is that $1.50 handling fee you would incur in POD distribution is already built into the 20% distributor fee.

Orders through Amazon and other online retailers

Unlike the scenario in Example C above, the trade discount offered to Amazon and other online retailers must be set at 55%. Additionally, our distributor gets a fee of 15% of the net wholesale price on each order.

The Amazon.com (and other online retailers) payouts would work as follows for authors with Expanded Distribution (For example, with our 200 page mythical book you would have a 55% trade discount and 15% distributor fee):

$14.00 (retail price) 
-$7.70 (55% Amazon discount) 
-$.95 (15% of the remaining $6.30, net wholesale cost: $14-$7.70=$6.30) 
-$3.90 (actual print cost)

$1.45 net to author

Orders through brick-and-mortar retailers

Many brick-and-mortar bookstores have existing relationships with our distributor. So, if Barnes & Noble wants to purchase a copy of your book, the buyer at B&N will contact our distributor and will place an order. B&N typically gets a 40% trade discount and requires the book be returnable.

If our distributor can sell your book directly to a bookstore, below you will find the breakdown of how that may look from a royalty perspective:

$14.00 (retail price)
-$5.60 (40% trade discount)
-$1.26 (15% of $8.40 net wholesale price: $14-$5.60= $8.40) /
-$3.90 (actual print cost)

$3.24 net to author