Book Royalties Are the Author’s Cut of Book Sales

How to Determine the Royalty Amount for Book Sales

How you determine your royalties depends on which distribution model you use: print-on-demand (POD), expanded, or direct-to-reader. We'll use a standard 200-page paperback book with a black-and-white interior as an example. 

POD Distribution Royalties

Print-on-demand means that your book is printed when it's purchased. When you sell through a third party (e.g., Amazon, B&N.com), they take a percentage of each sale (20–55 percent), so to figure out your royalties, you take the retail price minus the third party fee. What you have isn't your ultimate profit, however—you can't forget to subtract the print cost of the book.

The infographic below demonstrates:

Royalties with POD Distribution

Expanded Distribution Royalties

With expanded distribution, your book is printed ahead of time and stored in a warehouse. That means when someone purchases your book, the distributor handles sales to retailers and wholesalers. Because of the work the distributor does, it takes a small distribution fee.

The infographic below demonstrates:

Expanded Distribution Royalties

Direct-to-Reader Distribution

Direct-to-reader distribution involves selling a book directly to a reader, usually through an online sales page. This method of distribution offers you the best profits, as you can see below:

Direct-to-Reader Distribution Royalties

If you sell books at an author event, the royalties are essentially the same as direct-to-reader distribution, minus the pick and pack fee.

To learn about determining royalties and setting a retail price for your ebook, visit our page on how to price your ebook.

Share this Post: