Understanding Ebook Royalty Rates from Amazon and Other Online Bookstores
When you self-publish your book, you are usually granting a limited right to an online bookstore to create copies of your work in order to sell them to their customers. Each time Amazon or CreateSpace sells a copy of your ebook or print on demand (POD) book, they will exercise that limited right to make a copy, so they can fulfill the order. Barnes & Noble and Apple work the same way.
Each time they sell a copy, they owe you a royalty. They each have their own rules for how soon they will pay you the royalty, but they do maintain a running total of your sales, typically grouped by month and sometimes also by country, and then they pay out what they owe you when the amount due to you has met their minimums.
How they calculate the royalty on each sale is typically dependent upon three or four factors:
How did you price your book?
From which online bookstore did they sell your book?
In what country was the book purchased?
(And, in the case of Amazon: Was the file size of your ebook excessive?)
From the author’s standpoint, the only thing you can control is the pricing of your book.
Pricing Your Ebooks:
For sales in Amazon’s U.S. store (Amazon.com), Amazon offers three pricing bands:
For an ebook priced from 99 cents to $2.98, you will earn a royalty rate of 35% of the sales price for each book sold by Amazon.
For an ebook priced from $2.99 to $9.99, you will earn a royalty rate of 70% of the sales price for each book sold by Amazon.
For an ebook priced from $10 to $200, you will earn a royalty rate of 35% of the sales price for each book sold by Amazon.
Pricing Your POD Books:
As with ebooks, when you distribute your print on demand book into the Amazon store using their CreateSpace subsidiary, you also have the power to set its price. There is a lower limit, as you can’t price your book with a “negative” royalty. CreateSpace has a nice tool that allows the author to pre-calculate their royalty using four pieces of information: Interior Type, Trim Size, Number of Pages, and List Price. For example, using their calculator (click on the “Royalties” tab on thispage), you can see that a black and white, 5.5-inch by 8.5-inch, 200-page POD book, priced at $5.89 list, will yield a royalty of 28 cents for each book sold.
It is easy to calculate your royalties and experiment with your pricing in the Amazon store. Other ebook stores use similar policies, and the IngramSpark service similarly competes with CreateSpace. Once you know the Amazon system, the others are easy to understand.