That’s right. Authors earn more with subscription-based aggregation as opposed to royalty-share aggregation. It’s important to know the difference between these two models and what makes subscription pricing more profitable for indies like you. Spoiler: you secure 100% of your net royalties with a subscription-based aggregator like PublishDrive.
Let’s break it down.
First Off, What Is Book Aggregation?
In self-publishing, there are two main types of companies to know:
- Retailers are markets you can directly upload and sell your book to. Amazon, Apple, Kobo, and Barnes & Noble are popular retailers, to name a few.
- Aggregators are essentially one-stop shops that can distribute your book to multiple retailers, like the ones mentioned above. They also reach channels that don’t offer direct sign-ups for indie authors, such as Scribd, OverDrive, and Bibliotheca.
Selling directly to retailers gets you the full royalty percentages you can earn, around 40-70% for most stores. Meanwhile, going to an aggregator requires you to pay an additional percentage of your royalties on top of store percentages. (This pricing model is called royalty-share, which I talk more about below.)
Draft2Digital is a top book aggregator that uses royalty pricing. They ask for 10% of your sales commission no matter where you sell. Here’s a common scenario with an aggregator like Draft2Digital:
- You sell a book on Apple Books for $10
- Apple Books takes 30% of your royalties: $3
- Draft2Digital takes an additional 10%: $1
- You’re left with 60% of your take-home royalties: $6
There are authors who like to sell directly to retailers in order to save that extra 10%. However, many end up choosing to aggregate for these vital reasons:
- To publish wide to as many stores and markets as possible. This is a self-publishing best practice that focuses on diversifying revenue streams and maximizing reach.
- To save time and energy that goes into handling different stores and markets. With a solid aggregator, you should be able to manage all of your books and stores on a single platform. Platforms like PublishDrive provide royalty reporting, book promotion services, and other support.
Take care of all of your publishing needs with PublishDrive. Distribute in hundreds of stores, market like a champ, keep 100% of the royalties you earn with stores, and much more.
Royalty-Share vs. Subscription-Based Aggregation
I strongly recommend publishing wide with an aggregator for any indie looking to maximize and streamline their business. Now, within book aggregation, there are two payment models to know of:
- Royalty-share, as mentioned above, requires you to pay a percentage of your royalties to the aggregator on top of store percentages. This fee is usually around 10-20% royalties for most aggregators.
- Subscription-based requires you to subscribe to a flat fee on a recurring basis. There are no sales commissions. You keep 100% of the net royalties you earn, just as you would by selling directly to stores. (100% of net royalties means 100% of what’s left after stores have taken their cut.)
Most book aggregators employ the royalty-share model — it’s an industry standard. At first glance, this seems like a great option. There are no upfront fees and you pay as you earn. However, subscription pricing turns out to be more profitable across the board, especially if you’re an established author or make above $1,000 a month.
PublishDrive is a book aggregator that’s been challenging the status quo by refusing to take any sales commission. Indies pay a fixed monthly fee for publishing services, with no hidden costs, no matter how high sales go.
Indie author Rachel Morgan switched from Draft2Digital’s royalty pricing to PublishDrive’s subscription pricing. Rachel saw a 16% increase in take-home royalties within two months.
Math and psychology
Let’s break this down even more. Most aggregators seem to work with a simple formula: they take 10% royalties after you sell a book. But there’s more than meets the eye. Two factors to look at –
1. Base of commission
Aggregators calculate royalties based on the sales price. This means the price of their distribution services depends on the money paid by the final customer, not the royalties you receive.
You sell a book for $10 with an online retailer that uses a 70% payout plan. You receive $6, and the aggregator gets $1. That $1 represents 10% of the sales price only. But, you’re really losing about 17% of your royalties to the aggregator ($1/$6).
For retailers with smaller payouts, you lose out on more. For the standard payout plan with Amazon, you let go of about 40% of your royalties.
2. Invisible payment
Since the payments received from most aggregators are consolidated, you may not realize just how much you’ve paid. The amount you receive from an aggregator is already decreased by the amount you paid for their services. You don’t see the amount; you don’t feel you paid. However, you’ve actually paid a lot.
Here are some examples of how much you actually pay for standard book aggregation:
Amount received from aggregator
Minimum* amount spent on aggregator’s services
*These amounts show the best scenarios for sales where store payouts are 70%. For lower payouts, you end up paying more.
Secure 100% of Your Net Royalties With PublishDrive
With PublishDrive’s subscription pricing, you pay a fixed monthly price while keeping 100% of the net royalties you earn with all stores.
Bestselling author Quinn Loftis grew her business with subscription-based aggregation: “When you’re selling 5,000 books a month at 10% versus a flat fee of 100 bucks, that’s sort of a no-brainer...We can use PublishDrive, save a ton of money, and still reach the same audience and actually a bigger audience which is awesome too. When I first heard about that, I almost thought it was too good to be true.”
Let’s pan out what Loftis mentioned about selling 5,000 books a month. Suppose every book was sold for $5, meaning you made $25,000, and all stores have a 70% payout percentage –
Aggregator with a 10% royalty fee
- Stores take 30% of your royalties: $7,500
- Aggregator takes an additional 10%: $2,500
- You keep 60% of your take-home royalties: $15,000
Aggregator with a $100 flat monthly fee
- Stores take 30% of your royalties: $7,500
- Aggregator takes flat monthly fee: $100
- You keep 70% of your take-home royalties, minus $100: $17,400
You’d secure 16% more of your earnings with subscription pricing!
$100 a month can sound pricey for those who are just starting out. No worries, you can distribute to hundreds of stores for a fee as low as $14.19 a month. Check out PublishDrive’s pricing.